What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-06-04 compared with 2023-05-10 · 923 added, 858 removed, 1447 unchanged (55% of the section changed)

Risk Factors.

We have identified the following

risks and uncertainties that may have a material adverse effect on our business, financial condition, results of operations or reputation.

have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results

of operations or reputation.

The risks described below are not the only risks we face.

Additional risks not presently known to us or that we currently believe are

not material may also significantly affect our business, financial condition, results of operations or reputation.

Our business could

be harmed by any of these risks.

The risk factors described below should be read together with the other information set forth in this

Amended Report, including our consolidated financial statements and the related notes, as well as in other documents that we file with

Additional risks not presently known to us or

that we currently believe are not material may also significantly affect our business, financial condition, results of operations or

Our business could be harmed by any of these risks.

The risk factors described below should be read together with the other

information set forth in this Amended Report, including our consolidated financial statements and the related notes, as well as in other documents

that we file with the SEC.

Relating to the Internal Investigation, Restatement of our Consolidated Financial Statements, Our Ability to Continue as a Going Concern,

Our Internal Controls and Related Matters

The findings of the previously

disclosed Internal Investigation and other matters have exposed us to a number of legal proceedings, investigations and inquiries, resulted

in significant legal and other expenses, required significant time and attention from our senior management, among other adverse impacts.

As previously disclosed in the

Company’s Current Reports on Form 8-K, initially filed with the SEC on July 6, 2022 and July 22, 2022, the Board retained outside

counsel to conduct the Internal Investigation that revealed instances of non-compliance with state and federal laws concerning the state

in which tickets are procured as well as order fulfillment, and issues pertaining to the Company’s internal accounting controls.

Certain of these issues contributed to the Company’s auditors’ determination that the Company’s audited financial statements

for the year ended December 31, 2021 and the unaudited financial statement for the quarter ended March 31, 2022, should no longer be relied

upon and required restatement.

These issues have had and could

continue to have material adverse impacts on us.

We and certain of our former officers are the subject of a number of legal proceedings,

investigations and inquiries with respect to these issues and have been named as a defendant in a number of lawsuits, including class

action lawsuits.

We incurred significant costs in connection with the Internal Investigation, including legal expenses and cost associated

with the restatement and adjustment of our financial statements.

We may also incur material costs associated with our indemnification

arrangements with our current and former directors and certain of our officers, as well as other indemnitees.

Moreover, an unfavorable

outcome in any of these matters could result in significant damages, additional penalties or other remedies imposed against us, and/or

our current or former directors or officers, which could harm our reputation, business, financial condition, results of operations or

In addition, an unfavorable outcome in any of these matters could exceed coverage provided, if any, under potentially applicable

insurance policies, which is limited.

For example, we currently do not have an effective director and officer liability insurance policy

in place for our current officers and directors, and may not have the financial resources or otherwise be able to obtain a director and

officer liability insurance at reasonable cost or terms in the future.

These issues have also led to material adverse impacts on our operations,

including the Operational Cessation, our reputation and our relationships with business partners, as well as material adverse impacts

on our financial position, including incurred costs and expenses and our ability to raise new capital in the future.

Further, our senior

management team devoted significant time to facilitate the Internal Investigation and is expected to continue to devote significant time

and efforts to address the impacts associated with or arising from the Internal Investigation.

We cannot predict all impacts

on us in connection with or arising from any of the foregoing.

Any unknown or new risks might result in a material adverse effect on us.

We and certain of our former

officers are, and in the future, we or our officers and directors may become, the subject of legal proceedings, investigations and inquiries

by governmental agencies with respect to the findings of the Internal Investigation and other matters, which could have a material adverse

effect on our reputation, business, financial condition, cash flows and results of operations, and could result in additional claims and

material liabilities.

Certain of our former officers

are currently the subject of investigations and inquiries by the SEC and the U.S.

Department of Justice (the “DOJ”) relating

to the findings of the Internal Investigation and other matters, and we are cooperating fully with such investigations and inquiries.

In the future, we or our officers and directors may become the subject of legal proceedings, investigations and inquiries by governmental

agencies in various jurisdictions relating to the findings of Internal Investigation and other matters.

These investigations and inquiries

and any other similar or related future legal proceedings, investigations or inquiries are subject to inherent uncertainties, and the

actual costs to be incurred relating to these matters will depend upon many unknown factors.

We are unable to predict the outcome of these

legal proceedings, investigations and inquiries, and we could be forced to expend significant resources in the defense of these

actions, and we may not prevail.

Cooperating with as well as monitoring and defending against the legal actions is time-consuming for

management and detracts from their ability to fully focus our internal resources on continuing to restart our business operations, which

could result in delays in our anticipated recommencement plan.

In addition, we have already incurred and may continue to incur substantial

legal fees and costs in connection with these matters.

We are also generally obligated, to the extent permitted by law, to indemnify our

current and former directors and officers who are named in these and similar actions and do not have an effective director and officer

liability insurance policy in place for our current officers and directors.

We are not currently able to estimate the possible cost to

us from these matters, as we cannot be certain how long they may take to resolve or the possible amount of any civil penalties or damages,

if any, that we may be required to pay.

It is possible that we could, in the future, incur judgments or enter into settlements of claims

for monetary damages.

Decisions adverse to our interests in these actions could result in damages, fines, penalties, consent orders or

other administrative sanctions against the Company and/or our officers, or in changes to our business practices, among others, any of

which could have a material adverse effect on our cash flow, results of operations and financial position.

findings of the previously disclosed Internal Investigation and other matters have exposed us to a number of legal proceedings, investigations

and inquiries, resulted in significant legal and other expenses, required significant time and attention from our senior management,

among other adverse impacts.

As disclosed in the Company’s Current Reports on Form 8-K, initially filed with the SEC on July 6, 2022 and July 22, 2022,

the Board retained outside counsel to conduct the Internal Investigation that revealed instances of non-compliance with state and federal

laws concerning the state in which tickets are procured as well as order fulfillment, and issues pertaining to the Company’s internal

accounting controls.

of these issues contributed to the Company’s auditors’ determination that the Company’s audited financial statements

for the year ended December 31, 2021 and the unaudited financial statement for the quarter ended March 31, 2022, should no longer be

relied upon and required restatement.

a consequence, on May 10, 2023 and May 15, 2023 respectively, the Company filed with the SEC as amended reports the required restatements

of its year-end report for December 31, 2021 and for the quarter ended March 31, 2022.

aforementioned issues have had and could continue to have material adverse impacts on the Company.

The Company and certain of our former

officers are the subject of a number of legal proceedings, investigations and inquiries with respect to cited issues and have been named

as a defendant in a number of lawsuits, including class action lawsuits.

The Company incurred significant costs in connection with the

Internal Investigation, including legal expenses and costs associated with the restatement and adjustment of our financial statements.

We may also incur material costs associated with our indemnification arrangements with our current and former directors and certain of

our officers, as well as other indemnitees.

Moreover, an unfavorable outcome in any of these matters could result in significant damages,

additional penalties or other remedies imposed against the Company, and/or our current or former directors or officers, which could harm

our reputation, business, financial condition, results of operations or cash flows.

In addition, an unfavorable outcome in any of these

matters could exceed coverage provided, if any, under potentially applicable insurance policies, which is limited.

For example, we currently

do not have an effective director and officer liability insurance policy in place for our current officers and directors, and may not

have the financial resources or otherwise be able to obtain a director and officer liability insurance at reasonable cost or terms in

These issues have also led to material adverse impacts on our operations, our reputation and our relationships with business

partners, as well as material adverse impacts on our financial position, including incurred costs and expenses and our ability to raise

new capital in the future.

Further, our senior management team has devoted significant time to facilitate the Internal Investigation

and is expected to continue to devote significant time and efforts to address the impacts associated with or arising from the Internal

Investigation.

cannot predict all impacts on the Company in connection with or arising from any of the foregoing.

Any unknown or new risks might result

in a material adverse effect on us.

and certain of our former officers are, and in the future, we or our officers and directors may become, the subject of legal proceedings,

investigations and inquiries by governmental agencies with respect to the findings of the Internal Investigation and other matters, which

could have a material adverse effect on our reputation, business, financial condition, cash flows and results of operations, and could

result in additional claims and material liabilities.

of our former officers are currently the subject of investigations and inquiries by the SEC and the U.S.

Department of Justice (the “DOJ”).

The Company is cooperating fully with such investigations and inquiries.

In the future, we or our officers and directors

may become the subject of legal proceedings, investigations, and inquiries by governmental agencies in various jurisdictions relating

to the findings of Internal Investigation and other matters.

investigations and inquiries and any other similar or related future legal proceedings, investigations or inquiries are subject to inherent

uncertainties, and the actual costs to be incurred relating to these matters depend upon many unknown factors.

We are unable to predict

the outcome of any of these legal proceedings, investigations, and inquiries, and we could be forced to expend significant resources in

the defense of one or more of these actions.

There is also the risk that we may not prevail in any proceeding involving us.

with, as well as monitoring and defending against, any of these actions is time-consuming for management and detracts from their ability

to fully focus our internal resources pertaining to our business operations.

In addition, we have already incurred and may continue to

incur substantial legal fees and costs as well as internal administrative time, in connection with such matters.

We are also generally

obligated, to the extent permitted by law, when applicable, to indemnify our current and former directors and officers who may be named

in these or similar actions;

moreover, we do not currently have an effective director and officer liability insurance policy in place

for our current officers and directors.

We are not currently able to estimate the possible cost to us from these matters, as we cannot

be certain how long they may take to resolve or the possible amount of any civil penalties or damages, if any, that we may be required

It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages.

adverse to our interests in these actions could result in damages, fines, penalties, consent orders or other sanctions against the Company

and/or our officers, or in changes to our business practices, among others, any of which could have a material adverse effect on our

cash flow, results of operations and financial position.

publicity surrounding any such proceeding, investigation or inquiry or any enforcement action as a result thereof, even if ultimately

30 unchanged sentences

and inquiries, and we cannot assure you with any certainty that we will be able to obtain such coverage in the future.

relating to or arising from the restatement and the Internal Investigation, including adverse publicity and potential concerns from our

users, customers or others with whom we do business, have had and could continue to have an adverse effect on our business and financial

have been and could continue to be the subject of negative publicity focusing on the Internal Investigation and the restatement and adjustment

of our financial statements, and we may be adversely impacted by negative reactions from our users, customers or others with whom we

Concerns include the perception of the effort required to address our accounting and control environment, and the ability

for us to be a long-term provider to our customers.

Continued adverse publicity and potential concerns from our customers and business

partners or others could harm our business and have an adverse effect on our financial condition.

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 resources to fund our operations or pay certain existing obligations, including our payroll and related

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

In July 2022, we furloughed the

majority of our employees and ceased our operations after determining that we did not have sufficient financial resources to fund our

operations or pay certain existing obligations, including our payroll and related obligations.

As of March 31, 2022, the Company owed

approximately $1.4 million in outstanding payroll obligations, which amounts remain unpaid.

Since our business is largely dependent on

the efforts and talents of our employees, particularly our developers and engineers, and the provision of ongoing services to customers

by our employees, the loss of these employees has and may continue to result in the inability of the Company to operate its business and

technology, meet its obligations to customers, maintain key customer relationships and revenue, and fulfill its contractual obligations.

order for the Company to restart its operations, it must raise sufficient capital to re-hire employees.

Qualified employees may not be

available for hire, and/or may require salaries or benefits in excess of what we paid persons in similar positions previously, due to

among other things, our need to hire such persons away from their current jobs and the negative impact that the furlough has had on our

we are not able 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.

Matters relating to or arising from the financial filing restatements, the

investigations and regulatory inquiries, including adverse publicity connected to these matters as well as other concerns, coupled with

potential concerns from our users, customers or others with whom we do business, have had and could continue to have an adverse effect

on our business and financial condition.

have been and could continue to be the subject of negative publicity focusing on the Internal Investigation and the restatements and

adjustments to our financial statements, and we may be adversely impacted by negative reactions from our users, customers or others with

whom we do business.

Concerns include the perception of the effort required to address our accounting and control environment, and the

ability for us to be a long-term provider to our customers.

Continued adverse publicity and potential concerns from our customers and

business partners or others could harm our business and have an adverse effect on our financial condition.

In July 2022, the Company furloughed the majority of its employees and suspended lottery game sales operations after determining that

it did not have sufficient financial resources to fund its operations or pay certain existing obligations, including payroll and related

As a result, the Company may not be able to continue as a going concern.

July 2022, the Company furloughed the majority of our employees and ceased its operations after determining that it did not have sufficient

financial resources to fund our operations or pay certain existing obligations, including payroll and related obligations.

As of December

31, 2023, the Company owed approximately $3.85 million in outstanding payroll obligations, which amount remains unpaid.

business is largely dependent on the efforts and talents of our employees and contractors, particularly those who are our developers

and engineers, and the provision of ongoing services to customers by our employees and contractors, the loss of these employees and contractors

has and may continue to result in the inability of the Company to operate its business and technology, meet its obligations to customers,

maintain key customer relationships and revenue, and fulfill its contractual obligations.

order for the Company to fully restart its operations, it must raise sufficient capital to re-hire or hire additional employees.

Qualified employees may not be available for hire, and/or may require salaries or benefits in excess of what we paid persons in

similar positions previously, due to among other things, inflation and other economic factors, the need to hire such persons away

from their current jobs and the negative impact that the furlough has had on our reputation.

we are not able to restart our operations, hire new employees and engage new contractors, 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 or a corporate reorganization, which could cause the value of our securities to become worthless, or at best, become devalued

in the marketplace

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.

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

The accompanying financial statements have been prepared in accordance

5 unchanged sentences

The financial statements included herein also include a going concern footnote.

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

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.

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

The most likely

source of future funds presently available to us will be through future borrowings under the Loan Agreement (of which $1.25 million is

still owed to us as of the date of this Amended Report and which may not be funded in the future) or through the sale of equity or debt.

We may have difficulty obtaining additional funding, and we may have to accept terms that would adversely affect our stockholders.

example, the terms of any future financings, similar to the Loan Agreement, may impose restrictions on the manner in which we conduct

our business, including our ability to pay dividends.

Additionally, lending institutions or private investors may impose restrictions

on a future decision by us to make capital expenditures, acquisitions or significant asset sales.

Obtaining additional financing involves

certain risks, including:

need additional capital to, among other things, support and restart our operations, re-hire or hire employees and engage contractors

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.

need to raise capital to, among other things, support and restart our operations, re-hire or hire employees, engage contractors and

pay our expenses.

The most likely source of future funds presently available to us will be through future borrowings under one or

more loan agreements or through the sale of equity or debt.

We may have difficulty obtaining additional funding, and we may have to

accept terms that would adversely affect our stockholders.

For example, the terms of any future financings, similar to the UCIL Loan Agreement, may impose restrictions on the manner in which we conduct our business, including our ability

to pay dividends.

Additionally, lending institutions or private investors may impose restrictions on a future decision by us to make

capital expenditures, acquisitions or significant asset sales.

Obtaining additional financing involves certain risks,

equity or debt financing may not be available to us on satisfactory terms, if at all;

we raise additional funds by issuing equity, equity-linked securities or debt securities,

those securities may have rights, preferences or privileges senior to the rights of our currently

issued and outstanding equity or debt, and our existing stockholders may experience dilution;

or other debt instruments may have terms and/or conditions, such as interest rate, restrictive

covenants and control or revocation provisions, which are not acceptable to management or

we raise additional funds by issuing equity, equity-linked securities or debt securities, those securities may have rights, preferences

or privileges senior to the rights of our currently issued and outstanding equity or debt, and our existing stockholders may experience

or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants and control or revocation

provisions, which are not acceptable to management or our Board;

may not have sufficient funds to repay our debt, which could lead us to default on our obligations;

current environment in capital markets combined with our capital constraints may prevent

us from being able to obtain adequate debt financing.

Woodford does not advance us amounts owed under the Loan Agreement and/or we are unable to raise additional funds, we may not be able

to raise enough capital to recommence our operations and run our business.

Consequently, we may be forced to curtail or even abandon

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

current environment in capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt

funds advanced under our current loan agreements are inadequate to meet our needs, and/or we are unable to raise additional funds, we

may not be able to raise enough capital to recommence our operations and operate our business.

Consequently, we may be forced to curtail

or even abandon our plan to recommence our operations and we may need to permanently cease our operations.

the operating relationship between the Company and some of its partners, such as the minority owners of Aganar and JuegaLotto, may be

negatively impacted by the Company’s lack of liquidity.

If these relationships were to become strained or be terminated

entirely, it could have a material adverse effect on our reputation, business, financial condition, including our ability to raise new

capital, cash flows and results of operations.

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

meet our reporting obligations or prevent fraud, and, as a result, investor confidence and the trading price of our common stock and warrants may be

materially and adversely affected.

1 unchanged sentence

registered public accounting firm identified certain material weaknesses in our internal control over financial reporting as of December

As defined in the standards established by the U.S.

Public Company Accounting Oversight Board, or PCAOB, a “material

weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable

possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely

material weaknesses as of December 31, 2021 identified include:

Such material weaknesses have not been fully remediated as of December 31, 2023.

As defined in the standards established by

Public Company Accounting Oversight Board, or PCAOB, a “material weakness” is a deficiency, or combination of deficiencies,

in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual

or interim financial statements will not be prevented or detected on a timely basis.

material weaknesses as of December 31, 2022 and 2021 identified include:

of sufficient number of personnel with an appropriate level of knowledge and experience in accounting for complex or non-routine

5 unchanged sentences

a result of the material weaknesses, management has concluded that our internal control over financial reporting was ineffective as of

December 31, 2021.

December 31, 2022 and 2021, and these deficiencies remain uncorrected as of December 31, 2023.

intend to implement measures to remediate the identified material weaknesses.

7 unchanged sentences

Controls and Procedures-Material Weaknesses in Internal Control Over Financial

Reporting (as restated) .”

there can be no guarantee that the Internal Investigation and subsequent inquiries revealed all instances of inaccurate disclosure or

41 unchanged sentences

and how quickly we are able to effectively remediate the identified material weaknesses in our internal control over financial reporting.

Our filing of our quarterly reports and annual report has been delayed and we cannot assure you we will be able to timely make our future

Our filing of our quarterly reports and annual reports has been delayed and we cannot assure you we will be able to timely make our future

cases where we delay our filings, investors will need to evaluate certain decisions with respect to our shares of common stock and warrants

47 unchanged sentences

and globally following the financial crisis in 2008 through 2009,

and there appears to be an increasing risk of a recession or inflationary economic impacts due to international trade and monetary policy,

rising interest rates and inflation, and acts or threats of acts of war (including the ongoing war in Ukraine), along with other economic

If the national and international economic recovery slows or stalls, these economies experience another recession, or any

of the relevant regional or local economies suffers a downturn, or if inflationary effects accelerate, we may experience a material adverse

effect on our business, financial condition, or results of operations.

and there may be an increasing risk of a recession or inflationary economic impacts due to international trade and monetary policy, rising

interest rates and inflation, and acts or threats of acts of war (including the ongoing war in the Ukraine and Middle East), along with

other economic challenges.

If the national and international economic recovery slows or stalls, these economies experience another recession,

or any of the relevant regional or local economies suffers a downturn, or if inflationary effects accelerate, we may experience a material

adverse effect on our business, financial condition, or results of operations.

addition, changes in general market, economic, and political conditions in domestic and foreign economies or financial markets, including

those resulting from, for example:

the ongoing impact of the COVID-19 pandemic;

the ongoing effects of the COVID-19 pandemic;

rising interest rates and inflation;

geopolitical challenges,

including global security concerns in response to Russia’s continued war in Ukraine;

financial and credit market instability or

the unavailability of credit;

and fluctuation in stock markets, may reduce users’, customers’, or subscribers’ disposable

income and corporate budgets.

Any one of these changes could have a material adverse effect on our business, financial condition, or

results of operations and could cause the value of our securities to decline or become worthless.

including global security concerns in response to Russia’s continued war in Ukraine and regional wars in the Middle East;

and credit market instability or the unavailability of credit;

and fluctuation in stock markets, may reduce users’, customers’,

or subscribers’ disposable income and corporate budgets.

Any one of these changes could have a material adverse effect on our business,

financial condition, or results of operations and could cause the value of our securities to decline or become worthless.

in discretionary consumer spending could have an adverse effect on our business, financial condition, and results of operations.

27 unchanged sentences

opinion can significantly influence our business.

Unfavorable publicity regarding, for example, us, members of our management and Board,

Unfavorable publicity regarding, for example, our company, members of our management and Board,

our technology, our implementation of upgrades and changes to our technology, the quality of our Platform and its interfaces, our product

14 unchanged sentences

and results of operations.

ability to achieve growth in revenue in the future will depend, in large part, upon our ability to attract new players to our offerings,

retain existing users of our offerings, and reactivate users in a cost-effective manner.

Achieving growth in our community of users may

require us to increasingly engage in sophisticated and costly sales and marketing efforts, which may not make sense in terms of return

on investment.

We have used and expect to continue to use a variety of free and paid marketing channels, in combination with the promotional

activity of in-state and multi-state issued lottery games, to achieve our objectives.

For paid marketing, we intend to leverage a broad

array of advertising channels, which may include a combination of radio and social media platforms, such as Facebook, Instagram, and

Twitter, affiliate marketing, paid and organic search engines, and other digital channels, such as mobile display.

If the search engines

on which we rely modify their algorithms, change their terms around gaming and lottery, or if the prices at which we may purchase listings

increase, then our costs could increase, and fewer users may click through to our websites or download our application.

If links to our

websites or application are not displayed prominently in online search results, if fewer users click through to our websites or application,

if our other digital marketing campaigns are not effective, or if the costs of attracting users using any of our current methods significantly

increase, then our ability to efficiently attract new users could be reduced, our revenue could decline, and our business, financial

condition, and results of operations could be harmed and could cause the value of our securities to decline or become worthless.

ability to achieve growth in revenue in the future will depend, in large part, upon our ability to attract new players to our

offerings, retain existing users of our offerings, and reactivate users in a cost-effective manner.

Achieving growth in our

community of users may require us to increasingly engage in sophisticated and costly sales and marketing efforts, which may not make

sense in terms of return on investment.

We have used and expect to continue to use a variety of free and paid marketing channels, in

combination with the promotional activity of in-state and multi-state issued lottery games, to achieve our objectives.

marketing, we intend to leverage a broad array of advertising channels, which may include a combination of radio and social media

platforms, such as Facebook, Instagram, and X (formerly Twitter), affiliate marketing, paid and organic search engines, and other

digital channels, such as mobile display.

If the search engines on which we rely modify their algorithms, change their terms around

gaming and lottery, or if the prices at which we may purchase listings increase, then our costs could increase, and fewer users may

click through to our websites or download our application.

If links to our websites or application are not displayed prominently in

online search results, if fewer users click through to our websites or application, if our other digital marketing campaigns are not

effective, or if the costs of attracting users via any of our current methods significantly increase, then our ability to

efficiently attract new users could be reduced, our revenue could decline, and our business, financial condition, and results of

operations could be harmed and could cause the value of our securities to decline or become worthless.

addition, our ability to increase the number of users of our offerings will depend on user adoption of playing lottery games remotely

13 unchanged sentences

and could cause the value of our securities to decline or become worthless.

to the Operationally Cessation, Internet search engines drove traffic to our B2C Platform and our user growth could decline and our business,

to the Operational Cessation, Internet search engines drove traffic to our B2C Platform and our user growth could decline and our business,

financial condition, and results of operations would be adversely affected if we fail to appear prominently in search results when we

17 unchanged sentences

names that infringe on, are similar to, or otherwise decrease the value of our brand, trademarks, or service marks.

have registered domain names that we use in, or are related to, our business, most importantly www.lottery.com and sports.com .

have registered domain names that we use in, or are related to, our business, most importantly www.lottery.com and www.

We believe our easily identifiable and definitional brands and domain names are one of our competitive strengths.

If we lose the ability

to use our domain names, especially www.lottery.com and sports.com , whether due to trademark claims, failure to renew applicable

registrations, or any other cause, we may be forced to incur significant expense in order to attempt to purchase rights to the domain

name in question, the failure of which would require us to market the relevant offerings under a new domain name, and we may be required

to change our brand, which could cause us substantial harm and expense, and could negatively impact our business, financial condition,

and results of operations.

to use our domain names, especially www.lottery.com and www.

sports.com , whether due to trademark claims, failure to renew

applicable registrations, or any other cause, we may be forced to incur significant expense in order to attempt to purchase rights to

the domain name in question, the failure of which would require us to market the relevant offerings under a new domain name, and we may

be required to change our brand, which could cause us substantial harm and expense, and could negatively impact our business, financial

condition, and results of operations.

We may not be able to obtain preferred domain names outside the U.S.

due to a variety of reasons.

our competitors and others could attempt to capitalize on our brand recognition by using domain names similar to ours.

We may be unable

to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our

brand or our trademarks or service marks.

Protecting, maintaining, and enforcing our rights in our domain names may require litigation,

which could result in substantial costs and diversion of resources, all of which could, in turn, adversely affect our business, financial

condition, and results of operations and could cause the value of our securities to decline or become worthless.

are subject to risks related to corporate social responsibility, responsible gaming, reputation, and ethical conduct.

In addition, our competitors and others could attempt to capitalize on our brand recognition by using domain names similar to ours.

may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease

the value of our brand or our trademarks or service marks.

Protecting, maintaining, and enforcing our rights in our domain names may

require litigation, which could result in substantial costs and diversion of resources, all of which could, in turn, adversely affect

our business, financial condition, and results of operations and could cause the value of our securities to decline or become worthless.

are subject to risks related to corporate social responsibility, responsible gaming, reputation, and ethical

factors influence our reputation and the value of our brands, including the perception held by our users, customers, business partners,

investors, regulatory authorities, other key stakeholders, and the communities in which we operate, such as our social responsibility,

corporate governance, and responsible gaming practices.

We have faced, and will likely continue to face, increased scrutiny related to

social, governance and responsible gaming activities, and our reputation and the value of our brands can be materially adversely harmed

if we fail to act responsibly in a number of areas, such as diversity and inclusion, workplace conduct, responsible gaming, human rights,

philanthropy, and support for local communities.

Any harm to our reputation could impact employee engagement and retention, and the willingness

of users, customers and partners to do business with us, which could have a materially adverse effect on our business, financial condition,

investors, regulatory authorities, key stakeholders, and the communities in which we operate, such as our social responsibility, corporate

governance, and responsible gaming practices.

We have faced, and will likely continue to face, increased scrutiny related to social,

governance and responsible gaming activities, and our reputation and the value of our brands can be materially adversely harmed if we

fail to act responsibly in a number of areas, such as diversity and inclusion, workplace conduct, responsible gaming, human rights, philanthropy,

and support for local communities.

Any harm to our reputation could impact employee engagement and retention, and the willingness of

users, customers and partners to do business with us, which could have a materially adverse effect on our business, financial condition,

and results of operations and could cause the value of our securities to decline or become worthless.

3 unchanged sentences

Operational Risks

have incurred net losses in the past with negative cash flows and recently suspended our operations and may not be able to generate and

sustain profitability.

We have a history of incurring

net losses and have suspended significantly all of our operations since July 2022.

We may not be able to achieve or maintain profitability

in the future.

have incurred net losses in the past with negative cash flows and suspended operations and may not be able to generate and sustain profitability.

have a history of incurring net losses and have suspended significantly our operations since July 2022, the Operational Cessation.

We may not be able to achieve or maintain a needed level of profitability in the future.

We experienced net losses of approximately

0 million for the year ended December 31, 2021, and experienced net losses

of approximately $5.81 million and $10.77 million for the years ended December 31, 2020 and December 31, 2019, respectively.

As of December

31, 2021, we had an accumulated deficit of approximately $148.2 million.

While we have received some limited revenue since the Operational

Cessation, we cannot predict when or whether we will be able to restart our operations and/or whether or not we will be able to reach

profitability at any time in the future.

also expect our operating expenses to increase in the future as we continue to invest for our future growth, which will negatively affect

our results of operations if our total revenue does not increase.

We cannot ensure that these investments will result in substantial

increases in our total revenue or improvements in our results of operations.

In addition to the anticipated costs to grow our business,

we also expect to incur significant additional legal, accounting, and other expenses as a public company.

Once we restart our operations,

any failure to increase our revenue or to manage our costs could prevent us from achieving or maintaining profitability or positive cash

$24.2 million for the year ended December 31, 2023, and approximately $60.0 million and $53.0 million for

the years ended December 31, 2022 and December 31, 2021, respectively.

As of December 31, 2023, we had an accumulated deficit of

approximately $235.1 million.

While we have received some limited revenue since the Operational Cessation, we cannot predict when or

whether we will be able to fully restart our operations and/or whether or not we will be able to reach profitability at any time in

also expect our operating expenses to increase in the future as we continue to invest for our future growth, which will negatively

affect our results of operations if our total revenue does not increase.

We cannot ensure that these investments will result in

substantial increases in our total revenue or improvements in our results of operations.

In addition to the anticipated costs to

grow our business, we also expect to incur significant additional legal, accounting, and other expenses as a public company.

fully restart our operations, any failure to increase our revenue or to manage our costs could prevent us from achieving or

maintaining profitability or positive cash flow.

online lottery market is still in relatively early stages of growth, and if such market does not continue to grow, grows slower than

71 unchanged sentences

may not be able to capitalize on trends and changes in the gaming and lottery industries, including due to the operational costs involved,

the laws and regulations governing these industries, and other factors.

the laws and regulations governing these industries in various jurisdictions, and other factors.

participate in new and evolving aspects of the mobile gaming and lottery industries.

9 unchanged sentences

is deemed to be internet gaming, or our customers offer internet gaming, it is important to recognize that the laws relating to internet

gaming are evolving.

To varying degrees, governments have taken steps to change the regulation of internet wagering through the implementation

of new or revised licensing and taxation regimes, including the possible imposition of sanctions on unlicensed providers.

We cannot predict

the timing, scope or terms of the implementation or revision of any such state, federal or foreign laws or regulations, or the extent

to which any such laws and regulations may facilitate or hinder our strategy or be applicable to or impactful on our business, operations

and financial condition.

gaming are evolving literally by jurisdiction.

To varying degrees, governments have taken steps to change the regulation of internet

wagering through the implementation of new or revised licensing and taxation regimes, including the possible imposition of sanctions

on unlicensed providers.

We cannot predict the timing, scope or terms of the implementation or revision of any such state, federal or

foreign laws or regulations, or the extent to which any such laws and regulations may facilitate or hinder our strategy or be applicable

to or impactful on our business, operations and financial condition.

jurisdictions that authorize internet gaming, we may not be successful in offering our technology, content and services to internet gaming

operators, because we expect to face intense competition from our traditional competitors in the gaming and lottery industries, as well

operators, We expect to face intense competition from our traditional competitors in the gaming and lottery industries, as well

as a number of other domestic and foreign competitors (and, in some cases, the operators themselves), many of which have substantially

1 unchanged sentence

Know-your-customer

and geo-location programs and technologies supplied by third parties are an important aspect of certain internet and mobile gaming products,

services, and systems, because they can confirm certain information with respect to players and prospective players, such as age, identity,

and location.

Payment processing programs and technologies, typically provided by third parties, are also a necessary feature of interactive

and mobile wagering products, services, and systems.

These programs and technologies are costly, and our use of them may have an adverse

impact on our results of operations, cash flows, and our financial condition.

Additionally, our products or services containing these

programs and technologies may not be available to us on commercially reasonable terms, if at all, and may not perform accurately or otherwise

and geo-location programs and technologies supplied to us by third parties are an important aspect of certain internet and mobile gaming

products, services, and systems, because they can confirm certain information with respect to players and prospective players, such as

age, identity, and location.

Payment processing programs and technologies, typically provided by third parties, are also a necessary

feature of interactive and mobile wagering products, services, and systems.

Moreover, we cannot provide any assurance that programs or

technologies supplied to us by third parties will always meet regulatory standards, which constitutes an economic and regulatory risk

Additionally, these programs and technologies are costly to implement, and our use of them may have an adverse impact on our results

of operations, cash flows, and our financial condition and overall business risk.

Also, our products or services containing these programs

and technologies may not be available to us on commercially reasonable terms, if at all, and may not perform accurately or otherwise

in accordance with required specifications, all of which may have a negative impact on our business, results of operations, and financial

15 unchanged sentences

Additionally,

the reputational impact of our Board and management changes, the Operational Cessation and the events contributing thereto has not been

the reputational impact of our Board and management changes, the Operational Cessation and the events contributing thereto have not been

It may require significant investment to restore the value in our brand, and the value of our brand may never return to prior

24 unchanged sentences

would be adversely affected.

we fail to detect fraud or misappropriation of proprietary information, including by our users, customers, and employees, our reputation

and brand may suffer, which could negatively impact our business, financial condition, and results of operations and can subject us to

investigations and litigation.

have in the past, and may in the future, incur losses from various types of fraud, which may include the use of stolen or fraudulent

payment card data, claims of unauthorized payments by a user and attempted payments by users with insufficient funds, referral fraud

by affiliates, fraud with respect to background checks, fraud by employees, including our couriers, and account takeovers of user accounts

by bad actors, or phishing.

Bad actors use increasingly sophisticated methods to engage in illegal activities involving personal information,

such as unauthorized use of another person’s identity, account information, or payment information and unauthorized acquisition

or use of payment card details, bank account information, and mobile phone numbers and accounts.

we fail to detect fraud or misappropriation of proprietary information, including by our users, customers, and employees and contractors,

our reputation and brand may suffer, which could negatively impact our business, financial condition, and results of operations and can

subject us to investigations and litigation.

have in the past incurred, and may in the future, incur losses from various types of fraud, which may include the use of stolen or

fraudulent payment card data, claims of unauthorized payments by a user and attempted payments by users with insufficient funds,

referral fraud by affiliates, fraud with respect to background checks, fraud by employees or contractors, including our couriers,

and account misappropriation by bad actors, or phishing.

Bad actors use increasingly sophisticated methods to engage in illegal

activities involving personal information, such as identity theft, payment or bank account information theft and the unauthorized

acquisition of mobile phone numbers and other accounts.

of fraud may involve various tactics, including collusion.

15 unchanged sentences

have an adverse effect on our business, financial condition, and results of operations.

may be liable for these acts of fraud.

may be held liable for these acts of fraud.

For example, under current payment card industry practices, we may be liable for use of funds

133 unchanged sentences

our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers, breached due to employee

error, malfeasance, or other cybersecurity risks or disruptions.

Any such breach could compromise our networks and the information stored

there could be accessed, publicly disclosed, lost or stolen.

Any such access, disclosure, or other loss of information could result in

legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, fines,

and the payment of damages, restrictions on our ability to use data, disruption of our operations and the services we provide to users,

damage to our reputation, and a loss of confidence in our products, services, and systems, which could adversely affect our business.

or contractor error, malfeasance, or other cybersecurity risks or disruptions.

Any such breach could compromise our networks and the

information stored there could be accessed, publicly disclosed, lost or stolen.

Any such access, disclosure, or other loss of information

could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties,

fines, and the payment of damages, restrictions on our ability to use data, disruption of our operations and the services we provide

to users, damage to our reputation, and a loss of confidence in our products, services, and systems, which could adversely affect our

secure maintenance and transmission of personally identifiable information of our users is a critical element of our operations.

74 unchanged sentences

are subject to various privacy laws in the U.S.

and internationally and we expect that new industry standards, laws and regulations will

continue to be proposed regarding privacy, data protection and information security in many jurisdictions, including the California Consumer

Privacy Act of 2018, which went effective January 1, 2020 and the California Consumer Privacy Rights Act (“CCPA”), which

went effective on January 1, 2023, which impose obligations for the handling, disclosure and deletion of personal information for California

and foreign jurisdictions and we expect that new industry standards, laws and regulations

will continue to be proposed regarding privacy, data protection and information security in many jurisdictions, including the California

Consumer Privacy Act of 2018, which went effective January 1, 2020 and the California Consumer Privacy Rights Act (“CCPA”),

which went effective on January 1, 2023, which impose obligations for the handling, disclosure and deletion of personal information for

California residents.

Virginia and other states have enacted, or are considering enacting, data privacy laws similar to the CCPA.

Certain of these

laws, including the CCPA also requires companies to give residents the ability to opt out of the sale of their personal information and

creates potential liability for companies that fail to take adequate steps to protect personal information where that failure results

of these laws, including the CCPA also requires companies to give residents the ability to opt out of the sale of their personal information

and creates potential liability for companies that fail to take adequate steps to protect personal information where that failure results

in a data breach.

the European Union, the General Data Protection Regulation (the “GDPR”) significantly expanded the rules on using personal

data and increased the risks of processing personal data.

the European Union, the General Data Protection Regulation of 2018 (the “GDPR”) significantly expanded the rules on using

personal data and increased the risks of processing personal data.

Some of the new requirements include:

accountability and transparency

requirements, which require those who control data to demonstrate and record compliance and provide certain detailed information

to users regarding the ways in which data is used and processed;

enhanced data consent requirements,

which includes “explicit” consent with regard to information the regulation classifies as sensitive data;

obligations to consider

data privacy as new products, services and systems are developed, including ways to limit accessibility of data as well as the amount

of information collected, processed, and stored;

constraints on using data

to profile users;

obligations to provide

users with personal data in a usable format on request and to erase personal data in certain circumstances;

reporting to data protection

authorities of potential breaches without undue delay (72 hours, where feasible).

international jurisdictions in which the Company operates, or its services are available, have implemented, or are considering implementing,

data privacy laws similar to the GDPR.

Our policies and procedures for compliance with data privacy laws, may not be implemented correctly

or our management, employees or agents may not comply with the new procedures.

Failure to comply with data privacy laws may have serious

accountability

and transparency requirements, which require those who control data to demonstrate and record compliance and provide certain detailed

information to users regarding the ways in which data is used and processed;

data consent requirements, which includes “explicit” consent with regard to information the regulation classifies as

sensitive data;

to consider data privacy as new products, services and systems are developed, including ways to limit accessibility of data as well

as the amount of information collected, processed, and stored;

on using data to profile users;

to provide users with personal data in a usable format on request and to erase personal data in certain circumstances;

to data protection authorities of potential breaches without undue delay (72 hours, where feasible).

foreign jurisdictions in which the Company operates, or in which it has it services available, have implemented, or are considering implementing,

data privacy laws and regulations, many of which are similar to the GDPR.

Although we attempt to stay current with such developments

in the jurisdictions in which we or our subsidiaries operate, our policies and procedures for compliance with data privacy laws and regulations,

may not be up-to-date or implemented correctly or our management, employees or agents.

thereby not complying with current procedures.

Moreover, our third-party agents in foreign jurisdictions may likewise not implement policies and procedures that are the most current

for their jurisdiction, thereby creating a risk factor for us.

Failure to comply with data privacy laws and regulations may have serious

financial consequences.

4 unchanged sentences

We may operate in

jurisdictions that provide limited data or Internet connectivity, particularly as we expand internationally.

Internet access and access

to a mobile device or personal computer are frequently provided by companies with significant market power that could take actions that

degrade, disrupt, or increase the cost of consumers’ ability to access our offerings.

jurisdictions that provide limited data or Internet connectivity, particularly as we expand into foreign markets.

Internet access and

access to a mobile device or personal computer are frequently provided by companies with significant market power that could take actions

that degrade, disrupt, or increase the cost of consumers’ ability to access our offerings.

In addition, the Internet infrastructure

16 unchanged sentences

including, but not limited to, risks concerning:

product quality, including

the possibility of software or hardware defects, which could result in claims against us or the inability to sell our products;

the accuracy of our estimates

of user or customer demand, and the fit of the new products and features with users’ or customers’ needs;

the need to educate our

sales, marketing and services personnel to work with the new products and features, which may strain our resources and lengthen sales

market acceptance of initial

product releases;

competitor product introductions

or regulatory changes that render our new products obsolete.

quality, including the possibility of software defects, which could result in claims against us or the inability to sell our products;

accuracy of our estimates of user or customer demand, and the fit of the new products and features with users’ or customers’

need to educate our sales, marketing and services personnel to work with the new products and features, which may strain our resources

and lengthen sales cycles;

acceptance of initial product releases;

product introductions or regulatory changes that render our new products obsolete.

enhancing and localizing software is expensive, and the investment in product development may involve a long payback cycle.

we believe that we must dedicate a significant amount of resources to our development efforts to maintain our competitive position.

funding for such development efforts may not be available on favorable terms if at all, and we may not receive significant revenue from

these investments for several years, if at all.

we believe that we must dedicate a significant number of resources to our developmental efforts to maintain our competitive position.

However, funding for such development efforts may not be available on favorable terms if at all, and we may not receive significant revenue

from these investments for several years, if at all.

In addition, as we or our competitors introduce new or enhanced offerings, the demand

5 unchanged sentences

However, it may become increasingly difficult to maintain and improve the availability

of our Platform, especially during peak usage times and as our Platform becomes more complex and if our user and customer traffic increases.

of our Platform, especially during peak usage times and as our Platform becomes more complex and if our user and customer traffic increase.

If our Platform is unavailable when users and customers attempt to access it or it does not respond as quickly as they expect or it experiences

6 unchanged sentences

changes in technology, our business, reputation, financial condition, and results of operations would be adversely affected.

Platform may be vulnerable to risks, both foreseen and unforeseen, arising from the new and untested nature of distributed ledger technology.

Platform may be vulnerable to risks, both foreseen and unforeseen, arising from our application of distributed ledger technology.

to the Operational Cessation, our Platform utilized distributed ledger technology by preserving a cryptographic ledger of the user identification,

3 unchanged sentences

Distributed ledger technology

is a relatively new, untested and evolving technology.

Accordingly, the further development and future viability of this technology is

generally uncertain, and practical and ideological challenges, both known and unknown, may prevent its further development or integration

into the Platform.

is a relatively new, evolving technology.

Accordingly, the further development and future viability of this technology is generally undetermined

with practical and ideological challenges which may affect its further development or integration into our Platform.

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

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.

and federal laws in the U.S.

16 unchanged sentences

evaluate a wide range of issues that impact the mobile and online lottery and gaming industries.

As a result, 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.

have been several proposed state and federal bills to prohibit or restrict interactive or online lottery sales, some of which have

been successful.

For example, in 2015, the Minnesota legislature passed an amendment to the state’s lottery law prohibiting

the sale of scratch lottery tickets over the Internet.

In another case, the California legislature failed to pass assembly bill 1479

which would have regulated lottery courier operations, leaving the status of couriers in a legal grey area.

jurisdictions, the sale of lottery tickets through couriers is expressly unlawful.

For example, it is a Class 1 misdemeanor to

operate a lottery ticket courier service within the Commonwealth of Virginia.

Laws restricting the sale of lottery tickets via the

Internet, through mobile networks or by courier, or that otherwise materially impact our operations, including those relating to

sweepstakes, may be proposed or passed in the future at either the federal or state level or by international governments.

example, in April 2023, the Texas State Senate passed Senate Bill 1820 (the “Texas Bill”), which would, among other

things, prohibit online lottery gaming and the use of courier services in Texas.

As of the date of this Amended Report, the Texas

Bill is under review of the Texas State House of Representatives.

If the Texas Bill is enacted into law as drafted, the new rules

would be implemented by January 1, 2024.

Any proposal or passage of such laws may reduce our revenues or require us to expend a

significant amount of our funds and resources and incur additional legal and other expenses, thereby creating a material adverse

effect on us or our results of operations, cash flow, or financial condition.

in the executive branches of government at the state and federal level as well as internationally, may affect policies on lotteries and

mobile gaming.

For example, variations in the interpretation of The Federal Wire Act of 1961 (the “Wire Act”) by the Office

of Legal Counsel (the “OLC”) of the Department of Justice (the “DOJ”) has had a material impact on the online

gaming and lottery industry within the U.S.

For more information, see “— If there is a final determination on the applicability

of the Wire Act to our operations and it is determined or codified that the Wire Act extends to transmission of lottery games in interstate

or foreign commerce, certain of our operations that are not currently restricted by statute or practice to a state’s territorial

boundaries may be negatively impacted or eliminated, which may have a material adverse effect on our business, financial conditions,

and results of operations.

” We have and may from time to time in the future retain government affairs specialists in domestic

and international jurisdictions to advise elected and appointed officials regarding our perspectives on legislation and regulations related

to lottery and other aspects of our business, to monitor such legislation and regulations, and to otherwise provide us with advice regarding

our relations with such officials.

Such efforts, however, may not be successful in whole or in part and the change of such laws or policies

As a result, 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.

have been several proposed state and federal bills to prohibit or restrict interactive or online lottery sales, some of which have been

For example, in 2015, the Minnesota legislature passed an amendment to the state’s lottery law prohibiting the sale

of scratch lottery tickets over the Internet.

In certain jurisdictions, the sale of lottery tickets through couriers is expressly unlawful.

Laws restricting the sale of lottery tickets via the Internet, through mobile networks or by courier, or that otherwise materially impact

our operations, including those relating to sweepstakes, may be proposed or passed in the future at either the federal or state level

or by foreign governments.

For example, in 2023, the State of Texas passed Senate Bill 1820 (the “Texas Bill”), which among

other things, limited online lottery gaming and the use of courier services in Texas.

Any proposal or passage of such laws may reduce

our revenues or require us to expend a significant amount of our funds and resources and incur additional legal and other expenses, thereby

creating a material adverse effect on us or our results of operations, cash flow, or financial condition.

in the executive branches of government in the U.S.

as well as in foreign countries, may affect policies on lotteries and mobile gaming.

For example, variations in the interpretation of The Federal Wire Act of 1961 (the “Wire Act”) by the Office of Legal Counsel

(the “OLC”) of the Department of Justice (the “DOJ”) has had a material impact on the online gaming and lottery

industry within the U.S.

For more information, see “ If there is a final determination on the applicability of the Wire Act

to our operations and it is determined or codified that the Wire Act extends to transmission of lottery games in interstate or foreign

commerce, certain of our operations that are not currently restricted by statute or practice to a state’s territorial boundaries

may be negatively impacted or eliminated, which may have a material adverse effect on our business, financial conditions, and results

of operations.

” We have and may from time to time in the future retain government affairs specialists in domestic and international

jurisdictions to advise elected and appointed officials regarding our perspectives on legislation and regulations related to lottery

and other aspects of our business, to monitor such legislation and regulations, and to otherwise provide us with advice regarding our

relations with such officials.

Such efforts, however, may not be successful in whole or in part and changes in such laws or policies

could have a material adverse effect on us or our results of operations, cash flow, or financial condition.

we believe that we are in compliance with all material domestic and international laws and regulatory requirements applicable to our

business, we cannot ensure that our activities or the activities of those third parties with whom we do business will not become the

subject of regulatory or law enforcement proceedings.

Further, lottery regulatory associations, including the Multi-State Lottery

Association (the “MUSL”), and certain lottery entities both domestically and internationally exercise significant

authority regarding the means and manner in which the lottery and its products are marketed and sold as well as the equipment,

technology and services deployed by retailers and resellers of such lottery products.

While we believe we are in compliance with all

such applicable requirements, our activities or the activities of those third parties with whom we do business may become the

subject of further inquiries, investigations or enforcement proceedings by such authorities or entities.

Any such proceeding by

regulatory or law enforcement or associations or entities may have a material adverse effect on us or our results of operations,

cash flow, or financial condition.

We cannot ensure that our activities or the activities of those third parties with whom we do business will not become the subject of

regulatory or law enforcement proceedings.

Further, lottery regulatory associations, including the Multi-State Lottery Association (the

“MUSL”), and certain lottery entities both domestically and internationally exercise significant authority regarding the

means and manner in which the lottery and its products are marketed and sold as well as the equipment, technology and services deployed

by retailers and resellers of such lottery products.

activities or the activities of those third parties with whom we do business may become the subject of further inquiries, investigations

or enforcement proceedings by such authorities or entities.

Any such proceeding by regulatory or law enforcement or associations or entities

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

there is a final determination on the applicability of the Wire Act to our operations and it is determined or codified that the Wire

2 unchanged sentences

adverse effect on our business, financial conditions, and results of operations.

Wire Act provides that anyone engaged in the business of betting or wagering that knowingly uses a wire communication facility for the

transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting

event or contest, or for the transmission of a wire communication that entitles the recipient to receive money or credit as a result

of bets or wagers, or for information assisting in the placing of bets or wagers, may be fined or imprisoned, or both.

However, the Wire

Act provides that it shall not be construed to prevent the transmission in interstate or foreign commerce of information for use in news

reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting

event or contest from a state or foreign country where betting on that sporting event or contest is legal into a state or foreign country

in which such betting is legal.

Wire Act of 1961 provides that anyone engaged in the business of betting or wagering that knowingly uses a wire communication facility

for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on

any sporting event or contest, or for the transmission of a wire communication that entitles the recipient to receive money or credit

as a result of such bets or wagers, or for information assisting in the placing of such bets or wagers, may be fined or imprisoned, or

However, the Wire Act provides that it shall not be construed to prevent the transmission in interstate or foreign commerce of

information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing

of bets or wagers on a sporting event or contest from a state or foreign country where betting on that sporting event or contest is legal.

2011, there was uncertainty as to whether the Wire Act prohibited the conduct of intrastate lottery transactions via the Internet by

73 unchanged sentences

For more information, see “ Regulatory and Compliance

Risks — If there is a final determination on the applicability of the Wire Act to our operations and it is determined or codified

that the Wire Act extends to transmission of lottery games in interstate or foreign commerce, certain of our operations that are not

currently restricted by statute or practice to a state’s territorial boundaries may be negatively impacted or eliminated, which

may have a material adverse effect on our business, financial conditions, and results of operations.

Risks - If there is a final determination on the applicability of the Wire Act to our operations and it is determined or codified that

the Wire Act extends to transmission of lottery games in interstate or foreign commerce, certain of our operations that are not currently

restricted by statute or practice to a state’s territorial boundaries may be negatively impacted or eliminated, which may have

a material adverse effect on our business, financial conditions, and results of operations.

business model and the conduct of our operations may have to vary in each U.S.

38 unchanged sentences

employee and the mandatory redemption or transfer of such person’s equity securities.

currently hold a license issued by the Texas Lottery Commission to conduct the retail sale of lottery tickets in the State

We may determine or be required to secure additional licenses from other regulatory authorities with jurisdiction over lottery

operations in new markets in which we contemplate expansion.

Such licensure may impose additional obligations on us and our operations,

which may include continuous disclosure to and an investigation by the applicable regulatory authority into the financial stability,

integrity and business experience of the Company, its affiliates, and their respective significant stockholders, directors, officers,

and key employees.

In markets in which we have not previously operated or in newly regulated markets, licensing regimes may impose licensing

requirements or conditions with which we have not previously been required to comply, which may include locating technical infrastructure

within the relevant territory, establishing real-time data interfaces with the regulatory authority, implementing consumer protection,

responsible gaming and privacy measures, or additional approvals or certifications of our technology, all of which may present operational

challenges and material costs, and any of which may have a material adverse effect on us or our results of operations, cash flow, or

financial condition.

the extent that any stockholder, director, officer or key employee is required to submit to required background checks and provide disclosure

and fails to do so, or they or the Company fail to do so to the satisfaction of the relevant regulatory authority, such failure may jeopardize

the grant of a license, provide grounds for termination of an existing license, or result in the imposition of penalties.

any person or entity that fails or refuses to apply for a finding of suitability or a license within the prescribed period after being

advised by a competent authority that they are required to do so may be denied a license or found unsuitable, as applicable, which may

result in our being required to sever our relationship with such person or entity.

Further, we may be subject to disciplinary action

or suffer revocation of licensure if, following notification that a person or entity is disqualified or unsuitable, we:

currently hold a license issued by the Texas Lottery Commission to conduct the retail sale of lottery tickets in the State of Texas.

We may determine or be required to secure additional licenses from other regulatory authorities with jurisdiction over lottery operations

in new markets in which we contemplate expansion.

Such licensure may impose additional obligations on us and our operations, which may

include continuous disclosure to and an investigation by the applicable regulatory authority into the financial stability, integrity

and business experience of the Company, its affiliates, and their respective significant stockholders, directors, officers, and key employees.

In markets in which we have not previously operated or in newly regulated markets, licensing regimes may impose licensing requirements

or conditions with which we have not previously been required to comply, which may include locating technical infrastructure within the

relevant territory, establishing real-time data interfaces with the regulatory authority, implementing consumer protection, responsible

gaming and privacy measures, or additional approvals or certifications of our technology, all of which may present operational challenges

and material costs, and any of which may have a material adverse effect on us or our results of operations, cash flow, or financial condition.

To the extent that any stockholder, director, officer or key employee is required to submit to required background checks and provide

disclosure and fails to do so, or they or the Company fail to do so to the satisfaction of the relevant regulatory authority, such failure

may jeopardize the grant of a license, provide grounds for termination of an existing license, or result in the imposition of penalties.

Generally, any person or entity that fails or refuses to apply for a finding of suitability or a license within the prescribed period

after being advised by a competent authority that they are required to do so may be denied a license or found unsuitable, as applicable,

which may result in our being required to sever our relationship with such person or entity.

Further, we may be subject to disciplinary

action or suffer revocation of licensure if, following notification that a person or entity is disqualified or unsuitable, we:

any dividend or interest upon our shares;

9 unchanged sentences

in the future.

we believe that we are in compliance with all material licensure requirements applicable to our operations, we cannot ensure that our

We cannot ensure that our

activities will remain in compliance or that we will continue to receive all licenses or license renewals for which we apply.

10 unchanged sentences

such proceedings will not have a material adverse effect on our ability to retain and renew existing licenses or to obtain new licenses.

plan to continually develop internal compliance programs and requirements in an effort to ensure that we comply with legal requirements

imposed in connection with our activities and generally applicable to all publicly traded companies, however, we cannot ensure that they

will prevent the violation of one or more laws, which may have an adverse impact on our business, financial condition, and results of

plan to continually develop internal compliance programs and requirements in an effort to ensure that we comply with legal

requirements imposed in connection with our activities and generally applicable to all publicly traded companies, however, we cannot

ensure that they will prevent the violation of one or more laws, laws in any jurisdiction in which we conduct business, which may

have an adverse impact on our business, financial condition, and results of operations.

plan to continually develop internal compliance programs in ongoing efforts to ensure our compliance with legal requirements imposed

2 unchanged sentences

we cannot ensure that our compliance program will prevent the violation of one or more laws or regulations, or that a violation by us,

an employee, a customer or an affiliate will not result in the imposition of a monetary fine or suspension or revocation of one or more

of our governmental licenses, findings of suitability, registrations, permits and approvals, which could have a material adverse effect

on us or on our results of operations, cash flow, or financial condition.

an employee, a customer, a subsidiary or an affiliate will not result in the imposition of a monetary fine or suspension or revocation

of one or more of our governmental licenses, findings of suitability, registrations, permits and approvals, which could have a material

adverse effect on us or on our results of operations, cash flow, or financial condition.

we are confident that we will face additional regulatory requirements as we expand, we cannot predict the effect of future regulatory

22 unchanged sentences

by our ongoing compliance objectives and policies.

jurisdictions and most of the international jurisdictions in which we operate prohibit sales of lottery tickets to persons

under 18 years of age.

We have instituted know-your-customer requirements to aid our efforts in identifying minors and preventing them

from using our services.

jurisdictions and most of the foreign jurisdictions in which we operate prohibit sales of lottery tickets to persons under

18 years of age.

We have instituted know-your-customer requirements to aid our efforts in identifying minors and preventing them from

using our services.

In many cases, these requirements apply to our lottery retailer partners and may not apply to us.

Nevertheless,

if we fail to abide by these requirements, our partners may be reluctant to do business with us or the applicable regulatory authorities

Nevertheless, if

we fail to abide by these requirements, our partners may be reluctant to do business with us or the applicable regulatory authorities

may amend the requirements to apply specifically to us, to the extent that they do not already do so.

jurisdictions, especially international jurisdictions, are imposing more stringent rules with regard to underage and responsible gaming.

This trend could continue to spread and both U.S.

and international jurisdictions may strengthen underage and responsible gaming requirements.

In the event that any jurisdiction in which we operate mandates additional requirements regarding corporate social responsibility, responsible

jurisdictions, especially foreign jurisdictions, are imposing more stringent rules with regard to underage and responsible gaming.

trend could continue to spread and both U.S.

and foreign jurisdictions may strengthen underage and responsible gaming requirements.

the event that any jurisdiction in which we operate mandates additional requirements regarding corporate social responsibility, responsible

gaming, self-exclusion, or similar mandates, we may be required to undertake additional technological initiatives to remain in compliance.

Implementation of any such initiatives may present operational challenges and material costs and divert the attention of management and

systems developers and engineers, any of which may have a material adverse effect on us or our results of operations, cash flow, or financial

The failure to remain in compliance with underage and responsible gaming requirements or any amendments or additions to such

requirements could have a material adverse effect on us or on our business, results of operations, or financial condition.

our systems developers and engineers, any of which may have a material adverse effect on us or our results of operations, cash flow,

or financial condition.

The failure to remain in compliance with underage and responsible gaming requirements or any amendments or additions

to such requirements could have a material adverse effect on us or on our business, results of operations, or financial condition.

are subject to governmental laws and requirements of the U.S.

and various international jurisdictions in which we operate regarding anti-bribery,

and various foreign jurisdictions in which we operate regarding anti-bribery,

anti-corruption, economic and trade sanctions, anti-money laundering, and counter-terror financing.

4 unchanged sentences

a digital company operating within the U.S.

and are subject to the jurisdiction of various governments and regulatory agencies, we are

accordingly subject to domestic and international laws regarding anti-bribery, anti-corruption, economic and trade sanctions, anti-money

and subject to the jurisdiction of various foreign governments and regulatory agencies, we

are accordingly subject to domestic and foreign laws regarding anti-bribery, anti-corruption, economic and trade sanctions, anti-money

laundering, and counter-terror financing.

operations and our growth plans, including in connection with our intent to expand into new markets and undertake strategic acquisitions

Our operations and our growth plans, including in connection with our intent to expand into new markets and undertake strategic acquisitions

when we have sufficient funding to do so, may bring our officers, directors, employees, and representatives into contact with “foreign

16 unchanged sentences

Our operations, trade practices, investment decisions, and partnering activities may be restricted as a

addition, some of the international locations in which we operate lack a developed legal system and have elevated levels of corruption.

Our international operations expose us to the risk of violating, or being accused of violating, anti-corruption laws and regulations.

Our failure to successfully comply with these laws and regulations may expose us to brand and reputational harm, as well as significant

addition, some of the foreign locations in which we operate lack a developed legal system and may experience elevated levels of corruption.

Our foreign operations expose us to the risk of inadvertently violating, or being accused of violating, anti-corruption laws and regulations.

Our failure to successfully comply with any such laws and regulations may expose us to brand and reputational harm, as well as significant

sanctions, including criminal fines, imprisonment, civil penalties, disgorgement of profits, and injunctions, as well as impacting our

3 unchanged sentences

We are continuously developing,

and maintaining requirements to comply with applicable anti-corruption laws and regulations, however, there is no certainty that they

will effectively prevent violations for which we may be held responsible, or at all.

monitoring and maintaining the various governmental requirements to comply with applicable anti-corruption laws and regulations, however,

there is no certainty that they will effectively prevent violations for which we may be held responsible, or at all.

are currently required to comply with U.S.

5 unchanged sentences

As part of our ongoing compliance efforts, we are implementing requirements to ensure that we do not violate

these laws and requirements, however, our failure to adequately implement such requirements, fully perform our compliance requirements,

or otherwise breach our compliance requirements with OFAC could result in our being subject to penalties, fines or other enforcement

these laws and regulations, however, our failure to adequately fulfill such requirements, fully perform any and all compliance requirements,

or otherwise breach any compliance requirements of the OFAC could result in our being subject to penalties, fines or other enforcement

process, support and execute financial transactions as part of our business and disburse funds on behalf of certain of our users, including

receiving payment card information and processing payments for and due to our users.

Accordingly, we may be subject to various anti-money

laundering and counter-terrorist financing laws and regulations around the world that prohibit, among other things, involvement in transferring

the proceeds of criminal or terrorist activities, including, in the U.S., the Bank Secrecy Act of 1970, as amended (the “BSA”),

and certain provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism

Act of 2001 (the “Patriot Act”).

We have developed a risk-based anti-money laundering program that we are implementing, however,

in the event that we breach any of these laws and regulations that are applicable to us, we could be subject to significant civil fines,

penalties, inquiries, audits, investigations, enforcement actions, and criminal and civil liability.

Accordingly, we may be subject to various U.S.

foreign government anti-money laundering and counter-terrorist financing laws and regulations that prohibit, among other things, involvement

in transferring the proceeds, in whole or in part, for criminal or terrorist activities, including, for example, in the U.S., the Bank

Secrecy Act of 1970, as amended (the “BSA”), and certain provisions of the Uniting and Strengthening America by Providing

Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”).

Although we have developed

a risk-based anti-money laundering program that we are implementing, in the event that we breach any of these laws and regulations that

are applicable to us, we could be subject to significant civil fines, penalties, inquiries, audits, investigations, enforcement actions,

and criminal and civil liability.

failure on our part to implement, maintain or follow the necessary processes and policies to comply with these regulations and requirements,

42 unchanged sentences

Recruitment and retention of these individuals is vital to growing

our business and our business plans.

our business and our executing our business plans.

The loss of any of our key executives or other key employees could harm our business.

currently have nine employees who manage and operate our business, including our Chief Executive Officer, Mark Gustavson.

While we have

experienced significant turnout of our executive officers in the past year, we expect that the leadership of our current key executives

and employees will be a critical element of our success in the future.

The departure, death or disability of any one of our executive

officers or employees or other extended or permanent loss of any of their services, or any negative market or industry perception with

respect to any of them or their loss, could have a material adverse effect on our business.

addition, our failure to re-hire employees in the future will limit our ability to restart our business operations and earn revenue.

Certain employees have made significant contributions to our growth and success.

We believe our success and our ability to compete and

grow following the Operational Cessation will depend in large part on the efforts and talents of our future employees and on our ability

to retain highly skilled personnel.

The competition for these types of personnel is intense and we compete with other potential employers

for the services of our employees.

As a result, we may not succeed in hiring and retaining the executives and other key employees that

Employees, particularly developers and engineers, are in high demand, and we will need to devote significant resources to identifying,

hiring, training, successfully integrating and retaining these employees, including significant financial resources, which we may not

We cannot provide assurance that we will be able to attract or retain such highly qualified personnel in the future.

the loss of future employees or the inability to hire skilled employees as necessary could result in significant disruptions to our business,

and the integration of replacement personnel could be time-consuming and expensive and cause additional disruptions to our business.

currently have nine employees who manage and operate our business, including our Chief Executive Officer, Chief Financial Officer

and Chief Operating Officer, other employees as well as thirteen key outside contractors.

While we have experienced significant

turnover of our executive officers in past years, we expect that the leadership of our current key executives and employees will be

a critical element of our success in the future.

The departure, death or disability of any one of our executive officers or

employees or other extended or permanent loss of any of their services, or any negative market or industry perception with respect

to any of them or their loss, could have a material adverse effect on our business.

addition, our failure to re-hire, or hire new employees in the future may limit our ability to restart our business operations and

generate revenue.

We believe our success and our ability to compete and grow following the Operational Cessation will depend in

large part on the efforts and talents of our current and future employees and on our ability to retain highly skilled personnel.

competition for these types of personnel is intense and we compete with other potential employers for the services of appropriately

skilled employees.

As a result, we may not succeed in hiring and retaining the executives and other key employees that we need.

Employees, particularly highly skilled developers and engineers are in high demand, and we will need to devote significant resources

to identifying, hiring, training, successfully integrating and retaining such employees, including significant financial resources,

which we may not have when needed.

We cannot provide assurance that we will be able to attract or retain such highly qualified

personnel in the future.

In addition, the loss of future employees or the inability to hire skilled employees as necessary could

result in significant disruptions to our business, and the integration of replacement personnel could be time-consuming and

expensive and cause additional disruptions to our business.

we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, we may

be unable to grow effectively and our business, financial condition and results of operations could be seriously harmed.

improper, or otherwise inappropriate activity of our couriers, whether or not occurring while performing their employment duties, could

expose us to liability and adversely affect our business, reputation, brand, financial condition, and results of operations.

improper, or otherwise inappropriate activity of our couriers, whether or not occurring while performing their duties for us, could expose

us to liability and adversely affect our business, reputation, brand, financial condition, and results of operations.

improper, or otherwise inappropriate activities by our couriers, including the activities of individuals who may have previously engaged

18 unchanged sentences

Relating to our Dependence on Third Parties

business model depends upon the compatibility between our B2C Platform and the major mobile operating systems and upon third-party platforms

for the distribution of our product offerings.

If Google Play or the Apple App Store or other mobile download sites prevent users from

downloading our apps or if our advertising is blocked or rejected from being delivered to our users, our ability to grow our revenue,

profitability, and prospects may be adversely affected.

operational, our users access our B2C Platform product offerings on mobile devices and web applications, and accordingly, our business

model depends upon the compatibility between our application and the major mobile operating systems.

Third parties with whom we do not

have any formal relationships control the design of mobile devices and operating systems.

These parties frequently introduce new devices,

and from time to time they may introduce new operating systems or modify existing ones.

Network carriers may also impact the ability

to download applications or access specified content on mobile devices.

business model depends upon the compatibility between our B2C Platform and the major mobile and other operating systems and upon third-party

platforms for the distribution of our product offerings.

If Google Play or the Apple App Store or other mobile download sites prevent

users from downloading our apps or if our advertising is blocked or rejected from being delivered to our users, our ability to grow our

revenue, profitability, and prospects may be adversely affected.

operational, our users access our B2C Platform product offerings on mobile devices and various web applications, and accordingly, our

business model depends upon the compatibility between our application and all major mobile and web operating systems.

Third parties with

whom we do not have any formal relationships control the design of such devices and operating systems.

These parties frequently introduce

new devices, and from time to time they may introduce new operating systems or modify existing ones.

Network carriers may also impact

the ability to download applications or access specified content on mobile devices.

addition, when operational, we rely upon third-party platforms for distribution of our product offerings.

2 unchanged sentences

promotion, distribution and operation of our application are subject to the respective distribution platforms’ standard terms and

policies for application developers, which are very broad and subject to frequent changes and interpretation.

policies for application developers which are very broad and subject to frequent changes and interpretations.

Furthermore, the distribution

platforms may not enforce their standard terms and policies for application developers consistently and uniformly across all applications

and with all publishers.

and with such publishers.

is no guarantee that popular mobile devices will support or feature our product offerings when operational, or that mobile device users

1 unchanged sentence

We are dependent on the interoperability of our technology

with popular mobile operating systems, technologies, networks and standards that we do not control, such as the Android and iOS operating

systems, and any changes, bugs, technical or regulatory issues in such systems, our relationships with mobile manufacturers and carriers,

or in their terms of service or policies that degrade our offerings’ functionality, reduce or eliminate our ability to distribute

our offerings, give preferential treatment to competitive products, limit our ability to deliver high quality offerings, or impose fees

or other charges related to delivering our offerings, could adversely affect our product usage and monetization on mobile devices.

with popular mobile and web operating systems, technologies, networks and standards that we do not control, such as the Android and iOS

operating systems, and any changes, bugs, technical or regulatory issues in such systems, our relationships with mobile manufacturers

and carriers, or in their terms of service or policies that degrade our offerings’ functionality, reduce or eliminate our ability

to distribute our offerings, give preferential treatment to competitive products, limit our ability to deliver high quality offerings,

or impose fees or other charges related to delivering our offerings, could adversely affect our product usage and monetization on mobile

we may not successfully cultivate relationships with key industry participants or develop product offerings that operate effectively

4 unchanged sentences

if any of the third-party platforms used for distribution of our product offerings were to limit or disable advertising on their platforms,

either because of technological constraints or because the owner of these distribution platforms wished to impair our ability to serve

either because of technological constraints or because the managers of these distribution platforms wished to impair our ability to serve

ads on them, our ability to generate revenue could be harmed.

28 unchanged sentences

any of our third-party payment processors terminates its relationship with us or refuses to renew their agreements with us on commercially

reasonable terms, we would need to find an alternate payment processors, and may not be able to secure similar terms or replace such

reasonable terms, we would need to find an alternate payment processor, and may not be able to secure similar terms or replace such

payment processors in an acceptable time frame.

4 unchanged sentences

technology less trustworthy and convenient and adversely affect our ability to attract and retain our users.

all of our payments have been made by credit card, debit card, automated clearing house transaction, or through other third-party payment

all of our payments have been made by credit card, debit card, automated clearing house transactions, or through other third-party payment

services, which subjects us to certain regulations and to the risk of fraud.

10 unchanged sentences

regulations enforced by multiple authorities and governing bodies in the U.S.

and numerous state and local agencies who may define money

transmitter differently.

Certain states may have a more expansive view of who qualifies as a money transmitter.

Additionally, outside

of the U.S., we could be subject to additional laws, rules and regulations related to the provision of payments and financial services,

and if we expand into new jurisdictions, the foreign regulations and regulators governing our business that we are subject to will expand

If we are found to be a money transmitter under any applicable regulation and we are not in compliance with such regulations,

we may be subject to fines or other penalties in one or more jurisdictions levied by federal, state or local regulators, including state

Attorneys General, as well as those levied by foreign regulators.

In addition to fines, penalties for failing to comply with applicable

rules and regulations could include criminal and civil proceedings, forfeiture of significant assets or other enforcement actions.

could also be required to make changes to our business practices or compliance programs as a result of regulatory scrutiny.

including numerous state and local agencies who may define

money transmitter differently.

Certain states in the U.S.

may have a more expansive view of who qualifies as a money transmitter.

Additionally,

outside of the U.S., we could be subject to additional laws, rules and regulations related to the provision of payments and financial

services, and if we expand into new jurisdictions, the foreign regulations and regulators governing our business that we are subject

to will expand as well.

If we are found to be a money transmitter under any applicable regulation and we are not in compliance with such

regulations, we may be subject to fines or other penalties in one or more jurisdictions levied by federal, state or local regulators,

including state Attorneys General, as well as those levied by foreign regulators.

In addition to fines, penalties for failing to comply

with applicable rules and regulations could include criminal and civil proceedings, forfeiture of significant assets or other enforcement

We could also be required to make changes to our business practices or compliance programs as a result of regulatory scrutiny.

Additionally,

our payment processors require us to comply with payment card network operating rules, which are set and interpreted by the payment card

71 unchanged sentences

to, among other things:

implement additional management

information systems;

further develop our operating,

administrative, legal, compliance, financial and accounting systems and controls;

hire additional qualified

personnel and develop human capital;

comply with additional

regulatory regimes, securing licenses, findings of suitability, registrations, permits and approvals;

maintain close coordination

among our engineering, operations, legal, compliance, finance, sales and marketing and customer service and support organizations.

additional management information systems;

develop our operating, administrative, legal, compliance, financial and accounting system and controls;

additional qualified personnel and develop human capital;

with additional regulatory regimes, securing licenses, findings of suitability, registrations, permits and approvals;

close coordination among our engineering, operations, legal, compliance, finance, sales and marketing and customer service and support

organizations.

to accomplish any of these requirements could adversely affect our ability to deliver our product, service, and systems offerings in

25 unchanged sentences

Our international operations are subject to the following risks, among others:

political instability;

international hostilities,

military actions, wars, terrorist or cyber-terrorist activities, natural disasters, pandemics, and infrastructure disruptions;

differing economic cycles

and adverse economic conditions;

unexpected changes in regulatory

environments and government interference in the economy, including lottery and gaming, data privacy and advertising laws and regulations;

changes to economic and

anti-money laundering sanctions, laws and regulations;

varying tax regimes, including

with respect to the imposition of withholding taxes on remittances and other payments by our partnerships or subsidiaries;

differing labor regulations;

foreign exchange controls

and restrictions on repatriation of funds;

fluctuations in currency

exchange rates;

inability to collect payments

or seek recourse under or comply with ambiguous or vague commercial or other laws;

insufficient protection

against product piracy and rights infringement and differing protections for intellectual property rights;

varying attitudes towards

lottery games and betting by foreign governments;

difficulties in attracting

and retaining qualified management and employees, or rationalizing our workforce;

differing business practices,

which may require us to enter into agreements that include non-standard terms;

difficulties in penetrating

new markets due to entrenched competitors, lack of recognition of our brands or lack of local acceptance of our products, services

international

hostilities, military actions, wars, terrorist or cyber-terrorist activities, natural disasters, pandemics, and infrastructure disruptions;

economic cycles and adverse economic conditions;

changes in regulatory environments and government interference in the economy, including lottery and gaming, data privacy and advertising

laws and regulations;

to economic and anti-money laundering sanctions, laws and regulations;

tax regimes, including with respect to the imposition of withholding taxes on remittances and other payments by our partnerships

or subsidiaries;

labor regulations;

exchange controls and restrictions on repatriation of funds;

in currency exchange rates;

to collect payments or seek recourse under or comply with ambiguous or vague commercial or other laws;

protection against product piracy and rights infringement and differing protections for intellectual property rights;

attitudes towards lottery games and betting by foreign governments;

in attracting and retaining qualified management and employees, or rationalizing our workforce;

business practices, which may require us to enter into agreements that include non-standard terms;

in penetrating new markets due to entrenched competitors, lack of recognition of our brands or lack of local acceptance of our products,

services and systems.

overall success as a global business depends, in part, on our ability to anticipate and effectively manage these risks, and there can

6 unchanged sentences

our international operations may be negatively impacted.

a result of the intended growth of the international scope of our operations and our corporate and financing structure, we may become

subject to taxation in, and to the tax laws and regulations of, multiple jurisdictions.

Adverse developments in these laws or regulations,

or any change in position regarding the application, administration or interpretation of these laws or regulations in any applicable

jurisdiction, could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, changes

in or to the interpretation of the tax laws or tax treaties of the countries in which we operate may adversely affect the manner in which

we have structured our business operations and legal entity structure to efficiently realize income or capital gains and mitigate withholding

taxes, and may also subject us to tax and return filing obligations in such countries that do not currently apply to us.

may increase our tax burden and/or may cause us to incur additional costs and expenses in compliance with such changes.

the tax authorities in any applicable jurisdiction may disagree with the positions we have taken or intend to take regarding the tax

treatment or characterization of any of our transactions, including the tax treatment or characterization of our indebtedness.

applicable tax authorities were to successfully challenge the tax treatment or characterization of any of our transactions, it could

result in the disallowance of deductions, the imposition of withholding taxes, the reallocation of income or other consequences that

could have a material adverse effect on our business, financial condition and results of operations.

a result of the intended growth of the international scope of our operations and our corporate and financing structure, we may

become subject to taxation in, and to the tax laws and regulations of, multiple jurisdictions.

Adverse developments in these laws or

regulations, or any change in position regarding the application, administration or interpretation of these laws or regulations in

any applicable jurisdiction, could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, changes in or to the interpretation of the tax laws or tax treaties of the countries in which we operate may adversely

affect the manner in which we have structured our business operations and legal entity structure to efficiently realize income or

capital gains and mitigate withholding taxes and may also subject us to tax and return filing obligations in such countries that do

not currently apply to us.

Such changes may increase our tax burden and/or may cause us to incur additional costs and expenses in

compliance with such changes.

In addition, the tax authorities in any applicable jurisdiction may disagree with the positions we

have taken or intend to take regarding the tax treatment or characterization of any of our transactions, including the tax treatment

or characterization of our indebtedness.

If any applicable tax authorities were to successfully challenge the tax treatment or

characterization of any of our transactions, it could result in the disallowance of deductions, the imposition of withholding taxes,

the reallocation of income or other consequences that could have a material adverse effect on our business, financial condition and

results of operations.

addition, the U.S.

9 unchanged sentences

foreign currency and exchange rates may negatively impact our business, results of operations, and financial position.

to our international operations, a portion of our business is denominated in foreign currencies.

As a result, fluctuations in foreign

currency and exchange rates may have an impact on our business, results of operations and financial position.

Foreign currency exchange

rates have fluctuated and may continue to fluctuate.

Significant foreign currency exchange rate fluctuations may negatively impact our

international revenue, which in turn would affect our consolidated revenue.

Currencies may be affected by internal factors, general economic

conditions and external developments in other countries, all of which can have an adverse impact on a country’s currency.

we are not party to any hedging transactions intended to reduce our exposure to exchange rate fluctuations.

We may seek to enter into

hedging transactions in the future, but we may be unable to enter into these transactions successfully, on acceptable terms or at all.

We cannot predict whether we will incur foreign exchange losses in the future.

Further, significant foreign exchange fluctuations resulting

in a decline in the respective local currency may decrease the value of our foreign assets, as well as decrease our revenues and earnings

to our foreign operations, a portion of our business is denominated in foreign currencies.

As a result, fluctuations in foreign currency

and exchange rates may have an impact on our business, results of operations and financial position.

Foreign currency exchange rates

have fluctuated and may continue to fluctuate.

Significant foreign currency exchange rate fluctuations may negatively impact our international

revenue, which in turn would affect our consolidated revenue.

Currencies may be affected by internal factors, general economic conditions

and external developments in other countries, all of which can have an adverse impact on a country’s currency.

Currently, we are

not party to any hedging transactions intended to reduce our exposure to exchange rate fluctuations.

We may seek to enter into hedging

transactions in the future, but we may be unable to enter into these transactions successfully, on acceptable terms or at all.

predict whether we will incur foreign exchange losses in the future.

Further, significant foreign exchange fluctuations resulting in

a decline in the respective local currency may decrease the value of our foreign assets, as well as decrease our revenues and earnings

from our foreign subsidiaries, which would reduce our profitability and adversely affect our financial position.

7 unchanged sentences

proprietary products or technology, or gaining access to our proprietary information and technology, and are costly and time consuming.

of December 31, 2021, we had one trademark registered with the U.S.

Patent and Trademark Office and the registration of eight other word

marks and one logo was pending with the U.S.

success may depend, in part, on our ability to obtain trademark protection for the names or symbols under which we market our products

and to obtain copyright protection, which may not always be successful.

Also, we are continually evaluating opportunities to file patents.

Any future patent applications we hold or have rights to may not result in an issued patent, and if patents are issued, they may not

necessarily provide meaningful protection against competitors and competitive technologies or adequately protect our then-current technologies.

Additionally, even if granted, we may not be able to build and maintain goodwill in our trademarks or obtain trademark or patent protection,

and there can be no assurance that any trademark, copyright, or issued patent will provide competitive advantages for us or that our

intellectual property will not be successfully challenged or circumvented by competitors.

of December 31, 2023, we had one trademark, “Lottery.com”, registered with the U.S.

Patent and Trademark Office.

Our success may depend, in part, on our ability to obtain trademark

protection for the names or symbols under which we market our products and to obtain copyright protection, which may not always be successful.

We are continually evaluating opportunities to file patents.

Any future patent applications we hold or have rights to may not result

in an issued patent, and if patents are issued, they may not necessarily provide meaningful protection against competitors and competitive

technologies or adequately protect our then-current technologies.

Additionally, even if granted, we may not be able to build and maintain

goodwill in our trademarks or obtain trademark or patent protection, and there can be no assurance that any trademark, copyright, or

issued patent will provide competitive advantages for us or that our intellectual property will not be successfully challenged or circumvented

by competitors.

December 31, 2022, the registrations of our LOTTERY.COM, AUTOLOTTO and SPORTS.COM word marks and SPORTS.COM logo were pending with the

Patent and Trademark Office.

In March 2023, the U.S.

Patent and Trademark Office denied the registration of the SPORTS.COM word

mark and the appeal period has expired.

The registration of the SPORTS.COM logo has also been denied and the Company is currently considering

whether to appeal such denial.

We are also using and/or have common-law trademark rights in the trademarks AUTOLOTTO, SPORTS.COM, and

“TAP, TAP, TICKET.”

may not be able to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets.

For example, there can be

no assurance that consultants, vendors, partners, former employees, or current employees will not breach their obligations regarding

non-disclosure and restrictions on use.

Anyone could seek to challenge, invalidate, circumvent, or render unenforceable any patent that

we seek protection over in the future.

We may not be able to detect the unauthorized use of our intellectual property, prevent breaches

of our cybersecurity efforts, or take appropriate steps to enforce our proprietary or intellectual property rights effectively.

certain contractual provisions, including restrictions on use, copying, transfer, and disclosure of software, may be unenforceable under

the laws of certain jurisdictions.

no assurance that consultants, vendors, partners, former employees, or current employees and contractors will not breach their obligations

regarding non-disclosure and restrictions on use.

Anyone could seek to challenge, invalidate, circumvent, or render unenforceable any

trademark or patent that we seek protection over in the future.

We may not be able to detect the unauthorized use of our intellectual

property, prevent breaches of our cybersecurity efforts, or take appropriate steps to enforce our proprietary or intellectual property

rights effectively.

In addition, certain contractual provisions, including restrictions on use, copying, transfer, and disclosure of

software, may be unenforceable under the laws of certain jurisdictions.

intend to enforce our intellectual property rights, and from time to time may initiate claims against third parties that we believe are

24 unchanged sentences

Any such claim and any resulting litigation, should it occur, could:

be expensive and time consuming

to defend or require us to pay significant amounts in damages;

invalidate our proprietary

cause us to cease making,

licensing or using products, services or systems that incorporate the challenged intellectual property;

require us to redesign,

reengineer or rebrand our products, services or systems or limit our ability to bring new products, services or systems to the market

in the future;

require us to enter into

costly or burdensome royalty, licensing or settlement agreements in order to obtain the right to undertake a business activity or

use a product, process or component;

impact the commercial viability

of the products, services and systems that are the subject of the claim during the pendency of such claim;

require us by way of injunction

to remove products, services, or systems or stop implementing the business practice, or stop selling or offering new products, services.

expensive and time consuming to defend or require us to pay significant amounts in damages;

our proprietary rights;

us to cease making, licensing or using products, services or systems that incorporate the challenged intellectual property;

us to redesign, reengineer or rebrand our products, services or systems or limit our ability to bring new products, services or systems

to the market in the future;

us to enter into costly or burdensome royalty, licensing or settlement agreements in order to obtain the right to undertake a business

activity or use a product, process or component;

the commercial viability of the products, services and systems that are the subject of the claim during the pendency of such claim;

us by way of injunction to remove products, services, or systems or stop implementing the business practice, or stop selling or offering

new products, services.

Proceedings Risks

10 unchanged sentences

effect on our business, financial condition, and results of operations and could cause the value of our securities to decline or become

For example, as described in more detail in Item 3.

Legal Proceedings, the TinBu Plaintiffs (as defined below) filed a claim

against the Company for breach of contract and misrepresentation.

If the lawsuit results in an unfavorable judgment against the Company,

our Data Services business could be negatively impacted, and we may lose some of TinBu’s well-known clients.

In addition, defending

against these claims will require the Company to expend substantial time and money, which could divert management attention from restarting

litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal, or in payments

27 unchanged sentences

In its Complaint, the Company alleged that Streicher breached a contract entered into by the parties on March 9, 2022,

and demanded that Streicher return $16,500,000 it owed to the Company.

and demanded that Streicher return $16,500,000 it owes to the Company.

On September 26, 2022, the Chancery Court entered an order in

17 unchanged sentences

Streicher failed to remit the payment on February 28, 2023, and as a result, the

Company is proceeding with the post-judgment discovery and depositions, which was scheduled for March 16, 2023, provided that Streicher

did not appear at such hearing.

Company is proceeding with the post-judgment discovery and depositions, which was scheduled for March 16, 2023, however Streicher did

not appear at such hearing.

The Company intends to fully collect on the Judgment and intends to pursue all legal and equitable means

7 unchanged sentences

may differ materially from our expectations.

regulated gaming and lottery industry is subject to rapid change, significant competition, and regulatory oversight and our projections

gaming and lottery industry is subject to rapid change, significant competition, and multiple regulatory oversight and our projections

are subject to the risks and assumptions made by management with respect to our industries.

24 unchanged sentences

In particular, we have incurred

and expect to continue to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements

of Section 404 of the Sarbanes-Oxley Act, which will increase when we are no longer an “emerging growth company.” We have

and will continue to hire additional accounting and financial staff, and engage outside consultants, all with appropriate public company

experience and technical accounting knowledge and maintain an internal audit function, which will increase our operating expenses.

we could incur additional compensation costs in the event that we decide to pay cash compensation closer to that of other public companies,

which would increase our general and administrative expenses and could materially and adversely affect our profitability.

We cannot predict

or estimate the amount of additional costs we may incur or the timing of such costs.

and expect to continue to incur significant expenses and devote substantial management effort toward ensuring compliance with all these

requirements, including Section 404 of the Sarbanes-Oxley Act, which will increase when we are no longer an “emerging growth company.”

To meet these various requirements, we have and will continue to need to hire additional legal, accounting and financial staff and/or

contractors, all with appropriate public company experience.

Internally, we must continue to increase our technical accounting knowledge

as well as maintain an internal audit function, which will increase our operating expenses.

Moreover, we could incur additional compensation

costs in the event that we decide to pay cash compensation closer to that of other public companies, which would increase our general

and administrative expenses and could materially and adversely affect our profitability.

We cannot predict or estimate the amount of

additional costs we may incur or the timing of such costs.

Relating to Our Charter Documents and Delaware Law

34 unchanged sentences

redemption of Redeemable Securities shall be effectuated pursuant to the Charter without the receipt of the regulatory approvals required.

From and after the redemption date, the Redeemable Securities shall no longer be deemed outstanding, such Disqualified Holder

shall cease to be a stockholder with respect to such Redeemable Securities and all rights of such Disqualified Holder (other than the

right to receive the redemption price) shall cease.

From and after the redemption date, the Redeemable Securities shall no longer be deemed outstanding, such Disqualified Holder shall cease

to be a stockholder with respect to such Redeemable Securities and all rights of such Disqualified Holder (other than the right to receive

the redemption price) shall cease.

existence of the redemption rights set forth in our Charter may result in the value of the Redeemable Securities being less than they

6 unchanged sentences

the laws of the State of Delaware, our jurisdiction of incorporation, a corporation may provide in its certificate of incorporation for

the amount of securities that may be owned by any person or group of persons for the purpose of maintaining any statutory or regulatory

the number of securities that may be owned by any person or group of persons for the purpose of maintaining any statutory or regulatory

advantage or complying with any statutory or regulatory requirements under applicable law.

23 unchanged sentences

officers provide that:

the fullest extent permitted under the DGCL, our directors will not be personally liable

to the Company or its stockholders for monetary damages for breach of fiduciary duty as a

will indemnify our directors and officers for serving us in those capacities or for serving

other business entities at our request, to the fullest extent permitted by the DGCL.

DGCL provides that a corporation may indemnify such person if such person acted in good faith

and in a manner such person reasonably believed to be in or not opposed to the best interests

of the corporation and, with respect to any criminal action or proceeding, had no reasonable

cause to believe such person’s conduct was unlawful.

may, in our discretion, indemnify employees and agents in those circumstances where indemnification

is permitted by applicable law and such person was made a party to an action, suit or proceeding,

by reason of the fact that he or she is or was an employee or agent of the Company.

are required to advance expenses, as incurred, to our directors and officers in connection

with defending a proceeding, except that such directors or officers shall undertake to repay

such advances if it is ultimately determined that such person is not entitled to indemnification.

will not be obligated pursuant to the indemnification agreements entered into with our directors

and executive officers to indemnify a person with respect to proceedings initiated by that

person, except with respect to proceedings to enforce an indemnitees right to indemnification

or advancement of expenses, proceedings authorized by our board of directors and if offered

by us in our sole discretion.

rights conferred in our Charter are not exclusive, and we are authorized to enter into indemnification

agreements with our directors, officers, employees and agents and to obtain insurance to

indemnify such persons.

● We may not retroactively

amend our Charter or indemnification agreement provisions to reduce our indemnification

obligations to directors, officers, employees and agents.

the fullest extent permitted under the DGCL, our directors will not be personally liable to the Company or its stockholders for monetary

damages for breach of fiduciary duty as a director.

will indemnify our directors and officers for serving us in those capacities or for serving other business entities at our request,

to the fullest extent permitted by the DGCL.

The DGCL provides that a corporation may indemnify such person if such person acted

in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and,

with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law

and such person was made a party to an action, suit or proceeding, by reason of the fact that he or she is or was an employee or

agent of the Company.

are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that

such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled

to indemnification.

will not be obligated pursuant to the indemnification agreements entered into with our directors and executive officers to indemnify

a person with respect to proceedings initiated by that person, except with respect to proceedings to enforce an indemnitees right

to indemnification or advancement of expenses, proceedings authorized by our board of directors and if offered by us in our sole

rights conferred in our Charter are not exclusive, and we are authorized to enter into indemnification agreements with our directors,

officers, employees and agents and to obtain insurance to indemnify such persons.

may not retroactively amend our Charter or indemnification agreement provisions to reduce our indemnification obligations to directors,

officers, employees and agents.

a result of these provisions, if an investor were able to enforce an action against our directors or officers, in all likelihood, we

would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise

would be required to pay.

This could lead to us incurring substantial expenditures to cover the cost of settlement or damage awards against

our directors and officers, which the Company may not be able to pay or recoup.

Accordingly, our indemnification obligations could divert

needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely

affect the value of our business.

would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required

This could lead to us incurring substantial expenditures to cover the cost of settlement or damage awards against our directors

and officers, which the Company may not be able to pay or recoup.

Accordingly, our indemnification obligations could divert needed financial

resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect the

value of our business.

exclusive forum provision in our Charter may have the effect of discouraging lawsuits against our directors and officers.

28 unchanged sentences

These provisions provide for, among other things:

authorized but unissued

shares of common stock and preferred stock, which may be used for a variety of corporate finance transactions, acquisitions and employee

benefit plans and the existence of which could make more difficult or discourage an attempt to obtain control of the Company by means

of a proxy contest, tender offer, merger or otherwise (the DGCL does not require stockholder approval for any issuance of authorized

stockholder action may

not be by written consent (the DGCL provides that unless otherwise provided in the charter, any action of a meeting of stockholders

may be taken without a meeting and prior notice by signed written consent of stockholders having the minimum number of votes that

would be necessary to take such action at a meeting at which all shares entitled to vote thereon were present and voted);

amendment of certain provisions

of the organizational documents only by the affirmative vote of at least 66 2/3% of the voting power of the outstanding capital stock

(the DGCL provides generally that the affirmative vote of a majority of the outstanding shares entitled to vote thereon, voting together

as a single class, is required to amend a corporation’s certificate of incorporation, unless the certificate of incorporation

requires a greater percentage);

provisions providing for

a staggered board of directors and detailing that the number of directors may be fixed and modified only by our Board;

advance notice for nominations

of directors by stockholders and for stockholders to include matters to be considered at annual meetings, which may discourage or

deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise

attempting to obtain control of Lottery.com;

the ability of our Board

to issue one or more series of preferred stock.

providing that directors

may be removed only for cause and then only by a two-thirds vote of the holders of a majority of the voting power of the outstanding

shares then entitled to vote in an election of directors, voting together as a single class;

providing that vacancies

on our Board, including newly-created directorships, may be filled only by a majority vote of directors then in office;

prohibiting stockholders

from calling special meetings of stockholders.

but unissued shares of common stock and preferred stock, which may be used for a variety of corporate finance transactions, acquisitions

and employee benefit plans and the existence of which could make more difficult or discourage an attempt to obtain control of the

Company by means of a proxy contest, tender offer, merger or otherwise (the DGCL does not require stockholder approval for any issuance

of authorized shares);

action may not be by written consent (the DGCL provides that unless otherwise provided in the charter, any action of a meeting of

stockholders may be taken without a meeting and prior notice by signed written consent of stockholders having the minimum number

of votes that would be necessary to take such action at a meeting at which all shares entitled to vote thereon were present and voted);

of certain provisions of the organizational documents only by the affirmative vote of at least 66 2/3% of the voting power of the

outstanding capital stock (the DGCL provides generally that the affirmative vote of a majority of the outstanding shares entitled

to vote thereon, voting together as a single class, is required to amend a corporation’s certificate of incorporation, unless

the certificate of incorporation requires a greater percentage);

providing for a board of directors with staggered terms and detailing that the number of directors may be fixed and modified only

by our Board;

notice for nominations of directors by stockholders and for stockholders to include matters to be considered at annual meetings,

which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate

of directors or otherwise attempting to obtain control of Lottery.com;

ability of our Board to issue one or more series of preferred stock.

that directors may be removed only for cause and then only by a two-thirds vote of the holders of a majority of the voting power

of the outstanding shares then entitled to vote in an election of directors, voting together as a single class;

that vacancies on our Board, including newly-created directorships, may be filled only by a majority vote of directors then in office;

stockholders from calling special meetings of stockholders.

addition, these provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover

3 unchanged sentences

These anti-takeover provisions could substantially impede

your ability to benefit from a change in control or change our management and Board and, as a result, may adversely affect the market

price of common stock and your ability to realize any potential change of control premium.

any stockholder’s ability to benefit from a change in control or change our management and Board and, as a result, may adversely

affect the market price of common stock and the ability for any stockholder to realize any potential change of control premium.

Related to Our Common Stock and Warrants

are not currently in compliance with the continued listing standards of Nasdaq and may not be able to regain compliance with Nasdaq’s

continued listing standards in the future.

common stock and warrants trade on The Nasdaq Global Market under the symbols “LTRY” and “LTRYW,” respectively.

We are not currently in compliance with Nasdaq’s continued listing standards and our failure to continue to meet these requirements

may result in our securities being delisted from Nasdaq.

we are currently in full compliance with the continued listing standards of Nasdaq, we may not be able to remain in full compliance

with Nasdaq’s continued listing standards in the future.

common stock and warrants trade on The Nasdaq Global Market under the symbols “LTRY” and “LTRYW,”

respectively.

Our failure to remain in full compliance with these

requirements may result in our securities being delisted from Nasdaq.

August 17, 2022, the Company received a notice from Nasdaq indicating that, as a result of not having timely filed the Company’s

7 unchanged sentences

previous 30 consecutive business days, and, as a result, did not comply with Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq

Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until February 20, 2023, to regain compliance with such rule.

On February 23, 2023, the Company received a determination letter from Nasdaq advising it that Nasdaq had determined that the Company

had not regained compliance with such rule and that the Company was not eligible for a second 180 day period as the Company had not yet

filed its periodic reports with the SEC and Nasdaq noted above.

Nasdaq also confirmed to the Company in its February 23, 2023 letter

that the failure to timely file those periodic reports each serve as separate and an individual basis for delisting.

Company had until March 2, 2023 to request an appeal of this determination, which appeal was timely requested.

If the appeal is not granted,

then, the Company’s common stock and warrants will be delisted from Nasdaq, trading of the Company’s securities will be suspended,

and a Form 25-NSE will be filed with the SEC which will remove the Company’s securities from listing and registration on Nasdaq.

Subsequently,

on April 4, 2023, the Company received an additional notice from Nasdaq that the Company’s failure to timely file its Annual Report

Therefore, in accordance

with Nasdaq Listing Rule 5810(c)(3) (A), the Company was provided 180 calendar days, or until February 20, 2023, to regain compliance

with such rule.

On February 23, 2023, the Company received a determination letter from Nasdaq advising it that Nasdaq had determined

that the Company had not regained compliance with such rule and that the Company was not eligible for a second 180 day period as the

Company had not yet filed its periodic reports with the SEC.

Nasdaq also confirmed to the Company in its February 23, 2023 letter that

the failure to timely file those periodic reports each serve as separate and an individual basis for delisting.

Company had until March 2, 2023 to request an appeal of Nasdaq’s determination, which appeal was timely requested.

appeal were not granted, then, the Company’s common stock and warrants would be delisted from Nasdaq, trading of the

Company’s securities would be suspended, and a Form 25-NSE would need to be filed with the SEC which would remove the

Company’s securities from listing and registration on Nasdaq.

April 4, 2023, the Company received an additional notice from Nasdaq that the Company’s failure to timely file its Annual Report

on Form 10-K for the year ended December 31, 2022, serves as an additional basis for delisting the Company’s securities from Nasdaq.

April 24, 2023, the Company presented a plan to regain compliance with the Nasdaq Listing Rules and to file the Company’s

deficient quarterly reports for the quarters ended June 30, 2022 and September 30, 2022, as well as its annual report for the year

ended December 31, 2022, and to cure the bid price deficiency.

On May 8, 2023, the Company received notice that the Company’s

plan to regain compliance was conditionally accepted by the hearings panel.

There can be no assurance that the Company will be able to regain compliance with the applicable Nasdaq

listing requirements, or that a hearings panel will stay the delisting of the Company’s securities.

If 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 decline.

April 24, 2023, the Company presented a plan to a Nasdaq hearing panel (the “Panel”) to regain compliance with the Nasdaq

Listing Rules and to file the Company’s deficient quarterly reports for the quarters ended June 30, 2022 and September 30, 2022,

as well as its annual report for the year ended December 31, 2022, and to cure the bid price deficiency.

On May 8, 2023, the Company

received notice that the Company’s plan to regain compliance was conditionally accepted by the Panel and the Company provided Nasdaq

with certain requested information.

On May 24, 2023, the Company received a letter from the Panel (the “May 24th Decision”),

stating that as a result of its review of the requested information, it had determined to delist the Company’s common stock and

warrants from Nasdaq on May 26, 2023, and consequently the Company’s common stock and warrants were suspended from trading on Nasdaq

on that date.

The Company responded to the May 24 th Decision and requested that the Panel reconsider the historic facts underlying

its decision, the Company’s future prospects, the consequences of such delisting on the Company’s stockholders and the Company’s

ability to continue to relaunch its business.

May 31, 2023, the Panel requested additional information from the Company in order to conduct its reconsideration of the matter.

Specifically,

the Panel requested the Company’s projected cash flow for the next 12 months, the amount of anticipated drawdowns from the Company’s

Loan Agreement with Woodford, and a breakdown of the Company’s revenue earned since it recommenced lottery ticket sales in April

On June 2, 2023, the Company submitted a written response to the Panel’s May 31st request.

consideration of the record and the additional documentation provided by the Company, on June 8, 2023, the Company received a letter

(the June 8 th Decision”) from the hearings panel stating that it had determined to reverse its initial delisting decision

and grant the Company’s request for an exception to the continued listing rules until August 17, 2023, subject to the satisfaction

of certain conditions, which the Company met in a timely manner.

In addition to the above, there are other requirements to be met in order to maintain a continued listing on The Nasdaq Global Market.

These requirements include requiring that the Company maintain at least $10 million in stockholders’ equity, $5 million of Market

Value of Publicly Held Shares (MVPHS) listed securities, or $50 million in total assets and total revenue over the prior two years or

two of the prior three years 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 in MVPHS 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.

The Company met this

requirement, notified Nasdaq and on April 10, 2024 received written notification from Nasdaq confirming that the Company has

regained compliance with Nasdaq Listing Rule 5450(b)(1)(C) and the matter is now closed .

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

2 unchanged sentences

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

addition to the above, other conditions required for continued listing on The Nasdaq Global Market include requiring that we 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.

Our stockholders’ equity may not remain above Nasdaq’s

$50 million minimum, our market value of listed securities is not, and may in the future not be above $50 million, we may not generate

over $50 million of yearly net income (which we currently do not) and maintain over $50 million of assets.

Furthermore, we are required

to maintain a majority of independent directors and at least three members on our audit committee, which requirements we have not met

from time to time, provided that as of the date of this Amended Report which requirements are met.

from Nasdaq could also result in negative publicity.

20 unchanged sentences

of factors, including the following:

announcements by us or

our competitors of new products, features, or services;

the public’s reaction

to our press releases, other public announcements, and filings with the SEC, including but not limited to, those relating to the

Internal Investigation and related events, our financial restatements and the Operational Cessation;

rumors and market speculation

involving us or other companies in our industry;

actual or anticipated changes

in our results of operations or fluctuations in our results of operations;

changes in the financial

projections we may provide to the public or our failure to meet these projections;

actual or anticipated developments

in our business, our competitors’ businesses or the competitive landscape generally;

actual or perceived privacy

or data security incidents;

risks related to the organic

and inorganic growth of our business and the timing of expected business milestones, including those related to announced or completed

acquisitions of businesses, products, services, or technologies by us or our competitors;

actual or anticipated changes

in applicable laws or regulations;

changes in accounting standards,

policies, guidelines, interpretations, or principles;

our ability to forecast

or report accurate financial results;

technical factors in the

public trading market for our common stock and warrants that may produce price movements that may or may not comport with macro,

industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be

expressed on financial trading and other social media sites), the amount and status of short interest in our securities, access to

margin debt, trading in options and other derivatives on our common stock and warrants and any related hedging and other technical

trading factors.

addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the

market prices of equity securities of many companies.

These fluctuations have often been unrelated or disproportionate to the

operating performance of those companies.

Broad market and industry factors, as well as general economic, political, regulatory and

market conditions, may negatively affect the market price of our common stock and warrants, regardless of the Company’s actual

operating performance.

In addition, in the past, securities class action litigation has often been brought against a company following a

decline in the market price of its securities.

If the Company faces such litigation, it could result in substantial costs and a diversion

of management’s attention and resources, which could harm its business, results of operations, cash flow, or financial condition.

announcements

by us or our competitors of new products, features, or services;

public’s reaction to our press releases, other public announcements, and filings with the SEC;

and market speculation involving us or other companies in our industry;

or anticipated changes in our results of operations or fluctuations in our results of operations;

in the financial projections we may provide to the public or our failure to meet these projections;

or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally;

or perceived privacy or data security incidents;

related to the organic and inorganic growth of our business and the timing of expected business milestones, including those related

to announced or completed acquisitions of businesses, products, services, or technologies by us or our competitors;

or anticipated changes in applicable laws or regulations;

in accounting standards, policies, guidelines, interpretations, or principles;

ability to forecast or report accurate financial results;

factors in the public trading market for our common stock and warrants that may produce price movements that may or may not comport

with macro, industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including

as may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities,

access to margin debt, trading in options and other derivatives on our common stock and warrants and any related hedging and other

technical trading factors.

addition, the stock markets historically have experienced extreme price and volume fluctuations that have affected the market prices

of equity securities of many publicly-held companies.

These fluctuations have often been unrelated or disproportionate to the operating

performance of those companies.

Broad market and industry factors, as well as general economic, political, regulatory and market conditions,

may negatively affect the market price of our common stock and warrants, regardless of a company’s actual operating performance.

In addition, in the past, securities class action litigation has often been brought against a company following a decline in the market

price of its securities.

If the Company faces such litigation, it could result in substantial costs and a diversion of management’s

attention and resources, which could harm its business, results of operations, cash flow, or financial condition.

securities or industry analysts do not publish research or reports about the Company, or publish negative reports, the Company’s

11 unchanged sentences

source of gain.

Company currently anticipates that it will retain future earnings for the development, operation and expansion of its business and do

Company currently anticipates that it will retain future earnings for the development, operation and expansion of its business and does

not anticipate declaring or paying any cash dividends for the foreseeable future.

As a result, capital appreciation, if any, of the Company’s

shares of common stock would be your sole source of gain on an investment in such shares for the foreseeable future.

Related to Our Loan Agreement and Loan Agreement Warrants

Woodford may not loan us

the amounts they agreed to under the Loan Agreement.

If Woodford fails to provide us with necessary funding, we may be forced to curtail

or even abandon our plan to recommence our operations and we may need to permanently cease our operations

As previously noted, we need to

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

The Loan Agreement with

Woodford is one potential source of this needed additional capital that is presently available to us.

Pursuant to the Loan Agreement,

Woodford agreed to fund up to $2.5 million, subject to certain conditions and requirements, of which approximately $1.25 million has been

received to date and $1.25 million is currently available, upon request from the Company.

In the event Woodford does not fund us the remaining

amount of funds due, or alleges that we have breached the terms of the Loan Agreement, and therefore claims no additional funds are due,

we may not receive any further funding under the Loan Agreement.

Further, if Woodford does not advance us amounts owed under the Loan

Agreement and/or we are unable to raise additional funds, we may not be able to raise enough capital to recommence our operations and

run our business.

Consequently, we may be forced to curtail or even abandon our plan to recommence our operations and we may need to permanently

cease our operations.

are subject to certain covenants while amounts are outstanding under the Loan Agreement which may restrict our ability to undertake future

activities, including issuing additional shares of common stock.

a result, capital appreciation, if any, of the Company’s shares of common stock would be your sole source of gain on an investment

in such shares for the foreseeable future.

Related to Our Loan Agreements and Loan Agreement Warrants

United Capital Investments London Limited, (“UCIL”) may not loan us the amounts they agreed to under their amended and restated loan agreements, and

Univest Securities, LLC (“Univest” or our “Placement Agent”) may not be successful in whole or in part in placing

our Offering.

If UCIL fails to provide us with funding, and the Placement Agent is less than fully successful, we

may be forced to curtail or even abandon our plan to recommence our operations and we may need to permanently cease our operations.

previously noted, we need to raise capital to, among other things, support and restart our operations, re-hire employees and pay our

The amended and restated loan agreements with Woodford and UCIL are potential sources of this needed additional capital that

is presently available to us.

Univest funding was available on Dec 31 also.

to the Woodford Amended and Restated Loan Agreement, Woodford agreed to fund up to $52.5 million, subject to certain conditions and requirements,

of which, per our books and records, $885,734 was received by us through December 31, 2023.

reported on form 8-K on August 1, 2023, the Company reported that it had not received the requisite funding on a timely basis that

it expected from Woodford, despite making several requests to Woodford for said funding under the Woodford Amended and Restated Loan

Moreover, the Board of Directors determined that it was in the best interest of the Company and its stockholders to enter

into a new loan agreement with UCIL, as an alternative lender to Woodford, upon receiving an event of default notice on July 21,

2023 (the “Default Notice”) and an event of default and crystallization notice on July 25, 2023 (the

“Crystallization Notice”) from Woodford under the Woodford Amended and Restated Loan Agreement.

On July 24, 2023, the

Company responded to the Default Notice disputing that an event of default had occurred.

Further, on July 27, 2023, the Company

replied to the Crystallization Notice denying that an event of default occurred or continued, and further asserted that

Woodford’s attempt for crystallization was inappropriate and unlawful under its loan agreement.

The validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.

Despite requests

from the Company, Woodford has repeatedly amongst other things:

failed to prove the amounts borrowed by the Company or claimed to have

been advanced by Woodford to the Company;

failed to indicate if it would accept accelerated payment of those verified amounts;

to provide an anti-money laundering acceptable account to which payment could be made by the Company and failed to explain failure to

respond to requests for other funding to be accepted in the context of the Woodford Loan Agreement;

failed to respond to requests for

funding under the accordion facility of the Woodford Loan Agreement;

and failed to respond to allegations of money laundering and conspiracy

to defraud the Company and others.

the uncertainty of continued financing under the Woodford Loan Agreement, on July 26, 2023, the Company secured and formalized

alternative funding by entering into a Loan Agreement with UCIL which was further amended and restated on August 18,

The UCIL agreement was approved by the shareholders on or about November 17, 2023 and attached to this 10-K/A as an exhibit.

UCIL loan agreement provides for a credit facility (the “Credit Facility”) consisting of (a) funding in the principal

amount of up to $1,000,000 to be paid in tranches over time and as requested by the Company (the “Initial Loan”),

wherein in return for the Initial Loan the Company shall issue to UCIL a number of warrants (the “Warrants”) to purchase

shares of the Company’s common stock (“common stock”) in an amount representing at least 4.5% but not exceeding

15% of the Company’s issued and outstanding common stock on the date of such issuance;

and (b) an additional credit facility,

at the Company’s written request and at UCIL’s sole discretion for an amount up to a total of $49,000,000 in additional

financing (the “Accordion”) in subsequent funding tranches.

The interest rate on the Initial Loan and the Accordion is

10% per annum.

The Credit Facility provides that UCIL may elect, in its sole discretion, to convert an amount of the Initial Loan

and the Accordion, together with accrued interest, into shares of common stock at a conversion price calculated in accordance with

the terms of the Loan Agreement.

In addition, the Credit Facility includes certain customary representations, warranties and events

of default subject to customary notice and cure rights.

The Univest placement agent agreement pertains to the Company’s offering

(“Offering”) of units (“Units”) up to $5,000,000 to be offered to their investors;

each Unit consisting of a convertible

promissory note (each, a “Convertible Note” or collectively, the “Convertible Notes”), and a common stock purchase

warrant (each, a “Warrant”, or collectively, the “Warrants”) to purchase shares of common stock of the Company,

par value $0.001 per share (the “Common Stock”) which include specific registration rights (“Registration Rights”),

for their investors.

neither Woodford nor UCIL, nor any other potential lenders or investors (including those placed through Univest) are able or willing

over time to advance us amounts owed under either of their amended and restated loan agreements and/or we are unable to raise

additional funds from other third parties, we may not be able to raise enough capital to recommence our operations and run our

Consequently, we may be forced to curtail or even abandon our plan to recommence our operations and we may need to

permanently cease our operations.

are subject to certain covenants while amounts are outstanding under the loan agreements which may restrict our ability to undertake

future activities, including issuing additional shares of common stock.

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 may not be unreasonably withheld;

for transactions of this size and nature.

For example, included in the Woodford 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 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;

(e) amending or restating our governing documents;

(f) declaring or paying any dividend;

(g) issuing any shares of common stock which negatively affects Woodford;

and (h) repurchasing any shares of common stock.

The above covenants may restrict our ability to raise capital, pay consultants, officers

and directors, and may ultimately result in material adverse effects to the Company.

The result of that may be a decrease in the value

of our securities or our need to seek bankruptcy protection.

obligations under the Loan Agreement are secured by a first priority security interest in substantially all of our assets and if we were

to default, they could force us to curtain or abandon our business plans and operations.

amounts borrowed pursuant to the terms of the Loan Agreement are secured by substantially all of the present and after-acquired assets

of the Company and its subsidiaries.

As a result, Woodford as our creditor, in the event of the occurrence of a default under the Loan

Agreement, may enforce its security interests over our assets and/or our subsidiaries which secure such obligations, take control of

such assets and operations, force us to seek bankruptcy protection, or force us to curtail or abandon our current business plans and

If that were to happen, any investment in the Company (including, but not limited to any investment in our common stock)

could become worthless.

issuance and sale of common stock upon conversion of the amounts owed or upon exercise of the warrants issued to Woodford under the Loan

Agreement may depress the market price of our common stock and cause substantial dilution

of the date of this Amended Report, we have borrowed

approximately $1.25 million under the Loan Agreement to Woodford.

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

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

Amounts borrowed can be

repaid at any time without penalty.

Amounts borrowed pursuant to the Loan Agreement may, at Woodford’s option, be converted into

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

of Company common stock within 10 business days of the date of the Loan Agreement (which was equal to $0.28 per share), subject to a

4.99% beneficial ownership limitation and a separate limitation preventing the holder from holding more than 19.99% of the issued and

outstanding common stock of the Company, without the Company obtaining stockholder approval for such issuance.

addition, in connection with the Loan Agreement we agreed

to grant warrants to Woodford to purchase 15% of the 7,619,207 shares of common stock that were then issued and outstanding, each with

an exercise price equal to the average of the closing price for each of the ten days prior to the first amount being debited from the

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

In the event we fail to repay the amounts borrowed when

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

owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount (i.e., will equal $0.21

sequential conversions of amounts owed under the Loan Agreement or warrants are exercised, and sales of such resulting shares of common

stock take place, the price of our common stock may decline, and as a result, Woodford will be entitled to receive an increasing number

(g) issuing any shares of common stock which

negatively affects the lender and (h) repurchasing any shares of common stock.

Such covenants in either loan agreement may restrict our

ability to raise capital, pay consultants, officers and directors, and may ultimately result in material adverse effects to the Company.

The result of that may be a decrease in the value of our securities or our need to seek bankruptcy protection.

The validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.

obligations under the loan agreements are secured by a first priority security interest in substantially all of our assets and if we

were to default, they could force us to curtail or abandon our business plans and operations.

the amounts borrowed pursuant to the terms of the Woodford Loan Agreement are secured by substantially all of the present and

subsequently acquired assets of the Company and its subsidiaries, the validity and application of the Woodford Loan Agreement

Amendment is disputed by the Company.

Under the Agreement, Woodford as a creditor, in the event of the occurrence of a default might

have been able to enforce security interests over our assets and/or our subsidiaries which secure obligations, take control

of such assets and operations, force us to seek bankruptcy protection, or force us to curtail or abandon our current business plans

and operations.

If that were to happen, any investment in the Company (including, but not limited to, any investment in our common

stock) could become worthless.

The validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.

Despite requests

from the Company, Woodford has repeatedly amongst other things:

failed to prove the amounts borrowed by the Company or claimed to have

been advanced by Woodford to the Company;

failed to indicate if it would accept accelerated payment of those verified amounts;

to provide an anti-money laundering acceptable account to which payment could be made by the Company and failed to explain failure to

respond to requests for other funding to be accepted in the context of the Woodford Loan Agreement;

failed to respond to requests for

funding under the accordion facility of the Woodford Loan Agreement;

and failed to respond to allegations of money laundering and conspiracy

to defraud the Company and others.

issuance and sale of common stock upon conversion of the amounts owed or upon exercise of the warrants issued to either Woodford or UCIL

under each’s loan agreement may depress the market price of our common stock and cause substantial dilution.

of December 31, 2023, per the Company’s books and records, we had borrowed $798,351 under the Loan Agreement to Woodford and

$697,642 from UCIL.

Amounts borrowed can be repaid at any time without penalty and accrue interest per the terms and conditions of

each loan agreement.

Amounts borrowed may, at each lender’s option, be converted into shares of common stock, beginning 60

days after the first loan date at the rate of 80% of the lowest publicly available price per share of Company common

addition, in connection with the loan agreements we agreed to grant warrants to each of Woodford and UCIL to purchase up to 15% of the

shares of common stock that were then issued and outstanding, each with an exercise price equal to the average of the closing price for

each of the ten days prior to the drawing of the first tranche.

In the event we fail to repay the amounts borrowed when due or either

lender fails to convert the amount owed into shares of common stock, the exercise price of the warrants may be offset by amounts owed, and in such case, the exercise price of the warrants will be subject to a further discount.

sequential conversions of amounts owed under either loan agreement or warrants are exercised, and sales of such resulting shares of common

stock take place, the price of our common stock may decline, and as a result, the lender will be entitled to receive an increasing number

of shares of common stock, which shares could then be sold in the market, triggering further price declines and conversions or exercises

for even larger numbers of shares, to the detriment of our investors.

The shares of common stock issued to Woodford may, under certain

conditions, be sold without restriction pursuant to Rule 144.

As a result, the sale of these shares may adversely affect the market price,

if any, of our common stock.

The shares of common stock issued may, under certain conditions,

be sold without restriction pursuant to Rule 144.

As a result, the sale of these shares may adversely affect the market price, if any,

of our common stock.

Additionally,

the issuance of common stock upon conversion of the amounts owed under the Loan Agreement or the exercise of warrants will result in

immediate and substantial dilution to the interests of other stockholders.

currently owe a significant amount of money under our Loan Agreement, which we may not be able to repay.

of the date of this Amended Report we owe approximately $ 1.25 million under the Loan Agreement.

We do not have sufficient funds to repay

such amounts.

A high level of indebtedness increases

the risk that we may default on our debt obligations.

If the amounts owed under the Loan Agreement are not converted into common stock

pursuant to the terms of the Loan Agreement, we may not be able to generate sufficient cash flows to pay the principal or interest on

the loan, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt.

have sufficient funds and are otherwise unable to arrange financing or raise additional funds, we may have to sell significant assets

or have a portion of our assets foreclosed upon which could have a material adverse effect on our business, financial condition and results

of operations and could cause any investment in the Company to decline in value or become worthless.

insurance coverage may not be adequate to cover all possible losses that we could suffer, and our insurance costs may increase.

do not have an effective director and officer liability insurance, and may not have the financial resources or otherwise be able to obtain

a director and officer liability insurance at reasonable cost or terms in the future.

However, we have other insurance policies with

coverage features and insured limits that we believe are customary in their breadth and scope.

the issuance of common stock upon conversion of the amounts owed under either loan agreement or the exercise of warrants will result

in immediate and substantial dilution to the interests of other stockholders.

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

The validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.

currently owe a significant amount of money under our Loan Agreements which we may not be able to repay.

of the date of this Amended Report per our books and records, we owe approximately:

$798,351 under the Amended and Restated Woodford Loan

$697,642 under the Amended and Restated UCIL Loan Agreement;

and $1,075,000 under the Univest Placement Agent Agreement.

Currently, we do not have sufficient funds to repay such amounts.

A high level of indebtedness increases the risk

that we may default on our debt obligations.

If the amounts owed under any undisputed loan agreements are not

converted into common stock pursuant to the terms and conditions, we may not be able to pay the

principal or interest on the loan, and future working capital, borrowings or equity financing may not be available to pay or

refinance such debt.

If we do not have sufficient funds and are otherwise unable to arrange financing or raise additional funds, we

may have to sell significant assets or have a portion of our assets foreclosed upon which could have a material adverse effect on

our business, financial condition and results of operations and could cause any investment in the Company to decline in value or

become worthless.

insurance coverage is not adequate to cover all possible losses that we could suffer, and our insurance costs may increase.

currently do not have effective director and officer liability insurance and may not have the financial resources or otherwise be able

to obtain director and officer liability insurance at reasonable cost or terms in the future.

However, we have other insurance policies

with coverage features and insured limits that we believe are customary in their breadth and scope.

Nevertheless, in the event of a substantial

loss, the insurance coverage we carry may not be sufficient to pay the full market value or replacement cost of our lost inv estment

or could result in certain losses being totally uninsured.

loss, the insurance coverage we carry may not be sufficient to pay the full market value or replacement cost of our lost investment or

could result in certain losses being totally uninsured.

Market forces beyond our control may limit the scope of the insurance coverage

5 unchanged sentences

cash and cash equivalents may be exposed to failure of our banking institutions.

we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our balances in a number of large financial

institutions.

Notwithstanding, such allocation, we are subject to the risk of bank failure.

For example, on March 10, 2023, Silicon Valley

Bank (“SVB”) was unable to continue its operations and the Federal Deposit Insurance Corporation was appointed as receiver

for SVB and created the National Bank of Santa Clara to hold the deposits of SVB.

None of our cash and cash equivalents were held

at SVB and we do not expect further developments with SVB to have a material impact on our cash and cash equivalents balance,

expected results of operations, or financial performance for the foreseeable future.

However, if the banks where we hold deposits were

to experience a similar failure, we could experience additional risk.

Any such loss or limitation on our cash and cash equivalents would

adversely affect our business.

we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our cash balances in more than one financial

Notwithstanding such allocation, we are subject to the risk of bank failure and the consequent loss of our funds, in whole

If any bank at which we hold deposits were to experience a failure, we could experience the risk of loss, or limitation on

access to, our cash and cash equivalents which would adversely affect our business.

ultimate effect of the Reverse Stock Split on the market price of our common stock cannot be predicted with any certainty and may decrease

the liquidity of our common stock and magnify any decrease in our overall market capitalization.

ultimate effect of the Reverse Stock Split on the market price of our common stock cannot be predicted with any certainty, and we cannot

assure you that the Reverse Stock Split will result in any or all of the expected benefits, including enabling the Company to regain

compliance with the Nasdaq listing standards, for any meaningful period of time, or at all.

While we expect that the reduction in the

number of outstanding shares of common stock will proportionally increase the market price of our common stock, we cannot assure you

that the Reverse Stock Split will increase the market price of our common stock by a multiple of the Reverse Stock Split ratio or result

in any permanent or sustained increase in the market price of our common stock.

The market price of our common stock depends on multiple

factors, many of which are unrelated to the number of shares outstanding, including our business and financial performance, general market

conditions and prospects for future success, any of which could have a counteracting effect to the Reverse Stock Split on the per share

addition, the Reverse Stock Split also reduced the total number of outstanding shares of common stock, which may lead to reduced trading

for our common stock.

As a result of a lower number of shares outstanding, the market for our common stock may also become more volatile.

The Reverse Stock Split also increased the number of stockholders who own “odd lots” of less than 100 shares of common stock.

A purchase or sale of less than 100 shares of common stock (an “odd lot” transaction) may result in incrementally higher

trading costs through certain brokers, particularly “full service” brokers.

Therefore, those stockholders who own fewer than

100 shares of common stock following the Reverse Stock Split may be required to pay higher transaction costs if they sell their common

the decline in the per share price of our common stock and the decline in our overall market capitalization may be greater following

the Reverse Stock Split than would have occurred in the absence of a Reverse Stock Split.

Any reduction in our market capitalization

may be magnified as a result of the smaller number of total shares of common stock outstanding following the Reverse St

Unresolved Staff Comments.

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/A

Item 1A. Risk Factors