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]
Lottery(LTRY) - 2022 Q1 - Quarterly Report