0001493152-24-034347 | 10-Q/A | XBRL Viewer

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Notes Receivable (Details Narrative) - Secured Promissory Note Agreement [Member] - USD ($)	Sep. 30, 2023	Mar. 22, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Principal amount	$ 2,000,000	$ 2,000,000
Debt interest rate		3.10%

Stock-based Compensation Expense

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation Expense

12. Stock-based Compensation Expense

2015 Stock Option Plan

Prior to the Closing, AutoLotto had the AutoLotto, Inc. 2015 Stock Option/Stock Issuance Plan (the “2015 Plan”) in place. Under the 2015 Plan, incentive stock options could be granted at a price not less than fair market value of the AutoLotto common stock (the “AutoLotto Common Stock”). If the AutoLotto common stock was at the time of grant listed on any stock exchange, then such fair market value would be the closing selling price per share of AutoLotto common stock on the date in question on such stock exchange, as such price is officially quoted in the composite tape of transactions on such stock exchange and published in The Wall Street Journal. If there was no closing selling price for the common stock on the date in question, then the fair market value would be the closing selling price on the last preceding date for which such quotation exists. If the common stock is at the time not listed on any Stock Exchange, then the fair market value would be determined by the Board of Directors or the Committee acting in its capacity as administrator of the Plan after taking into account such factors as the Plan Administrator shall deem appropriate. The maximum number of shares of common stock that could have been issued over the term of the Plan could not exceed Twenty Two Thousand Five Hundred (22,500). Options are exercisable over periods not to exceed 10 years (five years for incentive stock options granted to holders of 10% or more of voting stock) from the date of grant. Shares of AutoLotto common stock issued under the 2015 Plan could, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or vest in one or more installments over the Participant’s period of service or upon attainment of specified performance objectives. The Plan Administrator could not impose a vesting schedule upon any option grant or the shares of common stock subject to that option which is more restrictive than twenty percent (20%) per year vesting, with the initial vesting to occur not later than one (1) year after the option grant date. However, such limitation shall not be applicable to any option grants made to individuals who are officers of the Corporation, non-employee Board members or independent consultants.

2021 Equity Incentive Plan

In connection with the Business Combination, our Board of Directors adopted, and our stockholders approved, the Lottery.com 2021 Incentive Plan (the “2021 Plan”) under which 656,518 shares of Class A common stock were initially reserved for issuance. The 2021 Plan allows for the issuance of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock or cash based awards. The number of shares of the Company’s Class A common stock available for issuance under the 2021 Plan increases annually on the first day of each calendar year, beginning on and including January 1, 2022 and ending on and including January 1, 2031 by a number of shares of Company common stock equal to five percent of the total outstanding shares of Company common stock on the last day of the prior calendar year. The maximum number of incentive stock options which can be granted under the 2021 Plan is 656,518. Notwithstanding the foregoing, the Board of Directors may act prior to January 1st of a given year to provide that there will be no such increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of Company common stock than would otherwise occur pursuant to the preceding sentence.

Stock Options

As of September 30, 2023, there were 10,456 stock options outstanding. The Company did not issue any new stock options during the three months ended September 30, 2023.

There was no stock-based compensation expense related to the employee options for the three months ended September 30, 2023 and 2022.

Restricted awards

The Company awarded restricted stock to employees on October 28, 2021, which was granted with various vesting terms including, service-based vesting, and performance-based vesting. In accordance with ASC 718, the Company has classified the restricted stock as equity.

For employee issuances, the measurement date is the date of grant, and the Company recognizes compensation expense for the grant of the restricted shares, over the service period for the restricted shares that vest over a period of multiple months or years and for performance-based vesting awards, the Company recognizes the expense when management believes it is probable the performance condition will be achieved. As of December 31, 2021, the Company had granted 191,622 shares with vesting to begin April 2022.

On April 29, 2022, restricted stock awards for certain employees vested and resulted in withholding tax for those employees. Given the limited trading liquidity of the Company’s common shares, the Company withheld 6,527 shares, valued at $47.60 per share (the closing price on April 29, 2022) from the employees, and paid the withholding tax on the employees’ behalf.

For the three months ended September 30, 2023, the Company recognized $358,349 of stock compensation expense related to the employee restricted stock grants. As of September 30, 2023, unrecognized stock-based compensation associated with the restricted stock awards is $2,986,246 which will be expensed over the next 1.04 years.

The Company had restricted stock activity summarized as follows:

			Weighted
			Average
	Number of		Grant
	Shares		Fair Value
To Outstanding at December 31, 2022		191,622	$	295.00
Granted		-		-
Vested		-		-
Forfeited/canceled		-		-
Restricted shares unvested at September 30, 2023		191,622	$	295.00

Stock-based Compensation Expense (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended		12 Months Ended
	Apr. 29, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Employee benefits and share-based compensation		$ 0	$ 0
Vested shares	6,527
Shares issued price per share	$ 47.60
Stock compensation expense				$ 1,075,049	$ 27,949,257
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options outstanding		10,456		10,456
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting term				1 year 14 days
Number of shares grant						191,622
Stock compensation expense		$ 358,349
Unrecognized stock based compensation		$ 2,986,246		$ 2,986,246
2015 Stock Option Plan [Member] \| Equity Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrant or right, reason for issuance, description				The maximum number of shares of common stock that could have been issued over the term of the Plan could not exceed Twenty Two Thousand Five Hundred (22,500). Options are exercisable over periods not to exceed 10 years (five years for incentive stock options granted to holders of 10% or more of voting stock) from the date of grant
Common stock subject to option percentage				20.00%
Vesting term				1 year
2021 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Purchase price of common stock, percent				500.00%
2021 Equity Incentive Plan [Member] \| Common Class A [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance		656,518		656,518

Liquidity and Going Concern

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity and Going Concern

2. Liquidity and Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and classification of liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.

Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

The Company has experienced recurring net losses and negative cash flows from operations and has an accumulated deficit of approximately $219 million and a working capital of approximately negative $2.8 million at September 30, 2023. The Company had loss from operations of $3.2 million for the three months ended September 30, 2023.

The Company has historically funded its activities almost exclusively from debt and equity financing. Management’s plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt. Although Management believes that it will be able to continue to raise funds by sale of its securities to provide the additional cash needed to meet the Company’s obligations through borrowings under the Woodford Loan Agreement and/or the UCIL Loan Agreement (see Note 8. Notes Payable ), the Plans for Recommencement of Company Operations require substantial funds to implement and there is no assurance that the Company will be able to continue raising the required capital.

The Company’s ability to continue as a going concern for the next twelve months from the issuance of these financial statements depends on its ability to execute its business plan, increase revenues, and reduce expenditures. Such conditions raise substantial doubt about the Company’s ability to continue as a going concern.

We will require additional financing to continue to execute on our business plan. However, there can be no assurances that we will be successful in raising the additional capital necessary to continue operations and execute on our business plan.

Business Combination (Details Narrative) - USD ($)		1 Months Ended	9 Months Ended	12 Months Ended
Business Combination (Details Narrative) - USD ($)	Oct. 29, 2021	Jan. 31, 2023	Sep. 30, 2023	Dec. 31, 2020
Business Acquisition [Line Items]
Repayment of notes payable		$ 53,000		$ 4,700
Common Stock [Member]
Business Acquisition [Line Items]
Number of shares issued			87,500
Common Stock [Member] \| Business Combination Agreement [Member] \| TDAC Founders [Member]
Business Acquisition [Line Items]
Number of shares issued			200,000
Auto Lotto LLC [Member]
Business Acquisition [Line Items]
Conversion of stock, shares converted	3.0058		488,226
Gross proceeds			$ 42,794,000
Business acquisition, transaction costs			9,460,000
Repayments of debt			11,068,000
Repayment of notes payable			5,475,000
Accrued underwriter fees			$ 5,593,000
Auto Lotto LLC [Member] \| Common Stock [Member] \| Business Combination Agreement [Member]
Business Acquisition [Line Items]
Number of shares issued			300,000
Auto Lotto LLC [Member] \| Series B Convertible Notes [Member]
Business Acquisition [Line Items]
Conversion of stock, shares converted			162,426
Convertible notes payable			$ 63,800,000

Subsequent Events (Details Narrative) - $ / shares	Oct. 11, 2023	Sep. 30, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Common stock, shares outstanding		2,527,045	2,527,045
Common stock, par value		$ 0.001	$ 0.001
Subsequent Event [Member]
Subsequent Event [Line Items]
Common stock, shares outstanding	500,000
Common stock, par value	$ 0.001
Subsequent Event [Member] \| Employees Directors And Consultants [Member]
Subsequent Event [Line Items]
Stock issuence	500,000

Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Depreciation of Property and Equipment

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

Computers and equipment			3 years
Furniture and fixtures			5 years
Software			3 years

Intangible assets, net (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite Lived Intangible Assets Amortization Expenses

Gross carrying values and accumulated amortization of intangible assets:

	September 30, 2023								December 31, 2022
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortizing intangible assets
Customer relationships	6 years	$	1,350,000	$	(950,135	)	$	399,865	$	1,350,000	$	(781,385	)	$	568,615
Trade name	6 years		2,550,000		(960,972	)		1,589,028		2,550,000		(642,222	)		1,907,778
Technology	6 years		3,050,000		(1,819,028	)		1,230,972		3,050,000		(1,437,778	)		1,612,222
Software agreements	6 years		14,450,000		(8,086,110	)		6,363,890		14,450,000		(5,968,611	)		8,481,389
Gaming license	6 years		4,020,000		(1,507,500	)		2,512,500		4,020,000		(1,005,000	)		3,015,000
Internally developed software	2 - 10 years		2,904,423		(648,463	)		2,255,960		2,904,423		(350,232	)		2,554,191
Domain name	15 years		6,935,000		(1,438,500	)		5,496,500		6,935,000		(1,091,750	)		5,843,250
		$	35,259,423	$	(15,410,708	)	$	19,848,715	$	35,259,423	$	(11,276,978	)	$	23,982,445

Schedule of Estimated Amortization Expense

Estimated amortization expense for years of useful life remaining is as follows:

Years ending December 31,	Amount
Remainder of 2023	$	1,367,042
2024		5,058,170
2025		4,738,170
2026		2,870,670
2027		1,359,775
Thereafter		4,454,888
Total	$	19,848,715

Schedule of Property and Equipment (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment	$ 2,168,498	$ 2,167,297
Accumulated depreciation	(2,144,563)	(2,059,219)
Property and equipment, net	23,935	108,078
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	125,400	124,199
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	16,898	16,898
Software Development [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 2,026,200	$ 2,026,200

Schedule of Fair Value of Assumptions (Details)	9 Months Ended
Schedule of Fair Value of Assumptions (Details)	Sep. 30, 2023 $ / shares
Equity
Risk-free interest rate	1.80%
Expected dividend yield	0.00%
Expected volatility	113.17%
Term	3 years
Fair value of common stock	$ 3.75

Nature of Operations

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

1. Nature of Operations

Description of Business

Lottery.com Inc. (formerly Trident Acquisitions Corp) (“TDAC”, “Lottery.com” or “the Company”), was formed as a Delaware corporation on March 17, 2016. On October 29, 2021, we consummated a business combination (the “Business Combination”) with AutoLotto, Inc. (“AutoLotto”) pursuant to the terms of a Business Combination Agreement, dated February 21, 2021 (“Business Combination Agreement”). Following the closing of the Business Combination (the “Closing”) we changed our name from “Trident Acquisitions Corp.” to “Lottery.com Inc.” and the business of AutoLotto became our business. In connection with the Business Combination, we moved our headquarters from New York, New York to AutoLotto’s offices in Spicewood, Texas.

We are a provider of domestic and international lottery products and services. As an independent third-party lottery game service, we offer a platform developed and operated by us to enable the remote purchase of legally sanctioned lottery games in the U.S. and abroad (the “Platform”). Our revenue generating activities are focused on (i) offering the Platform via the Lottery.com app and our websites to users located in the U.S. and international jurisdictions where the sale of lottery games is legal and our services are enabled for the remote purchase of legally sanctioned lottery games (our “B2C Platform”); (ii) offering an internally developed, created and operated business-to-business application programming interface (“API”) of the Platform to enable commercial partners in permitted U.S. and international jurisdictions to purchase certain legally operated lottery games from us and resell them to users located within their respective jurisdictions (“B2B API”); and (iii) delivering global lottery data, such as winning numbers and results, to commercial digital subscribers and providing access to other proprietary, anonymized transaction data pursuant to multi-year contracts (“Data Service”).

We have been a provider of lottery products and services and our business has been and continues to be subject to regulation in each jurisdiction in which we offer the B2C Platform, or a commercial partner offers users access to lottery games through the B2B API. In addition, we must also comply with the requirements of federal and other domestic and foreign regulatory bodies and governmental authorities in jurisdictions in which we operate or with authority over our business. Our business is also subject to multiple other domestic and international laws, including those relating to the transmission of information, privacy, security, data retention, and other consumer focused laws, and, as such, may be impacted by changes in the interpretation of such laws.

On June 30, 2021, we acquired an interest in Medios Electronicos y de Comunicacion, S.A.P.I de C.V. (“Aganar”) and JuegaLotto, S.A. de C.V. (“JuegaLotto”). Aganar is authorized to operate in the licensed iLottery market in Mexico since 2007 as an online retailer of Mexican National Lottery draw games, instant digital scratch-off games and other games of chance. JuegaLotto is authorized by the Mexican federal regulatory authorities to sell international lottery games in Mexico.

On July 28, 2022, the Board of Directors determined that the Company did not currently have sufficient financial resources to fund its operations or pay certain existing obligations, including its payroll and related obligations and effectively ceased its operations furloughing certain employees effective July 29, 2022 (the “Operational Cessation”). Subsequently, the Company has had minimal day-to-day operations and has primarily focused its operations on restarting certain aspects of its core business (the “Plans for Recommencement of Company Operations”).

On November 15, 2022, the Company formed a new wholly-owned subsidiary, Sports.Com, Inc., as a Texas corporation (the “New Subsidiary”). The New Subsidiary will share the same principal address as the Company. In connection therewith, on November 19, 2022, the Company filed in the State of Texas a “doing business as” assumed name registration under the name, “Sports.Com”, and intends to file additional assumed name registrations under this name in other U.S. and foreign jurisdictions.

On April 25, 2023, as part of the Plans for Recommencement of Company Operations, the Company resumed its ticket sales operations to support an affiliate partner through its Texas retail network.

Schedule of Depreciation of Property and Equipment (Details)	Sep. 30, 2023
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	5 years
Software Development [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	3 years

Commitments and Contingencies (Details Narrative) - USD ($)									1 Months Ended	3 Months Ended		9 Months Ended	65 Months Ended
	Mar. 13, 2023	Feb. 28, 2023	Feb. 13, 2023	Jan. 20, 2023	Oct. 27, 2022	Sep. 26, 2022	Jul. 29, 2022	Apr. 06, 2022	Dec. 31, 2018	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Participation interests									$ 285,000,000
Percentage of raffle revenue net									7.00%
Obligation to pay digital securities amount															$ 5,632
Lease expiration date								Dec. 31, 2024				Jan. 21, 2024
Rent payment										$ 6,000	$ 6,000		$ 204,725
Remitted rent payment								$ 40,221
Loss on contract termination	$ 4,600,000
Line of credit													30,000,000
Restricted cash													$ 30,000,000	$ 30,000,000
Related party costs						$ 16,500,000	$ 16,500,000
Fees					$ 397,036.94
Payment of litigation expense			$ 50,000	$ 75,000
Partial payment		$ 75,000

Other Long Term Assets (Details Narrative) - USD ($)	3 Months Ended			9 Months Ended			12 Months Ended
Other Long Term Assets (Details Narrative) - USD ($)	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2022
Investment	$ 250,000			$ 250,000	$ 250,000		$ 250,000
Total amount owed	$ 400,837		$ 2,085,898	2,499,568		$ 6,443,357
Net amount				$ (125,000)		$ 13,009,686
Subsidiaries [Member]
Investment					16,500,000		16,500,000
Net amount					$ 13,009,685
Proceeds from Other Operating Activities		$ 125,000
[custom:LongTermAsset]		$ 12,884,686
Subsidiaries [Member] \| Maximum [Member]
Total amount owed							16,500,000
Subsidiaries [Member] \| Minimum [Member]
Total amount owed							$ 15,000,000

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 28, 2023
Document Type	10-Q/A
Amendment Flag	true
Amendment Description	Amendment No. 1
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-38508
Entity Registrant Name	Lottery.com Inc.
Entity Central Index Key	0001673481
Entity Tax Identification Number	81-1996183
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	20808 State Hwy 71 W
Entity Address, Address Line Two	Unit B
Entity Address, City or Town	Spicewood
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	78669
City Area Code	(737)
Local Phone Number	309-4500
Entity Current Reporting Status	Yes
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,874,307
Common stock, $0.001 par value
Title of 12(b) Security	Common stock, $0.001 par value
Trading Symbol	LTRY
Security Exchange Name	NASDAQ
Warrants to purchase one share of common stock, each at an exercise price of $230.00
Title of 12(b) Security	Warrants to purchase one share of common stock, each at an exercise price of $230.00
Trading Symbol	LTRYW
Security Exchange Name	NASDAQ

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue	$ 285,523	$ 711,477	$ 1,561,096	$ 6,227,340
Cost of revenue	72,171	271,265	203,001	4,233,246
Gross profit	213,352	440,212	1,358,095	1,994,094
Operating expenses:
Personnel costs	1,289,893	1,298,009	3,606,841	35,213,231
Professional fees	400,837	2,085,898	2,499,568	6,443,357
General and administrative	255,441	1,666,482	1,557,271	8,606,444
Depreciation and amortization	1,421,269	1,478,242	4,218,907	4,149,561
Total operating expenses	3,367,440	6,528,631	11,882,587	54,412,593
Income (loss) from operations	(3,154,088)	(6,088,419)	(10,524,492)	(52,418,499)
Other expenses
Interest (income) expense	243,424	(438)	284,589	74,588
Other (income) expense	3,105	5,009	61,577	3,946,302
Total other expenses (income), net	246,529	4,571	346,166	4,020,890
Net loss before income tax	(3,400,617)	(6,092,990)	(10,870,658)	(56,439,389)
Income tax expense (benefit)
Net loss	(3,400,617)	(6,092,990)	(10,870,658)	(56,439,389)
Other comprehensive loss
Foreign currency translation adjustment, net	(34,256)	19,457	(182,607)	8,392
Comprehensive loss	(3,434,873)	(6,073,533)	(11,053,265)	(56,430,997)
Net income attributable to noncontrolling interest	72,227	23,364	212,094	321,853
Net loss attributable to Lottery.com Inc.	$ (3,362,646)	$ (6,050,169)	$ (10,841,171)	$ (56,109,144)
Net loss per common share
Net loss per common share, basic	$ (1.34)	$ (2.38)	$ (4.30)	$ (22.20)
Net loss per common share, diluted	$ (1.34)	$ (2.38)	$ (4.30)	$ (22.20)
Weighted average common shares outstanding
Weighted average common shares outstanding, basic	2,518,822	2,520,649	2,518,822	2,517,332
Weighted average common shares outstanding, diluted	2,518,822	2,520,649	2,518,822	2,517,332

Business Combination

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combination

4. Business Combination

TDAC Combination

On October 29, 2021, the Company and AutoLotto consummated the transactions contemplated by the Business Combination Agreement. At the Closing, each share of common stock and preferred stock of AutoLotto that was issued and outstanding immediately prior to the effective time of the Business Combination (other than excluded shares as contemplated by the Business Combination Agreement) was canceled and converted into the right to receive approximately 3.0058 shares (the “Exchange Ratio”) of Lottery.com. common stock.

The Business Combination closing was a triggering event for the Series B convertible notes, of which $63.8 million was converted into 162,426 shares of AutoLotto that were then converted into 488,226 shares of Lottery.com common stock using the Exchange Ratio.

At the Closing, each option to purchase AutoLotto’s common stock, whether vested or unvested, was assumed and converted into an option to purchase a number of shares of Lottery.com common stock in the manner set forth in the Business Combination Agreement.

The Company accounted for the Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer and TDAC as the accounting acquiree. Refer to Note 3, Significant Accounting Policies, for further details. Accordingly, the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization. The net assets of TDAC are stated at historical cost, with no goodwill or other intangible assets recorded.

The accompanying condensed consolidated financial statements and related notes reflect the historical results of AutoLotto prior to the merger and do not include the historical results of TDAC prior to the consummation of the Business Combination.

Upon the Closing, AutoLotto received total net proceeds of approximately $42,794,000 from TDAC’s trust and operating accounts. Total transaction costs were approximately $9,460,000, which principally consisted of advisory, legal and other professional fees and were recorded in additional paid in capital. Cumulative debt repayments of approximately $11,068,000, inclusive of accrued but unpaid interest, were paid in conjunction with the close, which included approximately $5,475,000 repayment of notes payable to related parties, and approximately $5,593,000 payment of accrued underwriter fees.

Pursuant to the terms of the Business Combination Agreement, the holders of issued and outstanding shares of AutoLotto prior to the Closing (the “Sellers”) were entitled to receive up to 300,000 additional shares of common stock (the “Seller Earnout Shares”) and Vadim Komissarov, Ilya Ponomarev and Marat Rosenberg (collectively the “TDAC Founders”) were also entitled to receive up to 200,000 additional shares of common stock (the “TDAC Founder Earnout Shares” and, together with the Seller Earnout Shares, the “Earnout Shares”). None of the earnout criteria had not been met by the December 31, 2021 and 2022 deadlines set forth in the Business Combination Agreement, thus no Seller Earnout Shares or TDAC Founder Earnout Shares were granted, accordingly, none of the Seller Earnout Shares and TDAC Founder Earnout Shares remain eligible to be earned.

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Certain footnotes and other financial information normally required by accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted in accordance with such rules and regulations. In management’s opinion, these condensed consolidated financial statements have been prepared on the same basis as our annual consolidated financial statements and notes thereto and include all adjustments, consisting of normal recurring items, considered necessary for fair presentation. The operating results for the three months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The condensed consolidated balance sheet as of September 30, 2023 has been derived from our unaudited financial statements at that date but does not include all disclosures and financial information required by GAAP for complete financial statements. The information included in this quarterly report on Form 10-Q should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2022, which were included in our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on June 15, 2023 (the “Annual Report”).

Impact of Trident Acquisition Corp. Business Combination

We accounted for the October 29, 2021 Business Combination as a reverse recapitalization whereby AutoLotto was determined as the accounting acquirer and TDAC as the accounting acquiree. This determination was primarily based on:

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

	●	the Board of Directors of Lottery.com having not less than 5 members, and TDAC only having the ability under the Business Combination Agreement to nominate one member to the Board of Directors for an initial two year term;

	●	AutoLotto management continuing to hold executive management roles for the post-Business Combination entity and being responsible for the day-to-day operations;

	●	the post-Business Combination entity assuming the Lottery.com name, which was the assumed name under which AutoLotto conducted business;

	●	Lottery.com maintaining the pre-existing AutoLotto headquarters; and

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

Accordingly, the Business Combination was treated as the equivalent of AutoLotto issuing stock for the net assets of TDAC, accompanied by a recapitalization. The net assets of TDAC are stated at historical cost, with no goodwill or other intangible assets recorded.

While TDAC was the legal acquirer in the Business Combination, because AutoLotto was determined to be the accounting acquirer, the historical financial statements of AutoLotto became the historical financial statements of the combined company, upon the consummation of the Business Combination. As a result, the financial statements included in the accompanying condensed consolidated financial statements reflect (i) the historical operating results of AutoLotto prior to the Business Combination; (ii) the combined results of the Company and AutoLotto following the Closing; (iii) the assets and liabilities of AutoLotto at their historical cost; and (iv) our equity structure for all periods presented.

In connection with the Business Combination transaction, we have converted the equity structure for the periods prior to the Business Combination to reflect the number of shares of our common stock issued to AutoLotto’s stockholders in connection with the recapitalization transaction. As such, the shares, corresponding capital amounts and earnings per share, as applicable, related to AutoLotto convertible preferred stock and common stock prior to the Business Combination have been retroactively converted by applying the exchange ratio established in the Business Combination.

Non-controlling Interests

Non-controlling interests represent the proportionate ownership of Aganar and JuegaLotto, held by minority members and reflect their capital investments as well as their proportionate interest in subsidiary losses and other changes in members’ equity, including translation adjustments.

Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by our management in deciding how to allocate resources and in assessing operating performance. Under the provisions of ASC 280-10, “Segment Reporting” (“ASC 280”), we are not organized around specific services or geographic regions. We operate in one service line, providing lottery products and services.

Our management uses financial information, business prospects, competitive factors, operating results and other non-U.S. GAAP financial ratios to evaluate our performance, which is the same basis on which our results and performance are communicated to our Board of Directors. Based on the information described above and in accordance with the applicable literature, management has concluded that we are organized and operated as one operating and reportable segment on a condensed consolidated basis for each of the periods presented.

Concentration of Credit Risks

Financial instruments that are potentially subject to concentrations of credit risk are primarily cash. Cash is placed with major financial institutions deemed to be of high-credit-quality in order to limit credit exposure. Cash is regularly maintained in excess of federally insured limits at the financial institutions. Management believes that we are not exposed to any significant credit risk related to cash deposits.

Use of Estimates

The preparation of the financial statements requires management to make estimates and assumptions to determine the reported amounts of assets, liabilities, revenue and expenses. Although management believes these estimates are reasonable, actual results could differ from these estimates. We evaluate our estimates on an ongoing basis and prepare our estimates on the basis of historical experience using assumptions we believe to be reasonable under the circumstances.

Foreign currency translation

The financial statements of the Company’s significant non-U.S. subsidiaries are translated into United States dollars in accordance with ASC 830, “Foreign Currency Matters”, using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs and expenses and historical rates for equity. Resulting foreign currency translation adjustments are recorded directly in accumulated other comprehensive loss as a separate component of shareholders’ deficit. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in general and administrative expenses in the accompanying consolidated statement of operations and comprehensive loss when realized.

Cash

As of September 30, 2023 and December 31, 2022, cash and cash equivalents were comprised of cash deposits. Certain deposits with some banks exceeded federally insured limits with the majority of cash held in one financial institution. Management believes all financial institutions holding its cash are of high credit quality and does not believe we are subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company had no marketable securities as of September 30, 2023 and December 31, 2022.

Accounts Receivable

Through the various merchant providers used by us, we pre-authorize forms of payment prior to the sale of digital representation of lottery games to minimize exposure to losses related to uncollected payments and we do not extend credit to the user of the B2C Platform or the commercial partner of the B2B API, or its customers, in the normal course of business. We estimate our bad debt exposure each period and record a bad debt provision for accounts receivable we believe may not be collected in full. The Company had an allowance for uncollectible receivables of $84,520 as of September 30, 2023 and December 31, 2022.

Prepaid Expenses

Prepaid expenses consist of payments made on contractual obligations for services to be consumed in future periods. The Company entered into an agreement with a third party to provide advertising services and issued equity instruments as compensation for the advertising services. The Company expenses the service as it is performed. The value of the services provided was used to value these contracts. The current portion of prepaid expenses is included in current assets on the condensed consolidated balance sheets.

Investments

On August 2, 2018, AutoLotto purchased 186,666 shares of Class A-1 common stock of a third-party business development partner representing 4% of the total outstanding shares of such company. As this investment resulted in less than 20% ownership, it was accounted for using the cost basis method.

Property and equipment, net

Property and equipment are stated at cost. Depreciation and amortization are generally computed using the straight-line method over estimated useful lives ranging from three to five years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Routine maintenance and repair costs are expensed as incurred. The costs of major additions, replacements and improvements are capitalized. Gains and losses realized on the sale or disposal of property and equipment are recognized or charged to other expense in the condensed consolidated statement of operations.

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

Computers and equipment			3 years
Furniture and fixtures			5 years
Software			3 years

Notes Receivable

Notes receivable consist of contracts where the Company has loaned funds to outside parties. The Company accrues interest receivable over the term of the outstanding notes and reviews for doubtful collectability periodically but in no instance less than annually .

Leases

Right-of-use assets (“ROU assets”) represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of the leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Otherwise, the implicit rate was used when readily determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, the Company accounts for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, management elected a short-term lease exception policy on all classes of underlying assets, permitting the Company to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

Internal Use Software Development

Software development costs incurred internally to develop software programs to be used solely to meet our internal needs and applications are capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the intended function. Additionally, we capitalize qualifying costs incurred for upgrades and enhancements to existing software that result in additional functionality. Costs related to preliminary project planning activities, post-implementation activities, maintenance and minor modifications are expensed as incurred. Internal-use software development costs are amortized on a straight line basis over the estimated useful life of the software.

Software License

Software license represents the Company’s license agreements for third party software, which are amortized over their estimated economic lives.

Customer relationships

Customer relationships are finite-lived intangible assets, which are amortized over their estimated economic lives. Customer relationships are generally recognized as the result of business combinations.

Gaming Licenses

The Company incurs fees in connection with applying for and maintaining good standing in jurisdictions via business licenses. Fees incurred in connection with the application and subsequent renewals are capitalized and amortized using the straight-line method over an estimated useful life. These fees are capitalized and amortized over the shorter of their expected benefit under the partnership agreement or estimated useful life.

Trademarks and Tradenames

The Company incurs fees in connection with applying for and maintaining trademarks and tradenames as well as trademarks and tradenames resulting from acquisitions. Fees incurred in connection with the application and subsequent renewals are capitalized and amortized using the straight-line method over an estimated useful life.

Domain Name

Domain name represents the cost incurred to purchase website domain names which are being amortized on a straight-line method over estimated useful lives.

Impairment of Long-Lived Assets

Long-lived assets, except for goodwill, consist of property and equipment and finite-lived acquired intangible assets, such as internal-use software, software licenses, customer relationships, gaming licenses, trademarks, tradenames and customer relationships. Long-lived assets, except for goodwill and indefinite-lived assets, are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount.

Goodwill

The Company’s business is classified into one reporting unit. In testing goodwill for impairment, the Company has the option to begin with a qualitative assessment, commonly referred to as “Step 0,” to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary user base. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative goodwill impairment analysis by comparing the carrying amount to the fair value of the reporting unit. If the carrying amount exceeds the fair value, goodwill will be written down to the fair value and recorded as impairment expense in the consolidated statements of operations. The Company performs its impairment testing annually and when circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

Revenue Recognition

Under the new standard, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”), the Company recognizes revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists; (ii) identifiable performance obligations under the contract exist; (iii) the transaction price is determinable for each performance obligation; (iv) the transaction price is allocated to each performance obligation; and (v) when the performance obligations are satisfied. Revenues are recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services.

Lottery game revenue

Items that fall under this revenue classification include:

Lottery game sales

The Company’s performance obligations of delivering lottery games are satisfied at the time in which the digital representation of the lottery game is delivered to the user of the B2C Platform or the commercial partner of the B2B API, therefore, revenue is recognized at a point in time. The Company receives consideration for lottery game sales at the time of delivery to the customer, either the user or commercial partner, as applicable. There is no variable consideration related to lottery game sales. As each individual lottery game delivered represents a distinct performance obligation and consideration for each game sale is fixed, representing the standalone selling price, there is no allocation of consideration necessary.

In accordance with ASC 606, the Company evaluates the presentation of revenue on a gross versus net basis dependent on if the Company is a principal or agent. In making this evaluation, some of the factors that are considered include whether the Company has control over the specified good or service before it is transferred to the customer. The Company also assesses if it is primarily responsible for fulfilling the promise to provide the specified good or service, has inventory risk, and has discretion in establishing the price. For all of the Company’s transactions, management concluded that gross presentation is appropriate, as the Company is primarily responsible for providing the performance obligation directly to the customers and assumes fulfillment risk of all lottery game sales as it retains physical possession of lottery game sales tickets from time of sale until the point of redemption. The Company also retains inventory risk on all lottery game sales tickets as they are responsible for any potential winnings related to lost or unredeemable tickets at the time of redemption. Finally, while each jurisdiction establishes the face value of the lottery ticket, representing the game sales prices, the Company charges a separate and additional fee for the services it provides.

Affiliate marketing credit revenue

The Company’s performance obligation in agreements with certain customers is to transfer previously acquired affiliate marketing credits (“credits”). Customers’ payment for these credits is priced on a per-contract basis. The performance obligation in these agreements is to provide title rights of the previously acquired credits to the customer. This transfer is point-in-time when the revenue is recognized, and there are no variable considerations related to this performance obligation.

Arrangements with multiple performance obligations

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, management allocates revenue to each performance obligation based on its relative standalone selling price. Management generally determines standalone selling prices based on the prices charged to customers.

Deferred Revenue

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

Payment terms vary by the type and location of the customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, management requires payment before the products or services are delivered to the customer.

Contract Assets

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

Taxes

Taxes assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions, that are collected by us from a customer, are excluded from revenue.

Cost of Revenue

Cost of revenue consists primarily of variable costs, comprising (i) the cost of procurement of lottery games, minus winnings to users, additional expenses related to the sale of lottery games, including, commissions, affiliate fees and revenue shares; and (ii) payment processing fees on user fees, including, chargebacks imposed on the Company. Non-variable costs included in cost of revenue include affiliate marketing credits acquired on a per-contract basis.

Stock-based Compensation

Effective October 1, 2019, the Company adopted ASU 2018-07, Compensation – “Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting” (“ASC 718”), which addresses aspects of the accounting for nonemployee share-based payment transactions and accounts for share-based awards to employees in accordance with ASC 718. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method.

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. As of September 30, 2023, the Company excluded 10,456 stock options, 23,417 restricted awards, 24,415 warrants, 100,000 earn out shares and 87,500 unit purchase options respectively in the calculation of diluted loss per share, as the effect would be anti-dilutive due to losses incurred.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that may have an impact on our accounting and reporting. We believe that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on our accounting or reporting or that such impact will not be material to our financial position, results of operations and cash flows when implemented.

Liquidity and Going Concern (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 219,070,712		$ 219,070,712		$ 208,187,210
Working capital	2,800,000		2,800,000
Loss from operations	$ 3,154,088	$ 6,088,419	$ 10,524,492	$ 52,418,499

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Schedule of Restricted Stock Awards Activity (Details) - Restricted Stock [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Shares, Balance	191,622
Weighted Average Grant Fair Value, Balance	$ 295.00
Number of Shares, Granted		191,622
Weighted Average Grant Fair Value, Granted
Number of Shares, Vested
Weighted Average Grant Fair Value, Vested
Number of Shares, Forfeited/canceled
Weighted Average Grant Fair Value, Forfeited/canceled
Number of Shares, Balance	191,622
Weighted Average Grant Fair Value, Balance	$ 295.00

Schedule of Finite Lived Intangible Assets Amortization Expenses (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 35,259,423	$ 35,259,423
Accumulated amortization	(15,410,708)	(11,276,978)
Net	$ 19,848,715	23,982,445
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	6 years
Gross carrying amount	$ 1,350,000	1,350,000
Accumulated amortization	(950,135)	(781,385)
Net	$ 399,865	568,615
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	6 years
Gross carrying amount	$ 2,550,000	2,550,000
Accumulated amortization	(960,972)	(642,222)
Net	$ 1,589,028	1,907,778
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	6 years
Gross carrying amount	$ 3,050,000	3,050,000
Accumulated amortization	(1,819,028)	(1,437,778)
Net	$ 1,230,972	1,612,222
Software Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	6 years
Gross carrying amount	$ 14,450,000	14,450,000
Accumulated amortization	(8,086,110)	(5,968,611)
Net	$ 6,363,890	8,481,389
Gaming License [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	6 years
Gross carrying amount	$ 4,020,000	4,020,000
Accumulated amortization	(1,507,500)	(1,005,000)
Net	2,512,500	3,015,000
Internally Developed Software [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	2,904,423	2,904,423
Accumulated amortization	(648,463)	(350,232)
Net	$ 2,255,960	2,554,191
Internally Developed Software [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	2 years
Internally Developed Software [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years
Domain Name [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	15 years
Gross carrying amount	$ 6,935,000	6,935,000
Accumulated amortization	(1,438,500)	(1,091,750)
Net	$ 5,496,500	$ 5,843,250

Property and Equipment, net (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation Expense	$ 49,562	$ 36,277

Intangible assets, net

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets, net

7. Intangible assets, net

Gross carrying values and accumulated amortization of intangible assets:

	September 30, 2023								December 31, 2022
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortizing intangible assets
Customer relationships	6 years	$	1,350,000	$	(950,135	)	$	399,865	$	1,350,000	$	(781,385	)	$	568,615
Trade name	6 years		2,550,000		(960,972	)		1,589,028		2,550,000		(642,222	)		1,907,778
Technology	6 years		3,050,000		(1,819,028	)		1,230,972		3,050,000		(1,437,778	)		1,612,222
Software agreements	6 years		14,450,000		(8,086,110	)		6,363,890		14,450,000		(5,968,611	)		8,481,389
Gaming license	6 years		4,020,000		(1,507,500	)		2,512,500		4,020,000		(1,005,000	)		3,015,000
Internally developed software	2 - 10 years		2,904,423		(648,463	)		2,255,960		2,904,423		(350,232	)		2,554,191
Domain name	15 years		6,935,000		(1,438,500	)		5,496,500		6,935,000		(1,091,750	)		5,843,250
		$	35,259,423	$	(15,410,708	)	$	19,848,715	$	35,259,423	$	(11,276,978	)	$	23,982,445

Amortization expense with respect to intangible assets for the three months ended September 30, 2023 and 2022 totaled $1,371,707 and $1,378,775, respectively, and for the nine months ended September 30, 2023 and 2022 totaled $4,133,730 and $4,006,903, respectively, which is included in depreciation and amortization in the Statements of Operations.

Estimated amortization expense for years of useful life remaining is as follows:

Years ending December 31,	Amount
Remainder of 2023	$	1,367,042
2024		5,058,170
2025		4,738,170
2026		2,870,670
2027		1,359,775
Thereafter		4,454,888
Total	$	19,848,715

The Company had software development costs of $476,850 related to projects not placed in service as of September 30, 2023 and December 31, 2022, respectively, which is included in intangible assets in the Company’s consolidated balance sheets. Amortization will be calculated using the straight-line method over the appropriate estimated useful life when the assets are put into service.

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss attributable to Lottery.com Inc.	$ (10,841,171)	$ (56,109,144)
Adjustments to reconcile net income to net cash used in operating activities:
Loss Attributable to noncontrolling interest	(139,866)	(321,853)
Depreciation and amortization	4,217,873	4,149,561
Issuance of common stock for legal settlement		241,740
Stock based compensation expense	1,075,049	27,949,257
Loss on impairment of intangibles		412,450
Changes in assets and liabilities:
Accounts receivable	67,057	(152,453)
Prepaid expenses	32,601	3,237,127
Other current assets	(48,873)	(52,970)
Other long-term assets	125,000	(13,009,686)
Note receivable		(2,000,000)
Trade payables	208,680	6,196,979
Accounts payable and accrued expenses	3,789,088	(857,701)
Deferred revenue	(80,357)	(671,264)
Other liabilities	617,556
Accrued interest	210,831	189,116
Other long term liabilities		(1,169)
Commitments and contingencies		30,000,000
Net cash (used in) provided by operating activities	(766,532)	(800,010)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets		(124,021)
Purchase of intangibles		(1,124,873)
Net cash used in investing activities		(1,248,894)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible debt	870,976
Payments on notes payable - related parties		(479,096)
Net cash (used in) provided by financing activities	870,976	(479,096)
Net effect of exchange rate changes on Cash	(143,475)	8,392
NET CHANGE IN NET CASH AND RESTRICTED CASH	(39,031)	(2,519,608)
CASH AND RESTRICTED CASH - BEGINNING OF YEAR	102,766	32,638,970
CASH AND RESTRICTED CASH - END OF PERIOD	63,735	30,119,362
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash
Taxes paid in cash

Schedule of Estimated Amortization Expense (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2023	$ 1,367,042
2024	5,058,170
2025	4,738,170
2026	2,870,670
2027	1,359,775
Thereafter	4,454,888
Total	$ 19,848,715	$ 23,982,445

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment, net as of September 30, 2023 and December 31, 2022, consisted of the following:

Schedule of Property and Equipment

	September 30,			December 31,
	2023			2022

Computers and equipment	$	125,400		$	124,199
Furniture and fixtures		16,898			16,898
Software		2,026,200			2,026,200
Property and equipment		2,168,498			2,167,297
Accumulated depreciation		(2,144,563	)		(2,059,219	)
Property and equipment, net	$	23,935		$	108,078

Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

16. Subsequent Events

On October 11, 2023, the Company filed with the Securities and Exchange Commission a registration statement on Form S-8 (this “Registration Statement”) to register under the Securities Act of 1933, as amended (the “Securities Act”) 500,000 shares of common stock, par value of $0.001 per share of the Company. These shares being registered are in addition to the shares registered by the Company on Form S-8 dated April 6, 2022. Additionally, the Company’s Board of Directors approved the 2023 Employees’, Directors’ and Consultants’ Stock Issuance Option Plan which authorizes the Company. to issue either shares directly or options to purchase up to 500,000 shares of common stock, on terms to be determined, to its Employees, Directors, and Consultants

On November 8, 2023, the Company entered into its second agreement with the International Gaming Alliance (“IGA”). This agreement impacts multiple aspects of the Company’s business including: making IGA an operational partner in Global Gaming; establishing IGA as a Master Affiliate for lottery ticket and sweepstakes new business initiatives; and authorizing the utilization of the Company’s prepaid advertising credits for co-branded domestic initiatives.

Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

We are required to file federal and state income tax returns in the United States. The preparation of these tax returns requires us to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by us. In consultation with our tax advisors, we base our tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various federal and state taxing authorities in the jurisdictions in which we file tax returns. As part of these reviews, a taxing authority may disagree with respect to the income tax positions taken by us (“uncertain tax positions”) and, therefore, may require us to pay additional taxes. As required under applicable accounting rules, we accrue an amount for our estimate of additional income tax liability, including interest and penalties, which we could incur as a result of the ultimate or effective resolution of the uncertain tax positions. We account for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Paragraph 17
-Subparagraph (b)
-Publisher FASB
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Prepaid Expenses

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses

5. Prepaid Expenses

Prepaid expenses consists primarily of advertising credits from two top tier media organizations that operate in the United States. The advertising credits were obtained in return for warrants, shares of common stock and shares of preferred stock. The agreements do not specify a time period for utilizing these credits and there is no requirement to provide cash or other consideration in connection with utilizing them. The balance can be utilized at any time at the mutual consent of the parties. The Company expects to begin utilizing these credits in the fourth quarter of 2023 or first quarter of 2024 and anticipates fully utilizing all of them by the end of 2024. Accordingly, they are presented as current assets.

Stockholders’ Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity

Schedule of Public Warrants

					Weighted
			Weighted		Average
			Average		Remaining
	Number of		Exercise		Contractual
	Shares		Price		Life (years)

Outstanding at December 31, 2022		24,415	$	30.40		2.8
Granted		-		-		-
Exercised		-		-		-
Forfeited/cancelled		-		-		-
Outstanding at September 30, 2023		24,415		30.40		2.1

Exercisable at September 30, 2023		24,415	$	30.40		2.1

Schedule of Fair Value of Assumptions

The Company has classified the warrants as having Level 2 inputs and used the Black-Scholes option-pricing model to value the warrants. The fair value at the issuance dates for the above warrants was based upon the following management assumptions:

Schedule of Fair Value of Assumptions

	Issuance dates
Risk-free interest rate		1.80	%
Expected dividend yield		0	%
Expected volatility		113.17	%
Term		3 years
Fair value of common stock	$	3.75

Stock-based Compensation Expense (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Restricted Stock Awards Activity

The Company had restricted stock activity summarized as follows:

			Weighted
			Average
	Number of		Grant
	Shares		Fair Value
To Outstanding at December 31, 2022		191,622	$	295.00
Granted		-		-
Vested		-		-
Forfeited/canceled		-		-
Restricted shares unvested at September 30, 2023		191,622	$	295.00

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	2,527,045	2,527,045
Common stock, shares outstanding	2,527,045	2,527,045

Schedule of Public Warrants (Details) - Public Warrants [Member]	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of Shares Outstanding, Balance \| shares	24,415
Weighted Average Exercise Price Outstanding, Balance \| $ / shares	$ 30.40
Weighted Average Remaining Contractual Life (years), Outstanding	2 years 9 months 18 days
Number of Shares, Granted \| shares
Weighted Average Exercise Price, Granted \| $ / shares
Number of Shares, Exercised \| shares
Weighted Average Exercise Price, Exercised \| $ / shares
Number of Shares, Forfeited/cancelled \| shares
Weighted Average Exercise Price, Forfeited/cancelled \| $ / shares
Number of Shares Outstanding, Balance \| shares	24,415
Weighted Average Exercise Price Outstanding, Balance \| $ / shares	$ 30.40
Weighted Average Remaining Contractual Life (years), Outstanding	2 years 1 month 6 days
Number of Shares Exercisable, Balance \| shares	24,415
Weighted Average Exercise Price Exercisable, Balance \| $ / shares	$ 30.40
Weighted Average Remaining Contractual Life (years), Exercisable	2 years 1 month 6 days

Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended	12 Months Ended
	Jan. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments of related party	$ 53,000				$ 4,700
Loans outstanding		$ 13,000
Reimbursement expenses			$ 440,000	$ 800,000
Settlement of outstanding obligations	$ 316,919
Service Agreement [Member[ \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Capital expenditure		100,000
Reimbursement expenses		$ 5,000

Significant Accounting Policies (Details Narrative) - USD ($)		9 Months Ended
	Aug. 02, 2018	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Marketable securities		$ 0	$ 0
Allowance for uncollectible receivables		$ 84,520	$ 84,520
Share-Based Payment Arrangement, Option [Member]
Property, Plant and Equipment [Line Items]
Anti dilutive shares		10,456
Restricted Stock [Member]
Property, Plant and Equipment [Line Items]
Anti dilutive shares		23,417
Warrant [Member]
Property, Plant and Equipment [Line Items]
Anti dilutive shares		24,415
Earn Out Shares [Member]
Property, Plant and Equipment [Line Items]
Anti dilutive shares		100,000
Unit Purchase Option [Member]
Property, Plant and Equipment [Line Items]
Anti dilutive shares		87,500
Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives		3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives		5 years
Auto Lotto LLC [Member]
Property, Plant and Equipment [Line Items]
Outstanding shares percentage	4.00%
Ownership percentage	20.00%
Class A-1 Common Stock [Member] \| Auto Lotto LLC [Member]
Property, Plant and Equipment [Line Items]
Shares issued in business combination	186,666

Intangible assets, net (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
Intangible assets, net (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Amortization of intangible assets	$ 1,371,707	$ 1,378,775	$ 4,133,730	$ 4,006,903
Finite-lived intangible assets, gross	35,259,423		35,259,423		$ 35,259,423
Software and Software Development Costs [Member]
Property, Plant and Equipment [Line Items]
Finite-lived intangible assets, gross	$ 476,850		$ 476,850		$ 476,850

Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

3. Significant Accounting Policies

Basis of Presentation

Impact of Trident Acquisition Corp. Business Combination

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

	●	the Board of Directors of Lottery.com having not less than 5 members, and TDAC only having the ability under the Business Combination Agreement to nominate one member to the Board of Directors for an initial two year term;

	●	AutoLotto management continuing to hold executive management roles for the post-Business Combination entity and being responsible for the day-to-day operations;

	●	the post-Business Combination entity assuming the Lottery.com name, which was the assumed name under which AutoLotto conducted business;

	●	Lottery.com maintaining the pre-existing AutoLotto headquarters; and

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

Non-controlling Interests

Segment Reporting

Concentration of Credit Risks

Use of Estimates

Foreign currency translation

Cash

The Company had no marketable securities as of September 30, 2023 and December 31, 2022.

Accounts Receivable

Prepaid Expenses

Investments

Property and equipment, net

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

Computers and equipment			3 years
Furniture and fixtures			5 years
Software			3 years

Notes Receivable

Leases

Internal Use Software Development

Software License

Software license represents the Company’s license agreements for third party software, which are amortized over their estimated economic lives.

Customer relationships

Gaming Licenses

Trademarks and Tradenames

Domain Name

Domain name represents the cost incurred to purchase website domain names which are being amortized on a straight-line method over estimated useful lives.

Impairment of Long-Lived Assets

Goodwill

Revenue Recognition

Lottery game revenue

Items that fall under this revenue classification include:

Lottery game sales

Affiliate marketing credit revenue

Arrangements with multiple performance obligations

Deferred Revenue

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

Contract Assets

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

Taxes

Taxes assessed by a governmental authority that are both imposed on and concurrent with specific revenue-producing transactions, that are collected by us from a customer, are excluded from revenue.

Cost of Revenue

Stock-based Compensation

Net Loss per Share

Recent Accounting Pronouncements

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

14. Commitments and Contingencies

Indemnification Agreements

The Company enters into indemnification provisions under its agreements with other entities in its ordinary course of business, typically with members of its Board of Directors, Officers, business partners, customers, landlords, lenders and lessors. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of September 30, 2023 and December 31, 2022.

Digital Securities

In 2018, the Company commenced an offering (the “LDC Offering”) of 285 million revenue participation interests (the “Digital Securities”) of net sweepstakes revenue of a wholly-owned entity of the Company, LDC Crypto Universal Public Company Limited (“LDC”); in February 2022, LTRY WinTogether, Inc. (“LTRY WinTogether”), a wholly-owned subsidiary of the Company assumed the obligations and liabilities of LDC, including, without limitation, with respect to the Digital Securities. The Digital Securities do not have any voting rights, redemption rights, or liquidation rights, nor are they tied in any way to other equity securities of any other subsidiary of the Company or of the Company nor do they otherwise hold any rights that a holder of equity securities of LTRY WinTogether or the Company may have or that a holder of traditional equity securities or capital stock may have. Rather, each of the holders of the Digital Securities has a pro rata right to receive 7% of the net sweepstakes revenue. If the net sweepstakes revenue is zero for a given period, holders of the Digital Securities are not eligible to receive any cash distributions from any sweepstakes of LTRY WinTogether for such period. For the year ended December 31, 2021, the Company incurred an obligation to pay an aggregate amount of approximately $5,632 to holders of the outstanding Digital Securities. No additional obligations related to the holders of outstanding Digital Securities were incurred during the year ended December 31, 2022 or the nine months ended September 30, 2023. The Company has not satisfied the outstanding obligation for 2021 as of September 30, 2023.

The Company leases office space in Spicewood, Texas (the “Spicewood Lease”), under an agreement which expires January 21, 2024. For the three months ended September 30, 2023 and 2022, the Company’s total rent expense for the Spicewood Lease was approximately $6,000 each quarter.

The Company leases space to facilitate its business in Waco, Texas (the “Waco Lease”). On or about April 6, 2022, the Company remitted payment in the amount of $40,221, which included any offsets and rent payment obligations through March 31, 2022, and rent payment obligations without offsets under the Waco Lease through June 30, 2022. The Waco lease expires on December 31, 2024. The Company additionally leased space in Dallas, Texas (the “Dallas Lease”). On or about April 6, 2022, the Company remitted payment in the amount of $204,725 for rent payment obligations from November 11, 2016, through March 31, 2022. Upon remitting said payment the Dallas Lease terminated by agreement as of March 31, 2022.

Litigation and Other Loss

On March 13, 2023, John Brier, Bin Tu and JBBT, LLC (collectively, the “Plaintiffs”) filed its original complaint against Lottery.com, Inc. f/k/a AutoLotto, Inc. (the “Company”) and its wholly-owned subsidiary TinBu, LLC (“TinBu”) (Company and TinBu collectively referred to herein as “Defendants”) in the Circuit Court of the 13^thJudicial District in and for Hillsborough County, Florida (the “Complaint”). The Complaint alleges breach of contract(s) and misrepresentation with alleged damages in excess of $4.6 million. On October 13, 2023, the Court granted the Defendants’ Motion to Stay Litigation and Discovery pending a ruling on its Motion to Compel Arbitration. On November 16, 2023, the Court granted Defendants’ Motion to Compel Arbitration in Texas. The parties await a signed written order from the Court to that effect.

Restricted Cash and Letter of Credit

In the first quarter of 2022, the Company entered an agreement with a lending institution whereby the company pledged $30,000,000 as security for a line of credit. Under that agreement, $30,000,000 of company cash became restricted and remained restricted until the fourth quarter of 2022 when the bank took the $30,000,000 from the Company and extinguished the debt related to the line of credit. This was presented on the company’s Balance Sheet as a Contingent Liability from March 31, 2022 until the obligation was satisfied in October of 2022.

J. Streicher Financial

On July 29, 2022, the Company filed an original Verified Complaint for Breach of Contract and Specific Performance (the “Complaint”) against J. Streicher Financial, LLC (“Streicher”) in the Court of Chancery of the State of Delaware (the “Chancery Court”). In its Complaint, the Company alleged that Streicher breached a contract entered into by the parties on March 9, 2022, and demanded that Streicher return $16,500,000 it owes to the Company. 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 (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 on the Judgment and Fee Order. The Company subsequently engaged a collection firm to pursue Streicher as a judgment debtor on behalf of Company. Since being engaged, the collection firm has sought collections on Streicher by noticing Judgment-Debtor for Deposition by Oral Examination in Aid of Judgment and seeking post-judgment discovery, including interrogatories and requests for production.

In an effort to avoid post-judgment discovery, Streicher indicated a willingness to pay the judgment over time with interest and attempted 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. On January 20, 2023, faced with post-judgment discovery and depositions, Streicher remitted a partial payment towards the Judgment in the amount of $75,000. On February 13, 2023, Streicher made another payment towards the Judgment in the amount of $50,000 and agreed to make another payment in the amount of $75,000 on February 28, 2023. Streicher failed to remit the payment on February 28, 2023, and as a result, the Company is proceeding with the post-judgment discovery and depositions, which was scheduled for March 16, 2023, provided that Streicher did not appear at such hearing. The Company intends to fully collect on the Judgment and intends to pursue all legal and equitable means to enforce the Judgment against Streicher until the Judgment is fully satisfied.

Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions

15. Related Party Transactions

The Company has entered into transactions with related parties. The Company regularly reviews these transactions; however, the Company’s results of operations may have been different if these transactions were conducted with nonrelated parties.

During the year ended December 31, 2020, the Company entered into borrowing arrangements with the individual founders to provide operating cash flow for the Company. The Company paid $4,700 during the year ended December 31, 2020 and has an outstanding balance for these loans at September 30, 2023 of $13,000.

Services Agreement with Master Goblin Games, LLC

In March 2020, the Company entered into a service agreement (as amended, the “Service Agreement”), with Master Goblin Games, LLC (“Master Goblin”), an entity that is wholly-owned by our former CFO and President, Ryan Dickinson. Master Goblin leases retail locations in certain U.S. jurisdictions from which it operated tabletop game retail stores and, ancillary to such retail operations, acted as sales agent or retailer licensed by the state lottery commission of such jurisdiction to sell lottery game tickets from such retail stores. The Company acquired lottery games as requested by users from Master Goblin on a non-exclusive basis in such jurisdictions.

Pursuant to the Service Agreement, Master Goblin was authorized and approved by the Company to incur up to $100,000 in initial expenses per location for the commencement of operations at each location, including, without limitation, tenant improvements, furniture, inventory, fixtures and equipment, security and lease deposits, and licensing and filing fees. Similarly, pursuant to the Service Agreement, during each month of operation, Master Goblin was authorized to submit to the Company for reimbursement on-going expenses of up to $5,000 per location for actually incurred lease expenses. The initial expenses were to be submitted by Master Goblin to the Company upon Master Goblin securing a lease, and leases were only secured by Master Goblin in any location upon request of the Company. On-going expenses were submitted by Master Goblin to the Company for reimbursement on a monthly basis, subject to offset, and were recorded by the Company as an expense. To the extent Master Goblin had a positive net income in any month, exclusive of the sale of lottery games, such net income reduced or eliminated such reimbursable expenses for that month. In addition, from time to time Master Goblin might incur certain additional reimbursable expenses for the benefit of the Company. The Company paid Master Goblin an aggregate of approximately $440,000 and $800,000, including expense reimbursements under the Service Agreement and additional reimbursable expenses, during the years ended December 31, 2022 and 2021, respectively. In January of 2023, the company paid $53,000 to Master Goblin Games for settlement of outstanding obligations of $316,919 and the parties mutually agreed to terminate the business relationship.

Credit Facility with United Capital Investments London Limited

On July 26, 2023, the Company entered into a credit facility (the “UCIL Credit Facility”) with United Capital Investments London Limited (“UCIL”). Each of Matthew McGahan, the Company’s interim Chief Executive Officer and Chair of the Board, and Barney Battles, a member of the Board, have a direct or indirect interest in UCIL. See Note [10] for additional information regarding the UCIL Credit Facility.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Notes Payable and Convertible Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Notes Payable and Convertible Debt

10. Notes Payable and Convertible Debt

Series A Notes

From August to October 2017, the Company entered into seven Convertible Promissory Note Agreements with unaffiliated investors for an aggregate amount of $821,500. The notes bear interest at 10% per year, are unsecured, and were due and payable on June 30, 2019. The parties verbally agreed to extend the maturity of the notes to December 31, 2022. The Company cannot prepay the loans without consent from the noteholders. As of September 30, 2023, there have been no Qualified Financing events that trigger conversion , accordingly the remaining outstanding balance of $771,500 is no longer convertible and has been reclassified to Notes Payable as per the agreement. Accrued interest on the notes payable was $318,909 at September 30, 2023. These Notes Payable are in default.

Series B Notes

From November 2018 to December 2020, the Company entered into multiple Convertible Promissory Note agreements with unaffiliated investors for an aggregate amount of $8,802,828. The notes bear interest at 8% per year, are unsecured, and were due and payable on dates ranging from December 2020 to December 2021. For those notes maturing on or before December 31, 2020, the parties entered into amendments in February 2021 to extend the maturity of the notes to December 21, 2021. The Company cannot prepay the loans without consent from the noteholders.

During the year ended December 31, 2021, the Company entered into multiple Convertible Promissory Note agreements with unaffiliated investors for an aggregate amount of $38,893,733. The notes bear interest at 8% per year, are unsecured, and are due and payable on dates ranging from December 2021 to December 2022. The Company cannot prepay the loans without consent from the noteholders. As of December 31, 2021, the Series B Convertible Notes had a balance of $0.

During the year ended December 31, 2021, the Company entered into amendments with six of the Series B promissory noteholders to increase the principal value of the notes. The additional principal associated with the amendments totaled $3,552,114. The amendments were accounted for as a debt extinguishment, whereby the old debt was derecognized and the new debt was recorded at fair value. The Company recorded loss on extinguishment of $71,812 as a result of the amendment which is included in “Other expenses” on the condensed consolidated statements of operations and comprehensive loss .

As of October 29, 2021, all except $185,095 of the series B convertible notes were converted into 488,226 shares of Lottery.com common stock, accordingly, the remaining outstanding balance of $185,095 is no longer convertible and has been reclassified to notes payable (See Note 3). Accrued interest on this note as of September 30, 2023 is $61,067.

Woodford Funding

The Company received funding that became available through Woodford Eurasia Assets, Ltd. (“Woodford”), which entered into a loan agreement with the Company on December 7, 2022 (the “Woodford Loan Agreement”). Pursuant to the Woodford Loan Agreement, Woodford agreed to fund up to $2.5 million, subject to certain conditions and requirements, of which approximately $991,000 has been received to date. The parties may also mutually agree to increase the amount of the funding to $52.5 million (i.e., an additional $50 million). Amounts borrowed accrue interest at the rate of 12% per annum (22% per annum upon the occurrence of an event of default) and are due within 12 months of the date of each loan. Amounts borrowed can be repaid at any time without penalty.

Amounts borrowed pursuant to the Woodford Loan Agreement are convertible into the Company’s common stock, beginning 60 days after the first loan date, at the option of the lender, at the rate of 80% of the lowest publicly available price per share of Company common stock within 10 business days of the date of the agreement (which was equal to $5.60 per share), subject to a 4.99% beneficial ownership limitation and a separate limitation preventing the holder from holding more than 19.99% of the issued and outstanding common stock of the Company, without the Company obtaining shareholder approval for such issuance.

Conditions to the loan included the resignation of four of the then members of the Board of Directors (Lisa Borders, Steven M. Cohen, Lawrence Anthony DiMatteo and William Thompson, all of which persons subsequently resigned from the Board of Directors), and the appointment of two new directors (who have been appointed). Subsequent loans under the Woodford Loan Agreement also require our compliance 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.

Proceeds of the loans can only be used by us for restarting our operations, and for general corporate purposes agreed to by Woodford.

The Woodford Loan Agreement includes confidentiality obligations, representations, warranties, covenants, and events of default, which are customary for a transaction of this size and nature. Included in the Woodford Loan Agreement are covenants prohibiting us from (a) making any loan in excess of $1 million or obtaining any loan in an amount exceeding $1 million without the consent of Woodford, which may not be unreasonably withheld; (b) selling more than $1 million in assets; (c) maintaining less than enough assets to perform our obligations under the Woodford Loan Agreement; (d) encumbering any assets, except in the normal course of business, and not in an amount to exceed $1 million; (e) amending or restating our governing documents; (f) declaring or paying any dividend; (g) issuing any shares which negatively affects Woodford; and (h) repurchasing any shares.

We also agreed to grant warrants to Woodford to purchase 15% of the 2,546,264 issued and outstanding shares of the company’s common stock, with an exercise price equal to the average of the Nasdaq Official Closing Price for each of the ten days prior to the first amount being debited from the bank account of Woodford, which equates to an exercise price of $5.60 per share. In the event we fail to repay the amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount (i.e., will equal $4.20 per share).

UCIL Financing

On July 26, 2023, the Company entered into a credit facility (the “UCIL Credit Facility”), which is represented by a loan agreement, which was initially entered into on July 26, 2023 and was amended and restated on August 8, 2023 and subsequently amended on August 18, 2023 (as so amended, the “UCIL Loan Agreement”), with United Capital Investments London Limited (“UCIL”), an entity in which each of Matthew McGahan, the Company’s interim Chief Executive Officer and Chair of the Company’s Board, and Barney Battles, a member of the Board, have a direct or indirect interest. The decision by the Company to enter into the UCIL Loan Agreement follows an acknowledgment by the Company amongst other things, that it had not received the requisite funding on a timely basis that it expected from Woodford, despite the Company making several requests to Woodford for said funding under the Woodford Loan Agreement. Moreover, the Board of Directors determined that it was in the best interest of the Company and its stockholders to enter into the UCIL 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 Loan Agreement. On July 24, 2023, the Company responded to the Default Notice disputing that an event of default had occurred given the Company’s earlier announcement that UCIL had agreed to enter into a funding arrangement with the Company. 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 the Woodford Loan Agreement. Given the uncertainty of the continued financing under the Woodford Loan Agreement, the Board of Directors sought to secure and formalize the Company’s alternative funding by entering into the UCIL Loan Agreement.

Short term loans

On June 29, 2020, the Company entered into a Promissory Note with the U.S. Small Business Administration (“SBA”) for $150,000. The loan has a thirty-year term and bears interest at a rate of 3.75% per annum. Monthly principal and interest payments were deferred for twelve months after the date of disbursement. The loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains events of default and other provisions customary for a loan of this type. As of September 30, 2023 and December 31, 2022, the balance of the loan was $150,000. As of September 30, 2023, the accrued interest on this note was $4,874.

In August 2020, the Company entered into three separate note payable agreements with three individuals for an aggregate amount of $37,199. The notes bear interest at variable rates, are unsecured, and the parties verbally agreed the notes would be due upon a qualifying financing event. As of September 30, 2023 and December 31, 2022 the balance of the loans totaled $13,000.

Notes payable

On August 28, 2018, in connection with the purchase of the entire membership interest of TinBu, the Company entered into several notes payable totaling $12,674,635 with the sellers of the TinBu and a broker involved in the transaction. The notes had an initial interest rate of 0%, and original maturity date of January 25, 2022. The notes payable were modified during 2021 to extend the maturity to June 30, 2022 and the interest rate was modified to include simple interest of 4.1% per annum effective October 1, 2021. Each of the amendments were evaluated and determined to be loan modifications and accounted for accordingly. As of September 30, 2023 and December 31, 2022, the balance of the notes was $2,336,081. These notes payable are in default.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Condensed Consolidated Statements of Equity (Unaudited) - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Parent [Member]	Noncontrolling Interest [Member]
Balance at Dec. 31, 2021	$ 94,000,199	$ 50,256	$ 239,358,644	$ (148,188,138)	$ (655)	$ 91,220,107	$ 2,780,092
Balance shares at Dec. 31, 2021		50,256,317
Issuance of common stock upon stock option exercise		$ 60	(60)
Issuance of common stock upon stock option exercise, shares		60,116
Issuance of common stock for legal settlement	241,740	$ 60	241,680			241,740
Issuance of common stock for legal settlement, shares		60,000
Stock based compensation	20,880,655		20,880,655			20,880,655
Other comprehensive loss	(1,064)				(1,064)	(1,064)
Net loss	(34,898,521)			(34,750,964)		(34,750,964)	(147,557)
Balance at Mar. 31, 2022	80,223,008	$ 50,376	260,480,919	(182,939,102)	(1,719)	77,590,474	2,632,535
Balance shares at Mar. 31, 2022		50,376,433
Stock based compensation	6,710,253	$ 164	6,710,089			6,710,253
Other comprehensive loss	(10,001)				(10,001)	(10,001)
Net loss	(15,458,943)			(15,356,423)		(15,356,423)	(102,520)
Stock based compensation, shares		164,473
Balance at Jun. 30, 2022	71,464,317	$ 50,540	267,191,008	(198,295,525)	(11,720)	68,934,303	2,530,015
Balance shares at Jun. 30, 2022		50,540,906
Stock based compensation	358,349		358,349			358,349
Other comprehensive loss	19,457				19,457	19,457
Net loss	(6,073,533)			(6,001,757)		(6,001,757)	(71,776)
Balance at Sep. 30, 2022	65,768,591	$ 50,540	267,549,357	(204,297,282)	7,737	63,310,352	2,458,239
Balance shares at Sep. 30, 2022		50,540,906
Balance at Dec. 31, 2022	61,816,485	$ 50,540	267,549,357	(208,187,210)	3,622	59,416,309	2,400,176
Balance shares at Dec. 31, 2022		50,540,906
Stock based compensation	358,349		358,349			358,349
Other comprehensive loss	(114,095)				(114,095)	(114,095)
Net loss	(3,328,077)			(3,260,437)		(3,260,437)	(67,640)
Balance at Mar. 31, 2023	58,732,662	$ 50,540	267,907,706	(211,447,647)	(110,473)	56,400,126	2,332,536
Balance shares at Mar. 31, 2023		50,540,906
Stock based compensation	358,350		358,350			358,350
Other comprehensive loss	(34,256)				(34,256)	(34,256)
Net loss	(4,290,314)			(4,218,088)		(4,218,088)	(72,226)
Balance at Jun. 30, 2023	54,766,442	$ 50,540	268,266,056	(215,665,735)	(144,729)	52,506,132	2,260,310
Balance shares at Jun. 30, 2023		50,540,906
Stock based compensation	358,350		358,350			358,350
Other comprehensive loss	(34,256)				(34,256)	(34,256)
Net loss	(3,434,872)			(3,362,646)		(3,362,646)	(72,226)
Balance at Sep. 30, 2023	$ 51,655,664	$ 50,540	$ 268,624,406	$ (219,028,381)	$ (178,985)	$ 49,467,580	$ 2,188,084
Balance shares at Sep. 30, 2023		50,540,906

Stockholders’ Equity (Details Narrative) - USD ($)			9 Months Ended
Stockholders’ Equity (Details Narrative) - USD ($)	Aug. 09, 2023	Jun. 01, 2018	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Feb. 15, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reverse stock split	1-for-20 Reverse Stock Split
Preferred stock, shares authorized			1,000,000	1,000,000
Preferred stock, par value			$ 0.001	$ 0.001
Preferred stock, shares issued			0	0
Preferred stock, shares outstanding			0	0
Common stock, shares authorized			500,000,000	500,000,000
Common stock, par value			$ 0.001	$ 0.001
Voting rights			Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders
Common Stock, Shares, Outstanding			2,527,045	2,527,045
Share price			$ 320.00
Number of trading days			20 days
Purchase aggregate shares			19,784
Warrants outstanding			$ 0		$ 194,695
Vested useful life			3 years 7 months 6 days
Beneficial conversion feature			$ 8,480,697
Corresponding debt discount			$ 2,795,000
Trident Acquisitions Corp [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of additional shares issued			5,000,000
Public Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock exercise price			$ 0.20
Minimum days prior written notice of redemption			30 days
Maximum trading days			30 days
Public Warrants [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of warrants to purchase			1,006,250
Public Warrants [Member] \| Auto Lotto LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of warrants to purchase			1,006,250
Unit Purchase Option [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Proceeds from sale of option		$ 100
Share unit exercisable		87,500
Price per unit		$ 240.00
Aggregate exercise price		$ 21,000,000
Cash payment			$ 100
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of warrants to purchase			87,500
Number of share units			87,500
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock exercise price						$ 151.20
Number of warrants to purchase						4,631
Warrants outstanding						$ 194,695

Notes Payable and Convertible Debt (Details Narrative) - USD ($)			3 Months Ended	9 Months Ended	12 Months Ended	26 Months Ended
	Dec. 07, 2022	Oct. 29, 2021	Oct. 31, 2017	Sep. 30, 2023	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2023	Dec. 31, 2022	Oct. 01, 2021	Aug. 31, 2020	Jun. 29, 2020	Aug. 28, 2018
Short-Term Debt [Line Items]
Balance on notes payable				$ 2,336,081				$ 2,336,081
Share price				$ 320.00
Common stock shares issued				2,527,045				2,527,045
Common stock shares outstanding				2,527,045				2,527,045
Woodford Eurasia Assets [Member]
Short-Term Debt [Line Items]
Debt instrument, description	(a) making any loan in excess of $1 million or obtaining any loan in an amount exceeding $1 million without the consent of Woodford, which may not be unreasonably withheld; (b) selling more than $1 million in assets; (c) maintaining less than enough assets to perform our obligations under the Woodford Loan Agreement; (d) encumbering any assets, except in the normal course of business, and not in an amount to exceed $1 million; (e) amending or restating our governing documents; (f) declaring or paying any dividend; (g) issuing any shares which negatively affects Woodford; and (h) repurchasing any shares.
Percentage of shares	15.00%
Common stock shares issued	2,546,264
Common stock shares outstanding	2,546,264
Share price	$ 5.60
Description of event of default	In the event we fail to repay the amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount (i.e., will equal $4.20 per share).
Loan Agreement [Member] \| Wood ford Eurasia Assets Ltd [Member]
Short-Term Debt [Line Items]
Share price	$ 5.60
Ownership percentage	4.99%
Loan Agreement [Member] \| Wood ford Eurasia Assets Ltd [Member]
Short-Term Debt [Line Items]
Principal amount	$ 2,500,000
Interest rate	12.00%
Face amount received	$ 991,000
Increase of debt	52,500,000
Debt additional amount	$ 50,000,000
Debt default percentage	22.00%
Interest percentage price per share	80.00%
Common stock percentage	19.99%
Series A Notes [Member]
Short-Term Debt [Line Items]
Principal amount			$ 821,500
Interest rate			10.00%
Maturity date			Dec. 31, 2022
Balance on notes payable				$ 771,500
Interest expense, debt				318,909
Series B Notes [Member]
Short-Term Debt [Line Items]
Principal amount					$ 38,893,733	$ 8,802,828
Interest rate					8.00%
Maturity date						Dec. 21, 2021
Balance on notes payable							$ 185,095
Debt instrument, interest rate, effective percentage						8.00%
Additional principal amount					$ 3,552,114
Loss on extinguishment					71,812
Convertible notes		$ 185,095
Convertible notes shares		488,226
Accrued interest				61,067
Series B Convertible Notes [Member]
Short-Term Debt [Line Items]
Convertible promissory note balance					$ 0
Short Term Loans [Member]
Short-Term Debt [Line Items]
Principal amount										$ 37,199	$ 150,000
Interest rate											3.75%
Accrued interest				4,874
Balance of loan amount				150,000				$ 150,000
Short Term Loans [Member] \| Note Payable Agreements [Member]
Short-Term Debt [Line Items]
Balance of loan amount				$ 13,000				$ 13,000
Notes Payable [Member]
Short-Term Debt [Line Items]
Principal amount												$ 12,674,635
Interest rate												0.00%
Maturity date					Jun. 30, 2022
Debt instrument, interest rate, effective percentage									4.10%

Property and Equipment, net

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, net

8. Property and Equipment, net

Property and equipment, net as of September 30, 2023 and December 31, 2022, consisted of the following:

Schedule of Property and Equipment

	September 30,			December 31,
	2023			2022

Computers and equipment	$	125,400		$	124,199
Furniture and fixtures		16,898			16,898
Software		2,026,200			2,026,200
Property and equipment		2,168,498			2,167,297
Accumulated depreciation		(2,144,563	)		(2,059,219	)
Property and equipment, net	$	23,935		$	108,078

Depreciation expense was $49,562 for the three months ended September 30, 2023, and was $36,277 for the three months ended December 31, 2022.

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash	$ 63,735	$ 102,766
Restricted cash
Accounts receivable	141,590	208,647
Prepaid expenses	19,265,364	19,409,323
Other current assets	767,423	718,550
Total current assets	20,238,112	20,439,286
Notes receivable	2,000,000	2,000,000
Investments	250,000	250,000
Goodwill	19,590,758	19,590,758
Intangible assets, net	19,848,715	23,982,445
Property and equipment, net	23,935	108,078
Other long term assets	12,884,686	13,009,686
Total assets	74,836,206	79,380,253
Current liabilities:
Trade payables	7,816,313	7,607,633
Deferred revenue	383,929	464,286
Notes payable - current	4,626,652	3,755,676
Accrued interest	695,003	484,172
Accrued and other expenses	8,416,061	4,626,973
Other liabilities	1,242,584	625,028
Total current liabilities	23,180,542	17,563,768
Long-term liabilities:
Convertible debt, net - non current
Other long term liabilities
Total long-term liabilities
Commitments and contingencies (Note 13)
Total liabilities	23,180,542	17,563,768
Controlling Interest
Preferred Stock, par value $0.001, 1,000,000 shares authorized, none issued and outstanding
Common stock, par value $0.001, 500,000,000 shares authorized, 2,527,045 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	2,527	2,527
Additional paid-in capital	268,672,419	267,597,370
Accumulated other comprehensive loss	(139,853)	3,622
Accumulated deficit	(219,070,712)	(208,187,210)
Total Lottery.com Inc. stockholders’ equity	49,464,381	59,416,309
Noncontrolling interest	2,191,283	2,400,176
Total Equity	51,655,664	61,816,485
Total liabilities and stockholders’ equity	$ 74,836,206	$ 79,380,253

Other Long Term Assets

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Long Term Assets

9. Other Long Term Assets

In the Spring of 2022, the Company made an investment of $16.5 million with a subsidiary of J. Streicher Financial, LLC. In the Summer of 2023, when the Company sought return of part of all of the investment, the Streicher subsidiary was unable to return the funds. The Company sued Streicher in Delaware Chancery Court and won a judgement against Streicher on September 6, 2022. The company is currently pursuing collection against the judgement.

Definitive terms for payment from Streicher have not been agreed upon by the parties and the Company anticipates that Streicher will pay it over a period of time that may exceed one year. While the Company expects to recover from Streicher 100% of its attorney fees incurred in connection with the Delaware Chancery Court proceedings, as a conservative measure it reduced the total amount owed from $16.5 million to $15 million, which difference represents attorney fees related to winning the judgement. Because the payments are expected to be received over time, the company discounted the cash flows and recorded a net amount of $13,009,685 after allowing for attorney fees and applying discounting and reported that amount in its financial statements from March 31, 2022 to December 31, 2022. During the first quarter of 2023, Streicher made payments totaling approximately $125,000 reducing the balance to $12,884,686. Because the timing of receipt from Streicher has not been agreed to and may extend beyond one year, the Company is presenting this balance as a long term asset.

Notes Receivable

9 Months Ended

Sep. 30, 2023

Credit Loss [Abstract]

Notes Receivable

6. Notes Receivable

On March 22, 2022, the Company entered into a three-year secured promissory note agreement with a principal amount of $2,000,000. The note bears simple interest at the rate of approximately 3.1% annually, due upon maturity of the note. The note is secured by all assets, accounts, and tangible and intangible property of the borrower and can be prepaid any time prior to its maturity date. As of September 30, 2023, the entire $2,000,000 in principle was outstanding.

This note was received in consideration for a portion of the development work that the Company performed for the borrower who had intended to use the Company’s technology to launch its own online game in a jurisdiction outside the U.S., where the Company is unlikely to operate.

Stockholders’ Equity

9 Months Ended

Sep. 30, 2023

Equity

Stockholders’ Equity

11. Stockholders’ Equity

Reverse Split

On 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. At 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. Stockholders 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 will be 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. The Reverse 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.

The effects of the Reverse Stock Split have been reflected in this Quarterly Report on Form 10-Q for all periods presented.

Preferred Stock

Pursuant to the Company’s charter, the Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.001 per share. Our Board of Directors has the authority without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock. As of June 30, 2023, there were no shares of preferred stock issued and outstanding.

Common Stock

Our Certificate of Incorporation, as amended, authorizes the issuance of an aggregate of 500,000,000 shares of common stock, par value $0.001 per share. The shares of common stock are duly authorized, issued, fully paid and non-assessable. Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the DGCL. Unless our Board determines otherwise, we will issue all shares of our common stock in uncertificated form. Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. The holders of common stock do not have cumulative voting rights in the election of directors. Upon our liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our common stock will be entitled to receive pro rata our remaining assets available for distribution.

As of both September 30, 2023 and December 31, 2022, 2,527,045 shares of common stock were outstanding. During the three months ended September 30, 2023, the Company did not issue any additional shares of common stock.

Public Warrants

The Public Warrants became exercisable 30 days after the Closing as the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The S-1 registration became effective November 24, 2021. The Public Warrants will expire five years after October 29, 2021, which was the completion of the TDAC Combination or earlier upon redemption or liquidation.

The Company may redeem the Public Warrants:

	●	in whole and not in part;
	●	at a price of $0.20 per warrant;
	●	upon a minimum of 30 days’ prior written notice of redemption;
	●	if, and only if, the last sale price of the Company’s common stock equals or exceeds $320.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
	●	if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. These warrants cannot be net cash settled by the Company in any event.

After giving effect to the Business Combination, there were 1,006,250 warrants to purchase shares of Common stock outstanding, 1,006,250 of which are Public Warrants and two of which were previously granted warrants of AutoLotto, which are now warrants of Lottery.com and are exercisable to purchase an aggregate of 19,784 shares of common stock.

Schedule of Public Warrants

					Weighted
			Weighted		Average
			Average		Remaining
	Number of		Exercise		Contractual
	Shares		Price		Life (years)

Outstanding at December 31, 2022		24,415	$	30.40		2.8
Granted		-		-		-
Exercised		-		-		-
Forfeited/cancelled		-		-		-
Outstanding at September 30, 2023		24,415		30.40		2.1

Exercisable at September 30, 2023		24,415	$	30.40		2.1

Private Warrants

Private warrants of TDAC issued before the business combination were forfeited and did not transfer to the surviving entity.

Unit Purchase Option

On June 1, 2018, the Company sold to the underwriter (and its designees), for $100, an option to purchase up to a total of 87,500 Units exercisable at $240.00 per Unit (or an aggregate exercise price of $21,000,000) commencing on the consummation of the Business Combination. The 87,500 Units represented the right to purchase 87,500 shares of common stock and 87,500 warrants to purchase 87,500 shares of common stock. The unit purchase option could be exercised for cash or on a cashless basis, at the holder’s option, and expired on May 29, 2023. The Company accounted for the unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the Business Combination resulting in a charge directly to stockholders’ equity.

Common Stock Warrants

On February 15, 2022, the Company issued warrants to purchase an aggregate 4,631 shares of the Company’s common stock at an exercise price of $151.20 per share. The warrants were valued at $194,695 using a Black-Scholes pricing model.

Schedule of Fair Value of Assumptions

	Issuance dates
Risk-free interest rate		1.80	%
Expected dividend yield		0	%
Expected volatility		113.17	%
Term		3 years
Fair value of common stock	$	3.75

The Company did not issue any other warrants during the nine months ended September 30, 2023 or the year ended December 31, 2022. All outstanding warrants are fully vested and have a weighted average remaining contractual life of 3.6 years. The Company incurred expenses related to outstanding warrants of $0 and $194,695 for the nine months ended September 30, 2023 and 2022, respectively.

Beneficial Conversion Feature – Convertible Debt

As detailed in Note 8 – Notes Payable and Convertible Debt, the Company has issued two series of convertible debt. Both issuances resulted in the recognition of the beneficial conversion features contained within both of the instruments. The Company recognized the proceeds allocable to the beneficial conversion feature of $8,480,697 as additional paid in capital and a corresponding debt discount of $2,795,000. This additional paid in capital is reflected in the condensed consolidated Statements of Equity for the three months ended September 30, 2023 and the year ended December 31, 2022.

Earnout Shares

As detailed in Note 3 – as part of the TDAC Combination which occurred in October of 2021 a total of 5,000,000 Earnout Shares were eligible for issuance, subject to the occurrence of certain conditions, until December 31, 2022. Conditions required for earning those shares were not met, accordingly no Earnout Shares remain eligible for issuance.

- Definition

The entire disclosure for equity.

+ References

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+ Details