What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-04-21 compared with 2024-04-03 · 493 added, 535 removed, 324 unchanged (76% of the section changed)

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

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

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

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

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

“street name”

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

institutions.

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

The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and

general financial condition as well as general business conditions.

The payment of any cash dividends will be within the discretion of

the Board at such time.

Sales of Unregistered Securities;

Use of Proceeds from Registered Offerings

did not issue any equity securities during the year ended December 31, 2023 that were not registered under the Securities Act and that

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

during the fiscal year 2023.

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

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

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

This discussion contains forward-looking statements that

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

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

under the “Risk Factors”

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

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

and Recent Developments

Investigation and Operational Cessation

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

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

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

The investigation

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

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

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

Subsequently, the Company initiated a review

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

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

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

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

should no longer be relied upon.

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

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

not properly recorded in the March 2022 Financials.

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

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

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

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

The Company’s remaining employees were limited to

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

week, several additional employees were recalled from furlough.

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

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

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

Only a few of

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

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

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

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

as the Company’s new independent registered public accounting firm.

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

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

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

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

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

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

(ii) Amendment No.

1 to the Company’s Quarterly

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

(iii) the Company’s Quarterly

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

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

(v) the Company’s

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

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

three months ended September 30, 2023;

and (vii) this Report.

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

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

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

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

reports and all subsequent required filings with the SEC.

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

the completion of its compliance plan.

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

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

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

The Company satisfied these conditions and the Panel indicated

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

time to complete the compliance plan presented at the hearing.

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

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

The Company’s securities were suspended

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

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

upon which the Panel had based its decision.

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

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

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

Decision”).

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

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

Risk Factors - Risks Related to Our Common

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

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

for more information.

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

These requirements include

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

equity, $50 million of market value of listed securities

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

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

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

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

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

However, under the Listing

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

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

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

In the event the Company does not regain

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

are subject to delisting.

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

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

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

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.

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 Nasdaq 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.

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

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

Further, there is no guarantee that we will be able to maintain our listing for any period of time.

from Nasdaq could also result in negative publicity.

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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.

$30,000,000 Business Loan

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

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

The Promissory

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

January 4, 2024.

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

The Promissory Note could be

repaid at any time without penalty.

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

Promissory Note.

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

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

Upon the occurrence of an event

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

We were required to pay a 1% commitment fee at

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

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

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

January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with bank prov, pursuant to which

the Company borrowed $30,000,000 from bank prov, which was evidenced by a $30,000,000 Promissory Note.

The Promissory Note accrued interest

at the rate of 2.750% per annum (7.750% upon the occurrence of an event of default) and had a maturity date of January 4, 2024.

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

The Promissory Note could be repaid at any time without

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

Loan included representations and warranties of AutoLotto and covenants (both positive and negative) which were customary for a transaction

of this nature and size, including rights to set off.

Upon the occurrence of an event of default, Provident could declare the entire

amount owed immediately due and payable.

We were required to pay a 1% commitment fee at the time of our entry into the Business Loan,

and another 1% annual loan fee would have been due on the first anniversary thereof.

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

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

The $30,000,000 Collateral Security

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

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

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

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

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

October of 2022.

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

Agreement with Woodford

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

(“Woodford”), (the “Woodford

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

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

to the terms of the Woodford Loan Agreement.

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

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

Amounts borrowed can be repaid at any

time without penalty.

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

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

Agreement with Woodford Eurasia Assets, Limited

On December 7, 2022, the Company

entered into a loan agreement with Woodford Eurasia Assets, Ltd.

(“Woodford”), (the “Woodford Loan Agreement”)

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

which, per the Company’s books and records $798,351 was received by December 31, 2024 and is owed pursuant to the terms of the Woodford

Loan Agreement.

Amounts borrowed accrue interest at the rate of 12% per annum (or 22% per annum upon the occurrence of an event of default)

and are due within 12 months of the date of each loan advance.

Amounts borrowed can be repaid at any time without penalty.

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

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

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

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

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

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

member of the Board of Directors resigns.

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

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

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

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

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

not be unreasonably withheld;

7 unchanged sentences

and (h) repurchasing any shares.

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

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

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

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

Each Woodford Warrant has an exercise price equal

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

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

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

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

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

The floating charge

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

an event of default;

if Woodford reasonably believes

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

or if Woodford reasonably considers that it is desirable

to protect its security interest.

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

other events.

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

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

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

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

The Woodford Loan Agreement Amendment provides that Woodford shall henceforth be able to convert, in whole or in part, the outstanding

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price of 20%.

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

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

section of this form.

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.

regarding ongoing legal proceedings with Woodford can be found in the “Legal Proceedings” section of this form.

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

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

(“TDAC”

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

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

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

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

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

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

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

Pursuant to the terms of the

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

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

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

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

of TDAC, which was renamed “Lottery.com Inc.” The aggregate value of the consideration paid by TDAC to the holders of AutoLotto

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

as earnout consideration) was approximately $440 million, consisting of approximately 2,000,000 shares of common stock valued at $220.00

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

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

International

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

Aganar operates

in the licensed Online Lottery market in Mexico and is licensed to sell Mexican National Lottery draw games, instant win tickets, and

other games of chance online with access to a federally approved online casino and sportsbook gaming license.

JuegaLotto is licensed

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

games of chance in other countries throughout Latin America.

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

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

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

Based on these

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

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

Prior to Operational Cessation

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

As an independent

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

lottery games in the U.S.

and abroad (the “Platform”).

Our revenue generating activities included (i) offering the Platform

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

and international jurisdictions where the sale of lottery games

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

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

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

and international jurisdictions, to purchase certain legally

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

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

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

In addition, each Seller was eligible to receive its pro rata portion of 150,000 Seller Earnout Shares and each Founder Holder

was eligible to receive one-third of 100,000 Founder Holders Earnout Shares, subject to adjustments in the normal course of business.

Conditions for earning the Seller Earnout Shares and Founder Holders Earnout Shares were not met within the designated deadline and all

potential earnout shares were forfeited.

August 9, 2023, the Company amended its Charter to implement, effective at 5:30 p.m., Eastern time, a 1-for-20 Reverse Stock Split.

the effective time of the Reverse Stock Split, every 20 shares of common stock either issued and outstanding or held as treasury stock

were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share.

who would have otherwise been entitled to fractional shares of common stock as a result of the Reverse Stock Split received a cash payment

in lieu of receiving fractional shares.

In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the

number of shares of common stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise

of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain

existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable.

Stock Split was approved by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders on August 7,

2023 and was subsequently approved by the Board of Directors on August 7, 2023.

An adjustment was made to the Company’s warrants based on the 1-for-20 split ratio.

The adjustment was made

automatically.

The number of shares of common stock issued subject to stock options, warrants, or convertible securities was automatically

decreased by the split ratio and the exercise price or conversion ratio will automatically be proportionately increased by the same split

effects of the Reverse Stock Split were reflected in the Quarterly Report on Form 10-Q for the period ended September 30, 2023 and in

all subsequent reports for all periods presented.

International Expansion

In June 2021, we closed the

acquisition of Global Gaming, which held 80% of the equity of each of Aganar and JuegaLotto.

Aganar operates in the licensed Online

Lottery market in Mexico and is licensed to sell Mexican National Lottery draw games, instant win tickets, and other games of chance

online with access to a federally approved online casino and sportsbook gaming license.

JuegaLotto is licensed by Mexico authorities

to commercialize international lottery games in Mexico through an authorized gaming portal and to commercialize games of chance in other

countries throughout Latin America.

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

market is $.68 billion with a compound annual growth rate projected at 6.05% through 2028.

Furthermore, it is projected that there will

be 3,000,000 online lottery players in the South American lottery market alone by 2028.

Based on these projections, we believe these

acquisitions will provide opportunities for growth of our international operations throughout Mexico and Latin America as we expand our

portfolio of products and expose our existing products to new markets.

Operations Prior to 2022 Operational Cessation

Prior to the 2022 Operational

Cessation, the Company was primarily a provider of domestic lottery products and services (subsidiary operations in Mexico, such as Aganar,

and JuegaLotto and TinBu in the U.S.

were unaffected by the 2022 Operational Cessation and continued operations).

As an independent third-party

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

games in the U.S.

and abroad (the “Platform”).

Our revenue generating activities included (i) offering the Platform via our

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

and international jurisdictions where the sale of lottery games was legal

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

(ii) offering

an internally developed, created and operated business-to-business application programming interface (“API”) of the Platform,

which enabled our commercial partners, in permitted U.S.

and international jurisdictions, to purchase certain legally operated lottery

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

and (iii) delivering

global lottery data, such as winning numbers and results, and subscriptions to data sets of our proprietary, anonymized transaction data

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

Lottery Game Platform Services

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

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

if required, for the claims and redemption process.

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

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

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

at random or picked by the user.

Both our B2C Platform and our

B2B API provided users with the ability to purchase legally sanctioned draw lottery games via a mobile device or computer, securely maintain

their acquired lottery game, automatically redeem a winning lottery game, as applicable, and receive support, if required, for the claims

and redemption process.

Our registration and user interfaces were designed to be easy to use, provide for the creation of an account

and purchase of a lottery game with minimum friction and without the creation of a mobile wallet or requirement to pre-load minimum funds

and - importantly - to provide instant confirmation of the user’s lottery game numbers, whether selected at random or picked by

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

jurisdictions, a mark-up

on the purchase price.

jurisdictions, a mark-up on the purchase price.

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

Our B2B API Platform

resumed limited operations for the month of April 2023.

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

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

Our Ticket Processing Platform resumed limited

operations for the month of April 2023.

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

anticipate that our B2C Platform will become available again by mid-year 2025.

WinTogether Platform

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

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

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

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

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

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

The suspension

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

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

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

While the operational activities of these subsidiaries vary,

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

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

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

Prior to the U.S.

2022 Operational

Cessation, we operated and administered of all sweepstakes offered by WinTogether, a registered 501(c)(3) charitable organization (“WinTogether”),

which was formed in April 2020 to support charitable, educational, and scientific causes.

In consideration of our operation of the WinTogether

platform and administration of the sweepstakes, we received a percentage of the gross donations to a campaign, from which we paid certain

dividends and all administration costs.

The WinTogether platform continued

operating after the 2022 Operational Cessation, until all sweepstakes campaigns were completed, and all prizes awarded.

On March 29, 2023,

the board of directors of WinTogether voted to suspend its relationship with the Company.

The suspension of the relationship was rescinded

by the WinTogether board on November 16, 2023.

WinTogether is now operating under the DonateTo.Win brand.

1, 2024, Lottery.com resumed its sweepstakes offerings through its partnership with the WinTogether .org foundation (DBA:

DonateTo.Win).

In April 2025, Sports.com sponsored a sweepstakes to support the Florida International University surrounding the

Formula 1 Crypto.com Miami Grand Prix 2025.

Despite the 2022 Operational

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

prior to the Company’s acquisition of such companies.

While the operational activities of these subsidiaries vary, from the 2022

Operational Cessation through the date of this Report, each of Aganar and JuegaLotto have decreased their expenses and has had their

revenues remain consistent or decrease slightly from pre-Operational Cessation levels.

TinBu has decreased its expenses and had their

revenues remain consistent for a period of time but revenue is now beginning to decrease from pre-Operational Cessation levels.

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

other data, as a wholly owned subsidiary.

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organizations.

See “ Item 1A.

Risk Factors –

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

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

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

more information about our relationship with Tinbu.

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and JuegaLotto

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

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

(“Aganar”) and JuegaLotto,

(“JuegaLotto”).

(“Aganar”) and JuegaLotto,

(“JuegaLotto”).

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

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under the brand name Capalli.

See “ Item 1A.

Risk Factors –

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

and we may need to permanently cease our operations”

for additional information.

and we may need to permanently cease our operations” for additional information.

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

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

Subsequently, Sports.com announced a partnership

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

of November 2022.

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

DSG ”), which provides

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

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

On July 23, 2023,

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

subsidiary called Sports.com, Inc., a Texas corporation.

On March 26, 2025, the Company registered Sports.com as a fictious name in the

state of Florida under AutoLotto, Inc, a wholly owned subsidiary (“Sports.com”).

Sports.com is currently available

worldwide as a website and a mobile application.

Holdings, LTD

On September 28, 2023, the company

entered into Stock Purchase Agreement with the shareholders of Nook Holdings Limited (“Nook”), a private limited company incorporated

and registered in the Abu Dhabi Global Market, Abu Dhabi, United Arab Emirates (“UAE”).

The total purchase price is approximately

$2.314 million.

The Company made three payments totaling $137,500 in the fourth quarter of 2023 and anticipates the transaction closing

during the second quarter of 2025.

Nook is known for its innovative approach to co-working in Dubai and has procured 200 licenses for

individuals and companies in the sports, health and wellness sector seeking access to Dubai and the broader Middle Eastern market.

its exclusive partnership with the Dubai Multi-Commodities Centre Free Zone (DMCC), Nook offers a wide range of services, including business

setup support, insurance, VAT registration, and networking opportunities for like-minded sports entrepreneurs.

As part of the acquisition,

Nook will be rebranded under the Sports.com umbrella.

for Recommencement of Company Operations

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

on restarting certain of its core businesses.

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

outlined below.

1 - Relaunch B2B API Platform .

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

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

rules related to ticket procurement and distribution.

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

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

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

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

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

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

Our B2B API Platform resumed limited

operations in April 2023.

2 - Resume B2C Platform Operations.

As noted above, since the 2022

Operational Cessation, the Company has had minimal day-to-day U.S.

operations and has primarily focused on restarting certain of its core

businesses in the United States.

The Company has developed a phased plan to recommence its U.S.

Phase 1 - Resume B2C Platform

The Company believes that it will be in a position to relaunch its B2C Platform by mid-year 2025.

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

of time before rolling it out to other jurisdictions.

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

another state.

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

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

For more information, see “

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

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

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

cash flow, or financial condition .”

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

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

As of the date of this

Report, the Company expects that it will initially relaunch its B2C Platform to customers in a limited number of US and International markets before rolling

it out to other jurisdictions.

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

plans to limit the rollout in order to give it additional time to properly vet and confirm compliance with local, state and federal rules

related to ticket procurement and distribution.

For more information, see “ Item 1A.

Risk Factors - Regulatory and Compliance

Risks - A jurisdiction may enact, amend, or reinterpret laws and regulations governing our operations in ways that impair our revenues,

cause us to incur additional legal and compliance costs and other operating expenses, or are otherwise not favorable to our existing

operations or planned growth, all of which may have a material adverse effect on us or our results of operations, cash flow, or financial

condition .” The Company has also maintained various pre-paid media credits that it expects to use to launch and maintain promotional

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

Company acquired Spektrum LTD in March of 2025.

This acquisition provided the Company with ownership of platform that is designed to

run in dozens of international jurisdictions.

The Company is in final phases of procuring the appropriate licensing and business services

to launch in multiple African and Asian jurisdictions.

The launch date is scheduled for Q2 2025.

2 - Restore Other Business Lines and Projects.

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

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

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

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

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

providers in international jurisdictions, monetizing Sports.com, and reviving other products and services that were

under development when the Operational Cessation occurred.

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

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

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

three months ended March 31, 2024.

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

ticker symbols “LTRY”

and “LTRYW,”

respectively.

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

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

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

Risk Factors - Risks Related to Our Common Stock and Warrants

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

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

and have been granted a limited exception from Nasdaq to continue

the listing of our securities.

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

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

accounting, and financial resources.

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

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

Company’s securities on Nasdaq.

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

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

As of the date of this Report,

the current estimated cash balance of the Company and subsidiaries is approximately $63,346.

The Company believes that this

cash on hand, along with future borrowings, will be sufficient for the Company to resume its core operations.

As of the date of this Report,

our common stock and warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbols “LTRY”

and “LTRYW,” respectively.

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

(the “Listing Rules”).

See, “ Risk Factors - Risks Related to Our Common Stock and Warrants –

Although we are

not 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 .” Additionally, under its new management, the Company continues to

work to improve its disclosure and reporting controls.

Also, the Company plans to continue to improve its systems of internal control

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

Even if the Company’s three

phase plan to recommence its operations is successful, there can be no assurance that the Company will be able to remain in compliance

with the applicable Nasdaq Listing Rules.

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

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

and warrants could suffer a material decline.

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

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

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

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

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

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

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

to support such operations in the future.

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

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

Future financing options available

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

other strategic transactions.

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

support such operations in the future.

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

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

Future financing options available to

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

strategic transactions.

Equity financings may include sales of common stock.

Such financing may not be available on terms favorable

to the Company or at all.

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

and may cause significant dilution to existing stockholders.

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

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

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

These matters, when

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

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

The accompanying financial

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

Such financing may not be available on terms favorable to

the Company or at all.

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

may cause significant dilution to existing stockholders.

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

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

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

These matters, when considered

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

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

The accompanying financial statements

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

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

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

Components of Our Results of Operations (Prior to the U.S.

2022 Operational

from B2C Platform.

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

impose on each lottery game purchased from our B2C Platform.

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

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

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

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

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

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

within the U.S.

or internationally.

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

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

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

face value of all lottery games purchased.

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

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

The Company did not operate its B2C platform in 2023.

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

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

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

of the face value of all lottery games purchased.

For example, the convenience fee for the purchase of five $2 tickets is $1.60, comprised

of the $1 base service fee, plus 6% of the aggregate value of the face value of all lottery games purchased.

The Company did not operate

its B2C platform in 2024.

Internationally,

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Platform will become operational by mid-year 2024.

from B2B API.

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

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

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

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

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

large data sets, an additional per record fee.

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

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

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

Operating Costs and Expenses

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

Revenue from B2B API.

with our third-party commercial partner(s), we agree on the amount of the technology usage fee to be imposed on the sale of each lottery

game purchased through the B2B API, if any, together with a service fee to be charged to the user;

we receive up to 50% of the net revenues

from such technology usage fee and service fee pursuant to our commercial agreement with each commercial partner.

As discussed above,

following the 2022 Operational Cessation, our B2B API Platform resumed limited operations in April 2023.

Data Services.

acquirers of our Data Service pay a subscription for access to the Data Service and, for acquisition of certain large data sets, an additional

per record fee.

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

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

Our Data Services operations

were not impacted by the 2022 Operational Cessation.

Company Operating Costs and Expenses

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

and office personnel.

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and Administrative.

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

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

and other fees and expenses.

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

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

fees and expenses.

and Amortization.

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

Trends and Factors Affecting Our Results

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

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

Key Trends and Factors Affecting Our Results

The following describes the trends

associated with our business prior to the U.S.

Operational Cessation that have impacted, and which we expect will continue to impact,

our business and results of operations in a material way:

International

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

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

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

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

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

of a new gaming platform .

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

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

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

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

We expect to utilize

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

The introduction of a new technology like

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

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

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

Project Nexus

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

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

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

We expect to utilize this platform

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

The introduction of new technology like Project Nexus is

subject to risks including, among other things, implementation delays, issues successfully integrating the technology into our solutions,

or the possibility that the technology does not produce the expected benefits.

growth plans and the competitive landscape.

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

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

Project Nexus.

Plan of Operations

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

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

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

We anticipate

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

and acquisition activities, as well as additional capital expenditures associated with potential further development of Project Nexus,

the initial phase of which was implemented in the second quarter of 2022.

Current Plan of Operations (Exclusive of Subsidiaries, Tinbu LLC, Aganar

and JuegaLotto)

As of the date of this Report,

the Company’s primary revenue drivers are the resumption of its B2B API platform, the full resumption of its sweepstakes business and the launch of Sports.com.

It is anticipated

that operational costs for the next 12 months through April 30, 2026 will be greater than revenues.

It is anticipated that the liquidity

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

We anticipate that our B2C Platform will

become operational by mid-year 2025.

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

The Moreover, the Company plans

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

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

The Company is moving forward with its previously announced plans to monetize

the Sports.com brand.

Those plans include introducing an advertising-supported subscription model;

the creation and licensing of original

content through Sports.com Studios;

and completing the acquisition of Nook and marketing business licenses to companies in the sports,

health and wellness markets seeking access to Dubai and the broader Middle Eastern market.

of Operations

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following table summarizes our results of operations for the years ended December 31, 2024 and December 31, 2023, respectively.

the Year Ended December 31,

For the Year Ended December 31,

Cost of revenue

(25,179,413 )

and administrative

and amortization

Operating expenses:

(33,141,255 )

(24,182,724 )

$ (55,792,779 )

(31,610,055 )

Personnel costs

Professional fees

General and administrative

Depreciation and amortization

Total operating expenses

Loss from operations

Other expenses

other expenses, net

before income tax

$ (24,702,722 )

$ (60,278,909 )

(35,576,187 )

expense (benefit)

(24,702,722 )

(60,383,265 )

(35,680,543 )

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

million for the year ended December 31, 2022.

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

in 2023 than in 2022.

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

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

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

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

costs and higher margins.

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

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

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

services provided to partners in 2022 was not recurring.

Costs and Expenses

Interest expense

Other expenses

Reserve for loss of prepaid advertising

Loss on impairment of intangibles & goodwill

Total other expenses, net

Net loss before income tax

Income tax expense (benefit)

Other comprehensive loss

Foreign currency translation adjustment, net

Comprehensive loss

Net income (loss) attributable to noncontrolling interest

Net loss attributable to Lottery.com, Inc.

Revenue for the year ended December 31, 2024 was $1.07

million, a decrease of $5.95 million, or (85)%, compared to revenue of $7.02 million for the year ended December 31, 2023.

is primarily because revenue from the bulk ticket sale that took place in April of 2023 did not reoccur in 2024.

Cost of Revenue.

Cost of revenue

includes product costs, commission expense to affiliates and commercial partners, and merchant processing fees.

Cost of revenue for the

year ended December 31, 2024 was $321,000, a decrease of $5.35 million, or 94%, compared to cost of revenue of $5.67 million for the year

ended December 31, 2023.

The decrease in COGS is because the costs for tickets and commissions to a retail partner resulting from the

bulk ticket sale that took place in April of 2023 did not reoccur in 2024.

Gross Profit.

Gross profit for

the year ended December 31, 2024 was $745,000, compared to $1.35 million for the year ended December 31, 2023, a decrease of $603,000,

This decrease is primarily because the bulk ticket sale that took place in April of 2023 did not reoccur in 2024.

Operating Costs and Expenses

the Year Ended December 31,

(32,179,413 )

and administrative

and amortization

Operating expenses:

(33,141,255 )

the Year Ended December 31,

(32,179,413 )

and administrative

Personnel costs

Professional fees

General and administrative

and amortization

operating expenses

(33,141,255 )

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

the year ended December 31, 2022.

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

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

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

for the year ended December 31, 2023.

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

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

for the year ended December 31, 2023.

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

and Administrative.

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

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

and Amortization.

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

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

expenses for the year ended December 31, 2024 were $18.9 million, a decrease of $96,000, or (1%), compared to $19.0 million for the year

ended December 31, 2023.

Changes in personnel costs and general and administrative expenses essentially offset and there was a net decrease

of $96,000 between professional fees and depreciation and amortization.

Personnel Costs.

costs increased by $191,000, or 4%, from $4.6 million for the year ended December 31, 2023, to $4.8 million for the year ended

December 31, 2024.

The increase was due primarily due to increases in base compensation and related payroll taxes for the

Company’s three officers approved by the Compensation Committee of our Board of Directors for 2024.

Professional Fees.

fees decreased by $218,000, or (5%) from $5.65 million for the year ended December 31, 2023 to $5.44 million for the year ended December

Utilization of contract attorneys and accountants was lower in 2024 than it was in 2023 when the company was under significant

pressure to file amended and delinquent 10-K’s and 10-Q’s in order to regain compliance with SEC reporting requirements and

Nasdaq listing rules.

General and Administrative.

General and administrative expenses of $3.7 million for the year ended December 31, 2024 are $198,000, (5%) lower than the $3.88

million reported for the year ended December 31, 2023.

Marketing expenses and expenses for software services lower for the year ended

December 31, 2024 than for the year ended December 31, 2023.

Depreciation and Amortization.

Depreciation and amortization increased $129 thousand, or (3%), from $4.9 million for the year ended December 31, 2023 to $5.0 million

for the year ended December 31, 2024.

Part of the increase was due to amortization of new intangible assets resulting from the SM&I

Ltd acquisition in September of 2024 and the rest was the result of revised amortization expenses over remaining useful lives after recognizing

impairments at the end of the three months ended September 30, 2024.

the Year Ended December 31,

Other expenses

Interest expense

Other expense

Total other expenses, net

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

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

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

did not occur in 2023.

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

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

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

million which was recorded in 2022.

Reserve for loss of prepaid advertising

on impairment of intangibles & goodwill

other expenses, net

Interest expense increased by $100,000, or (24%), for the year ended December 31, 2024, from $409,000 thousand to $509,000

as compared with the year ended December 31, 2023.

This increase is due to interest accruals on convertible debt placed by Univest in December

of 2023 which was present for a longer period in 2024 vs for only part of one month in 2023 and for interest accrued on additional convertible debt

placed by Univest between January and April of 2024.

Other expense increased by $832,000, or 610%, for the year ended December 31, 2023 as compared to the year ended December

31, 2022 from $136,000 to $969,000.

This increase was driven primarily by payment of a commitment fee for a Stock Purchase Agreement

entered into in November of 2024.

for loss of prepaid advertising credits.

Reserve for loss of prepaid advertising credits increased by $4.75 million for the year

ended December 31, 2024 as compared to the year ended December 31, 2023.

This increase was driven primarily by concern about management’s

assessment regarding the Company’s ability to fully utilize the advertising credits.

on impairment of intangibles & goodwill decreased

to $4.3 million or 43% from $7.5 million for the year ended December 31, 2024.

For the quarter ended September 30, 2024, the Company

wrote-off goodwill of $1.57 million related to the TinBu subsidiary and $1.91 million related to the Global Gaming subsidiary and

$817,000 related to intangible assets of Global Gaming.

There were no other write-offs to goodwill and intangibles during the year

ended December 31,2024.

For the year ended December 31 2023, there were write-offs to goodwill of $5.6 million related to the TinBu

subsidiary and $1.1M related to the Global Gaming subsidiary as well as write offs of $800,000 related to intangible assets of

Global Gaming for a total of $7.5 million.

and Capital Resources

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

capital expenditures and for general corporate purposes.

Our primary source of liquidity had historically been funds generated by

financing activities.

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

$42.8 million in cash.

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

and pay our expenses.

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

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

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

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

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

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

Prior to the 2022 Operational

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

general corporate purposes.

Our primary source of liquidity had historically been funds generated by financing activities.

Upon the Closing

of the business combination on October 29, 2021, we received net proceeds of approximately $42.8 million in cash.

Following the 2022 Operational

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

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

the issuance of equity or debt securities.

If lenders do not advance us amounts as agreed under loan agreements or we are otherwise not

able to secure the necessary capital to restart our operations, hire new employees, and obtain funding sufficient to support and restart

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

which could cause the value of our securities to become worthless.

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

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

entitled “

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

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

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

related obligations.

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

We need additional capital

As a result, we may not be able to continue as a going concern ” and “ [w]e need additional capital

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

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

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

This debt is in default.

“- Recent Developments- Loan Agreement with Woodford ”

and “Loan Agreement with United Capital Investments

London Limited”

above for additional information.

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

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

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

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

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

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

Net cash provided by financing activities

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

The increase was

due to funding received under convertible debt arrangements in 2023.

As of December 31, 2024, we had

$2,088,135 of convertible debt outstanding.

A portion of this debt has matured and is theoretically in default.

“- Recent Developments- Loan Agreement with Woodford ” and “Loan Agreement with United Capital Investments

London Limited” above for additional information.

Net cash used by operating activities

was $1.52 million for the year ended December 31, 2024, compared to net cash used by operating activities of $2.1 million for the year

ended December 31, 2023.

Factors affecting changes in operating cash flows were stock-based compensation expense along with decreased

expenses for personnel costs, and sales and marketing activities in 2024 as compared to 2023.

Net cash used in investing activities during

the year ended December 31, 2024 was $1.5 million, compared to $0 for the prior year.

Net cash provided by financing activities was $2.88

million for the year ended December 31, 2024, compared to $2.27 million used by financing activities for the year ended December 31, 2023.

The increase was due to funding received under convertible debt arrangements in 2024.

in or Adoption of Accounting Practices

following U.S.

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

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

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606, Revenue from Contracts with Customers

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

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

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and Cost Recognition

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

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

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

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

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

14 unchanged sentences

are recognized upon the application of the following steps:

Identification

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

Identification

of performance obligation(s) in the contract;

Determination

of the transaction price;

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

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

Identification of a contract or contracts with a user,

customer or subscriber;

Identification of performance obligation(s) in the

Determination of the transaction price;

Allocation of the transaction price to the performance

obligations in the contract;

Recognition of revenue when, or as, the performance

obligation is satisfied.

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

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

The Company’s

products are sold without a right of return or refund;

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

language that disclaims any warranties.

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

Marketing Credits.

The payment for these credits by the third parties is priced on a per-contract basis.

The performance obligation in

these agreements is to provide title rights of the previously acquired credits to the third party.

This transfer is point-in-time when

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

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

6 unchanged sentences

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

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

taxes are accounted for in accordance with ASC 740, “

Income Taxes ”

(“ASC 740”), using the asset and liability

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

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

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

10 unchanged sentences

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

The Company’s

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

1 unchanged sentence

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

tax purposes, the Company’s 2018 through 2020 tax years generally remain open for examination by the tax authorities under the

tax purposes, the Company’s 2020 through 2023 tax years generally remain open for examination by the tax authorities under the

normal three-year statute of limitations.

For state tax purposes, the Company’s 2018 through 2020 tax years remain open for examination

For state tax purposes, the Company’s 2019 through 2023 tax years remain open for examination

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

22 unchanged sentences

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

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

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

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Impairment is influenced by judgment in defining a cash-generating

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

The recoverable

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Assumptions about the generation

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

In addition, future changes in tax laws could

8 unchanged sentences

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

We are an “emerging growth

company”

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

We are an “emerging growth

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

of this extended transition period.

6 unchanged sentences

Quantitative and Qualitative Disclosures About Market Risk.

a “smaller reporting company”

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

a “smaller reporting company” as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity