What changed in this filing

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Item 1A. Risk Factors

2025-04-21 compared with 2024-04-03 · 668 added, 679 removed, 1666 unchanged (45% of the section changed)

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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

Risks Relating to the Restatements of our

Consolidated Financial Statements, Our Ability to Continue as a Going Concern, Our Internal Controls and Related Matters

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

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among other adverse impacts.

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.

of these issues contributed to the Company’s auditors’

determination that the Company’s audited financial statements

As disclosed in the Company’s

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 an

Internal Investigation that revealed past 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

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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.

The 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 its internal investigations, including

legal expenses and costs associated with the restatement and adjustments to its 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, or the Company’s 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 the future.

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.

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

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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”)

relating to the findings of the Internal Investigation and other matters.

The Company is cooperating fully with such investigations and

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.

Company and 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”).

The Company is cooperating fully with such investigations and inquiries.

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 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.

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 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

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As a result, such proceedings, investigations and inquiries 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

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

effect on our reputation, business, financial condition, cash flows and results of operations, and could cause our securities to decline

in value or become worthless.

have been named as a defendant in a number of lawsuits filed by purchasers of our securities, including class action lawsuits that could

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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 restatements 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

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

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

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 $1.6 million in outstanding payroll obligations, which amounts remain 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 restart its operations, it must raise sufficient capital to re-hire or hire additional employees.

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.

In July 2022, the Company

furloughed the majority of its U.S.

employees and suspended U.S.

lottery game sales operations after determining that it did not have

sufficient financial resources to fund these operations or pay certain existing obligations, including U.S.

payroll and related obligations.

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

In 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, 2024, the Company owed

approximately $3.94 million in outstanding U.S.

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.

In order for the Company to fully

restart its U.

operations, it must raise sufficient capital to re-hire or hire additional employees.

Qualified employees may not be

available for hire, 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

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

protection or a corporate reorganization, which could cause the value of our securities to become worthless, or at best, become devalued

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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 or hire employees and engage contractors

and pay our expenses.

We need additional capital

to, among other things, support and restart our U.S.

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 our initial

Woodford 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,

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.

We need to raise capital to,

among other things, support and restart our U.S.

operations, re-hire or hire employees, engage contractors and pay our expenses.

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.

additional financing involves certain risks, including:

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

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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

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

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

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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

funds advanced under our current loan agreements are inadequate to meet our needs, 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.

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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,

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we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations,

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

materially and adversely affected.

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.

connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2021, we and our independent

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As defined in the standards established by

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

is a deficiency, or combination of deficiencies,

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:

Past material weaknesses identified

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

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were either not designed and in place or not operating effectively;

in the design and operations of the procedures relating to the timely closing of financial books at the quarter and fiscal year end;

in the design and operations of the procedures relating to the timely closing of financial books at quarter and fiscal year end;

segregation of duties in certain types of transactions and processes.

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

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

As a result of the material weaknesses,

management has concluded that our internal control over financial reporting remained ineffective as December 31, 2024.

intend to implement measures to remediate the identified material weaknesses.

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operations or financial results.

See “ Item 9A.

Controls and Procedures-Material Weaknesses in Internal Control Over Financial

Reporting .”

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

other deficiencies, or that other existing or past inaccuracies or deficiencies will not be revealed in the future.

Our failure to correct

these deficiencies or our failure to discover and address any other deficiencies could result in inaccuracies in our financial statements

and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely

As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our shares

of common stock and warrants, may be materially adversely affected.

Further, there can be no guarantee

that the Company’s internal investigations and subsequent inquiries revealed all instances of inaccurate disclosure or other deficiencies,

or that other existing or past inaccuracies or deficiencies will not be revealed in the future.

Our failure to correct these deficiencies

or our failure to discover and address any other deficiencies could result in inaccuracies in our financial statements and could also

impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis.

our business, financial condition, results of operations and prospects, as well as the trading price of our shares of common stock and

warrants, may be materially adversely affected.

addition, these deficiencies could cause investors to lose confidence in our reported financial information, limiting our access to capital

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Additionally, ineffective internal controls could expose us to increased risks of fraud or misappropriation of corporate assets and subject

us to further litigation and/or regulatory investigations and civil or criminal sanctions.

us to further litigation or regulatory investigations and civil or criminal sanctions.

We could also be required to further restate

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10-K and Quarterly Reports on Form 10-Q.

In addition, once we become an “accelerated filer”

and cease to be a “smaller

reporting company”

as such terms are defined in the JOBS Act, our independent registered public accounting firm must attest to

In addition, once we become an “accelerated filer” and cease to be a “smaller

reporting company” as such terms are defined in the JOBS Act, our independent registered public accounting firm must attest to

and report on the effectiveness of our internal control over financial reporting.

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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

in light of our lack of current financial information.

Accordingly, any investment in our shares and/or warrants may involve a greater

Accordingly, any investment in our shares or warrants may involve a greater

degree of risk than other companies who are current on their public filings.

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interactivity, and enjoyment than our offerings.

We compete with these and other forms of entertainment for our users’

discretionary

We compete with these and other forms of entertainment for our users’ discretionary

time and income.

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market share, expand offerings, and broaden their geographic scope of operations.

If we are not able to achieve some market share, if

our offerings are not popular, or if we are not able to provide competitive products, our business, financial condition, and results

If we are not able to achieve sufficient market share,

if our offerings are not popular, or if we are not able to provide competitive products, our business, financial condition, and results

of operations could be harmed.

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and results of operations.

financial performance is subject to U.S.

and global economic conditions and their impact on levels of spending by potential users and

customers of our Platform and acquirers of our Data Service.

Economic recessions, or other economic conditions such as rising inflation

and interest rates, have had, and may continue to have, far reaching adverse consequences across many industries, including the global

entertainment, lottery, sweepstakes and promotions, and gaming industries, which may adversely affect our business, financial condition,

and results of operations.

Tepid growth was experienced in the U.S.

and globally following the financial crisis in 2008 through 2009,

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.

Our financial performance is

subject to U.S.

and global economic conditions and their impact on levels of spending by potential users and customers of our Platform

and acquirers of our Data Service.

Economic recessions, or other economic conditions such as rising inflation and interest rates, have

had, and may continue to have, far reaching adverse consequences across many industries, including the global entertainment, lottery,

sweepstakes and promotions, and gaming industries, which may adversely affect our business, financial condition, and results of operations.

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

in interest rates and inflation, and acts or threats of acts of war, 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 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 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.

geopolitical challenges, including global security concerns in

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

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.

in the sports media market could impair our ability to generate revenue from Sports.com

landscape of the sports content industry is changing as traditional media companies are putting on a focus on developing original sports

In recent years, Apple, Netflix, Warner Brothers Discovery, and Amazon have produced original sports content and entered into

agreements to broadcast live sporting events.

Their entry into the market could limit our ability to acquire streaming rights for live

sports events.

Costs to produce original content may increase to the point where we cannot compete in the sector.

trends in paying for streaming content may have an adverse impact on the Sports.com subscription service.

global video streaming market is expected to experience a compound annual growth rate of 17.8% over the next eight years, reaching a

value of $2.4 trillion by 2032.

With more than 200 global streaming services, consumers are presented with a wide array of choices

where to spend their discretionary entertainment dollars.

Since 2022, 25% of streaming subscribers have cancelled three or more

Additionally, 21% of subscribers indicated they intended to cancel at least one additional service in 2024.

This trend may

negatively impact our ability to attract new customers or may increase the costs of both customer acquisition and

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

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levels of unemployment, and rising prices and inflation, or the perception by consumers of weak or weakening economic conditions, may

reduce our users’

disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as purchasing

reduce our users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as purchasing

lottery games through remote channels.

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The effect of a decrease in consumer spending on entertainment and leisure activities due to unfavorable market conditions could reduce

the Company’s cash flows and revenues, and therefore have a material and adverse impact on our results of operations.

the Company’s cash flows and revenues and therefore have a material and adverse impact on our results of operations.

we cannot ensure that demand for our offerings will remain constant or achieve our anticipated growth.

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opinion can significantly influence our business.

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

offerings, our other services and systems, actual or threatened litigation or regulatory activity, the actions of third parties with

whom we have relationships, our ability to recommence our business operations, or the conduct of the lottery authorities and the products

they offer, including declining popularity of a particular lottery game or lottery games in general, could seriously harm our reputation.

In addition, a negative shift in the perception of lottery games by the public or by politicians, lobbyists, or others could affect future

legislation regarding the mobile purchase of lottery games from third-party providers, including with respect to the regulation or licensure

of couriers, or with respect to the legalization of online lottery game sales (“Online Lottery”), either of which may impact

our operations.

Negative public perception could also lead to new restrictions on or to the prohibition of mobile lottery play in jurisdictions

in which we currently operate.

Such negative publicity could also adversely affect the size, demographics, engagement, and loyalty of

our new players and established user base, and it could result in decreased revenue or slower user growth rates, which could seriously

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

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 offerings, our other services and systems, actual or threatened litigation or regulatory activity, the actions of third parties

with whom we have relationships, our ability to recommence our business operations, or the conduct of the lottery authorities and the

products they offer, including declining popularity of a particular lottery game or lottery games in general, could seriously harm our

In addition, a negative shift in the perception of lottery games by the public or by politicians, lobbyists, or others could

affect future legislation regarding the mobile purchase of lottery games from third-party providers, including with respect to the regulation

or licensure of couriers, or with respect to the legalization of online lottery game sales (“Online Lottery”), either of

which may impact our operations.

Negative public perception could also lead to new restrictions on or to the prohibition of mobile lottery

play in jurisdictions in which we currently operate.

Such negative publicity could also adversely affect the size, demographics, engagement,

and loyalty of our new players and established user base, and it could result in decreased revenue or slower user growth rates, which

could seriously harm our business, financial condition, and results of operations and could cause the value of our securities to decline

or become worthless.

future growth will depend largely on our ability to attract players and retain users, and the loss of our users, failure to attract new

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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.

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.

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

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

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

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

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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,

Prior to the U.S.

Operational Cessation, Internet search engines drove traffic to our U.S.

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

recommence operations.

success depends in part on our ability to attract users through unpaid Internet search results on search engines like Google, Yahoo!,

The number of users we attract to our B2C Platform from search engines is due, in large part, to how and where our website

ranks in unpaid search results.

These rankings can be affected by a number of factors, many of which are not under our direct control

and may change frequently.

recommence U.S.

success depends in part on our ability to attract users through unpaid Internet search results on search engines like Google and Yahoo!.

The number of users we attract to our B2C Platform from search engines is due, in large part, to how and where our website ranks in unpaid

search results.

These rankings can be affected by a number of factors, many of which are not under our direct control and may change

For example, a search engine may change its ranking algorithms, methodologies, or design layouts.

links to our web-based properties may not be prominent enough to drive traffic, and we may not know how or otherwise be in a position

to influence the results.

In some instances, search engine companies may change these rankings in a way that promotes their own competing

products or services or the products or services of one or more of our competitors.

As a result, links to our

web-based properties may not be prominent enough to drive traffic, and we may not know how or otherwise be in a position to influence

In some instances, search engine companies may change these rankings in a way that promotes their own competing products

or services or the products or services of one or more of our competitors.

Search engines may also adopt a more aggressive auction-pricing

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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

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

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

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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.

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

We experienced net losses of approximately $24.7

million for the year ended December 31, 2023, and experienced net losses of 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

$233.8 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.

We have a history of incurring

net losses and have suspended significantly our U.S.

operations since July 2022, the Operational Cessation.

We may not be able to achieve

or maintain a needed level of profitability in the future.

On a fully consolidated basis we experienced net losses of approximately $23.9

million for the year ended December 31, 2024, and approximately $60.0 million and $25.6 million for the years ended December 31, 2023

and December 31, 2022, respectively.

As of December 31, 2024, we had an accumulated deficit of approximately $258.9 million.

have received some limited revenue since the U.S.

2022 Operational Cessation, we cannot predict when or whether we will be able to fully

restart our operations 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

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

Once we restart our operations,

Once we 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

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

we expect, or fails to grow as we forecast, our business, financial condition, and results of operations could be adversely affected.

Online Lottery market has grown rapidly since we launched our Platform in 2016, but it is still relatively new, and it is uncertain to

what extent market acceptance will continue to grow, if at all.

Our success will depend to a substantial extent on the willingness of

users to purchase Online Lottery games, i.e.

, through mobile applications and web properties.

If the public does not perceive

these services as beneficial, or chooses not to use them as a result of concerns regarding security, safety, affordability, or for other

reasons, whether as a result of incidents on our Platform or on our competitors’

applications or otherwise, or instead adopts alternative

solutions that may arise, then the market for our Platform may not further develop, may develop slower than we expect, or may not achieve

the growth potential we expect, any of which could adversely affect our business, financial condition, and results of operations and

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

business may be materially adversely affected if our products, technology, services, and solutions do not achieve and maintain broad

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Expanding into new markets and investing resources towards increasing the depth of our coverage within existing

markets impose additional burdens on our research, systems development, sales, marketing, and general managerial resources.

unable to manage our expansion efforts effectively, obtain greater market share or obtain widespread adoption of new or upgraded products,

services, and systems, we may not be able to offset the expenses associated with the launch and marketing of the new or upgraded products,

services, and systems, which could have a material adverse effect on our financial results.

If we introduce new or expand existing offerings

for our business, we may incur losses or otherwise fail to enter these markets successfully.

Our expansion into these markets will place

us in competitive and regulatory environments with which we are unfamiliar and involve various risks, including the need to invest significant

resources and the possibility that returns on such investments will not be achieved for several years, if at all.

markets will impose additional burdens on our research, systems development, sales, marketing, and general managerial resources.

are unable to manage our expansion efforts effectively, obtain greater market share or obtain widespread adoption of new or upgraded

products, services, and systems, we may not be able to offset the expenses associated with the launch and marketing of the new or upgraded

products, services, and systems, which could have a material adverse effect on our financial results.

If we introduce new or expand existing

offerings for our business, we may incur losses or otherwise fail to enter these markets successfully.

Our expansion into these markets

will place us in competitive and regulatory environments with which we are unfamiliar and involve various risks, including the need to

invest significant resources and the possibility that returns on such investments will not be achieved for several years, if at all.

we are unable to develop new or upgraded offerings or decide to combine, shift focus from, or phase out a service, then our users or

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If we are unable to do so or otherwise provide products, services, and systems that users and

customers want, then our users or customers may become dissatisfied and use competitors’

customers want, then our users or customers may become dissatisfied and use competitors’ services.

If we are unable to continue

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of future performance.

lottery games are offered on a year-round basis, there is seasonality in lottery games purchasing that may impact our operations and

operations of our customers.

The broad geographical mix of our user and customer base also impacts the effect of seasonality, as users

and customers in different territories typically place differing importance on different lottery games and those games often have different

For example, some multi-state games can have occasional increasingly high jackpot opportunities, which increase user attention

and ticket purchases, which further increases the jackpot.

lottery games are offered on a year-round basis, there is seasonality in lottery game purchasing that may impact our operations and operations

of our customers.

The broad geographical mix of our user and customer base also impacts the effect of seasonality, as users and customers

in different territories typically place differing importance on different lottery games and those games often have different calendars.

For example, some multi-state games can have occasional increasingly high jackpot opportunities, which increase user attention and ticket

purchases, which further increases the jackpot.

Such events may cause increases in our revenues.

By contrast, low jackpot

lottery games or periods in which there is little promotional activity connected to lottery games in general may negatively impact the

purchase of lottery games.

By contrast, low jackpot lottery games

or periods in which there is little promotional activity connected to lottery games in general may negatively impact the purchase of

lottery games.

Such fluctuations and uncertainties may negatively impact our cash flows.

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our future results of operations, cash flows, and financial condition are difficult to predict and may not grow at the rates we expect.

the extent that we enter into any business that is determined to be internet gaming, any jurisdiction in which our existing business

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 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.

To the extent that we enter

into any business that is determined to be internet gaming, any jurisdiction in which our existing business 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

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, 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

greater financial resources or experience in this area than we do.

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 greater

financial resources or experience in this area than we do.

Know-your-customer

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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

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

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

levels and/or may be permanently reduced as a result of recent events.

levels or may be permanently reduced as a result of previous events.

our employees, our affiliates, and others with whom we have contractual relationships also use social media to communicate externally.

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and financial condition.

operate in a public-facing industry where negative publicity, whether or not justified, can spread rapidly through, among other things,

operate in a public-facing industry where negative publicity, whether justified, can spread rapidly through, among other things,

social media.

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marketing efforts to help grow our business may not be effective.

awareness of our Platform is important to our ability to grow our business and to attract new users and customers in the future, which

can be costly.

We believe that much of the growth in the number of users of our B2C Platform prior to the Operational Cessation was attributable

Promoting awareness of our Platform

is important to our ability to grow our business and to attract new users and customers in the future, which can be costly.

that much of the growth in the number of users of our U.S.-based B2C Platform prior to the 2022 Operational Cessation was attributable

to our paid marketing initiatives.

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social media engagement, radio, video, podcasts, search engine optimization, and keyword search campaigns.

Our marketing initiatives

may become increasingly expensive and generating a meaningful return on these initiatives may become difficult.

Even if we successfully

increase revenue as a result of these marketing efforts, it may not offset the additional marketing expenses we incur.

If our marketing

efforts intended to help grow our business are not effective, we expect that our business, financial condition, and results of operations

would be adversely affected.

Our marketing initiatives may

become increasingly expensive and generating a meaningful return on these initiatives may become difficult.

Even if we successfully increase

revenue as a result of these marketing efforts, it may not offset the additional marketing expenses we incur.

If our marketing efforts

intended to help grow our business are not effective, we expect that our business, financial condition, and results of operations would

be adversely affected.

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

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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.

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

of fraud may involve various tactics, including collusion.

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diverted from other projects and requirements to correct these issues, which may delay other projects and the achievement of our strategic

addition, any misappropriation of, or access to, users’

or other proprietary information or other breach of our information security

addition, any misappropriation of, or access to, users’ or other proprietary information or other breach of our information security

could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply

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If we are unable to develop technology and products, services, and systems

that address users’

needs or enhance and improve our existing technology and offerings in a timely manner, it could have a material

that address users’ needs or enhance and improve our existing technology and offerings in a timely manner, it could have a material

adverse effect on our business, financial condition, and results of operations and could cause the value of our securities to decline

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time we decided to execute any new initiative.

Creating additional offerings can also divert our management’s attention from other

business issues and opportunities.

Even if our new offerings attain market acceptance, those new offerings could exploit the market share

of our other product offerings or share of our users’

wallets in a manner that could negatively impact such offerings.

of our other product offerings or share of our users’ wallets in a manner that could negatively impact such offerings.

such offering expansion will increase the complexity of our business and place an additional burden on our management, operations, technical

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

our user and customer base and engagement grows, and the amount and types of offerings we provide grow and evolve, we will need an increasing

amount of technical infrastructure, including network capacity and computing power, to satisfy our users’

and customers’

our user and customer base and engagement grow, and the amount and types of offerings we provide grow and evolve, we will need an increasing

amount of technical infrastructure, including network capacity and computing power, to satisfy our users’ and customers’

Such infrastructure expansion may be complex, and unanticipated delays in completing these projects or availability of components

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service provider or business partner.

As a result, our users’

information may be lost, disclosed, accessed, or taken without our

As a result, our users’ information may be lost, disclosed, accessed, or taken without our

users’ consent.

We have experienced attempts to breach our systems and other similar incidents in the past and anticipate that

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unauthorized access to our sites, networks, and systems;

unauthorized access to and misappropriation of user information, including users’

personally identifiable information, or other confidential or proprietary information of ourselves or third parties;

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additional personnel and protection technologies, train employees, and engage third-party experts and consultants.

addition, any party who is able to illicitly obtain access to a user’s account could access the user’s transaction data or

personal information, resulting in the perception that our systems are insecure.

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We plan to continue

to devote significant resources to protect against security breaches or we may need to in the future to address problems caused by breaches,

to devote significant resources to protect against security breaches or we may need in the future to address problems caused by breaches,

including notifying affected users in accordance with regulatory requirements and responding to any resulting litigation, which in turn,

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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

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in a data breach.

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.

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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

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

sensitive data;

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business could be adversely impacted by changes in the Internet and mobile device accessibility of users.

business depends on users’

access to our offerings via a mobile device or personal computer and the Internet.

business depends on users’ access to our offerings via a mobile device or personal computer and the Internet.

We may operate in

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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.

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

In addition, the Internet infrastructure

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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’

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

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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 developmental efforts to maintain our competitive position.

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

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would adversely affect our business, reputation, financial condition, and results of operations.

it becomes operational, we expect to make significant investments to improve the availability of our Platform and to enable rapid releases

of new features and services, funding permitting.

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 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

capacity constraints due to an overwhelming number of users or customers accessing our Platform simultaneously, users or customers may

seek other offerings, and may not return to our Platform as often in the future, or at all.

This would adversely affect our ability to

attract users and customers and decrease the frequency with which they use our Platform.

To the extent that we do not effectively address

capacity constraints, upgrade our systems as needed, or develop our technology and network architecture to accommodate actual and anticipated

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

we fully resume operations, we expect to make significant investments to improve the availability of our Platform and to enable rapid

releases of new features and services, funding permitting.

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 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 capacity constraints due to an overwhelming number of users or customers accessing our Platform simultaneously,

users or customers may seek other offerings and may not return to our Platform as often in the future, or at all.

This would adversely

affect our ability to attract users and customers and decrease the frequency with which they use our Platform.

To the extent that we

do not effectively address capacity constraints, upgrade our systems as needed, or develop our technology and network architecture to

accommodate actual and anticipated 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 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,

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

The distributed ledger was append-only and kept

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

Distributed ledger technology

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.

Prior to the U.S.

2022 Operational

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

ticket identification, and game numbers into an immutable ledger.

The distributed ledger was append-only and kept a complete record of

all changes to the provided data that could not be deleted, modified, or overwritten.

Distributed ledger technology 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

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For example, the Interstate Wagering Amendment

1301 (the “Interstate Wagering Amendment”) limits our ability to purchase lottery games for a user located

in one state from a lottery authority located in another state, except under certain limited circumstances, such as where the lottery

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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.

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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.

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

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”) have 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 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.

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

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.

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.

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

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.

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Essentially, there was a debate with regard to whether all of the prohibitions

in the Wire Act applied only to bets or wagers on a “sporting event or contest”

as used in the Wire Act, or all bets or wagers.

In late 2011, the OLC issued an opinion that concluded the conduct prohibited by the Wire Act was limited to sports gambling (the “2011

DOJ Opinion”).

in the Wire Act applied only to bets or wagers on a “sporting event or contest” as used in the Wire Act, or all bets or wagers.

In late 2011, the OLC issued an opinion that concluded the conduct prohibited by the Wire Act was limited to sports gambling (the “2011

DOJ Opinion”).

Following the issuance of the 2011 DOJ Opinion, six state lotteries offered internet sales of scratch lottery games

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The New Hampshire federal district court declined, however, to issue a nationwide injunction in the case.

August 16, 2019, the DOJ appealed the New Hampshire federal district court’s decision to the First Circuit.

January 20, 2021, the First Circuit affirmed the District Court’s decision, determining that the Wire Act applies only to interstate

August 16, 2019, the DOJ appealed the New Hampshire federal district court’s decision to the First Circuit.

January 20, 2021, the First Circuit affirmed the District Court’s decision, determining that the Wire Act applies only to interstate

wire communications related to sporting events or contests.

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First Circuit declined to set aside the 2019 Opinion under the Administrative Procedure Act.

In addition to the First Circuit’s

decision, the Fifth Circuit has previously held the Wire Act prohibitions apply only to sports gambling.

September 15, 2022, the United States District Court for the District of Rhode Island entered an order siding with the First Circuit’s

interpretation of the Wire Act, and holding that “the Wire Act applies only to ‘bets or wagers on any sporting event or contest.”

September 15, 2022, the United States District Court for the District of Rhode Island entered an order siding with the First Circuit’s

interpretation of the Wire Act and holding that “the Wire Act applies only to ‘bets or wagers on any sporting event or contest.”

Notwithstanding

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take a different position.

Because many of the Company’s operations occur outside the jurisdiction of the First Circuit and the

Fifth Circuit, and because the First Circuit did not set aside the 2019 Opinion, we are still monitoring the potential impact of the

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and results of operations.

In particular, should it ultimately be determined or codified that the Wire Act extends to transmission of

Should it ultimately be 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.

Further, in such event, the DOJ or other federal regulatory

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with the laws of the state in which such lottery is operated.

The Interstate Wagering Amendment, enacted in 1994, sought to close a “loophole”

in the federal laws allowing the sale of lottery tickets across state lines “via computer transaction with no paper crossing state

lines.”

The Interstate Wagering Amendment, enacted in 1994, sought to close a “loophole”

in the federal laws allowing the sale of lottery tickets across state lines “via computer transaction with no paper crossing state

Interstate Wagering Amendment specifically provides:

“Whoever .

being engaged in the business of procuring for a person in

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that business is permitted under an agreement between the States in question or appropriate authorities of those States), knowingly transmits

in interstate or foreign commerce information to be used for the purpose of procuring such a ticket, chance, share, or interest”

shall have committed an offense under 18 U.S.C.

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to be used for the purpose of procuring a lottery ticket for a lottery conducted by a state to a person in another state.

“State”

is defined as “a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession

of the United States.”

The definition of “foreign government”

on the other hand, expressly excludes U.S.

Based on the use of the words “1 State”

and “another State”

and the omission of the term “foreign

country”, we believe the Interstate Wagering Amendment does not prohibit transmission of information for the purpose of procuring

is defined as “a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession

of the United States.” The definition of “foreign government” on the other hand, expressly excludes U.S.

Based on the use of the words “1 State” and “another State” and the omission of the term “foreign

country”, we believe the Interstate Wagering Amendment does not prohibit transmission of information for the purpose of procuring

tickets for persons in foreign countries.

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the purpose of procuring such tickets could also negatively impact our business.

For more information, see “

Regulatory and Compliance

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.

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jurisdiction where we do business to address the unique

features of applicable law to ensure we remain in compliance with that jurisdiction’s laws.

Our failure to adequately do so may

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For example, Pennsylvania prohibits

“any fee associated with the acquisition or transportation of lottery tickets or shares”

and Illinois law prohibits service

“any fee associated with the acquisition or transportation of lottery tickets or shares” and Illinois law prohibits service

charges, handling fees or other costs added to the established price of a ticket.

In those states and other states with similar prohibitions,

we will need to structure our business model to comply with the relevant laws while still endeavoring to operate profitably.

we need to structure our business model to comply with the relevant laws while still endeavoring to operate profitably.

jurisdiction prohibits our services, imposes onerous licensing or regulatory requirements, or imposes restrictions on the fees

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In some cases, the remedy to such a situation may require the removal of a key executive or

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 of Texas.

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

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

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

in new markets in which we contemplate expansion.

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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.

disclosure and fails to do so, 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

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in the future.

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.

of a license that we currently hold, or failure to receive a license, could have a material adverse effect on us or on our business,

financial condition, or results of operations.

cannot ensure that our activities will remain in compliance or that we will continue to receive all licenses for

which we apply.

The failure to receive a license, could have a material adverse effect on

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

and lottery authorities may revoke or suspend licenses, levy fines against us, or seize certain of our assets if we violate gaming regulations.

We cannot ensure that we will be able to obtain or maintain the necessary licenses or approvals or that the licensing process will not

We cannot ensure that we will be able to obtain the necessary licenses or approvals or that the licensing process will not

result in delays or adversely affect our operations.

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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

will prevent the violation of one or more 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

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or third parties.

As a result, we and/or our directors, management, employees, agents, partners, customers, affiliates, or other related

or third parties could be subject to investigations, criminal and civil penalties, sanctions and/or other enforcement measures that in

As a result, we or our directors, management, employees, agents, partners, customers, affiliates, or other related

or third parties could be subject to investigations, criminal and civil penalties, sanctions or other enforcement measures that in

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

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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

officials”

responsible for issuing or renewing governmental licenses, findings of suitability, registrations, permits and approvals,

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

officials” responsible for issuing or renewing governmental licenses, findings of suitability, registrations, permits and approvals,

or for otherwise enforcing governmental regulations and requirements.

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include the U.S.

Foreign Corrupt Practices Act (the “FCPA”), and the U.K.

Bribery Act 2010 (the “U.K.

Bribery Act”),

Foreign Corrupt Practices Act (the “FCPA”), and the U.K.

Bribery Act 2010 (the “U.K.

Bribery Act”),

as well as corresponding laws and regulations of the other countries where we do business.

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or retaining business or otherwise obtaining favorable treatment.

Bribery Act also prohibits non-governmental “commercial”

bribery and accepting bribes.

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economic and trade sanctions administered by the U.S.

Department of Treasury’s Office

of Foreign Assets Control (“OFAC”).

Department of Treasury’s Office

of Foreign Assets Control (“OFAC”).

Our Platform may be accessible from a sanctioned country in violation of applicable trade

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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”).

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

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misappropriation caused by systems failures, unauthorized access or misuse.

However, to the extent we retain our user’s data, we

could be subject to liability claims by users for the misuse of that information, which could negatively impact our ability to utilize

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

currently have ten non-furloughed employees who manage and operate our business, including our Chief Executive Officer, Chief

Financial Officer and Chief Operating Officer.

and 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 earn

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.

The 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

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.

Except for those

employed in our foreign subsidiaries (e.g.

Aganar and JuegaLotto), we 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.

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.

In 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 U.S.

2022 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.

The 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

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App Store are global application distribution platforms and have been the main distribution channels for our application.

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

standard terms and

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 interpretations.

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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

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,

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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

payment processors in an acceptable time frame.

Further, the software and services provided by our third-party payment processors may

not meet our expectations, contain errors or vulnerabilities, be compromised or experience outages.

Any of these risks could cause us

to lose our ability to accept payments or other payment transactions or make timely payments to our users, any of which could make our

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

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.

Further, the software and services provided by our third-party payment processors may not meet

our expectations, contain errors or vulnerabilities, be compromised or experience outages.

Any of these risks could cause us to lose

our ability to accept payments or other payment transactions or make timely payments to our users, any of which could make our 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 transactions, or through other third-party payment

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

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payments we accept from our users and customers, including with respect to money laundering, money transfers, privacy, and information

If we fail to comply with applicable rules and regulations, we may be subject to civil or criminal penalties, fines and/or

If we fail to comply with applicable rules and regulations, we may be subject to civil or criminal penalties, fines or

higher transaction fees and may lose our ability to accept online payments or other payment card transactions, which could make our offerings

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licenses could restrict our ability to provide our offerings.

technology contains software modules licensed to us by third-party authors under “open source”

licenses, including the distributed

technology contains software modules licensed to us by third-party authors under “open source” licenses, including the distributed

ledger technology, which we currently use and intend to continue to use in our Platform.

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In return for the use

of a third-party’s technology, we may agree to pay the licensor royalties based on sales of our products or services.

are a component of cost of revenue and affect the margins on our products.

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condition, and results of operations could be adversely affected.

International

Operations Risks

International Operations Risks

international scope of our operations may expose us to increased legal and regulatory risks, and our international operations and corporate

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and JuegaLotto, S.A.

The Company has recently launched additional international operations Sports.com Media Group Ltd.

and Lottery.com

International Ltd.

Accordingly, our

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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.

may increase our tax burden 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

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Congress, the U.K.

Government, the Organization for Economic Co-operation and Development (the “OECD”),

and other government agencies have had an extended focus on issues related to the taxation of multinational corporations.

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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

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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.

of December 31, 2024, we had one trademark, “Lottery.com”, registered with the U.S.

Patent and Trademark Office.

December 31, 2022, the registration of our LOTTERY.COM, AUTOLOTTO and SPORTS.COM word marks and SPORTS.COM logo were pending with the

As of December

31, 2024, the registrations of our LOTTERY.COM word marks was pending with the U.S.

Patent and Trademark Office.

In March 2023, the U.S.

Patent and Trademark Office denied the registration of the SPORTS.COM word

mark and the appeal period has expired.

The registration of the SPORTS.COM logo has also been denied and the Company is currently considering

whether to appeal such denial.

We are also using and/or have common-law trademark rights in the trademarks AUTOLOTTO, SPORTS.COM, and

“TAP, TAP, TICKET.”

Patent and Trademark Office denied the registration of the SPORTS.COM word mark and the appeal period has expired.

We are also using

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.

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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.

our Data Services business could be negatively impacted, and we may lose some of TinBu’s well-known clients.

In addition, defending

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Streicher Financial, LLC.

July 29, 2022, the Company filed an original Verified Complaint for Breach of Contract and Specific Performance (the “

Complaint ”)

Streicher Financial, LLC (“

Streicher ”) in the Court of Chancery of the State of Delaware (the “

Court ”).

July 29, 2022, the Company filed an original Verified Complaint for Breach of Contract and Specific Performance (the “ Complaint ”)

Streicher Financial, LLC (“ Streicher ”) in the Court of Chancery of the State of Delaware (the “ Chancery

In its Complaint, the Company alleged that Streicher breached a contract entered into by the parties on March 9, 2022,

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On September 26, 2022, the Chancery Court entered an order in

favor of the Company, Granting with Modifications Company’s Motion for Partial Summary Judgment in the amount of $16,500,000

Judgment ”).

On October 27, 2022, the Chancery Court further awarded the Company $397,036.94 in attorney’s

fees (the “

Fee Order ”).

favor of the Company, Granting with Modifications Company’s Motion for Partial Summary Judgment in the amount of $16,500,000

(the “ Judgment ”).

On October 27, 2022, the Chancery Court further awarded the Company $397,036.94 in attorney’s

fees (the “ Fee Order ”).

On November 15, 2022, the Company initiated efforts against Streicher to seek collections

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to negotiate a settlement and forbearance agreement with the Company.

Streicher’s original deadline to produce documents and respond

to the post-judgment discovery was January 16, 2023, and the Deposition was scheduled to take place on January 19, 2023.

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and Streicher may not have funds to pay us amounts due or make seek bankruptcy protection.

details are available in Item 3.

Legal Proceedings

Company Operating Risks

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significant commercial success, whether because of implementation, competition or otherwise, we may not recover the often substantial

“up front”

costs of developing and marketing those products and distribution channels or recover the opportunity cost of

“up front” costs of developing and marketing those products and distribution channels or recover the opportunity cost of

diverting management and financial resources away from other services, products or distribution channels.

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If actual results differ from our estimates, analysts may react negatively, and our stock price could be materially impacted.

requirements of being a public company may strain our resources and divert management’s attention, and the increases in legal,

accounting and compliance expenses may be greater than we anticipate.

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Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently

implemented by the SEC and the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), including changes in corporate

governance practices and the establishment and maintenance of effective disclosure and financial controls.

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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

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 or

contractors, all with appropriate public company experience.

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Relating to Our Charter Documents and Delaware Law

Charter includes certain redemption rights which may negatively affect the value our common stock and other securities and/or result

Charter includes certain redemption rights which may negatively affect the value our common stock and other securities or result

in the redemption of shares of common stock or other securities held by certain holders.

Second Amended and Restated Certificate of Incorporation (our “Charter”) provides that any shares of capital stock, bonds,

notes, convertible debentures, options, warrants or other instruments that represent a share of equity of the Company, a debt owed by

the Company or the right to acquire any of the foregoing (for purposes of this section, the “Redeemable Securities”), owned

or controlled by a record or beneficial holder of the Company’s Redeemable Securities or an affiliate thereof who or that (i) fails

the Company or the right to acquire any of the foregoing (for purposes of this section, the “Redeemable Securities”), owned

or controlled by a record or beneficial holder of the Company’s Redeemable Securities or an affiliate thereof who or that (i) fails

or refuses to participate in good faith in an investigative process of, or submit documents, give notices or make filings requested or

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causes the Company or any of its affiliates to lose or to be threatened with the loss of any Regulatory Approval, or (v) is deemed likely

by the Board, based on advice of counsel or verifiable information received from any Regulatory Authority, by virtue of such holder’s

ownership or control of Redeemable Securities or association or affiliation with the Company or its affiliates, to jeopardize, impede,

impair or adversely affect the ability of the Company’s or any of its affiliates to obtain, maintain, hold, use or retain any Regulatory

Approval or to cause or result in the suspension, disapproval, termination, non-renewal or loss of any Regulatory Approval (each of such

holders or an affiliate of such holder, a “Disqualified Holder”) shall be subject to redemption by the Company (as described

in the Charter) as and to the extent required by a Regulatory Authority or deemed necessary or advisable by the Company’s Board.

holders or an affiliate of such holder, a “Disqualified Holder”) shall be subject to redemption by the Company (as described

in the Charter) as and to the extent required by a Regulatory Authority or deemed necessary or advisable by the Company’s Board.

a Regulatory Authority requires the Company, or the Board deems it necessary or advisable, to cause any such Redeemable Securities be

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court may find that part or all of the provisions included in our Charter pertaining to the redemption right with respect to capital

stock held by any stockholders who are deemed to be “disqualified”

or “unsuitable”

holders is not enforceable,

stock held by any stockholders who are deemed to be “disqualified” or “unsuitable” holders is not enforceable,

either in general or as to a particular fact situation.

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.

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cannot assure you that the provision pertaining to the redemption right with respect to capital stock held by any stockholders who are

deemed to be “disqualified”

or “unsuitable”

holders is enforceable under all circumstances, particularly against

deemed to be “disqualified” or “unsuitable” holders is enforceable under all circumstances, particularly against

stockholders who did not vote in favor of the proposed provision, who do not have notice of the ownership limitations at the time they

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able to redeem the shares of a stockholder deemed an unsuitable person by applicable regulatory authorities.

for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us

and may reduce the amount of money available to us.

Charter and our amended and restated bylaws (the “Bylaws”) provide that we will indemnify our directors and officers, in

Claims for indemnification

by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount

of money available to us.

Charter and our amended and restated bylaws (the “Bylaws”) provide that we will indemnify our directors and officers, in

each case to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the Delaware General Corporation

Law (the “DGCL”), our Charter, Bylaws and our indemnification agreements that we have entered into with our directors and

officers provide that:

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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

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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

a person with respect to proceedings initiated by that person, except with respect to proceedings to enforce an indemnitee right

to indemnification or advancement of expenses, proceedings authorized by our board of directors and if offered by us in our sole

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(iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to

any provision of the Delaware General Corporation Law (the “DGCL”), our Charter or our Amended and Restated Bylaws (our “Bylaws”);

or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine under

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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);

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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;

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These anti-takeover provisions could substantially impede

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 full compliance with the continued listing standards of Nasdaq and may not be able to regain full compliance with

Nasdaq’s continued listing standards in the future.

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 standard for meeting

their requirement for the total market value of our publicly-held shares.

Our failure to regain 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

Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 with the SEC, the Company was not in compliance with Nasdaq Listing

Rule 5250(c)(1), which requires timely filing of all required periodic financial reports with the SEC.

On November 28, 2022, the Company

received an additional notice, dated November 16, 2022, from Nasdaq indicating that, as a result of an additional delinquency in the

timely filing of the Company’s Form 10-Q for the quarter ended September 30, 2022, the Company remained out of compliance with

Nasdaq Listing Rule 5250(c)(1)

August 24, 2022, the Staff notified the Company that the bid price of its common stock had closed at less than $1 per share over the

previous 30 consecutive business days, and, as a result, did not comply with Nasdaq Listing Rule 5550(a)(2).

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 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 has met this requirement and is in the process of notifying

In the event the Company does not regain

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

are subject to delisting.

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

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

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.

Our 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.

On September 11, 2024, the Staff

notified the Company that the bid price of its common stock had closed at less than $1 per share over the previous 30 consecutive business

days, and, as a result, did not comply with Nasdaq Listing Rule 5550(a)(1).

Therefore, in accordance with e Listing Rule 5810(c)(3)(A),

the Company was provided 180 calendar days to regain compliance with such rule.

reported on form 8-K filed on November 1, 2024, on October 28, 2024, 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.

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

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

The Company met this requirement, notified

Nasdaq and on March 6, 2025 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 notification also stated that the Company had regained compliance with Nasdaq

Listing Rule 5550(a)(1) and that matter was also 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

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 or trigger defaults and penalties under its outstanding

agreements or securities.

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

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

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

If our common stock

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

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

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

value of our common stock and/or warrants.

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

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

value of our common stock or warrants.

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

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

counter quotation system.

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of factors, including the following:

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.

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;

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 historically have experienced extreme price and volume fluctuations that have affected the market prices

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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

stock price and trading volume could decline.

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The Company does not have any control over these analysts.

If the Company’s financial performance fails

to meet analyst estimates or one or more of the analysts who cover the Company downgrade its common stock or change their opinion, the

Company’s stock price would likely decline.

If one or more of these analysts cease coverage of the Company or fail to regularly

publish reports on the Company, it could lose visibility in the financial markets, which could cause the Company’s stock price

or trading volume to decline.

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not anticipate declaring or paying any cash dividends for the foreseeable future.

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

Eurasia Assets Ltd., (“Woodford”), and United Capital Investments London Limited, (“UCIL”) may not loan us the

amounts they agreed to under each of their amended and restated loan agreements.

If either fails to provide us with 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.

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

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is presently available to us.

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, $951,298 was received by us through December 31, 2023.

Univest funding was available on Dec 31 also.

Pursuant 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, $798,351 was received by us through December 31, 2024.

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

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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

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.

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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 matter currently is in litigation.

the uncertainty of the 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 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.

neither Woodford nor UCIL is 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 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 validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.

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;

failed 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, 2023.

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.

As reported on form 8-K filed with the SEC on February 22, 2024, on February 16, 2024, the Company and UCIL entered into an “Amendment

and Restatement Agreement No.

2” to the UCIL Loan Agreement to increase the amount of the UCIL Credit Facility from $49,000,0000

to $149,000,000 (the “UCIL Amendment”).

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 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 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 agreements which may restrict our ability to undertake

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loan agreement includes confidentiality obligations, representations, warranties, covenants, and events of default, which are customary

for a transaction of this size and nature.

for transactions of this size and nature.

For example, included in the Woodford Loan Agreement are covenants prohibiting us from (a)

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(g) issuing any shares of common stock which

negatively affects UCIL;

and (h) repurchasing any shares of common stock.

negatively affects the lender and (h) repurchasing any shares of common stock.

Such covenants in either loan agreement may restrict our

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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.

amounts borrowed pursuant to the terms of the Woodford 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 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 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 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 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.

and application of the Woodford Loan Agreement Amendment is disputed by the Company.

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;

failed 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 $951,298 under the Loan Agreement to Woodford and $711,610

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 stock.

addition, in connection with the loan agreement we agreed to grant warrants to each of Woodford and UCIL to purchase up to 15% of the

shares of common stock that are then issued and outstanding, each with an exercise price equal to the average of the closing price for

under each’s loan agreement may depress the market price of our common stock and cause substantial dilution.

As of December 31, 2024,

per the Company’s books and records, we had borrowed $798,351 under the Loan Agreement to Woodford and $14,783 from UCIL [after

conversion of $682,859 from convertible debt to equity by UCIL in August of 2024].

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 stock.

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.

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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

All other terms and conditions of securitization remain in full force and effect.

currently owe a significant amount of money under our Woodford Loan Agreement, which we may not be able to repay.

of the date of this Report per our books and records, we owe approximately $991,258 under our Amended and Restated Woodford Loan Agreement.

Currently, we do not have sufficient funds to repay such amount.

A high level of indebtedness increases the risk that we may default

on our debt obligations.

If the amounts owed under the Amended and Restated Woodford Loan Agreement are not converted into common stock

pursuant to its terms and conditions, 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.

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.

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.

As of the date of this Report

per our books and records, we owe approximately:

$798,351 under the Amended and Restated Woodford Loan Agreement;

$697,642 under

the UCIL Amendment;

and $1,210,000 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 investment or

could result in certain losses being totally uninsured.

Market forces beyond our control may limit the scope of the insurance coverage

we can obtain in the future or our ability to obtain coverage at reasonable rates.

Certain catastrophic losses may be uninsurable or

too expensive to justify obtaining insurance.

As a result, if we suffer such a catastrophic loss, we may not be successful in obtaining

future insurance without increases in cost or decreases in coverage levels.

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.

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 investment or could

result in certain losses being totally uninsured.

Market forces beyond our control may limit the scope of the insurance coverage we can

obtain in the future or our ability to obtain coverage at reasonable rates.

Certain catastrophic losses may be uninsurable or too expensive

to justify obtaining insurance.

As a result, if we suffer such a catastrophic loss, we may not be successful in obtaining future insurance

without increases in cost or decreases in coverage levels.

cash and cash equivalents may be exposed to failure of our banking institutions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors