Financial Performance - Total revenue for the three months ended March 31, 2025, was $223,849, a decrease of 13.7% compared to $259,319 in the same period of 2024[18]. - Gross profit for Q1 2025 was $61,381, down 65% from $175,532 in Q1 2024[18]. - Operating expenses decreased to $3,541,363 in Q1 2025 from $5,770,361 in Q1 2024, representing a reduction of 38.5%[18]. - Net loss attributable to Lottery.com Inc. for Q1 2025 was $3,306,468, compared to a net loss of $5,594,337 in Q1 2024, indicating an improvement of 41.5%[18]. - The company reported a comprehensive loss of $3,323,740 for Q1 2025, compared to a comprehensive loss of $5,651,658 in Q1 2024[18]. Cash and Assets - Cash and restricted cash at the end of Q1 2025 totaled $468,677, significantly up from $68,035 at the beginning of the year[23]. - Total assets increased to $53,439,131 as of March 31, 2025, compared to $52,942,271 as of December 31, 2024[17]. - Total current liabilities rose to $31,532,777 in Q1 2025 from $30,397,442 in Q4 2024, an increase of 3.7%[17]. - The Company reported an accumulated deficit of approximately $266.8 million and negative working capital of approximately $15.0 million as of March 31, 2025[36]. Strategic Operations - The company moved its headquarters to Fort Worth, Texas, in September 2024, indicating a strategic shift in operations[25]. - The Company completed the acquisition of Spektrum Ltd for $1.5 million in common stock at $3 per share, supporting its strategic expansion and development of Lottery.com International[32]. - The Company resumed ticket sales operations on a limited basis on April 25, 2023, to support its affiliate partners through its Texas retail network[30]. - The Company launched the Sports.com app in 2024, providing users worldwide with access to curated sports content[31]. - The Company has made significant efforts to resume core lottery and gaming operations and expand the Sports.com brand globally, as evidenced by recent investment commitments[167]. Compliance and Governance - The company received a letter from Nasdaq indicating it did not meet the minimum requirement of $5 million in Market Value of Publicly Held Shares but was granted a 180-day grace period to regain compliance[178]. - The company successfully regained compliance with Nasdaq listing requirements on April 10, 2024, after its Market Value of Publicly Held Shares closed at $5 million or more for ten consecutive business days[179]. - The company has appointed Mr. Marc Bircham as an Executive Director to its Board of Directors on May 13, 2025[164]. Acquisitions and Market Expansion - The Company acquired Global Gaming in June 2021, which holds 80% equity in Aganar and JuegaLotto, expanding its operations in the Latin American lottery market[201]. - The estimated size of the Latin American lottery market is $0.68 billion, with a projected compound annual growth rate of 6.05% through 2028[202]. - The Company acquired TinBu, LLC, a digital publisher providing lottery data results, enhancing its Data Service to deliver daily results for over 800 lottery games from more than 40 countries[208]. - The company is acquiring Nook Holdings Limited for approximately $2.314 million, with plans to close the transaction in Q2 2025[212]. - Nook has procured 200 licenses in the sports, health, and wellness sector, providing services to entrepreneurs in the Middle Eastern market[212]. Financial Obligations and Funding - The company has outstanding payroll obligations of approximately $4.08 million as of March 31, 2025, which remain unpaid following operational cessation[171]. - A loan of $67,941 was provided by the Chief Financial Officer at zero percent interest, which was repaid in full through the issuance of common stock in February 2025[160]. - The Company entered into a loan agreement with Woodford Eurasia for up to $52.5 million, with $798,351 received by December 31, 2023, accruing interest at 12% per annum[185]. - The Woodford Loan Agreement allows for conversion into shares at a price of $5.60 per share, subject to a 4.99% ownership limitation[186]. Stock and Securities - The Company completed a reverse stock split of 1-for-20 on August 9, 2023, affecting all issued and outstanding shares[200]. - The company issued 8,373,205 shares of common stock during the quarter ended March 31, 2025, including 78,574 shares from the conversion of notes[13]. - The company had 3,101,277 restricted stock shares granted and vested at a fair value of $1.40 per share as of March 31, 2025[150]. - The company had 1,011,737 shares available for grant under stock options as of March 31, 2025, with an average exercise price of $2.00[147]. Operational Challenges - The company has experienced recurring net losses and negative cash flows from operations, raising substantial doubt about its ability to continue as a going concern[36]. - The company has faced operational challenges due to an internal investigation revealing non-compliance with laws and issues with internal accounting controls, leading to a cessation of operations in July 2022[168]. Revenue Recognition and Accounting - The Company recognizes revenues from lottery game sales at the time the digital representation is delivered, with no variable consideration involved[62]. - Deferred revenue is recorded when cash payments are received or due in advance of any performance, with payment terms varying by customer type[67]. - The Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options and warrants[82]. - The Company accounts for lease and non-lease components as a single lease component under the available practical expedient[58].
Lottery(LTRY) - 2025 Q1 - Quarterly Report