Part I. Financial Information [Consolidated Financial Statements](index=7&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The unaudited financial statements for H1 2022 reveal significant distress, including a cash drop, increased liabilities, a large net loss, and operational cessation [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The June 30, 2022 balance sheet shows a severe cash decline, quadrupled liabilities due to a contingent liability, and decreased total equity Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | June 30, 2022 | Dec 31, 2021 (Restated) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $369,322 | $32,638,970 | | Restricted Cash | $30,000,000 | $0 | | Total current assets | $51,457,944 | $55,840,989 | | Total assets | $113,633,386 | $104,534,006 | | **Liabilities & Equity** | | | | Total current liabilities | $12,167,546 | $10,532,638 | | Commitments & Contingencies | $30,000,000 | $0 | | Total liabilities | $42,169,068 | $10,533,807 | | Accumulated deficit | $(198,295,525) | $(148,188,138) | | Total Equity | $71,464,318 | $94,000,199 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2022 revenue plummeted 81% year-over-year, leading to a $15.4 million net loss, while the H1 2022 net loss widened to $50.1 million Q2 2022 vs Q2 2021 Performance (Unaudited) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | | :--- | :--- | :--- | | Revenue | $1,885,171 | $9,878,497 | | Gross Profit | $307,932 | $8,815,142 | | Total operating expenses | $15,910,316 | $7,743,321 | | Income (loss) from operations | $(15,602,384) | $1,071,821 | | Net loss attributable to Lottery.com | $(15,356,422) | $(1,418,571) | | Basic and diluted EPS | $(0.30) | $(0.06) | H1 2022 vs H1 2021 Performance (Unaudited) | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Revenue | $5,515,863 | $15,340,036 | | Gross Profit | $1,553,882 | $11,329,700 | | Total operating expenses | $47,837,234 | $13,010,145 | | Loss from operations | $(46,283,352) | $(1,680,445) | | Net loss attributable to Lottery.com | $(50,107,386) | $(6,874,605) | | Basic and diluted EPS | $(1.00) | $(0.29) | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2022, the company used $0.6 million in operating cash and saw a net decrease in total cash of $2.3 million Cash Flow Summary for Six Months Ended June 30 (Unaudited) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(599,509) | $(4,334,560) | | Net cash used in investing activities | $(1,179,978) | $(3,107,452) | | Net cash (used in) provided by financing activities | $(479,096) | $14,535,596 | | **Net Change in Cash and Restricted Cash** | **$(2,269,648)** | **$7,093,584** | | Cash and Restricted Cash - End of Period | $30,369,322 | $7,252,076 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes disclose an operational cessation in July 2022, substantial doubt about its going concern status, and critical subsequent events like new financing - On July 28, 2022, the Board determined the company **lacked sufficient financial resources** to fund operations, leading to an effective cessation of operations and furloughing of employees starting July 29, 2022[31](index=31&type=chunk)[162](index=162&type=chunk) - Management has concluded that there is **substantial doubt about the Company's ability to continue as a going concern** due to recurring net losses, negative cash flows, and an accumulated deficit of approximately **$198 million**[36](index=36&type=chunk)[38](index=38&type=chunk) - As of June 30, 2022, the company had **restricted cash of $30,000,000** pledged as collateral, which was later seized by the bank in October 2022 to extinguish a partner's debt[149](index=149&type=chunk) - Subsequent to the quarter end, the company secured a loan agreement with Woodford Eurasia Assets, Ltd on December 7, 2022, for up to **$2.5 million**, crucial for restarting operations[169](index=169&type=chunk) - Several notes payable are in default, including Series A Notes with an outstanding balance of **$771,500** and notes related to the TinBu acquisition with a balance of **$2,357,744**[108](index=108&type=chunk)[116](index=116&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses severe operational challenges, an internal investigation revealing control issues, the cessation of operations, and a plan for recommencement [Recent Developments](index=37&type=section&id=Recent%20Developments) An internal investigation uncovered non-compliance and control issues, leading to an operational halt and a new loan agreement to secure liquidity - An independent investigation revealed **non-compliance with state and federal laws** and issues with internal accounting controls, leading to the termination of the CFO on July 1, 2022[183](index=183&type=chunk) - On July 29, 2022, the company **effectively ceased operations** and furloughed the majority of its employees due to insufficient financial resources[186](index=186&type=chunk) - On December 7, 2022, the company secured a loan agreement with Woodford for up to **$2.5 million** to restart operations, which accrues interest at 12% and is convertible into common stock[192](index=192&type=chunk) [Operations and Plans for Recommencement](index=39&type=section&id=Operations%20and%20Plans%20for%20Recommencement) The company has a three-phase plan to restart its core B2B and B2C platforms, contingent on securing sufficient capital - The company has a **three-phase plan to recommence operations**: - **Phase 1:** Relaunch B2B API Platform (resumed limited operations in April 2023) - **Phase 2:** Resume B2C Platform Operations (expected Q3 2023) - **Phase 3:** Restore other business lines and projects[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - Despite the operational halt of the parent company, wholly-owned subsidiaries **TinBu (Data Services), Aganar, and JuegaLotto (Mexico operations) have continued to operate**[206](index=206&type=chunk)[207](index=207&type=chunk)[210](index=210&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Q2 2022 revenue fell 81% due to non-recurring project revenue, while operating expenses surged 105%, resulting in a $15.4 million net loss Comparison of Three Months Ended June 30, 2022 and 2021 | Metric | Q2 2022 | Q2 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $1,885,171 | $9,878,497 | (81)% | | Gross Profit | $307,932 | $8,815,142 | (97)% | | Total Operating Expenses | $15,910,316 | $7,743,321 | 105% | | Loss from Operations | $(15,602,384) | $1,071,821 | (1,556)% | | Net Loss | $(15,448,941) | $(1,418,571) | 1,159% | - The primary driver for the Q2 revenue decrease was **$8.0 million of non-recurring project-related revenue** from business partners in Q2 2021[244](index=244&type=chunk) - Personnel costs for Q2 2022 surged by **370% to $9.5 million**, mainly due to a **$6.7 million increase in stock compensation expense**[247](index=247&type=chunk)[248](index=248&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company's critical liquidity position relies solely on a new loan agreement, and its financial state raises substantial doubt about its going concern status - The company's primary source of liquidity is a loan agreement with Woodford, with **$1.25 million remaining available**[273](index=273&type=chunk) - The company's current financial state, lack of revenue, and significant debt raise **substantial doubt about its ability to continue as a going concern** for the next 12 months[274](index=274&type=chunk) Cash Flow Summary for Six Months Ended June 30 | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(0.6M) | $(4.3M) | | Net cash used in investing activities | $(1.2M) | $(3.1M) | | Net cash (used in)/provided by financing activities | $(0.5M) | $14.5M | [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Lottery.com Inc is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide this information as it qualifies as a **'smaller reporting company'**[288](index=288&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of June 30, 2022, due to material weaknesses in internal control over financial reporting - Management concluded that **disclosure controls and procedures were not effective** as of the end of the reporting period[290](index=290&type=chunk) - **Material weaknesses** were identified in internal control over financial reporting, including a lack of sufficient accounting personnel and ineffective review processes[291](index=291&type=chunk) - A specific control deficiency related to revenue recognition resulted in an **overstatement of revenue by approximately $52.1 million** for the year ended December 31, 2021, which required a restatement[292](index=292&type=chunk) - The company is implementing remediation steps, but these measures are **not yet fully remediated**[293](index=293&type=chunk) Part II. Other Information [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in several material legal proceedings, including a class-action lawsuit and a breach of contract complaint - **J. Streicher Lawsuit:** The company sued J. Streicher Financial to recover **$16.5 million** and won a summary judgment, though collection efforts are ongoing[298](index=298&type=chunk) - **Preston Million Class Action:** A securities class-action lawsuit was filed against the company and former officers/directors, alleging **materially false and misleading statements**[299](index=299&type=chunk) - **TinBu Complaint:** Former owners of TinBu, LLC filed a complaint against the company alleging breach of contract and misrepresentation, seeking damages over **$4.6 million**[300](index=300&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) The report refers to the company's Amended Annual Report on Form 10-K/A for a detailed description of risk factors - For a detailed discussion of risk factors, the report directs readers to the **'Risk Factors' section of its Amended Annual Report on Form 10-K/A**[301](index=301&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=54&type=section&id=Other%20Items) No material information was reported under Items 2-5 for the quarter, while Item 6 lists the exhibits filed with the report - No information was reported for Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information)[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk) - Item 6 lists exhibits filed with the 10-Q, including a Business Loan Agreement and officer certifications[306](index=306&type=chunk)

Revenue and Profitability - Revenue for the three months ended March 31, 2022, was $21,150,892, a significant increase from $5,461,539 in the same period of 2021, representing a growth of approximately 287%[17] - Gross profit for the same period was $17,985,423, compared to $2,514,558 in 2021, indicating a gross margin improvement[17] - Gaming revenue decreased to $2,301,275 in Q1 2022 from $3,232,448 in Q1 2021, while other revenue surged to $18,849,617 from $2,229,091[166] - For the three months ended March 31, 2022, total revenues for Lottery.com and Global Gaming combined were $6,500,276, while the net loss attributable to shareholders was $(5,463,205)[85] - The company reported transactions per user increased to 12.58 in Q1 2022 from 9.46 in Q1 2021, indicating improved user engagement[190] - Gross revenue per transaction decreased to $8.75 in Q1 2022 from $10.16 in Q1 2021, reflecting pricing trends and market conditions[190] Expenses and Losses - The net loss attributable to Lottery.com Inc. for Q1 2022 was $15,687,753, compared to a net loss of $5,456,034 in Q1 2021, reflecting a year-over-year increase in losses[17] - Operating expenses for Q1 2022 totaled $33,804,723, a substantial increase from $5,266,824 in Q1 2021, primarily driven by personnel costs[17] - Total operating expenses for the three months ended March 31, 2022, were $33,804,723, a 542% increase from $5,266,824 in the same period in 2021[212] - The company expects to incur greater operating expenses in the short term to maintain its competitive edge and support growth initiatives, including merger and acquisition activities[211] Assets and Liabilities - Total current assets increased to $99,682,065 as of March 31, 2022, up from $98,458,461 at the end of 2021[16] - Cash and cash equivalents decreased to $50,795,889 as of March 31, 2022, down from $62,638,970 at the end of 2021[16] - Total liabilities as of March 31, 2022, were $10,845,303, slightly up from $10,146,454 at the end of 2021[16] - As of March 31, 2022, net property and equipment amounted to $121,293, a decrease from $141,279 as of December 31, 2021, reflecting a depreciation expense of $38,291 for the three months ended March 31, 2022[86] Stock and Equity - The company reported a basic and diluted net loss per common share of $0.33 for Q1 2022, compared to $0.24 for Q1 2021[17] - The weighted average common shares outstanding for basic and diluted calculations were 46,832,919 for Q1 2022, up from 22,888,700 in Q1 2021[153] - The Company recognized a beneficial conversion feature of $8,480,697 as additional paid-in capital related to its convertible debt[143] - The Company issued multiple Convertible Promissory Notes totaling $38,893,733 during the year ended December 31, 2021, with a balance of $0 for Series B Convertible Notes as of that date[121] Acquisitions and Business Combinations - The company completed a business combination with AutoLotto on October 29, 2021, which resulted in a change of name and headquarters to Spicewood, Texas[25] - The total purchase price for the acquisition of Global Gaming was $10,989,691, consisting of $10,530,000 in cash and 687,439 shares of common stock valued at $0.67 per share[81] - The acquisition of Global Gaming included an 80% ownership interest, grossed up to $13,215,843 to reflect the 20% minority interest in the acquirees[81] - The company accounted for the business combination as a reverse recapitalization, treating AutoLotto as the accounting acquirer[74] Revenue Recognition and Business Model - The company recognizes revenue when control of the promised goods or services is transferred to customers, in accordance with ASC 606[56] - The company operates a B2C platform for remote lottery purchases and a B2B API for commercial partners, focusing on both domestic and international markets[26] - The company derives revenue from LotteryLink Credits, service fees from the B2C platform, revenue share from the B2B API, and subscription fees from its Data Service[171] Future Plans and Developments - The company is developing Project Nexus, a proprietary blockchain-enabled gaming platform aimed at improving user experience and handling high volumes of traffic, with the initial phase implemented in Q2 2022[180] - The company expects to grow its brand through the WinTogether platform, which supports charitable causes and incentivizes donations through sweepstakes, potentially providing a scalable source of revenue[172] - The company aims to expand its B2C offerings into new domestic and international jurisdictions and enter additional agreements for its B2B API[171] Miscellaneous - The company launched LotteryLink, an affiliate marketing program, in Q3 2021, which allows affiliates to earn a percentage of revenues from new customers they refer[182] - The company acquired the domain name sports.com in December 2021, exploring opportunities in legal sports gaming, including sports lottery games[171] - The company had no income tax expense or benefit recorded for the three months ended March 31, 2022 or 2021[154]

Financial Data and Key Metrics Changes - First quarter revenue was $21.2 million, representing a 287% increase from the first quarter of 2021 [19] - Adjusted EBITDA totaled $7.7 million, compared to negative adjusted EBITDA of $2.6 million in the first quarter of 2021 [25] - The company ended the quarter with nearly $51 million in cash and only $3.5 million in debt [17][26] Business Line Data and Key Metrics Changes - Revenue growth was driven by the sale of LotteryLink credits to affiliates, which were used for various services [19] - Gross profit was $18 million, up $15.5 million from the previous year [19] - Operating expenses were $33.8 million, including $22.2 million related to restricted stock awards [21] Market Data and Key Metrics Changes - The lottery market in the US presents a significant opportunity with over $100 billion in annual sales, with only about 5% of these purchases being online [28] - The company anticipates receiving approvals to operate in five new domestic jurisdictions by the end of 2022 [34] Company Strategy and Development Direction - The company is focusing on expanding its LotteryLink program to grow its user base efficiently [29] - Project Nexus has been launched to improve capability, security, and scalability, which will support marketing efforts [33] - The company is expanding its direct-to-consumer advertising campaigns targeting audiences with the highest return on investment [36] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the affiliate model as the most effective way to expand the user base [29] - The company is optimistic about scaling its marketing campaigns and improving customer acquisition costs [39] - Management noted that the initial success of the grocery promotional program has provided valuable insights for future campaigns [31] Other Important Information - The company has a strong balance sheet, which provides the necessary capital to invest in strategic growth initiatives [18] - The company is working to bring more responsibilities in-house to reduce public company expenses [23] Q&A Session Summary Question: Expected returns on direct-to-consumer marketing dollars - Management indicated that the return on investment remains strong with a lifetime value (LTV) of about $175 per user [46] Question: Timeline for ramping direct-to-consumer sales - Management expects to see some results in the current quarter, with growth continuing moving forward [47] Question: Reason for suspending LotteryLink campaign - The suspension was due to a contractual conflict with the state lottery in that jurisdiction [49] Question: Confidence in collecting receivables - Management expressed confidence in collecting the receivables, noting that half are not due until the end of the quarter [56]

Market Overview - The global lottery market was valued at $318 billion in gross sales in 2020, with a forecast to exceed $550 billion by 2025[37]. - In 2021, total U.S. lottery sales increased to $106 billion, reflecting a 17% increase compared to 2020, with instant ticket sales rising 13% to $72 billion and draw-based sales increasing by 24% to $33 billion[54]. - Online Lottery gross sales in the U.S. increased more than 28% year-on-year to $5.1 billion in 2021, representing approximately 5% of total U.S. lottery game sales[59]. - Sales of draw lottery games comprised 54.5% of the overall global lottery market in 2020, anticipated to grow at approximately 9.0% CAGR from $194 billion in 2020 to nearly $300 billion in 2025[42]. - Scratch lottery games accounted for 26.6% of the global lottery market in 2020, expected to increase approximately 58% from $95 billion in 2020 to $150 billion in 2025[44]. - Sports lottery games represented 18.9% of the global lottery market in 2020, projected to grow approximately 51% from $67 billion in 2020 to $101 billion in 2025[49]. - The Asia-Pacific region held a 37.1% market share of all lottery sales in 2020, while Europe accounted for 31.9%[52]. - The U.S. total sports betting market, including sports lottery betting, had gross sales of $57.7 billion in 2021, an increase of 167% from 2020[55]. - The estimated lottery game market in Latin America was approximately $9.1 billion across 26 countries as of December 31, 2020, with a total addressable market of 664 million people[121]. Company Operations and Revenue - The company derives revenue primarily from service fees on its B2C Platform, LotteryLink Credits sales, revenue share from B2B API partners, and Data Service subscriptions[17]. - As of December 31, 2021, the B2C Platform was available in 12 U.S. jurisdictions and multiple international jurisdictions[20]. - The company completed the acquisition of the domain name https://sports.com in December 2021, aiming to enter legal sports gaming verticals[17]. - The company launched its affiliate marketing program, LotteryLink, in Q3 2021, compensating affiliates for new customer referrals[27]. - The company provides daily lottery results from over 40 countries to more than 400 digital publishers and media organizations[35]. - The company holds a retail lottery license issued by the Texas Lottery Commission[25]. - The B2B API allows commercial partners to access legally operated lottery games for resale, with revenue sharing on each lottery game purchased[31]. - The company delivered approximately 2.6 million lottery games to users of the B2C Platform worldwide in 2021, with an average of 37,000 daily users[75]. - In 2021, the company delivered over 333,485 lottery games to end users through its B2B API, with agreements in place with three international and one U.S. commercial partner[86]. - The company sold approximately 2.9 million unique lottery games in 2021, representing a 123% year-over-year increase from 1.3 million in 2020[103]. - As of December 31, 2021, the company generated more than $7.2 million in lottery game sales across 12 jurisdictions in the U.S., which represented less than 0.1% of total U.S. lottery game sales[112]. Technology and Innovation - The company is exploring opportunities to enhance its technology, including distributed ledger technology[17]. - The company is developing Project Nexus, a proprietary blockchain-enabled online gaming platform, expected to handle high levels of user traffic and transaction volume while ensuring security and reliability[126]. - The company anticipates launching a fee-based subscription service for exclusive lottery game pools and premium lottery prediction data, which is expected to attract new users[124]. - The company aims to leverage distributed ledger technology to enhance the security and transparency of its platform, ensuring that all transaction data is immutable and resistant to cyber-attacks[130]. Marketing and User Acquisition - The average customer acquisition cost per new user remained unchanged at $4.26 in 2021, with no digital marketing expenses incurred[74]. - The company launched its global affiliate marketing program, LotteryLink, in Q3 2021 to attract new customers and convert them to ongoing users[77]. - The average customer acquisition cost since 2020 is $4.01 per new user, which may increase due to new marketing campaigns launched in early 2022[138]. - The company aims to attract and retain users through sophisticated marketing efforts, which may increase costs and affect return on investment[187]. Compliance and Regulatory Environment - The company is committed to compliance with underage and responsible gambling requirements, with know-your-customer measures in place to prevent minors from using its services[161]. - The company is developing a comprehensive internal compliance program and has hired a Vice President of Compliance to ensure adherence to legal requirements[163]. - The company has not faced any legal claims related to lottery prize distribution since its inception, indicating strong compliance and operational integrity[134]. - The company is subject to evolving regulations in internet gaming, which could impact its strategy and operations[208]. - The company is monitoring the potential impact of the 2019 Opinion regarding the Wire Act, which could affect its operations if interpreted to apply to lottery games[150]. Financial Performance - The company experienced net losses of approximately $9.30 million for the year ended December 31, 2021, with an accumulated deficit of approximately $104.44 million as of the same date[198]. - The company anticipates an increase in operating expenses as it continues to invest in future growth, which may negatively affect results if total revenue does not increase correspondingly[199]. - Economic downturns and inflation could adversely affect the company's business, financial condition, and results of operations, as seen during the 2008 financial crisis[180]. Competitive Landscape - The company is subject to intense competition in the global entertainment and gaming industries, which could negatively impact its market share and financial performance[177]. - The company expects to face intense competition in the internet gaming sector, which may hinder its ability to offer technology and services effectively[209]. - The company believes that competition for new users will remain low due to significant growth potential in the online lottery segment[139]. - The company believes that its competitive advantage lies in its brand name, proprietary technology, and synergies from its various platforms[139]. Employee and Organizational Development - As of December 31, 2021, the company had a total of 43 full-time employees, an increase from 20 in 2020, and 7 part-time employees, up from 5 in 2020[165]. - The company is developing learning functionality to enhance employee skills in line with business requirements and compliance best practices[168]. Risks and Challenges - The company faces risks related to negative public perception of lottery games, which could impact user retention and revenue[185]. - The company faces risks related to corporate social responsibility and reputation, which could materially affect its business if not managed properly[195]. - The company operates in a public-facing industry where negative publicity can rapidly affect its brand and revenue[214]. - The company has registered domain names critical to its business, and losing access to these could incur significant costs and harm its brand[192]. - The company must continually invest in product development to maintain market acceptance and attract users, as failure to do so could lead to decreased revenues[204].

Market Overview - The U S lottery market reached $106 billion in 2021, a 16% increase from 2020[10] - Online lottery sales represent only 5% of the total U S lottery market in 2021, indicating significant growth potential[10, 11] Financial Performance - Lottery com's 2021 revenue was $68 5 million, an increase of $61 1 million year-over-year[10] - The company's 2021 adjusted EBITDA was $31 1 million, an improvement of $34 2 million year-over-year[10] - Q4 2021 revenues reached $21 5 million, up $18 2 million or 559% from Q4 2020[34] - FY21 pro forma revenues were $70 5 million, driven by LotteryLink credits and including the full-year impact of acquired interests in Mexico[34] Business Initiatives - Lottery com operates in 12 U S jurisdictions and multiple jurisdictions outside the U S, with plans to enter five new U S jurisdictions by the end of 2022[26] - The average customer acquisition cost for U S B2C Lottery com users is $27, with a customer lifetime value of $92[26, 27] - The average customer acquisition cost for international B2C Lottery com users is $32, with a customer lifetime value of $110[27]

Lottery.com Inc. (NASDAQ:LTRY) Q4 2021 Earnings Conference Call March 31, 2022 8:30 AM ET Company Participants Matthew Schlarb - VP Investor Relations Tony DiMatteo - Co-founder and CEO Ryan Dickinson - President and CFO Katie Lever - Chief Legal Officer and COO Conference Call Participants Operator Good day ladies and gentlemen, and welcome to the Lottery.com Fourth Quarter and Full Year 2021 Conference Call. [Operator Instructions] As a reminder, this conference may be recorded. I would now like to introd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38508 Lottery.com Inc. (Exact name of registrant as specified in its charter) Delaware 81-1996183 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (State or other jurisdiction of incorporation or organization) FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38508 TRIDENT ACQUISITIONS CORP. (Exact name of registrant as specifi ...

Business Combination - The proposed business combination with Lottery.com involves a total consideration of approximately $444 million, calculated based on 40,000,000 shares of common stock at $11.00 per share [139]. - Upon closing, Lottery.com shareholders may receive up to 6,000,000 additional shares based on performance milestones related to the stock price [139]. - The business combination with Lottery.com requires stockholder approval and the effectiveness of a registration statement with the SEC [140]. - The company has extended the deadline for completing a business combination multiple times, with the latest extension to September 1, 2021 [146]. Financial Performance - As of March 31, 2021, the company reported a net income of $200,913, driven by a gain on the change in fair value of derivative liabilities of $853,000 and interest income of $933 [149]. - Cash used in operating activities for the three months ended March 31, 2021, was $474,001, with net income affected by various factors including a gain on derivative liabilities [152]. - The company has not generated any operating revenues to date and only incurs expenses related to being a public company and due diligence for the proposed acquisition [148]. - The company applies the two-class method in calculating earnings per share, with net income (loss) per common share calculated based on interest income earned on the Trust Account [172]. Cash and Investments - The company had marketable securities held in the Trust Account amounting to $63,366,019, including approximately $1,497,000 of interest income [151]. - As of March 31, 2021, the company had cash of $114,036 held outside the Trust Account, intended for identifying and evaluating target businesses [155]. - The company intends to use substantially all funds in the Trust Account for acquiring a target business and related expenses [154]. - The company has invested the net proceeds from the Initial Public Offering in U.S. government treasury bills or money market funds, minimizing exposure to interest rate risk [175]. Capital Needs - The company may need to raise additional capital through loans or investments from initial stockholders, officers, or directors to meet working capital needs [162]. - Up to $200,000 of loans may be convertible into Private Units at a price of $10.00 per unit at the lender's option [161]. Fees and Obligations - The underwriter is entitled to a deferred fee of 2.5% of the gross proceeds of the Initial Public Offering, amounting to $5,031,250, payable upon the closing of a Business Combination [165]. - The company has no long-term debt or capital lease obligations, with a monthly fee of $7,500 payable to VK Consulting, Inc. for services [164]. - Common stock subject to possible redemption is classified as temporary equity and presented at redemption value [171]. - The company does not have any off-balance sheet arrangements as of March 31, 2021 [163]. Accounting and Management - Management does not believe that recently issued accounting standards will materially affect the financial statements for the periods ended March 31, 2021 [173].

Business Combination - The proposed business combination with Lottery.com involves an aggregate consideration of approximately $444 million, calculated as 40,000,000 shares of common stock at $11.00 per share [138]. - Lottery.com shareholders may receive up to 6,000,000 additional shares based on performance metrics related to the stock price, with specific thresholds set at $13.00 and $16.00 per share [139]. Financial Performance - For the year ended December 31, 2020, the company reported a net loss of $809,047, with operating costs totaling $1,385,738 [148]. - Cash used in operating activities for the year ended December 31, 2020, was $1,848,754, influenced by interest earned on marketable securities and changes in operating assets and liabilities [151]. - The company has not engaged in any operations or generated revenues to date, focusing solely on organizational activities and preparing for the Initial Public Offering [146]. Cash and Securities - As of December 31, 2020, the company had marketable securities held in the trust account amounting to $63,405,336, including approximately $1,537,000 of interest income [150]. - The company had cash of $972,787 held outside the trust account as of December 31, 2020, intended for identifying and evaluating target businesses [154]. - The company intends to use substantially all funds in the trust account for acquiring a target business and related expenses, with remaining proceeds for working capital [153]. - The company may need to raise additional capital through loans or investments from initial stockholders, officers, or directors to meet working capital needs [161]. Debt and Obligations - The company has no long-term debt or capital lease obligations, only a monthly fee of $7,500 to VK Consulting for services [163]. - The underwriter is entitled to a deferred fee of 2.5% of the gross proceeds from the Initial Public Offering, amounting to $5,031,250, payable upon the closing of a Business Combination [164]. - A warrant solicitation fee of 5% of the exercise price of each Public Warrant exercised will be paid to the underwriter, with no maximum limit except for the number of Public Warrants outstanding [165]. Stockholder Equity - Stockholders redeemed an aggregate of approximately $137,130,484 (or approximately $10.48 per share) during the Annual Meeting held on November 26, 2019 [142]. - Common stock subject to possible redemption is classified as temporary equity and presented at redemption value outside of stockholders' equity [167]. - Net (loss) income per common share is calculated using the two-class method, with specific calculations for redeemable and non-redeemable common stock [168]. Investment Strategy - The company has invested the net proceeds from the Initial Public Offering in U.S. government treasury bills and money market funds, minimizing exposure to interest rate risk [170].