Financial Performance - Total revenue for Q3 2025 was $137,679, a decrease of 31.3% compared to $200,653 in Q3 2024[17] - Gross profit for Q3 2025 was negative $67,189, compared to a positive gross profit of $114,338 in Q3 2024[17] - Operating expenses increased to $4,488,506 in Q3 2025, up from $3,774,504 in Q3 2024, representing a 18.9% increase[17] - Net loss for Q3 2025 was $4,608,562, compared to a net loss of $8,077,304 in Q3 2024, showing a 42.3% improvement[17] - The company reported a net loss per common share of $1.19 for Q3 2025, compared to $7.86 for Q3 2024[17] - For the nine months ended September 30, 2025, Lottery.com Inc. reported a net loss of $11,731,597, compared to a net loss of $19,408,183 for the same period in 2024, indicating a reduction in losses[23] Assets and Liabilities - Total assets as of September 30, 2025, were $73,432,770, an increase from $52,942,271 as of December 31, 2024[16] - Total liabilities decreased slightly to $29,948,313 in Q3 2025 from $30,397,442 in Q4 2024[16] - The accumulated deficit increased to $275,435,350 as of September 30, 2025, from $263,468,728 at the end of 2024[16] Cash Flow - Cash increased significantly to $320,636 in Q3 2025 from $68,035 in Q4 2024[16] - Cash used in operating activities for the nine months ended September 30, 2025, was $(6,391,548), a significant decrease from the net cash provided of $952,753 in 2024[23] - Total cash and restricted cash at the end of the period was $320,636, compared to $60,465 at the beginning of the year[23] - The net cash provided by financing activities was $8,806,353, contrasting with a net cash outflow of $(31,560) in 2024[23] Stock and Equity - The company executed a 1-for-10 reverse stock split on August 28, 2025, affecting all outstanding shares and equity awards[139] - As of September 30, 2025, there were 4,391,123 shares of common stock outstanding, an increase from 1,832,685 shares as of December 31, 2024[144] - The company has authorized the issuance of 1,000,000 shares of preferred stock, but none were issued as of September 30, 2025[142] - The company did not issue any new stock options during the quarter ended September 30, 2025, maintaining 101,857 outstanding options[157] Acquisitions and Investments - The Company completed the acquisition of Global Gaming Enterprises, Inc. for a total purchase price of $10,989,691, which included cash of $10,530,000 and 687,439 shares of common stock valued at $0.67 per share[95][98] - The acquisition of Global Gaming provided the Company with an 80% ownership interest in entities licensed to operate lottery games in Mexico, with goodwill recognized primarily due to anticipated growth in the Mexican lottery market[95][98] - The Company acquired S&MI Ltd. for $1,000,000 in restricted stock units, with the total consideration transferred after net assets and assumption of long-term debt being approximately $440,000[101][104] - The Company signed a Letter of Intent to acquire a 51% controlling stake in Racing Women Limited at a valuation of $1 million[173] Future Outlook and Concerns - The company anticipates additional operating losses for the next twelve months, raising substantial doubt about its ability to continue as a going concern[39] - The Company is currently evaluating the impact of the new FASB guidance on segment reporting, effective for fiscal years beginning after December 15, 2023[88] Revenue Recognition and Expenses - The Company recognizes revenues when persuasive evidence of a contract exists, performance obligations are identifiable, and the transaction price is determinable[64] - Lottery game revenue is recognized at the time the digital representation of the lottery game is delivered to the user, with no variable consideration involved[65] - Cost of revenue for lottery operations includes variable costs such as procurement costs and payment processing fees[72] Legal and Compliance - The Company regained full compliance with Nasdaq listing requirements on October 16, 2025, resolving a shareholder-approval deficiency[176] - The Company has not recorded any liabilities for indemnification agreements as of September 30, 2025[162] - The Company has not incurred material costs related to legal proceedings deemed materially detrimental as of September 30, 2025[166]
Lottery(LTRY) - 2025 Q3 - Quarterly Report