What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2024-04-03 compared with 2023-06-15 · 850 added, 7 removed, 9 unchanged (99% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Common Stock is currently traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “LTRY.” Our public

warrants are traded on Nasdaq under the symbol “LTRYW”.

of June 15, 2023, there were 114 holders of record of our common stock and 10 holders of record of our warrants.

to holders of record of our securities we believe there is a substantially greater number of “street name” holders or beneficial

holders whose shares and warrants are held of record by banks, brokers and other financial institutions.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Common Stock is currently traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “LTRY.”

warrants are traded on Nasdaq under the symbol “LTRYW”.

of December 31, 2023, there were 114 holders of record of our common stock and 10 holders of record of our warrants.

to holders of record of our securities we believe, based on Company records, that there are over 6,000 brokerage accounts representing

“street name”

holders or beneficial holders whose shares and warrants are held of record by banks, brokers and other financial

institutions.

have not paid any cash dividends on our shares of common stock to date and do not anticipate paying any cash dividends for the foreseeable

7 unchanged sentences

have not otherwise been described in a Quarterly Report on Form 10-Q or a Periodic Report on Form 8-K.

during the fourth quarter of fiscal year 2022.

during the fiscal year 2023.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

should read the following discussion and analysis of our financial condition and results of operations together with the consolidated

financial statements and the related notes appearing elsewhere in this Report.

This discussion contains forward-looking statements that

reflect our plans, estimates, and beliefs that involve risks and uncertainties.

As a result of many factors, such as those set forth

under the “Risk Factors”

and “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary”

and elsewhere in this Report, our actual results may differ materially from those anticipated in these forward-looking statements.

and Recent Developments

Investigation and Operational Cessation

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

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

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

The investigation

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

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

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

Subsequently, the Company initiated a review

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

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

ended December 31, 2021 and 2020, advised the Company that its audited financial statements of for the year ended December 31, 2021 (the

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

should no longer be relied upon.

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

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

not properly recorded in the March 2022 Financials.

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

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

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

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

The Company’s remaining employees were limited to

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

week, several additional employees were recalled from furlough.

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

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

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

Only a few of

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

approximately $3.7 million in outstanding payroll obligations that remained unpaid.

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

subsequently, 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.

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

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

and completing and filing the following (i) the restatements of the Company’s 2021 Audit and March 2022 Financials and preparing

and filing the Company’s delinquent periodic reports, including Amendment No.

1 to the Company’s Annual Report on Form 10-K/A

for the year ended December 31, 2021, which the Company filed on May 10, 2023:

(ii) Amendment No.

1 to the Company’s Quarterly

Report on Form 10-Q/A for the three months ended March 31, 2022, which the Company filed on May 15, 2023;

(iii) the Company’s Quarterly

Reports on Form 10-Q for the three months ended June 30, 2022 and September 30, 2022, which the Company filed on May 22 and 24, 2023,

respectively;(iv) the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023;

(v) the Company’s

Quarterly Report on Form 10-Q for the three months ended June 30, 2023;

(vi) the Company’s Quarterly Report on Form 10-Q for the

three months ended September 30, 2023;

and (vii) this Report.

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

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

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

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

reports and all subsequent required filings with the SEC.

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

the completion of its compliance plan.

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

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

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

The Company satisfied these conditions and the Panel indicated

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

time to complete the compliance plan presented at the hearing.

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

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

The Company’s securities were suspended

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

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

upon which the Panel had based its decision.

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

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

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

Decision”).

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

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

Risk Factors - Risks Related to Our Common

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

full compliance with Nasdaq’s continued listing standards in the future ”

for more information.

there are other requirements to be met in order to maintain our continued listing on The Nasdaq Global Market.

These requirements include

requiring that the Company maintain at least $10 million in stockholders’

equity, $50 million of market value of listed securities

(which requirement is not currently met), or $50 million in total assets and total revenue over the prior two years or two of the prior

three years (which requirement is not currently met) and having a majority of independent directors.

reported on form 8-K filed on December 7, 2023, on November 29, 2023, the Company received a letter from Nasdaq stating that based upon

its review of the Company’s Market Value of Publicly Held Shares (“MVPHS”) for the last 30 consecutive business days,

the Company no longer met the minimum requirement of $5,000,000 set forth in Nasdaq Listing Rule 5450(b)(1)(C).

However, under the Listing

Rules, the Company was provided a 180-calendar day grace period to regain compliance, through May 28, 2024.

at any time during the compliance period the Company’s MVPHS closes at $5,000,000 or more for a minimum of ten consecutive business

days, Nasdaq will provide written confirmation of compliance and the matter will be closed.

In the event the Company does not regain

compliance with the rule prior to the expiration of the compliance period, the Company will receive written notification that its securities

are subject to delisting.

of the date of this Report, there can be no assurance that the Company will be able to meet the MVPHS requirements for a minimum period

of ten consecutive business days through May 28, 2024, or be able to remain in full compliance with all applicable Nasdaq listing requirements.

the requirement that we maintain a majority of independent directors and at least three members on our audit committee are Nasdaq requirements

that we currently meet but have not met from time to time.

the Company’s securities are delisted from Nasdaq, it could be more difficult to buy and sell the Company’s common stock

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

Delisting could also impair the Company’s ability to raise capital and/or trigger defaults and penalties under its outstanding

agreements or securities.

Further, even if we regain compliance with Nasdaq listing requirements, there is no guarantee that we will

be able to maintain our listing for any period of time.

from Nasdaq could also result in negative publicity.

Further, if we are delisted, we would also incur additional costs under state blue

sky laws in connection with any sales of our securities.

These requirements could severely limit the market liquidity of our common stock

and/or warrants and the ability of our stockholders to sell our common stock and/or warrants in the secondary market.

If our common stock

and/or warrants are delisted by Nasdaq, our common stock and/or warrants may be eligible to trade on an over-the-counter quotation system,

such as the OTCQB Market, where an investor may find it more difficult to sell our stock or obtain accurate quotations as to the market

value of our common stock and/or warrants.

In the event our common stock and/or warrants are delisted from The Nasdaq Global Market,

we may not be able to list our common stock and/or warrants on another national securities exchange or obtain quotation on an over-the

counter quotation system.

$30,000,000 Business Loan

January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”),

pursuant to which the Company borrowed $30,000,000 from Provident, which was evidenced by a $30,000,000 Promissory Note.

The Promissory

Note accrued interest at the rate of 2.750% per annum (7.750% upon the occurrence of an event of default) and had a maturity date of

January 4, 2024.

Monthly interest payments were due under the Promissory Note beginning February 4, 2022.

The Promissory Note could be

repaid at any time without penalty.

The Promissory Note included customary events of default for a debt obligation of the size of the

Promissory Note.

The Business Loan included representations and warranties of AutoLotto and covenants (both positive and negative) which

were customary of a customary for a transaction of this nature and size, including rights to set off.

Upon the occurrence of an event

of default, Provident could declare the entire amount owed immediately due and payable.

We were required to pay a 1% commitment fee at

the time of our entry into the Business Loan, and another 1% annual loan fee would have been due on the first anniversary thereof.

accordance with the terms of the Business Loan, upon entering into the agreement, $30,000,000 in a separate account with Provident was

pledged as security for the amount outstanding under the loan (“Collateral Security”).

The $30,000,000 Collateral Security

became restricted and remained restricted until October 12, 2022, when AutoLotto defaulted on its obligations under the Business Loan

and Provident foreclosed on the $30,000,000 of Collateral Security.

The Collateral Security, which was in the form of restricted cash,

was presented as a contingent liability on the Company’s balance sheet from March 31, 2022 until the obligation was satisfied in

October of 2022.

See Note 3 to our consolidated financial statements for additional information.

Agreement with Woodford

December 7, 2022, the Company entered into a loan agreement with Woodford Eurasia Assets, Ltd.

(“Woodford”), (the “Woodford

Loan Agreement”) pursuant to which Woodford agreed to provide the Company with up to $52.5 million, subject to certain conditions

and requirements, of which, per the Company’s books and records $951,298 was received by December 31, 2023 and is owed pursuant

to the terms of the Woodford Loan Agreement.

Amounts borrowed accrue interest at the rate of 12% per annum (or 22% per annum upon the

occurrence of an event of default) and are due within 12 months of the date of each loan advance.

Amounts borrowed can be repaid at any

time without penalty.

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

stock, beginning 60 days after the first loan date at the rate of 80% of the lowest publicly available price per share of common stock

within 10 business days of the date of the Loan Agreement (which was equal to $5.60 per share), subject to a 4.99% beneficial ownership

limitation and a separate limitation preventing Woodford from holding more than 19.99% of the issued and outstanding common stock of

the Company, without the Company obtaining shareholder approval for such issuance.

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

Cohen, Lawrence Anthony DiMatteo

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

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

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

member of the Board of Directors resigns.

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

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

customary for a transaction of this size and nature.

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

loan in excess of $1 million or obtaining any loan in amount exceeding $1 million without the consent of Woodford, which consent may

not be unreasonably withheld;

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

under the Loan Agreement;

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

(e) amending or restating our governing documents;

(f) declaring or paying any dividend;

(g) issuing any shares which negatively affects

and (h) repurchasing any shares.

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

equal to 15% of the Company’s then issued and outstanding shares of common stock.

Each Woodford Warrant has an exercise price equal

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

from the bank account of Woodford, which equates to an exercise price of $5.60 per share.

In the event the Company fails to repay the

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

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

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

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

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

The floating charge

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

an event of default;

if Woodford reasonably believes

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

or if Woodford reasonably considers that it is desirable

to protect its security interest.

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

other events.

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

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

June 12, 2023, the Company entered into an amendment of its Woodford Loan Agreement (the “Woodford Loan Agreement Amendment”).

The Woodford 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 and effect.

Information regarding ongoing legal proceedings with Woodford can be found in the “Legal Proceedings”

section of this form.

October 29, 2021, we, as AutoLotto, Inc.

(“AutoLotto”), consummated the Business Combination with Trident Acquisitions Corp.

(“TDAC”

and after the Business Combination described herein, the “Company”), pursuant to the terms of that certain

Business Combination Agreement, dated as of February 21, 2021 (the “Business Combination Agreement”), by and among TDAC,

Trident Merger Sub II Corp., a wholly-owned subsidiary of TDAC (“Merger Sub”) and AutoLotto.

Pursuant to the terms of the

Business Combination Agreement, Merger Sub merged with and into AutoLotto with AutoLotto surviving the merger as a wholly owned subsidiary

of TDAC, which was renamed “Lottery.com Inc.”

The aggregate value of the consideration paid by TDAC to the holders of AutoLotto

common stock in the Business Combination (excluding shares that may be issued to former AutoLotto stockholders (the “Sellers”)

as earnout consideration) was approximately $440 million, consisting of approximately 40,000,000 shares of common stock valued at $11.00

In addition, each Seller shall receive its pro rata portion of 3,000,000 Seller Earnout Shares and each Founder Holder shall

receive one-third of 2,000,000 Founder Holders Earnout Shares, subject to adjustments in the normal course of business.

International

June 2021, we closed the acquisition of Global Gaming, which holds 80% of the equity of each of Aganar and JuegaLotto.

Aganar operates

in the licensed Online Lottery market in Mexico 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.

JuegaLotto is licensed

by Mexico authorities to commercialize international lottery games in Mexico through an authorized gaming portal and to commercialize

games of chance in other countries throughout Latin America.

As of the date of this Report, according to Statista, the estimated size

of the Latin American lottery market is $.68 billion with a compound annual growth rate projected at 6.05% through 2028.

it is projected that there will be 3,000,000 online lottery players in the South American lottery market alone by 2028.

Based on these

projections, we believe these acquisitions will provide opportunities for growth of our international operations throughout Mexico and

Latin America as we expand our portfolio of products, and expose our existing products to new markets.

Prior to Operational Cessation

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

As an independent

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

lottery games in the U.S.

and abroad (the “Platform”).

Our revenue generating activities included (i) offering the Platform

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

and international jurisdictions where the sale of lottery games

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

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

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

and international jurisdictions, to purchase certain legally

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

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

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

Lottery Game Platform Services

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

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

if required, for the claims and redemption process.

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

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

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

at random or picked by the user.

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

jurisdictions, a mark-up

on the purchase price.

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

Our B2B API Platform

resumed limited operations for the month of April 2023.

As of the date of this Report, our B2C Platform is not currently available to

We anticipate that our B2C Platform will become available again by mid-year 2024.

WinTogether Platform

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

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

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

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

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

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

The suspension

of the relationship was rescinded by the WinTogether board on November 16, 2023

the Operational Cessation, the Company’s subsidiaries have continued to operate under the direction of the leadership teams that

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

While the operational activities of these subsidiaries vary,

from the Operational Cessation through the date of this Report, each of TinBu, Aganar and JuegaLotto has decreased its expenses and has

had its revenue remain consistent or decrease slightly from pre-Operational Cessation levels.

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

other data, as a wholly-owned subsidiary.

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

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

organizations.

Risk Factors –

We are party to pending litigation and investigations in various jurisdictions

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

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

more information about our relationship with Tinbu.

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

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

We are not required to obtain licenses or approvals from the

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

Commercial acquirers of our Data

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

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

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

a bundle of provided services.

and JuegaLotto

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

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

(“Aganar”) and JuegaLotto,

(“JuegaLotto”).

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

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

in other countries throughout Latin America.

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

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

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

under the brand name Capalli.

Risk Factors –

We need additional capital to, among other things, support

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

Such capital may not be available on commercially acceptable terms,

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

and we may need to permanently cease our operations”

for additional information.

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

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

Subsequently, Sports.com announced a partnership

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

of November 2022.

In December 2022, Sports.com signed an agreement with Data Sports Group, GmbH (“

DSG ”), which provides

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

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

On July 23, 2023,

DSG exercised its right to terminate the exclusive distribution rights due to Sports.com not meeting its contractual obligations.

for Recommencement of Company Operations

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

on restarting certain of its core businesses.

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

outlined below.

1 - Relaunch B2B API Platform .

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

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

rules related to ticket procurement and distribution.

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

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

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

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

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

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

Our B2B API Platform resumed limited

operations in April 2023.

2 - Resume B2C Platform Operations.

The Company believes that it will be in a position to relaunch its B2C Platform by mid-year 2024.

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

of time before rolling it out to other jurisdictions.

The Company may elect to accelerate the relaunch of its Platform to customers in

another state.

The Company plans to limit the rollout in order to give it additional time to properly vet and confirm compliance with

local, state and federal rules related to ticket procurement and distribution.

For more information, see “

- Regulatory and Compliance Risks - A jurisdiction may enact, amend, or reinterpret laws and regulations governing our operations in

ways that impair our revenues, cause us to incur additional legal and compliance costs and other operating expenses, or are otherwise

not favorable to our existing operations or planned growth, all of which may have a material adverse effect on us or our results of operations,

cash flow, or financial condition .”

The Company has also maintained various pre-paid media credits that it expects to use to

launch and maintain promotional campaigns geared towards encouraging prior customers to return to the Platform and to acquire new customers.

3 - Restore Other Business Lines and Projects.

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

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

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

under development when the Operational Cessation occurred.

of the date of this Report, the current estimated cash balance of the Company and subsidiaries is approximately $36,799.

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

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

three months ended March 31, 2024.

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

ticker symbols “LTRY”

and “LTRYW,”

respectively.

As of the date of this Report, we are in compliance with Nasdaq’s

continued listing requirements (the “Listing Rules”), except for meeting their requirement for the total market value of

our publicly-held shares, as discussed in greater detail below under “

Risk Factors - Risks Related to Our Common Stock and Warrants

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

with Nasdaq’s continued listing standards in the future ,”

and have been granted a limited exception from Nasdaq to continue

the listing of our securities.

Additionally, under its new management, the Company continues to work to improve its disclosure and reporting

Also, the Company plans to overhaul its systems of internal control over financial reporting and invest in additional legal,

accounting, and financial resources.

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

able to fully regain compliance with the applicable Listing Rules, or that the Nasdaq Panel will continue to stay the delisting of the

Company’s securities on Nasdaq.

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

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

and warrants could suffer a material decline.

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

to fund its operations and/or trigger defaults and penalties under outstanding agreements or securities of the Company.

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

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

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

to support such operations in the future.

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

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

Future financing options available

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

other strategic transactions.

Equity financings may include sales of common stock.

Such financing may not be available on terms favorable

to the Company or at all.

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

and may cause significant dilution to existing stockholders.

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

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

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

These matters, when

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

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

The accompanying financial

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

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

of Our Results of Operations (Prior to the Operational Cessation)

from B2C Platform.

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

impose on each lottery game purchased from our B2C Platform.

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

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

within the U.S.

or internationally.

Currently, in the U.S, the minimum service fee is $0.50 for the purchase of a $1 lottery game and

$1 for the purchase of a $2 lottery game;

the service fee for additional lottery games purchased in the same transaction is 6% of the

face value of all lottery games purchased.

For example, the service fee for the purchase of five $2 tickets is $1.60, being the $1 base

service fee, plus 6% of the aggregate value of the face value of all lottery games purchased.

The Company did not operate its B2C platform in 2023.

Internationally,

B2C sales in jurisdictions where we do not have direct or indirect authority generate an immaterial amount of revenue, and we are assessing

our operations in these jurisdictions.

As discussed above, our B2C Platform is not currently operational.

We anticipate that our B2C

Platform will become operational by mid-year 2024.

from B2B API.

Together with our third-party commercial partner, we agree on the amount of the technology usage fee to be imposed

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

up to 50% of the net revenues from such technology usage fee and service fee pursuant to our commercial agreement with each commercial

As discussed above, following the Operational Cessation, our B2B API Platform resumed limited operations in April 2023.

Commercial acquirers of our Data Service pay a subscription for access to the Data Service and, for acquisition of certain

large data sets, an additional per record fee.

The Company additionally enters into multi-year contracts pursuant to which it sells proprietary,

anonymized transaction data pursuant to multi-year agreements and in accordance with our Terms of Service in consideration of a fee.

Our Data Services operations were not impacted by the Operational Cessation.

Operating Costs and Expenses

Personnel costs include salaries, payroll taxes, health insurance, worker’s compensation and other benefits for management

and office personnel.

Professional fees include fees paid for legal and financial advisors, accountants and other professionals related to the Business

Combination and other transactions.

and Administrative.

General and administrative expenses include marketing and advertising, expenses, office and facilities lease

payments, travel expenses, bank fees, software dues and subscriptions, expensed research and development (“R&D”) costs

and other fees and expenses.

and Amortization.

Depreciation and amortization expenses include depreciation and amortization expenses on real property and other

Trends and Factors Affecting Our Results

following describes the trends associated with our business prior to the Operational Cessation that have impacted, and which we expect

will continue to impact, our business and results of operations in a material way:

International

We face challenges related to expanding our footprint globally and the related process of obtaining the licenses and

regulatory approvals necessary to provide services and products within new and emerging markets.

The international jurisdictions where

we operate and seek to expand have been subject to increasing foreign currency fluctuations against the U.S.

dollar, inflationary pressures

and political and economic instability.

We expect these trends to continue during fiscal 2024 and believe they are likely to affect consumer

spending, which could have a material impact on our revenues.

As a result, it may take longer to achieve projected revenue gains or

generate cash in any such regions affected or any new foreign jurisdiction into which we expand.

of a new gaming platform .

We have developed a proprietary, blockchain-enabled gaming platform, which we have named Project Nexus.

Project Nexus is designed to handle high levels of user traffic and transaction volume, while maintaining expediency, security, and reliability

in (i) the processing of lottery game sales, (ii) fulfillment of retail requirements of the B2C Platform, (iii) the administrative and

back-office functionality required by our B2B API, and (iv) the requirements of our claims and redemption process.

We expect to utilize

this platform to launch new products, including any proprietary products we may introduce.

The introduction of a new technology like

Project Nexus is subject to risks including, among other things, implementation delays, issues successfully integrating the technology

into our solutions, or the possibility that the technology does not produce the expected benefits.

growth plans and the competitive landscape.

Our direct competitors operate in the global entertainment and gaming industries and,

like us, seek to expand their product and service offerings with integrated products and solutions.

Our short-to-medium term focus is

on increasing our penetration in our existing U.S.

jurisdictions by increasing direct to consumer marketing campaigns, introducing our

B2C Platform into new U.S.

and select foreign jurisdictions and acquiring synergistic regulated and sports betting enterprises domestically

in the sale of online lottery games has significantly increased in recent years, is currently characterized by intense price-based competition,

and is subject to changing technology, shifting needs and frequent introductions of new games, development platforms and services.

maintain our competitive edge alongside other established industry players (many of which have more resources, or capital), we expect

to incur greater operating short-term expenses, such as increased marketing expenses, increased compliance expenses, increased personnel

and advisory expenses associated with being a public company, additional operational expenses and salaries for personnel to support expected

growth, additional expenses associated with our ability to execute on our strategic initiatives including our aim to undertake merger

and acquisition activities, as well as additional capital expenditures associated with the ongoing development and implementation of

Project Nexus.

Plan of Operations

of the date of this Report, the Company’s primary revenue drivers are the resumption of its B2B API platform and the launch of

It is anticipated that operational costs for the next 12 months through April 30, 2024 will be greater than revenues.

is anticipated that the liquidity gap will be satisfied by equity investment or debt incurred, of which there is no assurance.

We anticipate

that our B2C Platform will become operational by mid-year 2024.

the next 12 months, the Company plans to continue to expand in domestic and international operations.

The Moreover, the Company plans

to enhance its mobile application to include pool plays, tickets subscriptions, loyalty programs and various gamification modules.

of Operations

consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include

adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should

we be unable to continue in operation.

We will require additional capital to meet our long-term operating requirements.

raise additional capital through, among other things, the sale of equity or debt securities.

Ended December 31, 2023 Compared to Year Ended December 31, 2022

following table summarizes our results of operations for the years ended December 31, 2023 and December 31, 2022, respectively.

the Year Ended December 31,

Cost of revenue

(25,179,413 )

and administrative

and amortization

operating expenses

(33,141,255 )

(24,182,724 )

$ (55,792,779 )

(31,610,055 )

Other expenses

other expenses, net

before income tax

$ (24,702,722 )

$ (60,278,909 )

(35,576,187 )

expense (benefit)

(24,702,722 )

(60,383,265 )

(35,680,543 )

Revenue for the year ended December 31, 2023 was $6.5 million, a decrease of $296 thousand, or (4%), compared to revenue of $6.8

million for the year ended December 31, 2022.

The decrease in revenue was because there were fewer months of revenue generating activity

in 2023 than in 2022.

Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing

Cost of revenue for the year ended December 31, 2023 was $5.5 million, an increase of $1.2 million, or 29%, compared to cost of

revenue of $4.3 million for the year ended December 31, 2022.

In 2022 there was revenue from services provided to partners that had lower

costs and higher margins.

Gross profit for the year ended December 31, 2023 was $937 thousand, compared to $2.5 million for the year ended December 31,

2022, a decrease of $1.5 million, or (62%).

This decrease was the result of lower overall revenue and because higher margin revenue for

services provided to partners in 2022 was not recurring.

Costs and Expenses

the Year Ended December 31,

(32,179,413 )

and administrative

and amortization

operating expenses

(33,141,255 )

the Year Ended December 31,

(32,179,413 )

and administrative

and amortization

operating expenses

(33,141,255 )

expenses for the year ended December 31, 2023 were $25.1 million, a decrease of $33.1 million, or 57%, compared to $58.2 million for

the year ended December 31, 2022.

The decrease was primarily driven by decreased stock compensation expense, decreased headcount, and

decreased marketing spend and decreased depreciation and amortization expenses during the 2023 fiscal year.

Personnel costs increased by $32.2 million, or 87%, from $37.1 million for the year ended December 31, 2022, to $4.9 million

for the year ended December 31, 2023.

The increase was due primarily to decreases in stock compensation expense of $25.7 million.

Professional fees decreased by $159 thousand, or 2% from $6.61 million for the year ended December 31, 2022 to $6.77 million

for the year ended December 31, 2023.

The decrease was driven by legal fees for outside attorneys and accountants.

and Administrative.

General and administrative expenses increased $284 thousand, or 3%, from $8.9 million for the year ended December

31, 2022 to $9.3 million for the year ended December 31, 2023.

and Amortization.

Depreciation and amortization decreased $1.4 million, or (25)%, from $5.6 million for the year ended December 31,

2022 to $4.2 million for the year ended December 31, 2023.

For the Year Ended December 31,

Other expenses

Interest expense

Other expense

Total other expenses, net

Interest expense decreased by $381 thousand, or (50%), for the year ended December 31, 2023, from $764 thousand to $383

thousand as compared to the year ended December 31, 2022.

This decrease relates to interest on the Bank Prov line of credit in 2022 which

did not occur in 2023.

Other expense increased by $3.6 million, or (96)%, for the year ended December 31, 2023 as compared to the year ended December

31, 2022 from $3.7 million to $136 thousand.

This decrease was driven primarily by a discount on asset with periodic payments of $3.5

million which was recorded in 2022.

and Capital Resources

to the Operational Cessation, our primary need for liquidity was to fund working capital requirements of our business, growth,

capital expenditures and for general corporate purposes.

Our primary source of liquidity had historically been funds generated by

financing activities.

Upon the Closing of the business combination on October 29, 2021, we received net proceeds of approximately

$42.8 million in cash.

the Operational Cessation, our primary need for liquidity has been to fund the restart of our business operations, re-hire employees

and pay our expenses.

The most likely source of such future funding presently available to us is through additional borrowings under

loan agreements or through the issuance of equity or debt securities.

If lenders do not advance us amounts as agreed under loan agreements

or we are otherwise not able to secure the necessary capital to restart our operations, hire new employees, and obtain funding sufficient

to support and restart our operations, we may be forced to permanently cease our operations, sell off our assets and operations, and/or

seek bankruptcy protection, which could cause the value of our securities to become worthless.

conditions, along with our current lack of material revenue producing activities, and significant debt, raise substantial doubt about

our ability to continue as a going concern for the next 12 months.

For more information, see Note 2 - Significant Accounting Policies,

Going Concern to the consolidated financial statements included herein, as well as the risk factors included in Item 1A of this Report

entitled “

In July 2022, we furloughed the majority of our employees and suspended our lottery game sales operations after determining

that we did not have sufficient financial sources to fund our operations or pay certain existing obligations, including our payroll and

related obligations.

As a result, we may not be able to continue as a going concern ”

We need additional capital

to, among other things, support and restart our operations, re-hire employees and pay our expenses.

Such capital may not be available

on commercially acceptable terms, if at all.

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

plans to recommence our operations and we may need to permanently cease our operations.

Debt Obligations

to the Closing, we funded our operations through the issuance of convertible promissory notes.

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 bore interest at 10% per year, were unsecured, and were due and payable on June 30, 2019.

The Company and

the noteholders executed amendments in February 2021 to extend the maturity date to December 21, 2021.

November 2019 through October 28, 2021, we issued approximately $48.2 million in aggregate principal amount of Series B convertible promissory

The notes bore interest at 8% per year, were unsecured, and were due and payable on dates ranging from December 2020 to December

For those promissory notes that would have matured on or before December 31, 2020, the parties extended the maturity date to December

21, 2021 through amendments executed in February 2021.

The amendments also allowed for automatic conversion to equity as a result of

the Business Combination.

Nearly all of the aforementioned promissory notes automatically converted into shares of Common Stock or were

terminated pursuant to their terms, as applicable, in connection with the Closing.

Those that remain outstanding do not have conversion

terms that were triggered by the Closing.

prior to the Closing, approximately $60.0 million of convertible debt was converted into equity of AutoLotto.

of December 31, 2023, we had $1,256,595 of convertible debt outstanding.

This debt is in default.

“- Recent Developments- Loan Agreement with Woodford ”

and “Loan Agreement with United Capital Investments

London Limited”

above for additional information.

cash used by operating activities was $2.03 million for the year ended December 31, 2023, compared to net cash used by operating activities

of $31.3 million for the year ended December 31, 2022.

Factors affecting changes in operating cash flows were interest and stock-based

compensation expense along with decreased expenses for personnel costs, and sales and marketing activities in 2023 as compared to 2022.

Net cash used in investing activities during the year ended December 31, 2023 was $0, compared to $1.3 million for the prior year.

decrease was because there were no expenditures for development of intangible assets during 2023.

Net cash provided by financing activities

was $2.3 million for the year ended December 31, 2023, compared to $16 thousand for the year ended December 30, 2022.

The increase was

due to funding received under convertible debt arrangements in 2023.

in or Adoption of Accounting Practices

following U.S.

GAAP standards have been recently issued by the Financial Accounting Standards Board (the “FASB”).

in the process of assessing the impact of these new standards on future consolidated financial statements.

Pronouncements that are not

applicable or where it has been determined do not have a significant impact on the Company have been excluded herein.

606, Revenue from Contracts with Customers

May 2014 and December 2016, the FASB issued several Accounting Standards Updates (“ASUs”)’s on ASC 606, which updates

superseded nearly all previous revenue recognition guidance under U.S.

The core principle is to recognize revenues when promised

goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled

for those goods or services.

A five-step process has been defined to achieve this core principle, and, in doing so, more judgment and

estimates may be required within the revenue recognition process than are required under existing U.S.

The standards are effective

for annual periods beginning after December 15, 2017 using either of the following transition methods:

(i) a full retrospective approach

reflecting the application of the standards in each prior reporting period with the option to elect certain practical expedients;

(ii) a retrospective approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which

includes additional footnote disclosures).

The Company adopted these standards effective on January 1, 2018, and management concluded

the adoption of this standard did not result in any financial statement impacts or changes to revenue recognition policies or processes

as revenue is primarily derived from arrangements in which the transfer of control coincides with the fulfillment of performance obligations.

Accounting Policies

financial statements are prepared in conformity with U.S.

Certain of our accounting policies require that management apply significant

judgments and estimates in defining the appropriate assumptions integral to financial estimates.

Judgments are based on historical experience

and other factors that we believe to be reasonable under the circumstances, such as terms of contracts, industry trends and information

available from outside sources, as appropriate.

However, by their nature, judgments are subject to an inherent degree of uncertainty,

and therefore actual results could differ from our estimates.

We have applied significant estimates and assumptions related to the following:

and Cost Recognition

May of 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09,

Revenue from Contracts with Customers (Topic 606) (“ASC 606”), amending revenue recognition guidance and requiring a more

structured approach to measuring and recognizing revenue as well as provide more detailed disclosures to enable users of financial statements

to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

guidance is effective for accounting periods commencing on or after January 1, 2018.

have applied ASC 606 to all revenue contracts.

The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer

of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in

exchange for those goods or services.

Revenues are generally recognized upon the transfer of control of promised products provided to

our users, customers and subscribers, reflecting the amount of consideration we expect to receive for those products.

We enter into contracts

that can include various products, which are generally capable of being distinct and accounted for as separate performance obligations.

Revenue is recognized net of any taxes collected from users, commercial partners and subscribers, which are subsequently remitted to

governmental authorities.

The revenue recognition policy is consistent for sales generated directly with users and sales generated indirectly

through affiliates, other solution partners, and our commercial partners.

are recognized upon the application of the following steps:

Identification

of a contract or contracts with a user, customer or subscriber;

Identification

of performance obligation(s) in the contract;

Determination

of the transaction price;

of the transaction price to the performance obligations in the contract;

of revenue when, or as, the performance obligation is satisfied.

with users and customers for lottery game sales are at the point of sale and may include transfer of multiple products to a user or a

customer and generally do not require future obligations.

In these situations, the Company generally considers each transferred product

as a separate performance obligation.

The Company also has contracts with subscribers for the continued delivery of lottery and anonymized

transaction data over a defined period of time.

In accounting for these contracts, the Company generally considers each set of data as

a separate performance obligation and recognizes revenue on their delivery ratably over the service period of the agreement.

The Company’s

products are sold without a right of return or refund;

the Company’s terms of service and contracts generally include specific

language that disclaims any warranties.

addition, the Company’s performance obligation in agreements with certain third parties is to transfer previously acquired Affiliate

Marketing Credits.

The payment for these credits by the third parties 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 third party.

This transfer is point-in-time when

the revenue is recognized, and there are no variable considerations related to this performance obligation.

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;

(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 2020 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 2018 through 2020 tax years remain open for examination

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

a business combination, substantially all identifiable assets, liabilities and contingent liabilities acquired are recorded at the date

of acquisition at their respective fair values.

One of the most significant areas of judgment and estimation relates to the determination

of the fair value of these assets and liabilities, including the fair value of contingent consideration, if applicable.

If any intangible

assets are identified, depending on the type of intangible asset and the complexity of determining its fair value, an independent external

valuation expert may develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total

expected future net cash flows.

These valuations are linked closely to the assumptions made by our management regarding the future performance

of the assets concerned and any changes in the discount rate applied.

value of financial assets and financial liabilities

value of financial assets and financial liabilities recorded in the consolidated statements of financial position, which cannot be derived

from active markets, is determined using a variety of techniques including the use of valuation models.

The inputs to these models are

derived from observable market data where possible, but where observable market data is not available, judgment is required to establish

Judgment includes, but is not limited to, consideration of model inputs such as volatility, estimated life and discount

value of stock options and warrants

use 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 our share price.

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

useful lives, depreciation of property, plant and equipment, and amortization of intangible assets

of property, plant and equipment and amortization of intangible assets is dependent upon estimates of useful lives based on management’s

The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that consider factors such

as economic and market conditions and the useful lives of assets.

and intangible assets

and indefinite life intangible asset impairment testing require us to make estimates in the impairment testing model.

On an annual basis,

we test whether goodwill and indefinite life intangible assets are impaired.

Impairment is influenced by judgment in defining a cash-generating

unit (“CGU”) and determining the indicators of impairment, and estimates used to measure impairment losses.

The recoverable

amount is the greater of value in use and fair value less costs to sell.

The recoverable value of goodwill, indefinite and definite long-lived

assets is determined using discounted future cash flow models, which incorporate assumptions regarding projected future cash flows and

capital investment, growth rates and discount rates.

Tax Asset and Valuation Allowance

for deferred tax assets, including those arising from tax loss carry-forwards, requires management to assess the likelihood that we will

generate sufficient taxable earnings in future periods in order to utilize recognized deferred tax assets.

Assumptions about the generation

of future taxable profits depend on management’s estimates of future cash flows.

In addition, future changes in tax laws could

limit our ability to obtain tax deductions in future periods.

To the extent that future cash flows and taxable income differ significantly

from estimates, the ability of the Company to realize the net deferred tax assets recorded at the reporting date could be impacted.

Growth Company Accounting Election

102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards

until private companies are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company

can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth

companies, and any such election to not take advantage of the extended transition period is irrevocable.

We are an “emerging growth

company”

as defined in Section 2(a) of the Securities Act of 1933, as amended, and have elected to take advantage of the benefits

of this extended transition period.

We expect to remain an emerging growth company through the end of the 2024 fiscal year and we expect

to continue to take advantage of the benefits of the extended transition period.

This may make it difficult or impossible to compare

the financial results with the financial results of another public company that is either not an emerging growth company or is an emerging

growth company that has chosen not to take advantage of the extended transition period exemptions for emerging growth companies because

of the potential differences in accounting standards used.

Quantitative and Qualitative Disclosures About Market Risk.

a “smaller reporting company”

as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this

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 5. Market for Registrant’s Common Equity