What changed in this filing

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Item 9A. Controls and Procedures

2023-06-15 compared with 2022-04-01 · 749 added, 1471 removed, 58 unchanged (97% of the section changed)

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our

disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of

the period covered by this Annual Report.

Our disclosure and procedures are designed to ensure that information required to be disclosed

by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods

specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive

Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving

their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the

period covered by this Annual Report, our disclosure controls and procedures were not effective due to the material weakness in our internal

control over financial reporting with respect to our financial statement close and reporting process, as described below.

Notwithstanding

such material weakness in our internal control over financial reporting, our management concluded that our condensed consolidated financial

statements included in this Annual Report fairly present, in all material respects, our financial position, results of operations and

cash flows as of the dates and for the periods presented in conformity with GAAP.

of Disclosure Controls and Procedures

previously disclosed, in connection with the filing of the Company’s Annual Report on Form 10-K for the year ended December 31,

2021 (the “Original 2021 Annual Report”) on April 1, 2022, our management, with the participation of our then Chief Executive

Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in

Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021.

Based on their evaluation, our then Chief Executive Officer

and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective due to

material weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process.

connection with the filing of Amendment No.

1 to the Company’s Annual Report on Form 10-K/A for the year ended December 31,

2021 (the “Amended 2021 Annual Report”), our management, with the participation of our Chief Executive Officer,

reevaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)

under the Exchange Act) as of December 31, 2021 and determined they were not effective due to the material weaknesses in our internal control over financial reporting

with respect to our financial statement close and reporting process.

Our disclosure and procedures are designed to ensure that information required to

be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported

within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our

management, including our Chief Executive Officer, to allow timely decisions regarding required disclosures.

Report on Internal Control Over Financial Reporting

discussed elsewhere in this Annual Report, we completed the Business Combination on October 29, 2021.

Prior to the Business Combination,

we were a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,

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

As a result, previously existing

internal controls are no longer applicable or comprehensive enough as of the assessment date as our operations prior to the Business Combination

were insignificant compared to those of the consolidated entity post-Business Combination.

The design of internal controls over financial

reporting for the Company post-Business Combination has required and will continue to require significant time and resources from management

and other personnel.

As a result, management was unable, without incurring unreasonable effort or expense, to conduct an assessment of

our internal control over financial reporting as of December 31, 2021.

Accordingly, we are excluding management’s report on internal control

over financial reporting pursuant to Section 215.02 of the SEC Division of Corporation Finance’s Regulation S-K Compliance & Disclosure

Interpretations.

In addition, as an emerging growth company, management’s assessment of internal control over financial reporting

was not subject to attestation by our independent registered public accounting firm.

Weakness in Internal Control Over Financial Reporting

connection with the audits of our condensed consolidated financial statements included in this Annual Report, our management has

identified a material weakness in internal control over financial reporting as of December 31, 2021 and 2020 relating to

deficiencies in the design and operation of the procedures relating to the closing of our financial statements.

recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of

achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible

controls and procedures.

In connection with this Report, our management, with the participation of our Chief Executive Officer,

reevaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)

under the Exchange Act) as of December 31, 2022.

Based on such reevaluation, our Chief Executive Officer concluded that, as of the

end of the period covered by this Report, our disclosure controls and procedures were still not effective due to the material

weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process, as

described further below.

As a result of this conclusion, we retained third-party accounting consultants who performed additional

analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP.

Accordingly, management

believes that the financial statements included in this Report present fairly in all material respects our financial position,

results of operations and cash flows for the periods presented.

The issues which were identified during the initial and subsequent review continued until the new management team

for the company began addressing them in the fall of 2022.

Efforts to strengthen and improve internal controls over accounting and financial

reporting are ongoing.

Weaknesses in Internal Control Over Financial Reporting

connection with the audit of our condensed consolidated financial statements included in this Report, our management has identified material

weaknesses in our internal control over financial reporting as of December 31, 2022 and 2021 relating to deficiencies in the design and

operation of the procedures relating to the closing of our financial statements.

These include:

our lack of a sufficient number of personnel with an appropriate level of knowledge and experience in accounting for complex or

non-routine transactions, (ii) the fact that our policies and procedures with respect to the review, supervision and monitoring of

our accounting and reporting functions were either not designed and in place or not operating effectively;

(iii) the timely closing

of financial books at the quarter and fiscal year end, and (iv) incomplete segregation of duties in certain types of transactions

and processes.

have commenced measures to remediate the identified material weakness, including (i) adding personnel with sufficient accounting knowledge;

(ii) adopting a more rigorous period-end review process for financial reporting;

(iii) adopting improved period close processes and accounting

processes, and (iv) clearly defining and documenting the segregation of duties for certain transactions and processes.

The implementation

of our remediation is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over

a sustained period of financial reporting cycles.

We may also conclude that additional measures may be required to remediate the material

weakness in our internal control over financial reporting.

cannot assure you that the measures we have taken to date will be sufficient to remediate the material weakness we identified or avoid

the identification of additional material weaknesses in the future.

If the steps we take do not remediate the material weakness in a timely

manner, there could continue to be a reasonable possibility that this control deficiency or others could result in a material misstatement

of our annual or interim financial statements that would not be prevented or detected on a timely basis.

(i) our lack of a sufficient number of

personnel with an appropriate level of knowledge and experience in accounting for complex or non-routine transactions, (ii) the fact

that our policies and procedures with respect to the review, supervision and monitoring of our accounting and reporting functions were

either not designed and in place or not operating effectively;

(iii) our inability to complete the timely closing of financial books

at the quarter and fiscal year end, and (iv) incomplete segregation of duties in certain types of transactions and processes.

Specifically,

management did not design and maintain sufficient procedures and controls related to revenue recognition including those related to ensuring

accuracy of revenue recognized from non-routine transactions such as the sales of LotteryLink Credits.

As a result, we determined that

there was an overstatement of revenue in the consolidated statement of operations of approximately $52.1 million during the year ended

December 31, 2021, which required a restatement of the previously issued financial statements for the year ended December 31, 2021 contained

in the Amended 2021 Annual Report.

have begun implementing remediation steps to improve our internal control over financial reporting and to remediate the identified

material weaknesses, including (i) adding personnel with sufficient accounting knowledge;

(ii) adopting a more rigorous period-end

review process for financial reporting;

(iii) adopting improved period close processes and accounting processes, and (iv) clearly

defining and documenting the segregation of duties for certain transactions and processes.

Management has expanded and will continue

to enhance our system of identifying transactions and evaluating and implementing the accounting standards that apply to our

financial statements, including through enhanced analyses by our personnel and third-party professionals with whom we consult

regarding complex accounting applications.

We intend to continue take steps to remediate the material weaknesses described above and

further continue re-assessing the design of controls, the testing of controls and modifying processes designed to improve our

internal control over financial reporting.

The Company plans to continue to assess its internal controls and procedures and intends

to take further action as necessary or appropriate to address any other matters it identifies or are brought to its attention.

will not be able to fully remediate these material weaknesses until these steps have been completed and have been operating

effectively for a sufficient period of time.

The implementation of our remediation will be ongoing and will require validation and

testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles.

also conclude that additional measures may be required to remediate the material weaknesses in our internal control over financial

cannot assure you that the measures we take will be sufficient to remediate the material weaknesses we identified or avoid the identification

of additional material weaknesses in the future.

If the steps we take do not remediate the material weaknesses in a timely manner, there

could continue to be a reasonable possibility that this control deficiency or others could result in another material misstatement of

our annual or interim financial statements that would not be prevented or detected on a timely basis.

more information, see “ Item 1A.

Risk Factors – Public Company Operating Risks – As a newly public company, we are

subject to certain obligations with respect to our internal controls that, as a private company, we were not required to maintain, document,

test or certify.

A prior failure to maintain adequate financial, information technology, and management processes and internal controls

while we operated as a private company has resulted in and could continue to result in a material weakness which could lead to errors

in our financial reporting, which could adversely affect our business .”

Changes in Internal Control Over Financial

Except as otherwise described

herein, there was no change in our internal control over financial reporting identified in connection

with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2021

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Risk Factors - Public Company Operating Risks - If we fail to implement and maintain an effective

system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent

fraud, and investor confidence and the trading price of our common stock and warrants may be materially and adversely affected .”

in Internal Control Over Financial Reporting

as otherwise described herein, there was no change in our internal control over financial reporting identified in connection with the

evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2022 that

has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

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

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

The information required by

this Item is incorporated by reference to the applicable information in our definitive proxy statement relating to the 2022 Annual Meeting

of the Company’s Stockholders (the “definitive proxy statement”), which will be filed no later than 120 days after the

close of the fiscal year covered by this Annual Report.

We have adopted a code of conduct that applies to all of our employees,

including our Chief Executive Officer, Chief Financial Officer, and persons performing similar functions.

The code of conduct is publicly

available on our website at www.lottery.com.

If we ever were to amend or waive any provision of our code of conduct that applies to our

Chief Executive Officer, Chief Financial Officer or any person performing similar functions, we intend to satisfy our disclosure obligations,

if any, with respect to any such waiver or amendment by posting such information on our website set forth above rather than by filing

a Current Report on Form 8-K

and Executive Officers

following sets forth certain information, as of the date of this report, concerning the directors and officers of the Company.

Executive Officer

Gustavson has been our Chief Executive Officer since February 2023.

Gustavson has 17 years of business development, transactional,

alliance management, finance, operational, company formation, and IP experience with emerging businesses.

During his career he has acquired

extensive experience in the integration of business disciplines, with an emphasis on turnaround transactions.

Gustavson held senior

management positions in a variety of technology companies.

his various executive capacities, Mr.

Gustavson was responsible for transactions ranging from acquisitions and strategic collaborations

to ordinary course transactions.

He was also engaged in strategic planning for business development, product development, and in-licensing

activities, and participated in the consummation of numerous collaborations.

Sector specialties include biotechnology, IP based banking,

mobile payment systems, social media, mobile gaming applications, fiber optics, and mixed and virtual reality technologies.

Gustavson is a co-founder and currently serves as Chief Executive Officer of ZENIOS Technologies Corporation, a position he has held

since May 2022.

Said company is involved in the business of augmented and mixed-reality based internet search technology.

March of 2020, Mr.

Gustavson and a group of investors acquired control of Sansar from Linden Labs Corporation, implementing an expansion

plan, and successfully deploying, virtual reality applications for live events and festivals.

These included the renowned London based

Lost Horizons festival Glastonbury, gaining an audience in excess of 4.2 million attendees.

The assets of Sansar were transferred to

Sansar, Inc, in June 2022, and Mr.

Gustavson has served as a Board member of Sansar, Inc.

since June 2022.

February 2020 to April 2021, Mr.

Gustavson served as Chief Executive Officer of Regnum Corp (OTC:RGMP).

Gustavson served as President,

CFO and co-founder of Tri Capital Energy Corporation, from June 2019 to March 2021.

From March 2025 to May 2018, Mr.

Gustavson served

as Chief Financial Officer and Director of Wookey Search Technologies Corporation.

From July 2016 to August 2017, Mr.

Gustavson served

as Chief Financial Officer and Director of Sharkreach Corporation.

Gustavson also previously served as President and co-founder of MedicuRx Corporation, a position he held from February 2013 to June 2015.

During this time, he was responsible for managing the company formation and transactional activities in collaboration with co-founder

Joseph Rubinfeld, as well as taking care of business development, finance, and research and alliance management.

MedicuRx Corporation

business was a pharmaceutical company developing cancer therapeutics addressing Glioblastoma Multiforme.

Gustavson began his career as a Private Banker at the banking and financial business known as HSBC in Saipan, Commonwealth of the Northern

Mariana Islands.

From April 1997 through February 1999, Mr.

Gustavson was Vice President of Private Banking and was charged with co-launching

the Commonwealth of the Northern Mariana Islands branch of the Pacific Regional Division during the bank’s expansion period.

Gustavson received a Bachelor of Science in Political Science degree (minor in sociology, concentration in economics) from the University

of Oregon in 1991.

McGahan , has been a member of and Chairman of the Board since October 2022.

McGahan is the founder of the U.K.

charity, “Mask

Our Heroes” (“MOH”), created in memory of his father Alan, who was a victim of the COVID-19 pandemic.

MOH was one of

the first charities to recognize the urgent need for vital personal protection equipment and in the first months of the pandemic, MOH

secured and shipped several plane loads of surgical masks to the U.K.

Prior to founding MOH, Mr.

McGahan had founded Magic Automotive

Group, a Europe-based Harley-Davidson dealer.

McGahan sold Magic Automotive Group to pursue other endeavors.

In 1997, prior

to founding Magic Automotive Group, Mr.

McGahan had joined his family’s business, Pinewood Motor Group, which his father founded

In the early 1990s Mr.

McGahan left a public UK multi-brand automotive group to set up an international company specializing

in the importing and exporting of luxury automotive brands, race cars and classics.

McGahan is a graduate of the Purley Boys and

Guildford Engineering Technology College.

Battles has been a member of the Board since October 2022.

Battles founded The League of Angels, a network of UHNW

international members investing in fast growth British ventures with a global impact and strong corporate values.

Battle is the former

co-owner of Jackpot Games, a Maltese online gaming venture that was then sold to a large German Media Group.

Additionally, Mr.

is the former senior advisor to the Rank Group PLC (LSE:

RNK), where he focused on the Grosvenor Casinos and Bingo (a UK-based chain

of 53 casinos located in major towns and cities across the UK and 76 bingo clubs located in Belgium, Spain, and the UK).

During his time

at Grosvenor Casinos and Bingo, Mr.

Battles focused on delivering interactive digital gaming formats across their retail footprint.

also has extensive FTSE experience, working as Executive Chairman/CFO in turnaround or high growth sectors and is a former CFO of London’s

largest digital agency.

Battles earned a Master in Computing Science from the University of Aberdeen, and was a Scottish Chartered

Accountant with Ernst & Young.

Kounoupias has been a member of the Board since April 2023.

Kounoupias is a respected attorney with almost 40-years of experience

with digital, media and technology companies with a strong practice focus on corporate governance, legal issues, regulations, and Intellectual

Property (IP), with varying skills across multiple sectors.

He has worked both within private practice and in-house, including a 16 year

period in a senior position in the consumer entertainment industry.

He also has extensive experience in branding, media, news and related

and he has held non-executive directorships and senior positions within the computer software, design, branded goods and

newspaper and magazine publishing industries.

He is the founder and CEO of Kounoupias IP, a boutique Intellectual Property consultancy

operating out of offices in England and Cyprus providing strategic guidance on digital technology and IP matters internationally.

is recognized as a leading specialist in anti-piracy and anti-counterfeiting and possesses extensive experience in managing and conducting

investigations in IP and other sectors.

He regularly contributes to journals and books, as well as providing professional training on

legal matters at seminars and webinars.

Executive Officer

Gustavson, our Chief Executive Officer (“CEO”), serves at the discretion of our Board and holds office until his successor

is duly appointed or until his earlier resignation or removal.

Gustavson also serves as the principal financial/accounting officer

of the Company until a replacement is found.

Board consists of three directors.

Each of our current directors will continue to serve as a director until the election and qualification

of his successor or until his earlier death, resignation or removal.

The authorized number of directors may be changed by resolution

of our Board.

Vacancies on our Board may be filled by resolution of our Board.

Board consists of Matthew McGahan, Barney Battles and Nick Kounoupias, with Mr.

McGahan acting as chairman of the Board.

Board has affirmatively determined that each of Messrs.McGahan, Battles and Kounoupias is an “independent director” under

the Nasdaq listing rules applicable to board members.

For more details, see the section entitled “Independence of our Board.”

Board is divided into three classes with only one class of directors being elected in each year, and with each class serving a three-year

Class I director is Mr.

McGahan, and his term will expire at the 2025 annual meeting of stockholders;

Class II director is Mr.

Kounoupias, and his term will expire at the 2023 annual meeting of stockholders;

Class III director is Mr.

Battles, and his term will expire at the 2024 annual meeting of stockholders.

a result of the staggered Board, only one class of directors will be elected at each annual meeting of stockholders, with the other classes

continuing for the remainder of their respective terms.

At any meeting of stockholders at which directors are to be elected, the number

of directors elected may not exceed the greatest number of directors then in office in any class of directors.

The members of each class

will hold office until the annual meeting stated above when their term expires and until their successors are elected and qualified.

At each succeeding annual meeting of the stockholders, the successors to the class of directors whose term expires at that meeting will

be elected by plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders

held in the third year following the year of their election and until their successors are elected and qualified.

Subject to the rights,

if any, of the holders of any series of preferred stock to elect additional directors under circumstances specified in a preferred stock

designation, directors may be elected by the stockholders only at an annual meeting of stockholders.

of our Board and Executive Officer

on information provided by each director concerning his background, employment, and affiliations, our Board has determined that the Board

meets independence standards under the applicable rules and regulations of the SEC and the listing standards of Nasdaq.

family relationships among any of our directors and executive officer.

In making these determinations, our Board considered the current

and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board deemed relevant

in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions

involving them described under the heading “ Item 13.

Certain Relationships and Related Party Transactions, and Director Independence.

Board has two standing committees:

an Audit Committee and a Compensation Committee.

Each of the committees reports to the Board as it

deems appropriate and as the Board may request.

The composition, duties and responsibilities of these committees are set forth below.

In the future, our Board may establish other committees, as it deems appropriate, to assist it with its responsibilities.

of the members of our Board serve as members of our Audit Committee.

Battles is the chair of our Audit Committee.

All members of

the Audit Committee are “independent” in accordance with the Nasdaq Rules (as defined below) and rules of the U.S.

and Exchange Commission (the “SEC”) applicable to boards of directors in general and Audit Committee members in particular.

The Board has determined that each member of the Audit Committee is “financially literate” within the meaning of the Nasdaq

Rules because each member is able to read and understand fundamental financial statements, including the Company’s balance sheet,

income statement and cash flow statement.

In addition, the Board has determined that Mr.

Battles qualifies as an “audit committee

financial expert” as defined by Item 407(d) of Regulation S-K, and therefore, also satisfies the “financial sophistication”

requirement in accordance with Nasdaq Rule 5605(c)(2)(A).

The Board reached its conclusion as to Mr.

Battles’ qualifications based

on, among other things, his background in financial services and accounting, and experience on the audit committees of public, private

and investment companies.

duties and responsibilities of the Audit Committee include:

duties and responsibilities delegated to it by the Board, including overseeing our financial reporting policies, our internal controls,

and our compliance with legal and regulatory requirements applicable to financial statements and accounting and financial reporting

directly responsible for the appointment, retention, replacement and oversight of our independent registered public accounting firm

and reviewing and evaluating its qualifications, performance and independence;

pre-approving

the audit and non-audit services and the payment of compensation to the independent registered public accounting firm;

reports from, and material written communications between, management and the independent registered public accounting firm, including

with respect to issues as to the adequacy of the Company’s internal controls;

and approving any related person transaction that is required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated

by the SEC and prior to our entering into such transaction;

and discussing with management and the independent registered public accounting firm our guidelines and policies with respect to

risk assessment and risk management;

the Audit Committee Charter and the Audit Committee’s performance at least annually.

respect to our reporting and disclosure matters, the Audit Committee is also responsible for reviewing and discussing with the independent

registered public accounting firm and management our annual audited financial statements and our quarterly financial statements prior

to their inclusion in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or other publicly disseminated materials in accordance

with the applicable SEC rules and regulations.

members of our Compensation Committee are Messrs.

McGahan, Battles and Kounoupias.

Kounoupias is the chair of our Compensation Committee.

All members of the Compensation Committee are “independent” in accordance with the Nasdaq Rules and SEC rules applicable

to boards of directors in general and compensation committees in particular.

In addition, at least two members of the Compensation Committee

qualify as “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act.

Compensation Committee is responsible for reviewing and overseeing our compensation policies and practices, and meets regularly throughout

the year to review and discuss, among other items, our compensation philosophy, changes in compensation governance, and compliance rules

and best practices.

With respect to executive compensation, the Compensation Committee:

reviews and approves corporate goals and objectives relevant to the compensation of our CEO and other executive officers;

as a committee or together with the other independent directors (as directed by the Board), the performance of our CEO and other

executive officers in light of such corporate goals and objectives, as well as their individual achievements;

and recommends to our Board for approval of the compensation of our CEO and other executive officers based on this evaluation;

reviews and approves of all elements of our CEO’s and other executive officers’ compensation, including cash-based and

equity-based awards and opportunities, as well as any employment agreements and severance agreements, change in control agreements

and special or supplemental compensation and benefits.

Nominating Process

do not currently have a nominating committee or any other committee serving a similar function.

Director nominations are approved by

a vote of a majority of our directors, each of whom is independent, as required under the Nasdaq rules and regulations.

We believe that

the current process in place functions effectively to select director nominees who will be valuable members of our Board of Directors.

identify potential nominees to serve as directors through a variety of business contacts, including current executive officers, directors

and stockholders.

We may, to the extent they deem appropriate, retain a professional search firm and other advisors to identify potential

believe that our Board as a whole should encompass a range of talent, skill, and expertise enabling it to provide sound guidance with

respect to our operations and interests.

Our independent directors evaluate all candidates to our Board by reviewing their biographical

information and qualifications.

of Business Conduct and Ethics and Corporate Governance Guidelines

Governance Guidelines .

To further our commitment to sound governance, our Board has adopted the Corporate Governance Guidelines to

ensure that the necessary policies and procedures are in place to facilitate the Board’s review and make decisions with respect

to the Company’s business operations that are independent from management.

The Corporate Governance Guidelines set forth the practices

regarding Board and committee composition, selection and performance evaluations;

Board meetings;

director qualifications and expectations,

including with respect to continuing education obligations;

and management succession planning, including for the CEO.

of Business Conduct and Ethics .

We maintain a Code of Business Conduct and Ethics (the “Code of Conduct”) that is applicable

to all of our directors, officers and employees, including our Chairperson, CEO and other members of management.

The Code of Conduct

sets forth standards of ethical business conduct, including conflicts of interest, compliance with applicable laws, rules and regulations,

timely and truthful disclosure, protection and proper use of our assets and reporting mechanisms for illegal or unethical behavior.

Code of Conduct also satisfies the requirements for a code of ethics as defined by Item 406 of Regulation S-K promulgated by the SEC.

If the Company ever were to amend or waive any provision of the Code of Conduct and that applies to the Company’s principal executive

officer, principal financial officer, principal accounting officer or any person performing similar functions, the Company intends to

satisfy its disclosure obligations, if any, with respect to any such waiver or amendment by posting such information on its website set

forth above rather than by filing a Current Report on Form 8-K.

Amendments to the Code of Conduct must be approved by our Board and will

be promptly disclosed (other than technical, administrative or non-substantive changes) on our website.

A copy of the Code of Conduct

will be provided free of charge by making a written request and mailing it to our corporate headquarters offices to the attention of

our Compliance Manager.

Section 16(a) Reports

16(a) of the Exchange Act requires executive officers, directors and persons who beneficially own more than 10% of a company’s

common stock to file initial reports of ownership (Forms 3) and reports of changes in ownership (Forms 4 and 5) with the SEC.

on our review of copies of such reports and on written representations from our executive officers and directors, we believe that none

of our executive officers and directors complied with their Section 16(a) filing requirements during our fiscal year ended December 31,

2022 following the Operational Cessation.

Executive Compensation.

The information required by

this Item is incorporated by reference to the applicable information in our definitive proxy statement, which will be filed no later than

120 days after the close of the fiscal year covered by this Annual Report.

section discusses the material components of the executive compensation program for the executive officers of Lottery.com who were “named

executive officers,” or NEOs for fiscal 2022.

This discussion may contain forward-looking statements that are based on our current

plans, considerations, expectations and determinations regarding future compensation programs.

Actual compensation programs that we adopt

may differ materially from the existing and currently planned programs summarized or referred to in this discussion.

an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting

companies” as such term is defined in the rules promulgated under the Securities Act, which, in general, require compensation disclosure

for our principal executive officer and its two other most highly compensated executive officers, referred to herein as our NEOs.

primary objectives of our executive compensation programs are to attract and retain talented executives to effectively manage and lead

Our NEOs for fiscal 2022 are:

former CEOs, Tony DiMatteo and Sohail S.

former executive officers, Edward Moffly, Ryan Dickinson and Matthew Clemenson.

Compensation Table

following table provides summary information concerning compensation of our named executive officers for services rendered to us during

the years noted.

and Principal Position

Awards (2) ($)

Incentive Plan Compensation ($)

Other Compensation ($)

CFO and President

Matthew Clemenson

Amounts reflect the NEO’s base salary earned during the

fiscal year presented.

Amount represents the aggregate grant date fair value of restricted

share awards (“Restricted Shares”) made to the named executive officer computed in accordance with Financial Accounting Standards

Codification Topic 718, Compensation - Stock Compensation (“Topic 718”).

As required by SEC rules, awards are reported in

the year of grant.

For more information, see “ Narrative Disclosure to Summary Compensation Table — Supplemental Table ”

Disclosure to Summary Compensation Table

October 28, 2021, AutoLotto awarded 778,250 restricted shares of common stock (which were exchanged for 2,339,286 restricted shares of

Common Stock (“Restricted Shares”) in connection with the Business Combination Closing) to Mr.

Dickinson and 155,809 restricted

shares of common stock (which were exchanged for 468,335 Restricted Shares in connection with the Business Combination Closing) to Ms.

Lever, in each case, under the AutoLotto, Inc.

2015 Stock Option/Stock Issuance Plan (the “2015 Plan”) (together, such equity

grants are referred to herein as the “Fiscal 2021 Equity Awards”).

Fiscal 2021 Equity Awards rewarded Mr.

Dickinson and Ms.

Lever for their respective service to the Company during a critical period for

the Company and as a result of their significant efforts in growing the Company’s business and preparing the Company to be a public

company, as well as for completing the Business Combination during fiscal 2021.

In particular, Mr.

Dickinson joined the Company in June

2018, serving the Company for over three years, including through the Business Combination process, but had not previously received equity

compensation for his services to the Company and previously had no equity in the Company.

Lever joined the Company in March 2021,

heading the Company’s legal function through the Business Combination process, without previously receiving any grant of equity

for her services.

Dickinson’s Restricted Shares vest in full six months following the Business Combination Closing, or on April 29, 2022.

Dickinson’s Service terminates for any reason, all unvested Restricted Shares at the time of such termination will be

respect to Ms.

Lever’s grant:

Lever’s Restricted Shares are subject to time vesting, with 25% (or 58,542 Restricted Shares) vesting on October 28,

2022 (the one year anniversary of the Grant Date) and the remaining 75% vesting monthly over the subsequent 36 month period (with

4,878 Restricted Shares vesting each month).

Lever’s Restricted Shares are subject to performance vesting, with 79,617 Restricted Shares (or 34%) vesting six months

following the Business Combination Closing, or on April 29, 2022, and 154,550 of her Restricted Shares (or 66%) vesting based on

stock price performance hurdles, with half of such shares vesting if the stock price equals or exceeds $14.50 for any 20 trading

days in any 30 consecutive day trading period during the one year period following the Business Combination Closing and the other

half vesting if the stock price equals or exceeds $16.00 for any 20 trading days in any 30 consecutive day trading period during

the one year period following the Business Combination Closing.

In the event that one or both closing price goals are not satisfied

within 12 months following the Business Combination Closing, the remaining unvested performance-vested Restricted Shares will vest

monthly over the 36 month period commencing with the 13 month anniversary of the Business Combination Closing, or on November 29,

the event Ms.

Lever’s service terminates for any reason, all unvested Restricted Shares at the time of such termination will be

There were no equity awards granted to our named executive officer during

salaries are generally set at levels deemed necessary to attract and retain our executives.

We provide each named executive officer with

a base salary for the services that the executive officer performs for us.

This compensation component constitutes a stable element of

compensation while other compensation elements may be variable.

Base salaries are generally reviewed annually and may be increased based

on any number of factors at the discretion of the Compensation Committee, including the individual performance of the named executive

officer, company performance, any change in the executive’s position within our business, the scope of their responsibilities and

For fiscal 2022, the amounts earned by our named executive officers are shown in the Summary Compensation Table above.

addition to base salaries, the named executive officers may receive discretionary annual bonuses, guaranteed and/or retention

bonuses in the discretion of the Compensation Committee.

Our NEOs did not earn any cash bonuses during fiscal 2020 or fiscal 2021;

however, during fiscal 2022, the Compensation Committee in its discretion awarded one-time retention bonuses to each of Messrs.

DiMatteo, Dickinson and Clemenson, who each received a cash award of $227,740.

bonuses are being reported as fiscal 2022 compensation in the Summary Compensation Table above.

Benefits, and Termination and Change in Control Provisions at December 31, 2021 and 2020

were no pension or retirement benefits pursuant to any existing plan provided or contributed to by the Company or any of its subsidiaries.

In addition, there were no termination and change in control provisions in effect for our NEOs.

Equity Awards at December 31, 2022

of our named executive officers have any outstanding equity awards.

Any outstanding equity awards were forfeited as of the date of their

resignation or separation from the Company.

February 2022, our Board approved a Non-Employee Director Compensation Program generally providing for an annual cash fee of $62,000,

an annual equity grant of restricted stock units with an award value of $65,000, and an initial equity grant of restricted stock units

with an award value of $85,000.

Notwithstanding this program adopted by our Board, no cash fees were paid to our directors during fiscal

2022 and all outstanding equity awards were forfeited in connection with director resignations from the Board.

following table sets forth the total compensation paid to each of our non-employee directors for their service on the Board during fiscal

or Paid in Cash ($)

Barney Battles(2)

Matthew McGahan(3)

Richard Kivel(4)

Lisa Borders(5)

Steven Cohen(5)

Joseph Kaminkow(6)

William Thompson (7)

Amer Rustom(8)

Vladimir Klechtchev(9)

Naila Chowdhury(10)

all non-employee directors who served on our Board during fiscal 2022.

All stock awards granted to our directors during fiscal 2021

were forfeited in connection with the director resignations from the Board noted below.

Battles was appointed to our Board on November 3, 2022.

Battles did not receive compensation for his service on the Board during

McGahan was appointed to our Board on October 19, 2022.

McGahan did not receive compensation

for his service on the Board during fiscal 2022.

Kivel served on our Board until November 4, 2022.

Cohen and Ms.

Borders served on our Board until September 2, 2022.

Kaminkow resigned from our Board on June 9, 2022.

Thompson served on our Board from March 10, 2022 to September 2, 2022.

Rustom served on our Board from September 12, 2022 to November 23, 2022.

Rustom did not

receive compensation for his service on the Board during fiscal 2022.

Klechtchev served on our Board from September 12, 2022 to October 19, 2022.

Klechtchev did not receive compensation for his service

on the Board during fiscal 2022.

Chowdhury served on our Board from November 3, 2022 to March 9, 2023.

Chowdhury did not receive compensation for his service on the

Board during fiscal 2022.

Committee Interlocks and Insider Participation

of the individuals who served as a member of the Compensation Committee during fiscal 2022 is, or has ever been, an officer or employee

of the Company or any of its subsidiaries, or has or had any relationship with the Company requiring disclosure under Item 404 of Regulation

S-K under the Exchange Act.

In addition, during the last fiscal year, no executive officer of the Company served as a member of the board

of directors or the compensation committee of any other entity that has or has had one or more executive officers serving on our Board

or our Compensation Committee.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by

this Item is incorporated by reference to the applicable information in our definitive proxy statement, which will be filed no later than

120 days after the close of the fiscal year covered by this Annual Report.

following table shows information with respect to the beneficial ownership of our common stock as of June 15, 2023, for:

person known to us to own beneficially 5% or more of our outstanding common stock;

of our directors or director nominees;

of our directors and executive officers as a group.

of June 15, 2023, there were 50,794,707 shares of our common stock outstanding.

Except as indicated by footnote and subject to community

property laws where applicable, to our knowledge, the persons named in the table below have sole voting and investment power with respect

to all shares of common stock shown as beneficially owned by them:

amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial

ownership of securities.

Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has

or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security.

is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60

Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage,

but not for purposes of computing any other person’s percentage.

Under these rules, more than one person may be deemed to be a

beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has

no economic interest.

NAME OF BENEFICIAL OWNER

AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP

PERCENT OF COMMON STOCK OUTSTANDING

DIRECTORS, NAMED EXECUTIVE OFFICERS AND 5% STOCKHOLDERS (1)

Tony DiMatteo(2)

Matt Clemenson(3)

Ryan Dickinson

Mark Gustavson

Barney Battles

Matthew McGahan

Nick Kounoupias

Suhail Quraeshi

Edward Moffly

Woodford Eurasia Assets Ltd.

DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (FOUR PERSONS)

business address of each of these stockholders is c/o Lottery.com Inc., 20808 State Hwy 71 W, Unit B, Spicewood, TX 78669.

shown are held by ALD Holdings Group, LLC (“ALD Holdings”).

DiMatteo may be deemed to beneficially own the shares

held by ALD Holdings.

shown are held by MC Holdings, LLC (“MC Holdings”).

Clemenson may be deemed to beneficially own the shares held by

Compensation Plan Information

following table summarizes share and exercise price information about the Company’s equity compensation plans as of December 31,

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights

Weighted Average Exercise Price of Outstanding Options, Warrants and Rights

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans

Equity Compensation plans approved by security holders (1)

Relates only to the Lottery.com 2021 Incentive Plan.

connection with the Business Combination, the Board and stockholders approved the Lottery.com 2021 Incentive Plan, which enables the

Company to grant non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock

units, unrestricted stock, other share based awards and cash awards to directors, employees, consultants and advisors to improve the

ability of the Company to attract and retain key personnel upon whom the Company’s sustained growth and financial success depend,

by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company.

Certain Relationships and Related Transactions, and Director Independence.

The information required by

this Item is incorporated by reference to the applicable information in our definitive proxy statement, which will be filed no later than

120 days after the close of the fiscal year covered by this Annual Report.

Agreement with Master Goblin Games, LLC

March 2020, the Company entered into a service agreement (as amended, the “Service Agreement”), with Master Goblin Games,

LLC (“Master Goblin”), an entity that is wholly owned by our President and CFO, Ryan Dickinson.

Master Goblin leases retail

locations in certain U.S.

jurisdictions from which it operates tabletop game retail stores and, ancillary to such retail operations,

acts as sales agent or retailer licensed by the state lottery commission of such jurisdiction to sell lottery game tickets from such

retail stores.

The Company acquires lottery games as requested by users from Master Goblin on a non-exclusive basis in such jurisdictions.

to the Service Agreement, Master Goblin is authorized and approved by the Company to incur up to $100,000 in initial expenses per location

for the commencement of operations at each location, including, without limitation, tenant improvements, furniture, inventory, fixtures

and equipment, security and lease deposits, and licensing and filing fees.

Similarly, pursuant to the Service Agreement, during each

month of operation, Master Goblin is authorized to submit to the Company for reimbursement on-going expenses of up to $5,000 per location

for actually incurred lease expenses.

The initial expenses are submitted by Master Goblin to the Company upon Master Goblin securing

a lease, and leases are only secured by Master Goblin in any location upon request of the Company.

On-going expenses are submitted by

Master Goblin to the Company for reimbursement on a monthly basis, subject to offset.

To the extent Master Goblin has a positive net

income in any month, exclusive of the sale of lottery games, such net income reduces or eliminates such reimbursable expenses for that

In addition, from time to time Master Goblin may incur certain additional reimbursable expenses for the benefit of the Company.

The Company paid Master Goblin an aggregate of approximately $440,000 and $800,000, including expense reimbursements under the Service Agreement

and additional reimbursable expenses, as of December 31, 2022 and 2021, respectively.

Rights Agreement

Simultaneously

with the closing of the Business Combination on October 29, 2021 (the “Business Combination Closing”), the Company entered

into an investor rights agreement (the “Investor Rights Agreement”) with the initial stockholders of Trident Acquisition

and certain stockholders of AutoLotto, including Lawrence Anthony DiMatteo III, our former chief executive officer, and Matthew

Clemenson, our former chief revenue officer (collectively, the “Stockholder Parties”).

Pursuant to the Investor Rights Agreement,

such parties agreed to vote or cause to be voted all shares owned by them or take such other necessary action to ensure that (i) our

Board was made up of at least five directors at Closing, (ii) one director nominated by the Initial Stockholders (the “Initial

Stockholders Director”) and the remaining directors nominated by the AutoLotto stockholders (the “AutoLotto Directors”)

would be elected to our initial Board, with the Initial Stockholders Director designated as a Class II director, and (iii) following

the nomination of our initial Board, neither the Initial Stockholders nor the AutoLotto Stockholders shall have ongoing nomination rights,

except that in the event that a vacancy is created on our Board at any time by the death, disability, resignation or removal of the Initial

Stockholders Director or any AutoLotto Director during their initial term, then (x) the AutoLotto Stockholders, with respect to a vacancy

created by the death, disability, resignation or removal of an AutoLotto Director, or (y) the Initial Stockholders, with respect to a

vacancy created by the death, disability, resignation or removal of an Initial Stockholders Director, will be entitled to designate an

individual to fill the vacancy.

In addition, the Investor Rights Agreement provides that we will register for resale under the Securities

Act, certain shares of Common Stock and other equity securities that are held by the parties thereto from time to time as well as other

customary registration rights for the parties thereto.

The Investor Rights Agreement was terminated in connection with the Woodford Loan

Independence and Independence Determinations

Board has established the Corporate Governance Guidelines to assist it in making independence determinations for each director of our

The Corporate Governance Guidelines define an “independent director” to align with the definition provided under the

corporate governance requirements of the Nasdaq Stock Market LLC (collectively, the “Nasdaq Rules”).

Under Nasdaq Rule 5605(a)(2),

a director is not independent unless the Board affirmatively determines that they do not have a direct or indirect relationship which,

in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director

of the Company.

Directors who serve on the Audit Committee and Compensation Committee are subject to the additional independence requirements

under applicable SEC rules and Nasdaq Rules.

is the policy of the Board to make affirmative independence determinations for all directors at least annually in connection with the

preparation of the Company’s proxy statement.

In making independence determinations, the Board will broadly consider all relevant

facts and circumstances in addition to the requirements of Nasdaq Rule 5605(a)(2).

Board undertook its annual review of director independence.

As a result of this review, the Board affirmatively determined that Messrs.

McGahan, Battles and Kounoupias are independent within the meaning of the Nasdaq Rules, including with respect to their respective committee

The Board has determined that each member of the Audit Committee is “independent” for purposes of service on the

Audit Committee in accordance with Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

and that each member of the Compensation Committee is “independent” for purposes of service on the Compensation Committee

in accordance with Section 10C(a)(3) of the Exchange Act.

Principal Accounting Fees and Services.

The information required by

this Item is incorporated by reference to the applicable information in our definitive proxy statement, which will be filed no later than

120 days after the close of the fiscal year covered by this Annual Report.

September 27, 2022, Armanino LLP (“Armanino”) resigned as the independent registered public accounting firm of the Company,

effective immediately.

On October 7, 2022, the Audit Committee approved the engagement of Yusufali & Associates, LLC (“Yusufali”)

as the Company’s new independent registered public accounting firm, effective immediately, for the fiscal year ended December 31,

The following table sets forth the aggregate fees billed to us for the fiscal year ended December 31, 2022 by Yusufali:

Audit Fees (1)

Audit-Related Fees (2)

All Other Fees (4)

Fees represent the aggregate fees billed for professional services rendered for the audits of the annual financial statements and

the Company’s internal control over financial reporting;

for review of the consolidated financial statements included in the

Company’s Quarterly Reports on Form 10-Q filings;

for the audits and reviews of certain of our subsidiaries;

and for services

that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings.

Audit-Related

Fees represent the aggregate fees billed for assurance and other services related to the performance of the audit or review of our

consolidated financial statements and that are not reported under paragraph (1) above.

These services include due diligence related

to mergers and acquisitions and consultation concerning financial accounting and reporting standards.

Fees represent the aggregate fees billed for international tax compliance, tax advice, and tax planning services.

Other Fees represent fees billed for all other services.

Committee Pre-Approval Procedures for Independent Registered Public Accounting Firm

Audit Committee has sole authority to engage and determine the compensation of our independent registered public accounting firm.

Audit Committee also is directly responsible for evaluating the independent registered public accounting firm, reviewing and evaluating

the lead partner of the independent registered public accounting firm and overseeing the work of the independent registered public accounting

In addition, and pursuant to its charter and the Company’s Audit and Non-Audit Services Pre-Approval Policy, the Audit Committee

annually reviews and pre-approves the audit services to be provided by Armanino LLP, and also reviews and pre-approves the engagement

of Armanino LLP for the provision of other services during the year, including audit-related, tax and other permissible non-audit.

each proposed service, the Company’s management and the independent registered public accounting firm are required to jointly submit

to the Audit Committee detailed supporting documentation at the time of approval to permit the Audit Committee to make a determination

as to whether the provision of such services would impair the independent registered public accounting firm’s independence, and

whether the fees for the services are appropriate.

in Independent Registered Public Accounting Firm

of Armanino LLP

previously disclosed in the Current Report on Form 8-K filed with the SEC on October 12, 2022 (the “October 12, 2022 Form 8-K”),

the Audit Committee approved on October 7, 2022 the engagement of Yusufali as the Company’s independent registered public accounting

firm for the fiscal year ended December 31, 2022, effective on the same day.

As previously disclosed in the Current Report on Form 8-K

filed with the SEC on October 6, 2022 (the “October 6, 2022 Form 8-K”), Armanino resigned as the Company’s independent

registered public accounting firm on September 27, 2022, effectively immediately.

previously disclosed in the October 6, 2022 Form 8-K, Armanino’s report on the Company’s

financial statements for the fiscal years ended December 31, 2021 and December 31, 2020 did

not contain an adverse opinion or disclaimer of opinion, nor was it qualified or modified

as to uncertainty, audit scope or accounting principles.

In addition, there were no disagreements

between the Company and Armanino on accounting principles or practices, financial statement

disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of

Armanino, would have caused them to make reference to the disagreement in their report for

such period, or any subsequent interim period preceding Armanino’s resignation.

on July 20, 2022, the Company was advised by Armanino, its registered independent public

accountant for the fiscal year ended December 31, 2021, that the audited financial statements

for the year ended December 31, 2021, and the unaudited financial statements for the quarter

ended March 31, 2022, should no longer be relied upon.

Armanino advised and determined subsequent

to the audit and review of such financial statements, respectively, that a Company subsidiary

entered into a line of credit in January 2022 that was not disclosed in the footnotes to

the December 31, 2021 financial statements and was not recorded in the March 31, 2022 financial

previously disclosed in the October 6, 2022 Form 8-K, during the Company’s two audited fiscal years ended December 31, 2021 and

December 31, 2020, and the subsequent interim period through September 27, 2022, Armanino identified the following reportable events

of the type described in Item 304(a)(1)(v) of Regulation S-K:

based on Armanino’s evaluation of the facts and circumstances pertaining

to matters disclosed in the Company’s recent Form 8-K filings regarding the resignations of certain officers and directors, Armanino

is unable to rely on the representations of management.

Company provided Armanino with a copy of the foregoing disclosures and has requested that Armanino furnish the Company with a letter

addressed to the SEC stating whether it agrees with the statements made by the Company set forth above.

A copy of Armanino’s letter,

dated October 7, 2022, was filed as Exhibit 16.1 to the amendment to the October 12, 2022 Form 8-K.

of Marcum LLP in connection with the Business Combination

previously disclosed in the Current Report on Form 8-K filed with the SEC on November 15, 2021 (the “November 15, 2021 Form 8-K”),

following the Business Combination Closing, the Audit Committee engaged Armanino LLP as the Company’s independent registered public

accounting firm for the fiscal year ending December 31, 2021 and approved the dismissal of Marcum LLP as the Company’s independent

registered public accounting firm on November 10, 2021, effective on the same day.

Prior to the Business Combination, Marcum LLP served

as TDAC’s independent registered public accounting firm and Armanino LLP served as AutoLotto’s independent registered public

accounting firm.

reports of Marcum LLP on the Company’s financial statements as of and for the two most

recent audited fiscal years ended December 31, 2020 and December 31, 2019 did not contain

an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties,

audit scope or accounting principles.

the Company’s two audited fiscal years ended December 31, 2020 and December 31, 2019, and the subsequent interim period through

November 10, 2021, there were no disagreements between the Company and Marcum LLP on any matter of accounting principles or practices,

financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum LLP, would have

caused it to make reference to the subject matter of the disagreements in its reports on the Company’s financial statements for

the Company’s two audited fiscal years ended December 31, 2020 and December 31, 2019, and the subsequent interim period through

November 10, 2021, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange

Company provided Marcum LLP with a copy of the foregoing disclosures and has requested that Marcum furnish the Company with a letter

addressed to the SEC stating whether it agrees with the statements made by the Company set forth above.

A copy of Marcum’s letter,

dated November 12, 2021, was filed as Exhibit 16.1 to the November 15, 2021 Form 8-K.

Exhibits, Financial Statement Schedules.

Financial Statements

The consolidated financial

statements listed in the accompanying Index to Consolidated Financial Statements are filed as part of this Annual Report.

The exhibits listed below

are filed as part of this Annual Report or incorporated herein by reference to the location indicated.

Exhibit Number

consolidated financial statements listed in the accompanying Index to Consolidated Financial Statements are filed as part of this Report.

exhibits listed below are filed as part of this Report or incorporated herein by reference to the location indicated.

Business Combination Agreement, dated as of February 21, 2021, by and among Trident Acquisitions Corp., Trident Merger Sub II Corp., and AutoLotto, Inc.

5 unchanged sentences

Warrant Agreement, dated as of May 29, 2018, between TDAC and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K, filed by Lottery.com with the SEC on June 4, 2018).

Description of Capital Stock.

Description of Capital Stock (incorporated by reference to Exhibit 4.2 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Letter Agreement among Trident Acquisitions Corp., Trident Acquisitions Corp.’s officers, directors and stockholders (incorporated by reference to Exhibit 10.2 to Amendment No.

15 unchanged sentences

(incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).

Exhibit Number

Employment Agreement, dated as of February 21, 2021, by and between Matthew Clemenson and AutoLotto, Inc.

(incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).

Amendment to Employment Agreement, dated March 23, 2022, by and between

Matthew Clemenson and Lottery.com.

Amendment to Employment Agreement, dated March 23, 2022, by and between Matthew Clemenson and Lottery.com (incorporated by reference to Exhibit 10.9 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Employment Agreement, dated as of February 21, 2021, by and between Ryan Dickinson and AutoLotto, Inc.

(incorporated by reference to Exhibit 10.5 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).

Amendment to Employment Agreement, dated March 23, 2022, by and between

Ryan Dickinson and Lottery.com.

Amendment to Employment Agreement, dated March 23, 2022, by and between Ryan Dickinson and Lottery.com (incorporated by reference to Exhibit 10.11 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Employment Agreement, dated as of March 19, 2021, by and between Kathryn Lever and AutoLotto, Inc.

(incorporated by reference to Exhibit 10.12 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Amendment to Employment Agreement, dated as of March 28, 2022, by and between Kathryn Lever and Lottery.com Inc.

(incorporated by reference to Exhibit 10.13 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).

5 unchanged sentences

333-257734), filed by Lottery.com with the SEC on October 5, 2021).

Form of Option Award Agreement under the Lottery.com 2021 Incentive Plan.

Form of Restricted Stock Award Agreement under the Lottery.com 2021 Incentive Plan.

Form of Director Restricted Stock Award Agreement under the Lottery.com

2021 Incentive Plan.

Form of Option Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.18 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Form of Restricted Stock Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.19 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Form of Director Restricted Stock Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.20 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).

Resignation and Release Agreement, dated July 22, 2022, by and between Lottery.com and Lawrence Anthony DiMatteo III (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on July 22, 2022).

Consulting Agreement by and between AutoLotto, Inc.

dba Lottery.com and Simpexe, LLC, specifically Harry Dhaliwal, dated July 1, 2022 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on July 6, 2022).

Master Affiliate Agreement, dated as of October 2, 2021 (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 16, 2022).

Loan Agreement (Deed), dated December 7, 2022, between Lottery.com and Woodford Eurasia Assets Ltd, as lender (incorporated by reference to Exhibit 10.24 of the Annual Report on Form 10-K/A filed by Lottery.com with the SEC on May 10, 2023).

Loan Agreement Deed, Debenture Deed and Securitization, dated December 7, 2022, between Lottery.com and Woodford Eurasia Assets Ltd, as security holder (incorporated by reference to Exhibit 10.25 of the Annual Report on Form 10-K/A filed by Lottery.com with the SEC on May 10, 2023).

Business Loan Agreement dated January 4, 2022, between Autolotto, Inc.

and The Provident Bank (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 22, 2023).

$30,000,000 Promissory Note dated January 4, 2022, between Autolotto, Inc.

and The Provident Bank (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 22, 2023).

Amendment and Restatement Agreement in respect of Loan Agreement (Deed) dated 7 December 2022, between Lottery.com and Woodford Eurasia Assets Ltd.

Letter from Marcum LLP to the SEC, dated November 12, 2021 (incorporated by reference to Exhibit 10.13 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 15, 2021).

Letter from Armanino LLP to the SEC, dated October 7, 2022 (incorporated by reference to Exhibit 16.1 of Amendment No.

1 to the Current Report on Form 8-K filed by Lottery.com with the SEC on October 12, 2022.

List of Subsidiaries of Lottery.com Inc.

(incorporated by reference to Exhibit 21.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).

Powers of Attorney (included on the signature page of this Annual Report).

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer Pursuant to 18 U.S.C.

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Inline XBRL Taxonomy Extension Label Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

† Certain schedules and

exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

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schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The registrant hereby undertakes to furnish

1 unchanged sentence

Securities and Exchange Commission.

# Indicates management

contract or compensatory plan or arrangement.

portions of this exhibit have been omitted pursuant to Regulation S-K Item 601(b)(10)(iv).

The Registrant agrees to furnish an unredacted

copy of the exhibit to the SEC upon its request.

management contract or compensatory plan or arrangement.

Form 10-K Summary

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on

its behalf by the undersigned, thereunto duly authorized .

LOTTERY.COM INC.

April 1, 2022

/s/ Lawrence Anthony DiMatteo III

Lawrence Anthony DiMatteo III

Chairperson and Chief Executive Officer

POWER OF ATTORNEY

ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ryan Dickinson and Kathryn Lever,

and each or any one of them, their true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution,

for them and in their name, place and stead, in any and all capacities, to sign any and all amendments to this Report, and to file

the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission,

granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every

act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as they might or could

do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes

or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements

of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant

in the capacities and on the dates indicated.

/s/ Lawrence Anthony DiMatteo III

Chairperson and Chief Executive Officer

April 1, 2022

Lawrence Anthony DiMatteo III

(principal executive officer)

/s/ Matthew Clemenson

Chief Revenue Officer and Director

April 1, 2022

Matthew Clemenson

/s/ Ryan Dickinson

Chief Financial Officer, President and Treasurer

April 1, 2022

Ryan Dickinson

(principal financial officer and principal accounting officer)

/s/ Lisa Borders

April 1, 2022

/s/ Steven Cohen

April 1, 2022

/s/ Joseph Kaminkow

April 1, 2022

Joseph Kaminkow

/s/ Richard Kivel

April 1, 2022

Richard Kivel

/s/ William C.

Thompson, Jr.

April 1, 2022

Thompson, Jr.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Armanino LLP, Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020 F-4

Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 2021 and 2020 F-5

Consolidated Statements of Equity for the Years ended December 31, 2021 and 2020 F-6

Consolidated Statements of Cash Flows for the Years ended December 31, 2021 and 2020 F-7

Notes to Consolidated Financial Statements F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Stockholders

Lottery.com Inc.

Spicewood, Texas

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheets of Lottery.com Inc.

(the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements

of operations and comprehensive loss, equity, and cash flows for each of the years in the two-year period ended December

31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations

and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally

accepted in the United States of America.

Basis for Opinion

The Company’s management is responsible

for these consolidated financial statements.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

/s/ Armanino LLP

We have served as the Company’s auditor

Bellevue, Washington

April 1, 2022

LOTTERY.COM INC.

CONSOLIDATED BALANCE SHEETS

Restricted cash

Accounts receivable

Prepaid expenses

Other current assets

Total current assets

Intangible assets, net

Property and equipment, net

$ 147,151,478

Trade payables

Deferred revenue

Convertible debt, net - current

Notes payable - current

Accrued interest

Accrued and other expenses

Total current liabilities

Convertible debt, net - non current

Other long term liabilities

Total liabilities

Commitments and contingencies (Note 11)

Controlling Interest

Preferred Stock, par value $ 0.001 , 1,000,000 shares authorized, none issued and outstanding

Common stock, par value $0.001, 500,000,000 shares authorized, 46,808,251 and 22,658,006 issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

( 106,232,518 )

( 95,140,568 )

Total Lottery.com Inc.

stockholders’ equity

Noncontrolling interest

Total Liabilities & Equity

$ 147,151,478

The accompanying notes are an integral part of these consolidated financial

CONSOLIDATED STATEMENTS

OF OPERATIONS AND COMPREHENSIVE LOSS

Years Ended December 31,

Cost of revenue

Operating expenses:

Personnel costs

Professional fees

General and administrative

Depreciation and amortization

Total operating expenses

Income (loss) from operations

$ ( 3,710,852 )

Other expenses

Interest expense

Other expense

Total other expenses, net

Net loss before income tax

$ ( 12,506,715 )

$ ( 5,811,863 )

Income tax expense (benefit)

( 1,551,689 )

( 10,955,026 )

( 5,812,663 )

Other comprehensive loss

Foreign currency translation adjustment, net

Comprehensive loss

( 10,955,681 )

( 5,812,663 )

Net income attributable to noncontrolling interest

Net loss attributable to Lottery.com Inc.

( 11,092,605 )

( 5,812,663 )

Net loss per common share

Basic and diluted

Weighted average common shares outstanding

Basic and diluted

The accompanying notes are

an integral part of these consolidated financial statements.

LOTTERY.COM INC.

CONSOLIDATED STATEMENTS OF EQUITY

Preferred Stock

Comprehensive

Total Lottery.com Inc.

Stockholders’

Noncontrolling

Balance as of December 31, 2019

Issuance of common stock

Beneficial conversion feature

of digital securities

Stock-based compensation

Balance as of December 31, 2020

Issuance of common stock upon stock option exercise

Issuance of common stock upon warrant exercise

Effect of reverse capitalization, net

Conversion of convertible debt

Issuance of common stock in business acquisition

Beneficial conversion feature on notes payable

Issuance of digital securities

Stock-based compensation

interest in business acquisition

Other comprehensive loss

Net income (loss)

Balance as of December 31, 2021

( 106,232,518

The accompanying notes are an integral part of these consolidated financial

STATEMENTS OF CASH FLOWS

Cash flow from operating activities

Net loss attributable to Lottery.com Inc.

$ ( 11,091,950 )

$ ( 5,812,663 )

Adjustments to reconcile net loss to net cash used in operating activities:

Net income attributable to noncontrolling interest

Depreciation and amortization

Non-cash interest expense

Stock-based compensation expense

Forgiveness of PPP Loan

Loss on extinguishment of debt

Issuance of debt to pay expenses

Income tax valuation allowance

( 1,653,067 )

Changes in assets & liabilities:

Accounts receivable

( 21,636,324 )

Prepaid expenses

Other current assets

Trade payables

( 1,171,557 )

Deferred revenue

( 7,101,258 )

Accrued interest

Accrued and other expenses

Other long term liabilities

Net cash provided by operating activities

Cash flow from investing activities

Purchases of property and equipment

Purchases of intangible assets

( 5,192,050 )

Investment in subsidiary, net

( 10,012,540 )

Net cash used in investing activities

( 15,232,760 )

Cash flow from financing activities

Issuance of digital securities

Proceeds from exercise of options and warrants

Proceeds from issuance of convertible debt

Payment of debt issuance cost

( 1,115,031 )

Proceeds from the issuance of notes payable

Proceeds from reverse recapitalization

Principal payments on debt

( 11,647,713 )

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net change in net cash and restricted cash

Cash and restricted cash at beginning of period

Cash and restricted cash at end of period

SUPPLEMENTAL DISCLOSURES:

Interest paid in cash

Taxes paid in cash

Non cash investing and financing activities

Conversion of convertible debt into common stock

Capitalization of interest from loan extinguishment

Purchase of intangible assets through the issuance of convertible debt

Issuance of convertible debt in exchange for outstanding liabilities

Issuance of convertible debt in exchange for notes payable

Common stock issued as part of acquisition

Beneficial conversion feature on notes payable

The accompanying notes are an integral part of these consolidated financial

TO CONSOLIDATED FINANCIAL STATEMENTS

of Operations

(formerly Trident Acquisitions Corp) (“TDAC”, “Lottery.com” or “the Company”), was formed as

a Delaware corporation on March 17, 2016.

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.

In connection with the Business Combination the Company moved its headquarters from New York, New York to Spicewood,

Company is a leading provider of domestic and international lottery products and services.

As an independent third-party lottery game

service, the Company offers a platform that it developed and operates to enable the remote purchase of legally sanctioned lottery games

and abroad (the “Platform”).

The Company’s revenue generating activities are focused on (i) offering the

Platform via the 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 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 to enable commercial partners in permitted U.S.

and international jurisdictions to purchase certain legally operated

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

delivering global lottery data, such as winning numbers and results, to commercial digital subscribers and provide access to other proprietary,

anonymized transaction data pursuant to multi-year contracts (“Data Service”).

provider of lottery products and services, the Company is required to comply, and its business is subject to, regulation in each jurisdiction

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

it must also comply with the requirements of federal and other domestic and foreign regulatory bodies and governmental authorities in

jurisdictions in which the Company operates or with authority over its business.

The Company’s 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 the interpretation of such laws.

30, 2021, the Company acquired interest in Medios Electronicos y de Comunicacion, S.A.P.I de C.V.

(“Aganar”) and JuegaLotto,

(“JuegaLotto”).

Aganar has been operating in the licensed iLottery market in Mexico since 2007 as an online

retailer of Mexican National Lottery draw games, instant digital scratch-off games and other games of chance.

JuegaLotto is licensed

by the Mexican federal regulatory authorities to sell international lottery games in Mexico.

Accounting Policies

of Presentation

accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the

United States of America (“ GAAP ”) and include the accounts of the Company and its wholly owned operating subsidiaries.

Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting

principles as found in the Accounting Standards Codification (“ ASC ”) and Accounting Standards Update (“ ASU ”)

of the Financial Accounting Standards Board (“ FASB ”).

All intercompany accounts and transactions have been eliminated

in consolidation.

of Trident Acquisition Corp.

Business Combination

for the October 29, 2021 Business Combination as a reverse recapitalization whereby AutoLotto was deter mined

as the accounting acquirer and Trident Acquisition Corp.

(“TDAC”) as the accounting acquiree.

This determination was primarily

former AutoLotto stockholders having the largest voting interest in Lottery.com Inc.

(“Lottery.com”);

board of directors of Lottery.com having 7 members, and AutoLotto’s former stockholders

having the ability to nominate the majority of the members of the board of directors;

management continuing to hold executive management roles for the post-combination company

and being responsible for the day-to-day operations;

post-combination company assuming the Lottery.com name;

● Lottery.com

maintaining the pre-existing AutoLotto headquarters;

intended strategy of Lottery.com being a continuation of AutoLotto’s strategy.

the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization.

The net assets of TD AC are stated at historical cost, with no goodwill or other intangible assets

TDAC was the legal acquirer in the Business Combination, because AutoLotto was determined as the accounting acquirer, the

historical financial statements of AutoLotto became the historical financial statements of the combined company, upon the consummation

of the Business Combination.

As a result, the financial statements included in t he accompanying consolidated

financial statements reflect (i) the historical operating results of AutoLotto prior to the Business Combination;

(ii) the combined results

of the Company and AutoLotto following the closing of the Business Combination;

(iii) the assets and liabilities of AutoLotto at their

historical cost;

and (iv) the Company’s equity structure for all periods presented.

connection with the Business Combination transaction, we have converted the equity structure for the periods prior to the Business Combination

to reflect the number of shares of the Company’s common stock issued to AutoLotto ’ s

stockholders in connection with the recapitalization transaction.

As such, the shares, corresponding capital amounts and earnings per

share, as applicable, related to AutoLotto convertible preferred stock and common stock prior to the Business Combination have been retroactively

converted by applying the exchange ratio established in the Business Combination.

Non-controlling

interests represent the proportionate ownership of Aganar and JuegaLotto, held by minority members and reflect their capital investments

as well as their proportionate interest in subsidiary losses and other changes in members’ equity, including translation adjustments.

Segment Reporting

segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly

by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance.

Under the provisions

of ASC 280, Segment Reporting, the Company is not organized around specific services or geographic regions.

The Company operates in one

service line, providing lottery products and services .

determined that our Chief Financial Officer is the Chief Operating Decision Maker and he uses financial information, business prospects,

competitive factors, operating results and other non-U.S.

GAAP financial ratios to evaluate our performance, which is the same basis

on which our results and performance are communicated to our Board of Directors.

Based on the information described above and in accordance

with the applicable literature, management has concluded that we are organized and operated as one operating and reportable segment on

a consolidated basis for each of the periods presented.

Concentration

of Credit Risks

instruments that are potentially subject to concentrations of credit risk are primarily cash.

Cash are placed with major financial institutions

deemed to be of high-credit-quality in order to limit credit exposure.

Cash is regularly maintained in excess of federally insured limits

at the financial institutions.

Management believes that the Company is not exposed to any significant credit risk related to cash deposits.

preparation of the financial statements requires management to make estimates and assumptions to determine the reported amounts of assets,

liabilities, revenue and expenses.

Although management believes these estimates are reasonable, actual results could differ from these

The Company evaluates its estimates on an ongoing basis and prepares its estimates on historical experience and other assumptions

the Company believes to be reasonable under the circumstances.

Reclassifications

balances have been reclassified in the accompanying consolidated financial statements to conform to the current year presentation.

reclassifications had no effect on the balances of current or total assets and prior year’s net loss or accumulated deficit.

currency translation

and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S.

Dollars are translated

Dollars using year-end exchange rates.

Sales, costs and expenses are translated at the average exchange rates in effect during

Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss).

and Restricted Cash

December 31, 2021 and 2020, cash comprised of cash deposits, and deposits with some banks exceeded federally insured limits with the

majority of cash held in one financial institution.

Management believes all financial institutions holding its cash are of high credit

quality and does not believe the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking

relationships.

Company had no marketable securities as of December 31, 2021 and December 31, 2020.

of December 31, 2020, restricted cash included $ 6,950,000 escrow deposit related to the Company’s future performance obligations

to provide data access to a third party under a Master Service Agreement dated December 12, 2020.

As of December 31, 2021, the restricted

cash balance was $ 0 as the Company met all requirements in the agreement.

Company through its various merchant providers pre-authorizes forms of payment prior to the sale of digital representation of lottery

games to minimize exposure to losses related to uncollected payments and does not extend credit to the user of the B2C Platform or the

commercial partner of the B2B API, being its customers, in the normal course of business.

The Company estimates its bad debt exposure

each period and records a bad debt provision for accounts receivable it believes it may not collect in full.

The Company did not record

any allowance for uncollectible receivables as of December 31, 2021 and 2020.

The Company has not incurred bad debt expense historically.

expenses consist of payments made on contractual obligations for services to be consumed in future periods.

The Company entered into

an agreement with a third party to provide advertising services and issued equity instruments as compensation for the advertising services.

The Company expenses the service as it is performed.

The value of the services provided were used to value these contracts.

portion of prepaid expenses is included in current assets on the consolidated balance sheets.

August 2, 2018, AutoLotto purchased 186,666 shares of Class A-1 common stock of a third party business development partner representing

4 % of the total outstanding shares of the company.

As this investment resulted in less than 20 % ownership, it was accounted for using

the cost basis method.

and equipment, net

and equipment are stated at cost.

Depreciation and amortization are generally computed using the straight-line method over estimated

useful lives ranging from three to five years .

Leasehold improvements are amortized over the shorter of the lease term or the estimated

useful life of the asset.

Routine maintenance and repair costs are expensed as incurred.

The costs of major additions, replacements and

improvements are capitalized.

Gains and losses realized on the sale or disposal of property and equipment are recognized or charged to

other expense in the consolidated statement of operations.

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

Computers and equipment

Furniture and fixtures

assets (“ROU assets”) represent the Company’s right to use an underlying asset for the lease term and lease liabilities

represent the obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at

commencement date based on the present value of lease payments over the lease term.

Variable lease payments are not included in the calculation

of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period

As most of the leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information

available at commencement date in determining the present value of lease payments.

Otherwise, the implicit rate was used when readily

determinable.

The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will

exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

the available practical expedient, the Company accounts for the lease and non-lease components as a single lease component for all classes

of underlying assets as both a lessee and lessor.

Further, management elected a short-term lease exception policy on all classes of underlying

assets, permitting the Company to not apply the recognition requirements of this standard to short-term leases (i.e.

terms of 12 months or less).

Use Software Development

development costs incurred internally to develop software programs to be used solely to meet our internal needs and applications are

capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software will

be used to perform the intended function.

Additionally, we capitalize qualifying costs incurred for upgrades and enhancements to existing

software that result in additional functionality.

Costs related to preliminary project planning activities, post-implementation activities,

maintenance and minor modifications are expensed as incurred.

Internal-use software development costs are amortized on a straight line

basis over the estimated useful life of the software.

and Other Intangible Assets

represents the excess of the cost of assets acquired over the fair value of the net assets at the date of acquisition.

assets represent the fair value of separately recognizable intangible assets acquired in connection with the Company’s

business combinations.

The Company evaluates its goodwill and other intangibles for impairment on an annual basis or whenever events

or circumstances indicate that an impairment may have occurred in accordance with the provisions of ASC 350, “ Goodwill and

Other Intangible Assets ”.

The Company reviewed for impairment and determined that no impairment indicators exist as of

December 31, 2021 and 2020.

See Footnote 5 for further discussion.

the new standard, Accounting Standards Update (“ASU”) 2014-09, “ Revenue from

Contracts with Customers (Topic 606) ”, the Company recognizes revenues when the following

criteria are met:

(i) persuasive evidence of a contract with a customer exists;

(ii) identifiable performance obligations under the contract

(iii) the transaction price is determinable for each performance obligation;

(iv) the transaction price is allocated to each performance

and (v) when the performance obligations are satisfied.

Revenues are recognized when control of the promised goods or

services is transferred to the customers in an amount that reflects the consideration expected to be entitled to in exchange for those

goods or services.

that fall under this revenue classification include:

The Company’s

performance obligations of delivering lottery games are satisfied at the time in which the digital representation of the lottery game

is delivered to the user of the B2C Platform or the commercial partner of the B2B API, therefore, are recognized at a point in time.

The Company receives consideration for lottery game sales at the time of delivery to the customer, being the user or commercial partner,

as applicable.

There is no variable consideration related to lottery game sales.

As each individual lottery game delivered represents

a distinct performance obligation and consideration for each game sale is fixed, representing the standalone selling price, there is

no allocation of consideration necessary.

In accordance with Accounting Standards

Codification (“ASC”) 606, the Company evaluates the presentation of revenue on a gross versus net basis dependent on if the

Company is a principal or agent.

In making this evaluation, some of the factors that are considered include whether the Company has control

over the specified good or services before they are transferred to the customer.

The Company also assesses if it is primarily responsible

for fulfilling the promise to provide the goods or services, has inventory risk, and has discretion in establishing the price.

of the Company’s transactions, management concluded that gross presentation is appropriate, as the Company is primarily responsible

for providing the performance obligation directly to the customers and assumes fulfilment risk of all lottery game sales as it retains

physical possession of lottery game sales tickets from time of sale until the point of redemption.

The Company also retains inventory

risk an all lottery game sales tickets as they would be responsible for any potential winnings related to lost or unredeemable tickets

at the time of redemption.

Finally, while states has the authority to establish lottery game sales prices, the Company can add service

fees to ticket prices evidencing its ability to establish the ultimate price of the lottery tickets being sold.

associated revenue

The Company’s

performance obligations in agreements with certain customers is to provide a license of intellectual property related to the use of the

Company’s tradename for marketing purposes by partners of the Company.

Customers pay a license fee up front.

The transaction price

is deemed to be the license issue fee stated in the contract.

The license offered by the Company represents a symbolic license which

provides the customer with the right to use the Company’s intellectual property on an ongoing basis with continued support throughout

the term of the contract in the form of ongoing maintenance of the underlying intellectual property.

There is no variable consideration

related to these performance obligations.

marketing credit revenue

The Company’s

performance obligation in agreements with certain customers is to transfer previously acquired affiliate marketing credits (‘credits’).

Customers’ payment for these credits is priced on a per-contract basis.

The performance obligation in these agreements is to provide

title rights of the previously acquired credits to the customer.

This transfer is point-in-time when the revenue is recognized, and there

are no variable considerations related to this performance obligation.

with multiple performance obligations

The Company’s

contracts with customers may include multiple performance obligations.

For such arrangements, management allocates revenue to each performance

obligation based on its relative standalone selling price.

Management generally determines standalone selling prices based on the prices

charged to customers.

records deferred revenue when cash payments are received or due in advance of any performance, including amounts which are refundable.

terms vary by the type and location of the customer and the products or services offered.

The term between invoicing and when payment

is due is not significant.

For certain products or services and customer types, management requires payment before the products or services

are delivered to the customer.

the nature of the Company’s services and contracts, it has no contract assets.

assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions, that are collected

by us from a customer, are excluded from revenue.

of revenue consists primarily of variable costs, comprising (i) the cost of procurement of lottery games, minus winnings to users, additional

expenses related to the sale of lottery games, including, commissions, affiliate fees and revenue shares;

and (ii) payment processing

fees on user fees, including, chargebacks imposed on the Company.

Other non-variable costs included in cost of revenue include affiliate

marketing credits acquired on a per-contract basis.

Stock-based Compensation

October 1, 2019, the Company adopted ASU 2018-07, Compensation – “Stock Compensation (Topic 718):

Improvements to

Nonemployee Share-based Payment Accounting” (“ASC 718”), which addresses aspects of the accounting for

nonemployee share-based payment transactions and accounts for share-based awards to employees in accordance with ASC 718, Stock

Compensation .

Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award,

and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method.

costs are charged to operations when incurred.

Advertising costs for the years ended December 31, 2021 and 2020 were approximately

$ 507,000 and $ 66,000 , respectively.

both financial accounting and tax reporting purposes, the Company reports income and expenses based on the accrual method of accounting.

federal and state income tax purposes, the Company reports income or loss from their investments in limited liability companies on the

consolidated income tax returns.

As such, all taxable income and available tax credits are passed from the limited liability companies

to the individual members.

It is the responsibility of the individual members to report the taxable income and tax credits, and to pay

any resulting income taxes.

Therefore, in relation to the income and losses incurred by the limited liability companies, they have been

consolidated in the Company’s tax return and provision based upon its relative ownership.

taxes are accounted for in accordance with ASC 740, “ Income Taxes ” (“ASC 740”), using the asset and liability

Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to

temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which

these temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in

tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance is provided for those deferred

tax assets for which it is more likely than not that the related benefit will not be realized.

Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (i) the Company

determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position;

and (ii) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount

of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company’s

policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit.

To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits.

the taxing authorities can audit the previous three years of tax returns and in certain situations audit additional years.

tax purposes, the Company’s 2018 through 2021 tax years generally remain open for examination by the tax authorities under the

normal three-year statute of limitations.

For state tax purposes, the Company’s 2017 through 2021 tax years remain open for

examination by the tax authorities under the normal four-year statute of limitations.

Value of Financial Instruments

Company determines the fair value of its financial instruments in accordance with the provisions of ASC 820, Fair Value

Measurements and Disclosures (“ASC 820”) , which establishes a fair value hierarchy that prioritizes

the inputs to valuation techniques used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in

active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs ( Level

3 measurements).

The three levels of the fair value hierarchy under ASC 820 are described below:

1 — Unadjusted quoted prices in active markets that are accessible at the measurement

date for identical, unrestricted assets or liabilities

2 — Quoted prices in markets that are not active, or inputs that are observable, either

directly or indirectly, for substantially the full term of the asset or liability

3 — Valuation is generated from model-based techniques that use significant assumptions

not observable in the market.

These unobservable assumptions reflect our own estimates of

assumptions that market participants would use in pricing the asset or liability.

Determination

of fair val ue and the resulting hierarchy requires the use of observable market data whenever available.

classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement

of fair value.

value of stock options and warrants

uses the Black-Scholes option-pricing model to calculate the fair value of stock options and warrants.

Use of this method requires

management to make assumptions and estimates about the expected life of options and warrants, anticipated forfeitures, the risk-free rate,

and the volatility of the Company’s share price.

In making these assumptions and estimates, management relies on historical market

Accounting Pronouncements

2017, the FASB issued ASU No.

2017-04, Intangibles - Goodwill and other (Topic 350) (“ASU 2017-04”).

ASU 2017-04 simplifies

the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test.

Goodwill impairment will now be the amount

by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated to that reporting

Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is

The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying

The amendments in this ASU are effective for goodwill impairment tests in fiscal years beginning after December 15, 2021, and

early adoption is permitted.

The Company is currently evaluating this new standard and management does not currently believe it will

have a material impact on its consolidated financial statements, depending on the outcome of future goodwill impairment tests.

2016, the FASB issued ASU No.

2016-13, Financial Instruments – Credit Losses (Topic 326) :

Measurement of Credit Losses

on Financial Instruments (“ASU 2016-13”).

ASU 2016-13 requires the measurement of all expected credit losses for financial

assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

of ASU 2016-13 will require the Company to use forward-looking information to formulate its credit loss estimates.

ASU 2016-13 is effective

for annual reporting periods beginning after December 15, 2022, and early adoption is permitted.

The Company is currently evaluating

this new standard and currently does not expect it to have a significant impact on the Company’s consolidated financial statements.

2019, the FASB issued ASU No 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes ( “ASU2019-12” ) .

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles.

is effective for annual reporting periods beginning after December 15, 2021, and early adoption is permitted.

The Company is currently

evaluating this new standard and currently does not expect it to have a significant impact on the Company’s consolidated financial

2020, the FASB issued ASU No.

2020-09, Debt (Topic 470) (“ASU 2020-09”).

ASU 2020-09 a mendments to SEC paragraphs

pursuant to SEC release NO.

33-10762 amends terms related to Debt Guarantors and Issuers of Guaranteed Securities Registered or to be

Registered with the SEC.

The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial

October 29, 2021, the Company and AutoLotto consummated the transactions contemplated by the Merger Agreement.

At the Closing, each share

of common stock and preferred stock of AutoLotto that was issued and outstanding immediately prior to the effective time of the Merger

(other than excluded shares as contemplated by the Merger Agreement) was cancelled and converted into the right to receive approximately

3.0058 shares (the “Exchange Ratio”) of Lottery.com.

common stock.

Merger closing was a triggering event for the Series B convertible notes, of which $ 63.8 million was converted into 3,248,526 shares

of AutoLotto that were then converted into 9,764,511 shares of Lottery.com common stock using the Exchange Ratio.

the Closing, each option to purchase AutoLotto’s common stock, whether vested or unvested, was assumed and converted into an option

to purchase a number of shares of Lottery.com common stock in the manner set forth in the Merger Agreement.

Company accounted for the Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer

and TDAC as the accounting acquiree.

Refer to Note 2, Summary of Significant Accounting Policies , for further details.

the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization.

The net assets of TDAC are stated at historical cost, with no goodwill or other intangible assets recorded.

accompanying consolidated financial statements and related notes reflect the historical results of AutoLotto prior to the merger and

do not include the historical results of TDAC prior to the consummation of Business combination.

the closing of the transaction, AutoLotto received total gross proceeds of approximately $ 42,794,000 , from TDAC’s trust and operating

Total transaction costs were approximately $ 9,460,000 , which principally consisted of advisory, legal and other professional

fees and were recorded in additional paid in capital.

Cumulative debt repayments of approximately $ 11,068,000 , inclusive of accrued but

unpaid interest, were paid in conjunction with the close, which included approximately $ 5,475,000 repayment of notes payable to related

parties, and approximately $ 5,593,000 payment of accrued underwriter fees.

Pursuant to the terms of the

Business Combination Agreement, the holders of issued and outstanding shares of AutoLotto immediately prior to the Closing (the “Sellers”)

were entitled to receive up to 6,000,000 additional shares of Common Stock (the “Seller Earnout Shares”) and Vadim Komissarov,

Ilya Ponomarev and Marat Rosenberg (collectively the “TDAC Founders”) were also entitled to receive up to 4,000,000 additional

shares of Common Stock (the “TDAC Founder Earnout Shares” and, together with the Seller Earnout Shares, the “Earnout

One of the earnout criteria had not been met by the December 31, 2021 deadline thus no earnout shares were granted specific

to that criteria.

As of December 31, 2021, 3,000,000 of the Seller Earnout Shares and 2,000,000 TDAC Founder Earnout Shares are still

eligible Earnout Shares until December 31, 2022.

Global Gaming Acquisition

30, 2021, the Company completed its acquisition of 100 percent of 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.

and JuegaLotto, S.A.

(“JuegaLotto”).

JuegaLotto is federally licensed by the Mexico regulatory authorities with jurisdiction

over the ability to sell international lottery games in Mexico through an authorized federal gaming portal and is licensed for games

of chance in other countries throughout Latin America.

Aganar has been operating in the licensed iLottery market in Mexico since 2007

and is licensed 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.

The opening balance of the acquirees have been included in our consolidated balance sheet since the date of the acquisition.

Since the acquirees’ financial statements were denominated in Mexican pesos, the exchange rate of 22.0848 pesos per dollar was

used to translate the balances.

net purchase price was allocated to the assets and liabilities acquired as per the table below.

Goodwill represents the future economic

benefits arising from other assets acquired that could not be individually identified and separately recognized.

The fair values of the

acquired intangible assets were determined using Level 3 inputs which were not observable in the market.

The total purchase price of $ 10,989,691 , consisting of cash of $ 10,530,000

and 687,439 shares of common stock of AutoLotto at $ 0.67 per share.

The total consideration transferred was approximately $ 10,055,214 ,

reflecting the purchase price, net of cash on hand at Global Gaming and the principal amount of certain loans acquired.

The purchase price

is for an 80 % ownership interest and is therefore grossed up to $ 13,215,843 as to reflect the 20 % minority interest in the acquirees.

The purchase price was allocated to the identified tangible and intangible assets acquired based on their estimated fair values at the

acquisition date as follows:

Accounts receivable, net

Property and equipment, net

Other assets, net

Intangible assets

Accounts payable and other liabilities

$ ( 387,484 )

Customer deposits

Related party loan

Total liabilities

$ ( 939,208 )

Total net assets of Acquirees

recognized in connection with the acquisition is primarily attributed to an anticipated growing lottery market in Mexico that are expected

to be achieved from the integration of these Mexican entities.

None of the goodwill is expected to be deductible for income tax purposes.

are details of the purchase price allocated to the intangible assets acquired.

Customer relationships

Gaming licensees

Trade names and trademarks

Total Intangibles

The following pro forma condensed consolidated results of operations

for the year ended December 31, 2021 have been prepared as if the acquisition of Global Gaming had occurred on January 1, 2021

and includes adjustments for amortization of intangibles and the addition to basic and diluted weighted average number of shares outstanding.

For the year ended December 31, 2021

(As presented

Total revenues

Net income (loss)

( 10,955,026 )

( 11,041,188 )

Net income (loss) attributable to shareholders

$ ( 11,092,605 )

$ ( 11,178,767 )

Net income (loss) per common share

Basic and diluted

Weighted average common shares outstanding

Basic and diluted

Subsequently, the Company adjusted

Goodwill for the recording of related deferred tax liabilities as the Company released $ 1.6 million of valuation allowance since the additional

deferred tax liabilities represent a future source of taxable income.

and Equipment, net

and equipment, net as of December 31, 2021 and 2020, consisted of the following:

Computers and equipment

Furniture and fixtures

Property and equipment

Accumulated depreciation

( 1,898,753 )

( 1,331,474 )

Property and equipment, net

expense for the years ended December 31, 2021 and 2020 amounted to $ 560,246 and $ 641,661 , respectively.

following intangible assets, net relate to the acquisition of TinBu LLC (“TinBu”):

Relationships

relationships represent the valuation of acquired customer accounts.

The cost is amortized on the straight-line method over its

estimated useful life of six years .

accumulated amortization

expense for the years ended December 31, 2021 and 2020 was $ 156,667 .

Estimated amortization expense for each of the ensuing

years through December 31, 2024 will be $ 156,667 (except for 2024, which will be $ 104,444 ).

name consists of the valuation of the Company’s trademarks and brand identity.

The trade name is being amortized on the straight-line

method over its respective term of six years .

accumulated amortization

expense for the years ended December 31, 2021 and 2020 was $ 1,667 .

Estimated amortization expense for each of the ensuing years through

December 31, 2024 will be $ 1,667 (except for 2024, which will be $ 1,111 ).

represents the valuation of acquired technology.

The cost is amortized on the straight-line method over its estimated useful life

of six years .

accumulated amortization

expense for the years ended December 31, 2021 and 2020 was $ 238,333 .

Estimated amortization expense for each of the ensuing

years through December 31, 2024 will be $ 238,333 (except for 2024, which will be $ 158,889 ).

Company entered into a software agreement with a third party.

As part of the agreement, the Company paid $ 2,000,000 for unlimited

access to the software of the third party.

The cost of this software agreement is amortized on the straight-line method over its estimated

useful life of six years .

accumulated amortization

( 1,277,777 )

expense for the years ended December 31, 2021 and 2020 was $ 333,333 .

Estimated amortization expense for each of the ensuing

years through December 31, 2024 will be $ 333,333 (except for 2024, which will be $ 55,556 ).

2018, the Company and Playsino Inc.

executed a Merger Agreement (the “Playsino Agreement”), which included a provision that,

in the event of the Playsino Agreement’s termination, the Company would receive a non-exclusive license to certain programs,

databases and operating systems owned by Playsino, Inc.

without further action required by either the Company or Playsino, Inc.

On February 15,

2021, the Company terminated the majority of the Playsino Agreement, to pursue a business combination with Trident.

The surviving provision

was the non-exclusive license for which the Company issued Playsino, Inc.

a Series B notes in the principal amount to $ 12.45 million.

The Company’s non-exclusive license to certain programs, databases and operating systems became effective as of the date of

the termination of the Playsino Agreement, being February 15, 2021, on which both parties were able to agree on the value for the

non-exclusive license.

The non-exclusive license is treated as an intangible asset under ASC 350 “Intangibles —

Goodwill and Other”.

The useful life of the intangible asset is five years .

The cost of the intangible asset is amortized on the

straight-line method over its estimated useful life.

As of the date of this filing, the Company’s management assessed that

were no triggering events or circumstances that indicated that the asset carrying value would be impaired.

Management will continue to

evaluate for impairment periodically in accordance with ASC 360-10 “Overall — Recoverability of Carrying Amounts —

Assets to Be Held and Used”.

accumulated amortization

( 1,867,500 )

Amortization expense for the year ended

December 31, 2021 was $ 1,867,500 .

Estimated amortization expense for each of the ensuing years through December 31, 2026 will be $ 2,075,000

(except for 2026, which will be $ 207,500 ).

Sports.com Domain Acquisition

In February 2021, the Company purchased the domain name sports.com.

The total purchase price for the unlimited use of the domain name was $ 6,000,000 which was partially paid in cash for $ 3,000,000 and the

balance was settled by issuing Series B convertible debt of $ 3,000,000 (see Note 6).

The cost is amortized n the straight-line method

over its estimated useful life of fifteen years .

accumulated amortization

Amortization expense for the year ended December 31,

2021 was $ 333,333 .

Estimated amortization expense for each of the ensuing years through December 31, 2036 will be $ 400,000 (except

for 2036, which will be $ 66,667 ).

Lottery.com Domain Acquisition

In March 2017, the Company purchased the domain

name lottery.com.

The total purchase price was $ 935,000 for the domain name.

The cost is amortized on the straight-line method over its

estimated useful life of fifteen years .

accumulated amortization

Amortization expense for the years ended December

31, 2021 and 2020 was $ 62,333 .

Estimated amortization expense for each of the ensuing years through December 31, 2032, will be $ 62,333

(except for 2032, which will be $ 15,588 ).

Aganar and JuegaLotto Acquisition

The following intangible assets, net relate to

the acquisition of Aganar and JuegaLotto:

Customer Relationships

Customer relationships represent the

valuation of acquired customer accounts.

The asset will be amortized on the straight-line method over its estimated useful life of

accumulated amortization

Amortization expense for the year ended

December 31, 2021 was $ 34,167 .

Estimated amortization expense for each of the ensuing years through December 31, 2027 will be $ 68,333

(except for 2027, which will be $ 34,167 ).

Trade name consists of the valuation

of the Company’s trademarks and brand identity.

The trade name is being amortized on the straight-line method over its respective

term of six years .

accumulated amortization

Amortization expense for the year ended

December 31, 2021 was $ 211,667 .

Estimated amortization expense for each of the ensuing years through December 31, 2027 will be $ 423,333

(except for 2027, which will be $ 211,667 ).

Technology represents the valuation

of acquired technology.

The asset will be amortized on the straight-line method over its estimated useful life of six years .

accumulated amortization

Amortization expense for the year ended

December 31, 2021 was $ 135,000 .

Estimated amortization expense for each of the ensuing years through December 31, 2027 will be $ 270,000

(except for 2027, which will be $ 135,000 ).

Gaming Licenses

Gaming licenses represent the valuation

of licenses allowing the entities to operate in certain jurisdictions.

The asset will be amortized on the straight-line method over its

estimated useful life of six years .

accumulated amortization

Amortization expense for the year ended

December 31, 2021 was $ 670,000 .

Estimated amortization expense for each of the ensuing years through December 31, 2027 will be $ 670,000

(except for 2027, which will be $ 335,000 ).

Internal Use Software Development

The Company has reviewed the software

development expenses associated with a variety of software development efforts during the year 2021 and determined that a significant

amount of the expense associated with internally developed software should be capitalized under ASC 350-40.

The Company’s identified capitalized software intangible assets

are amortized on a straight-line basis over their estimated useful lives, ranging from 2 to 10 years.

accumulated amortization

Amortization expense for the year ended

December 31, 2021 was $ 23,323 .

Estimated amortization expense for years ended December 31, 2022 and December 31, 2023 will be $ 55,976

and $ 32,652 , respectively.

Software development costs of $ 2,080,099 relate

to project not placed in service as of December 31, 2021, amortization will be calculated using the straight line method over the appropriate

estimated useful life.

Notes Payable and Convertible Debt

Secured Convertible Note

In connection with the Lottery.com domain purchase,

the Company issued a secured convertible promissory note (“Secured Convertible Note”) with a fair value of $ 935,000 that matured

in March 2021.

The Company used the fair value of the Secured Convertible Note to value the debt instrument issued.

2021, the Secured Convertible Note was fully converted into 1,398,221 shares of the Company’s common stock (see Note 7).

Series A Notes

From August to October 2017, the Company entered into seven Convertible

Promissory Note Agreements with unaffiliated investors for an aggregate amount of $ 821,500 .

The notes bear interest at 10 % per year, are

unsecured, and were due and payable on June 30, 2019.

The parties have verbally agreed to extend the maturity of the notes to December

As of December 31, 2021 and December 31, 2020, the balance amount due on these notes was $ 0 and $ 821,500 , respectively.

Company cannot prepay the loan without consent from the noteholders.

As of December 31, 2021, there have been no Qualified Financing events,

that trigger conversion, this included the TDAC combination.

As of December 31, 2021, the remaining outstanding balance of $ 771,500 are

no longer convertible and have been reclassified to Notes Payable as per the agreement.

Accrued interest on the note payable was $ 138,822

at December 31, 2021.

Series B Notes

From November 2018 to December 2020,

the Company entered into multiple Convertible Promissory Note agreements with unaffiliated investors for an aggregate amount of $ 8,802,828 .

The notes bear interest at 8 % per year, are unsecured, and were due and payable on dates ranging from December 2020 to December 2021.

For those notes maturing on or before December 31, 2020, the parties entered into amendments in February 2021 to extend the maturity

of the notes to December 21, 2021.

The Company cannot prepay the loan without consent from the noteholders.

During the year ended December 31, 2021, the Company entered into multiple

Convertible Promissory Note agreements with unaffiliated investors for an aggregate amount of $ 38,893,733 .

The notes bear interest at

8 % per year, are unsecured, and are due and payable on dates ranging from December 2021 to December 2022.

The Company cannot prepay the

loan without consent from the noteholders.

As of December 31, 2021, the Series B Convertible Notes had a balance of $ 0 .

The Company also

issued additional convertible promissory notes with unaffiliated investors for an aggregate amount of $ 10,000,000 .

The notes bear an interest

at 6 % per year, are unsecured and were due in May 2023.

During the year ended December 31, 2021, the Company

entered into amendments with six of the Series B promissory noteholders to increase the principal value of the notes.

The additional principal

associated with the amendments totaled $ 3,552,114 .

The amendments were accounted for as a debt extinguishment, whereby the old debt was

derecognized and the new debt was recorded at fair value.

The Company recorded loss on extinguishment of $ 71,812 as a result of the amendment

which is mapped in “Other expenses” on the consolidated statements of operations and comprehensive loss.

As of October 29, 2021, all except

$ 185,095 of the series B convertible notes were converted into 9,764,511 shares of Lottery.com common stock.

As of December 31, 2021,

the remaining outstanding balance of $ 185,095 are no longer convertible and have been reclassified to notes payable.

See Note 3 Accrued

interest on this note payable as of December 31, 2021 was $ 35,184 .

As of December 31, 2021 and 2020, the outstanding

balances of the Series A and B notes was as follows;

Total face value of series A convertible notes payable

Total face value of series B convertible notes payable

Total face value of secured convertible promissory note

Total face value of convertible notes payable

unamortized beneficial conversion feature

( 1,240,716 )

unamortized debt discount

Total convertible notes payable, net

current portion of convertible notes payable

( 8,882,665 )

Convertible notes payable, net of current portion

On May 1, 2020, the Company entered into a Promissory

Note with Cross River Bank, which provides for a loan in the aggregate amount of $493,225, pursuant to the Paycheck Protection Program,

The PPP, established under Division A, Title I of the Coronavirus Aid, Relief and Economic Security Act (“CARES

Act”) enacted on March 27, 2020, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly

payroll expenses of the qualifying business.

The loans and accrued interest are forgivable after eight weeks as long as the borrower uses

the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities (“Qualified Expenses”), and maintains

its payroll levels.

On August 24, 2021, the PPP loan and accrued interest was forgiven by the U.S.

Small Business Administration

(“SBA”) in full.

The Company recorded the full amount related to the forgiveness of the PPP loan as a gain on extinguishment

of debt during our third quarter of fiscal year 2021.

Short term loans

On June 29, 2020, the Company entered

into a Promissory Note with the U.S.

Small Business Administration (“SBA”) for $ 150,000 .

The loan has a thirty-year term and

bears interest at a rate of 3.75 % per annum.

Monthly principal and interest payments are deferred for twelve months after the date of

disbursement.

The loan may be prepaid at any time prior to maturity with no prepayment penalties.

The Promissory Note contains events

of default and other provisions customary for a loan of this type.

As of December 31, 2021 and 2020, the balance of the loan was $ 150,000

and $ 150,000 , respectively.

As of December 31, 2021, the accrued interest on this note was $ 2,255 .

In August 2020, the Company entered into three

separate note payable agreements with three individuals for an aggregate amount of $ 37,199 .

The notes bear interest at a variable rate,

are unsecured, and the parties have verbally agreed the notes will be due upon a qualifying financing event.

As of December 30, 2021 and

2020, the balance of the loans totaled $ 13,000 and 17,700 , respectively.

Notes payable

On August 28, 2018, in connection with the purchase of the entire membership

interest of TinBu, the Company entered into several notes payable for $ 12,674,635 with the sellers of the TinBu and a broker involved

in the transaction.

The notes had an interest rate of 0 %, and original maturity date of January 25, 2022 .

The notes payable were modified

during 2021 to extend the maturity to June 30, 2022 and modified the interest rate to include simple interest of 4.1 % per annum effective

October 1, 2021.

Each of the amendments were evaluated and determined to be loan modifications and accounted for accordingly.

As of December 30, 2021 and December 31, 2020,

the balance of the notes was $ 2,628,234 and $ 11,067,643 , respectively.

Stockholders’ Equity

Preferred and Common Stock

Preferred Stock

Pursuant to the Company’s charter,

the Company is authorized to issue 1,000,000 shares of preferred stock, par value $ 0.001 per share.

Our board of directors has the authority

without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number

of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and

relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption

privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock.

As of December

31, 2021, there were no shares of preferred stock issued and outstanding.

Our Charter authorizes the issuance of an aggregate of 500,000,000 shares

of Common Stock, par value $ 0.001 per share.

The shares of Common Stock are duly authorized, validly issued, fully paid and non-assessable.

Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the DGCL.

our Board determines otherwise, we will issue all shares of our common stock in uncertificated form.

Holders of our Common Stock are entitled

to one vote for each share held of record on all matters submitted to a vote of stockholders.

The holders of Common Stock do not have

cumulative voting rights in the election of directors.

Upon our liquidation, dissolution or winding up and after payment in full of all

amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of

our Common Stock will be entitled to receive pro rata our remaining assets available for distribution.

As of December 31, 2021 and December

31, 2020, 46,808,251 shares and 22,658,006 shares, respectively, were outstanding.

During the year ended December 31, 2021, the Company

issued the following shares of common stock.

Issuance of Common Stock in Reverse Merger (Note 3)

Issuance of Common Stock in Global Gaming Acquisition (Note 3)

Exercise of options (Note 8)

Exercise of warrants (See below)

Conversion of convertible debt (Note 6)

Public Warrants became exercisable 30 days after the Closing as the Company has an effective registration statement under the Securities

Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available

(or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration

under the Securities Act).

The S-1 registration became effective November 24, 2021.

The Public Warrants will expire five years after October

29, 2021, which was the completion of the TDAC Combination or earlier upon redemption or liquidation.

The Company may redeem the Public

whole and not in part;

a price of $0.01 per warrant;

a minimum of 30 days’ prior written notice of redemption;

and only if, the last sale price of the Company’s common stock equals or exceeds $16.00

per share for any 20 trading days within a 30-trading day period ending on the third trading

day prior to the date on which the Company sends the notice of redemption to the warrant

● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public

Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on

a “cashless basis,” as described in the warrant agreement.

These warrants cannot be net cash settled by the Company in any

As of December 31, 2021, there

were 20,125,000 Public Warrants outstanding.

Immediately after giving effect to the Business Combination, there were 20,125,002 warrants

to purchase share of Common stock outstanding, 20,125,000 of which are public warrants and two of which were previously warrants

of AutoLotto, which are now warrants of Lottery.com and are exercisable to purchase an aggregate of 395,675 shares of common

warrants of TDAC issued before the business combination were forfeited and did not transfer to the surviving entity.

Purchase Option

On June 1, 2018, the Company

sold to the underwriter (and its designees), for $ 100 , an option to purchase up to a total of 1,750,000 Units exercisable at

$ 12.00 per Unit (or an aggregate exercise price of $ 21,000,000 ) commencing on the consummation of the Business Combination.

The 1,750,000

Units represents the right to purchase 1,750,000 shares of common stock and 1,750,000 warrants to purchase 1,750,000 shares

of common stock.

The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option, and expires

on May 29, 2023 .

The Units issuable upon exercise of this option are identical to those offered by Lottery.com.

The Company accounted

for the unit purchase option, inclusive of the receipt of $ 100 cash payment, as an expense of the Business Combination resulting

in a charge directly to stockholders’ equity.

As of December 31, 2021 all of the 1,750,000 Units are vested, exercisable and

Common Stock Warrants

The Company did not issue any warrants during

the years ended December 31, 2021 and 2020.

All 395,675 outstanding warrants are fully vested and have a weighted average remaining contractual

life of 4.0 years.

The Company did not incur any expense for the year ended December 31, 2021 and 2020.

Number of Shares

Outstanding at December 31, 2019

Forfeited/cancelled

Outstanding at December 31, 2020

Forfeited/cancelled

Outstanding at December 31, 2021

Exercisable at December 31, 2021

Beneficial Conversion Feature – Convertible

As detailed in Note 6 – Notes

Payable and Convertible Debt, the Company has issued two series of convertible debt.

Both issuances resulted in the recognition of the

beneficial conversion features contained within both of the instruments.

The Company recognized the proceeds allocable to the beneficial

conversion feature of $ 8,480,697 as additional paid in capital and a corresponding debt discount of $ 2,795,000 .

This additional paid in

capital is reflected in the accompanying consolidated Statements of Equity.

Earnout Shares

As detailed in Note 3 – as part of the TDAC Combination

as of December 31, 2021 a total of 5,000,000 Earnout Shares are eligible for issuance until December 31, 2022.

Stock-based Compensation Expense

2015 Stock Option Plan

Prior to the closing of the Business Combination,

AutoLotto had the AutoLotto, Inc.

2015 Stock Option/Stock Issuance Plan (the “2015 Plan”) in place.

Under the 2015 Plan, incentive

stock options may be granted at a price not less than fair market value of the common stock ( 110 % of fair value to holders of 10 % or more

of voting stock).

If the Common Stock is at the time of grant listed on any Stock Exchange, then the Fair Market Value shall be the closing

selling price per share of Common Stock on the date in question on the Stock Exchange, as such price is officially quoted in the composite

tape of transactions on such exchange and published in The Wall Street Journal.

If there is no closing selling price for the Common Stock

on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation

If the Common Stock is at the time neither listed on any Stock Exchange, then the Fair Market Value shall be determined by the

Board of Directors or the Committee acting in its capacity as administrator of the Plan after taking into account such factors as the

Plan Administrator shall deem appropriate.

The maximum number of shares of Common Stock which may be issued over the term of the Plan

shall not exceed Four Hundred Fifty Thousand (450,000).

Options are exercisable over periods not to exceed 10 years (five years for incentive

stock options granted to holders of 10% or more of voting stock) from the date of grant.

Shares of Common Stock issued under the Stock

Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or

more instalments over the Participant’s period of Service or upon attainment of specified performance objectives.

The Plan Administrator

may not impose a vesting schedule upon any option grant or the shares of Common Stock subject to that option which is more restrictive

than twenty percent ( 20 %) per year vesting, with the initial vesting to occur not later than one (1) year after the option grant date.

However, such limitation shall not be applicable to any option grants made to individuals who are officers of the Corporation, non-employee

Board members or independent consultants.

2021 Equity Incentive Plan

In connection with the Business Combination, our board of directors

adopted, and our stockholders approved, the Lottery.com 2021 Incentive Award Plan (the “2021 Plan”) under which 13,130,368

shares of Class A common stock were initially reserved for issuance.

The 2021 Plan allows for the issuance of incentive and non-qualified

stock options, stock appreciation rights, restricted stock, restricted stock units and other stock or cash based awards.

The number of

shares of the Company’s Class A common stock available for issuance under the 2021 Plan increases annually on the first day of each

calendar year, beginning on and including January 1, 2022 and ending on and including January 1, 2031 by a number of shares of Company

common stock equal to five percent ( 5 %) of the total outstanding shares of Company common stock on the last day of the prior calendar

Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no

such increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number

of shares of Company common stock than would otherwise occur pursuant to the preceding sentence.

As of December 31, 2021, the Company

has not granted awards under the 2021 Plan.

Stock Options

The Company did not issue any new stock options

during the years ended December 31, 2021 and 2020.

The following table shows stock option activity for the years ended December 31, 2021

Balance, December 31, 2019

Forfeited/cancelled

Balance, December 31, 2020

Forfeited/Cancelled

Balance, December 31, 2021

Exercisable, December 31, 2021

Stock-based compensation expense related

to the employee options was $ 10,077 and $ 9,417 for the year ended December 31, 2021, and 2020 respectively.

Stock-based compensation expense related to the non-employee options

was $ 0 and $ 6,682 for year ended December 31, 2021 and 2020, respectively.

No income tax benefit has been recognized related to the stock-based

compensation expense, and no tax benefits have been realized from the exercised stock options.

As of December 31, 2021, unrecognized stock-based

compensation associated with stock options amounted to $ 0 .

Restricted awards

The Company has awarded restricted

stock to employees on October 28, 2021, which were granted with various vesting terms including immediate vesting, service-based vesting,

and performance-based vesting.

In accordance with ASC 718, the Company has classified the restricted stock as equity.

For employee issuances, the measurement date is the date of grant,

and the Company recognizes compensation expense for the grant of the restricted shares, over the service period for the restricted shares

that vest over a period of multiple years and for performance-based vesting awards, the Company recognizes the expense when management

believes it is probable the performance condition will be achieved.

As of December 31, 2021, the Company had granted 3,832,431 shares

with vesting to begin April 2022.

For the year ended December 31, 2021, the Company recognized $ 15,522,185 of stock compensation expense

related to the employee restricted stock grants.

As of December 31, 2021, unrecognized stock-based compensation associated with the restricted

stock awards is $ 41,006,168 which will be expensed over the next 3.75 years.

The Company had restricted stock activity summarized as follows:

Outstanding at December 31, 2020

Forfeited/cancelled

Restricted shares unvested at December 31, 2021

Loss Per Share

The following table sets forth the computation of basic and diluted

net loss per share:

Ended December 31,

Comprehensive net loss attributable to stockholders

Weighted average common shares outstanding

Basic and diluted

Net loss per common share

Basic and diluted

As of December 31, 2021, the Company

excluded 345,661 stock options, 2,012,774 convertible debt into common shares, 3,832,431 of restricted awards, 3,869,305 of warrants,

1,726,027 of earn out shares and 604,110 of unit purchase options from the calculation of diluted net loss per share with the effect being

anti-dilutive.

As of December 31, 2020, the Company excluded 1,315,218 stock options

and 537,359 warrants from the computation of diluted net loss per share since the intrinsic value of these instruments was zero with the

effect being anti-dilutive.

The Company's pre-tax income (loss) by jurisdiction was as follows

for the years ending December 31, 2021 and December 31, 2020;

The provision for income taxes for continuing operations for the year

ended December 31, 2021 and 2020 consist of the following:

Year ended December 31,

Current income taxes

Total current income taxes

Deferred income taxes

( 1,653,067 )

Total deferred income taxes

( 1,653,067 )

Valuation allowance

Total income tax expense (benefit)

( 1,551,689 )

A reconciliation between the amount of reported

income tax expense (benefit) and the amount computed by multiplying income from continuing operations before income taxes by the statutory

federal income tax rate is shown below.

Income tax expense for the year ended December 31, 2021 includes state minimum taxes, permanent

differences, and deferred tax assets for which a full valuation allowance has been placed.

A corresponding tax expense is included for

the year ended December 31, 2021 to reflect the increase in the valuation allowance.

Year ended December 31,

Tax Expense at statutory federal rate of 21 %

$ ( 2,278,546 )

$ ( 1,069,636 )

State income taxes, net of federal income tax benefit

Foreign rate differential

Permanent differences

Other – Miscellaneous

Change in valuation allowance

Income tax expense (benefit)

$ ( 1,551,689 )

Deferred income taxes reflect the tax effects

of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for

income tax purposes.

The following table discloses those significant components of our deferred tax assets and liabilities, including

any valuation allowance:

Long-term deferred tax assets:

Federal net operating loss carryforwards

Foreign net operating loss carryforwards

Stock compensation

Intangible assets

Total deferred tax assets before valuation allowance

Deferred tax liabilities:

Intangible assets

Total deferred tax liabilities

Valuation allowance

( 14,334,743 )

( 13,510,703 )

Net deferred tax assets and liabilities

Due to the Global Gaming acquisition

and the recording of related deferred tax liabilities, the Company released approximately $ 1,600,000 of valuation allowance since the

additional deferred tax liabilities represent a future source of taxable income.

For the year ended December 31, 2021, the valuation allowance

decreased by approximately $ 800,000 .

the Company believes a full valuation allowance against the net deferred tax asset is appropriate

at this time.

The Company will continue to evaluate the realizability of its deferred tax assets in future years.

At December 31, 2021, our carryforwards

available to offset future taxable income consisted of federal net operating loss (“NOL”) carryforwards of approximately $52,000,000, $11,400,000 of which expires between 2034 and 2037 and $40,700,000 of which has no expiration date.

We account for uncertain tax positions

in accordance with ASC 740-10-25, which prescribes a comprehensive model for the financial statement recognition, measurement, presentation

and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.

We have not recorded any unrecognized tax

benefits as of December 31, 2021.

Our practice is to recognize interest

and penalties related to income tax matters in income tax expense in our consolidated statements of operations.

We did not have any

interest or penalties on unrecognized tax benefits accrued at December 31, 2021.

The Company is subject to income taxes in the US federal jurisdiction

and various state jurisdictions.

With few exceptions, the Company is no longer subject to US federal, state and local tax examinations

by tax authorities for years prior to fiscal year 2017.

The Company is currently not under audit by any tax authority.

Commitments and Contingencies

Indemnification Agreements

The Company enters into indemnification

provisions under its agreements with other entities in its ordinary course of business, typically with business partners, customers, landlords,

lenders and lessors.

Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered

or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s

activities under the agreement.

The maximum potential amount of future payments the Company could be required to make under these indemnification

provisions is unlimited.

The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification

As a result, the Company believes the estimated fair value of these agreements is minimal.

Accordingly, the Company has no

liabilities recorded for these agreements as of December 31, 2021 and 2020.

In 2018, the Company commenced a sale

offering and issuance (the “LDC Offering”) of 285 million revenue participation interests (the “Digital Securities”)

of the net raffle revenue of LDC Crypto Universal Public Company Limited (“LDC”).

The Digital Securities do not

have any voting rights, redemption rights, or liquidation rights, nor are they tied in any way to other equity securities of LDC or the

Company nor do they otherwise hold any rights that a holder of equity securities of LDC or the Company may have or that a holder of traditional

equity securities or capital stock may have.

Rather, each of the holders of the Digital Securities has a pro rata right to receive 7 %

of the net raffle revenue.

If the net raffle revenue is zero for a given period, holders of the Digital Securities are not eligible

to receive any cash distributions from any raffle sweepstakes of LDC for such period.

For the year ended December 31, 2021, the Company

incurred an obligation to pay an aggregate amount of approximately $ 5,632 to holders of the outstanding Digital Securities.

did not satisfy any of those obligations during the year ended December 31, 2021.

For year ended December 31, 2020, the Company incurred

obligations and paid $ 17,937 , respectively, to holders of the outstanding Digital Securities.

The Company leases office space in Spicewood,

Texas which expires January 21, 2022 .

For the year ended December 31, 2021 and 2020, the Company’s total rent expense was approximately

$ 206,471 and $ 49,202 , respectively.

As of December 31, 2021, future minimum rent payments

due under non-cancellable leases with initial maturities greater than one year are as follows:

Years ending December 31,

and Other Loss Contingencies

As of December 31, 2021, there

were no pending proceedings that are deemed to be materially detrimental.

The Company is a party to legal proceedings in the ordinary

course of its business.

The Company believes that the nature of these proceedings is typical for a company of its size and scope.

Related Party Transactions

The Company has entered into transactions with

related parties.

The Company regularly reviews these transactions;

however, the Company’s results of operations may have been different

if these transactions were conducted with nonrelated parties.

During the year ended December 31,

2020, the Company entered into borrowing arrangements with the individual founders to provide operating cash flow for the Company.

Company paid $ 4,700 during the year and has an outstanding balance of $ 13,000 .

During the years ended December 31,

2021 and 2020, the Company entered into a services agreement with Master Goblin Games, LLC (“Master Goblin Games”), an entity

owned by an officer of the Company, to facilitate the establishment of receipt of retail lottery licenses in certain jurisdictions.

of December 31, 2021, the Company had no outstanding related party payables.

Pursuant to the Service Agreement,

Master Goblin is authorized and approved by the Company to incur up to $ 100,000 in initial expenses per location for the commencement

of operations at each location, including, without limitation, tenant improvements, furniture, inventory, fixtures and equipment, security

and lease deposits, and licensing and filing fees.

Similarly, pursuant to the Service Agreement, during each month of operation, Master

Goblin is authorized to submit to the Company for reimbursement on-going expenses of up to $ 5,000 per location for actually incurred

lease expenses.

The initial expenses are submitted by Master Goblin to the Company upon Master Goblin securing a lease and leases are

only secured by Master Goblin in any location upon request of the Company.

Such initial expenses are recorded by the Company as lease

On-going expenses are submitted by Master Goblin to the Company on a monthly basis, subject to offset, and are recorded

by the Company as an expense.

To the extent Master Goblin has a positive net income in any month, exclusive of the sale of lottery games,

such net income reduces or eliminates such reimbursable expenses for that month.

Revenue Disaggregation

Revenue disaggregation consists of the following:

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report

to be signed on its behalf by the undersigned, thereunto duly authorized .

June 15, 2023

Mark Gustavson

Executive Officer

Executive Officer and Principal Financial/Accounting Officer)

ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark Gustavson and Matthew McGahan,

and each or any one of them, their true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for

them and in their name, place and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same,

with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting

unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite

and necessary to be done in connection therewith, as fully to all intents and purposes as they might or could do in person, hereby ratifying

and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes or substitute, may lawfully do or cause

to be done by virtue hereof.

to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on

behalf of the Registrant in the capacities and on the dates indicated.

Mark Gustavson

Executive Officer

June 15, 2023

Executive Officer and Principal Financial/Accounting Officer)

Matthew McGahan

June 15, 2023

Barney Battles

June 15, 2023

Nick Kounoupias

June 15, 2023

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 9A. Controls and Procedures