Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 09, 2022 | |
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Lottery.com Inc. (the “Company,” “we,” “us,” or “our”) is filing this Amendment No. 1 (this “Amended Report”) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, which was originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 16, 2022 (the “Original Report”), to amend and revise the following Items of our Original Report: | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
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, Spicewood | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78669 | |
City Area Code | 512 | |
Local Phone Number | 592-2451 | |
Entity Current Reporting Status | No | |
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 | 50,760,799 | |
Common Stock [Member] | ||
Title of 12(b) Security | Common stock, $0.001 par value | |
Trading Symbol | LTRY | |
Security Exchange Name | NASDAQ | |
Warrant [Member] | ||
Title of 12(b) Security | Warrants to purchase one share of common stock, each at an exercise price of $11.50 | |
Trading Symbol | LTRYW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 4,295,639 | $ 32,638,970 |
Restricted cash | 30,000,000 | |
Accounts receivable | 1,439,604 | 79,181 |
Prepaid expenses | 21,843,029 | 22,896,638 |
Other current assets | 241,917 | 226,200 |
Total current assets | 57,820,189 | 55,840,989 |
Notes receivable | 2,000,000 | |
Investments | 250,000 | 250,000 |
Goodwill | 19,590,758 | 19,590,758 |
Intangible assets, net | 28,500,219 | 28,710,980 |
Property and equipment, net | 121,293 | 141,279 |
Other long term assets | 13,009,686 | |
Total assets | 121,292,145 | 104,534,006 |
Current liabilities: | ||
Trade payables | 2,392,244 | 1,006,535 |
Deferred revenue | 544,643 | 1,162,335 |
Notes payable – current | 3,477,339 | 3,771,340 |
Accrued interest | 180,281 | 176,260 |
Accrued and other expenses | 4,473,107 | 4,416,168 |
Total current liabilities | 11,067,614 | 10,532,638 |
Long-term liabilities: | ||
Convertible debt, net – noncurrent | ||
Other long term liabilities | 1,522 | 1,169 |
Total long-term liabilities | 1,522 | 1,169 |
Commitments and contingencies (Note 14) | 30,000,000 | |
Total liabilities | 41,069,136 | 10,533,807 |
Equity | ||
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, 50,376,433 and 50,256,317 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 50,376 | 50,256 |
Additional paid-in capital | 260,480,919 | 239,358,644 |
Accumulated other comprehensive loss | (1,719) | (655) |
Accumulated deficit | (182,939,102) | (148,188,138) |
Total Lottery.com Inc. stockholders’ equity | 77,590,474 | 91,220,107 |
Noncontrolling interest | 2,632,535 | 2,780,092 |
Total Equity | 80,223,009 | 94,000,199 |
Total liabilities and stockholders’ equity | $ 121,292,145 | $ 104,534,006 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
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 | 50,376,433 | 50,256,317 | 50,376,433 |
Common stock, shares outstanding | 50,376,433 | 50,256,317 | 50,256,317 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 3,630,692 | $ 5,461,539 |
Cost of revenue | 2,384,742 | 2,946,981 |
Gross profit | 1,245,950 | 2,514,558 |
Operating expenses: | ||
Personnel costs | 24,402,866 | 1,095,793 |
Professional fees | 3,137,950 | 2,415,198 |
General and administrative | 3,012,179 | 1,388,574 |
Depreciation and amortization | 1,373,925 | 367,259 |
Total operating expenses | 31,926,918 | 5,266,824 |
Loss from operations | (30,680,968) | (2,752,266) |
Other expenses | ||
Interest expense | 3,981 | 2,472,048 |
Other expense | 4,189,144 | 231,720 |
Total other expenses, net | 4,193,125 | 2,703,768 |
Net loss before income tax | (34,874,093) | (5,456,034) |
Income tax expense (benefit) | 23,364 | |
Net loss | (34,897,457) | (5,456,034) |
Other comprehensive loss | ||
Foreign currency translation adjustment, net | (1,064) | |
Comprehensive loss | (34,898,521) | (5,456,034) |
Net income attributable to noncontrolling interest | 147,557 | |
Net loss attributable to Lottery.com Inc. | $ (34,750,964) | $ (5,456,034) |
Net loss per common share | ||
Basic and diluted | $ (0.69) | $ (0.24) |
Weighted average common shares outstanding | ||
Basic and diluted | 50,376,433 | 22,888,700 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) | Total | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Parent [Member] | Noncontrolling Interest [Member] |
Balance, value at Dec. 31, 2020 | $ 16,634,973 | $ 22,658 | $ 111,752,883 | $ (95,140,568) | $ 16,634,973 | |||
Balance, shares at Dec. 31, 2020 | 22,658,006 | |||||||
Issuance of common stock upon stock option exercise | 900 | $ 15 | 885 | 900 | ||||
Issuance of common stock upon stock option exercise, shares | 15,029 | |||||||
Stock based compensation | 2,160 | 2,160 | 2,160 | |||||
Comprehensive loss | (5,456,034) | |||||||
Balance, value at Mar. 31, 2021 | 21,375,014 | $ 24,071 | 121,947,545 | (100,596,602) | 21,375,014 | |||
Balance, shares at Mar. 31, 2021 | 24,071,259 | |||||||
Conversion of convertible debt | 935,000 | $ 1,398 | 933,602 | 935,000 | ||||
Conversion of convertible debt, shares | 1,398,224 | |||||||
Beneficial conversion feature | 9,149,683 | 9,149,683 | 9,149,683 | |||||
Issuance of digital securities | 108,332 | 108,332 | 108,332 | |||||
Comprehensive loss | (5,456,034) | (5,456,034) | (5,456,034) | |||||
Balance, value at Dec. 31, 2020 | 16,634,973 | $ 22,658 | 111,752,883 | (95,140,568) | 16,634,973 | |||
Balance, shares at Dec. 31, 2020 | 22,658,006 | |||||||
Balance, value 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 | 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) | |||||
Comprehensive loss | (34,898,521) | (34,750,964) | (34,750,964) | (147,557) | ||||
Balance, value at Mar. 31, 2022 | 80,223,009 | $ 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 | |||||||
Comprehensive loss | $ (34,897,457) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flow from operating activities | ||
Net loss attributable to Lottery.com Inc. | $ (34,750,964) | $ (5,456,034) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Net income attributable to noncontrolling interest | (147,557) | |
Depreciation and amortization | 249,052 | 367,259 |
Non-cash interest expense | 1,841,807 | |
Stock-based compensation expense | 20,880,655 | 2,160 |
Issuance of debt to pay expenses | 241,740 | |
Changes in assets & liabilities: | ||
Accounts receivable | (1,360,423) | |
Prepaid expenses | 1,053,609 | 894,872 |
Notes Receivable | (2,000,000) | |
Commitments and contingencies (Note 14) | 30,000,000 | |
Other current assets | (15,717) | (54,853) |
Trade payables | 1,385,709 | (354,736) |
Deferred revenue | (617,692) | (2,039,113) |
Accrued interest | 4,021 | (605,961) |
Accrued and other expenses | 56,939 | 1,512,125 |
Other long term asset | (13,009,686) | |
Other long term liabilities | 353 | |
Net cash provided by operating activities | 1,970,039 | (3,892,474) |
Cash flow from investing activities | ||
Purchases of property and equipment | (18,305) | (57,452) |
Purchases of intangible assets | (3,050,000) | |
Net cash used in investing activities | (18,305) | (3,107,452) |
Cash flow from financing activities | ||
Issuance of digital securities | 108,332 | |
Proceeds from exercise of options and warrants | 895 | |
Proceeds from issuance of convertible debt | 19,282,619 | |
Payments on notes payable - related parties | (294,001) | |
Principal payments on debt | (4,856,250) | |
Net cash provided by financing activities | (294,001) | 14,535,596 |
Effect of exchange rate changes on cash | (1,064) | |
Net change in net cash and restricted cash | 1,656,669 | 7,535,670 |
Cash and restricted cash at beginning of period | 32,638,970 | 158,492 |
Cash and restricted cash at end of period | 34,295,639 | 7,694,162 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid in cash | 24,280 | |
Taxes paid in cash | ||
Non cash investing and financing activities | ||
Conversion of convertible debt into common stock | 935,000 | |
Purchase of intangible assets through the issuance of convertible debt | $ 15,450,000 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2022 | |
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 ” We have been a provider of lottery products and services, our business is 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 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 April 25, 2023, as part of the Plans for Recommencement of Company Operations, the Company resumed its ticket sales operations to support its affiliate partners through its Texas retail network. |
Liquidity and Going Concern
Liquidity and Going Concern | 3 Months Ended |
Mar. 31, 2022 | |
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. Due to losses experienced by the Company’s Operational Cessation, the Company has experienced recurring net losses and negative cash flows from operations and has an accumulated deficit of approximately $ 182,939,102 and a working capital of approximately $ 16.8 million at March 31, 2022. For the three months ending March 31, 2022, the Company sustained a net loss of $ 34,750,964 . The Company sustained a loss from operations of $ 30.7 million and $ 2.8 million for the three months ending March 31, 2022 and 2021, respectfully. Subsequently, the Company sustained additional operating losses and anticipates additional operating losses for the next twelve months. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company has historically funded its activities to date 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 as they become due beginning with a loan agreement the Company entered into with Woodford Eurasia Assets, Ltd. (“Woodford”) on December 7, 2022 (see Note 16. Subsequent Events), the Plans for Recommencement of Company Operations to 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 revenue, 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. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 3. Significant Accounting Policies Restatement On January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”), pursuant to which the Company borrowed $ 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 As previously disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (“SEC”) on July 22, 2022, as amended on July 22, 2022, the Company’s Management met on July 19, 2022 in consultation with the Chairman of the Board of Directors of the Company, the Company’s legal counsel and the Company’s auditors at that time (Armanino LLP) and concluded that the Company’s previously issued audited consolidated financial statements for the fiscal year ended December 31, 2021, and the unaudited consolidated financial statements for the quarter ended March 31, 2022, previously filed with the SEC should no longer be relied upon and should be restated. The need for the restatement arose out of the Company’s reexamination of various transactions that occurred in 2021 and which were later rescinded or canceled in 2022. The Company has restated its financial statements for the year ended December 31, 2021, as included herein as discussed below and to reflect a change in the recognition of income in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606. On September 20, 2021, the Company entered into a purchase agreement with a major customer for the sale of various service credits with a total purchase price of $ 30 million dollars. Upon execution of the purchase agreement, the Company recognized the income and the customer was required make payment within 90 days. The customer provided payment prior to December 31, 2021, in the form of a check accepted by the Company for deposit and included in undeposited funds. During 2022, the Company discovered that the original service credits were non-transferrable and that the Company had pledged its own cash accounts to secure the customer with a line of credit in the amount of $ 30,000,000 utilized by the customer to provide the Company with payment towards the purchase of the service credits. Since the Company was prohibited from transferring the advertising portion of the service credits and could not complete the sale of such credits, the Company cancelled the transaction and could not recognize the income, or recognize a cash payment in the Company’s financial statements. In addition, the Company had recorded cost of sales related to this transaction in the amount of $ 10,000,000 30,000,000 10,000,000 In addition, the Company had invoiced the customer a further $ 17,117,472 18,539,472 17,117,472 18,539,472 In an unrelated transaction, the Company entered into an arrangement with another customer totaling $ 5,000,000 5,000,000 500,000 500,000 500,000 4,500,000 500,000 5,000,000 500,000 In addition, related to the transaction stated above, in February 2022, the Company loaned the customer $ 450,000 450,000 6,050,000 4,500,000 1,550,000 6,500,000 4,500,000 6,050,000 1,550,000 450,000 2,000,000 2,000,000 Further, during the Company’s reassessment of all accounts as of December 31, 2021, the Company determined that approximately $ 2,000,000 2,000,000 2,000,000 The following table presents the impact of the restatements on the Company’s previously reported consolidated balance sheet for the fiscal year ended December 31, 2021. The values as previously reported were derived from the 2021 consolidated financial statements contained in the Company’s previously reported balance sheet as of December 31, 2021 filed in the Company’s Annual Report on Form 10-K, which were included in the Company’s Annual Report on Form 10-K that was filed with the SEC on May 10, 2023. Schedule of Restatements of Previously Reported Consolidated Balance Sheet Reported Impacts Restated Fiscal Year Ended December 31, 2021 As Previously Restatement As Reported Impacts Restated ASSETS Cash $ 62,638,970 $ (30,000,000 ) $ 32,638,970 Accounts receivable 21,696,653 (21,617,472 ) 79,181 Prepaid expenses 13,896,638 9,000,000 22,896,638 Total Asset $ 147,151,478 $ (42,617,472 ) $ 104,534,006 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue 662,335 500,000 1,162,335 Accrued and other expenses 4,528,815 (112,647 ) 4,416,168 Total current liabilities 10,145,285 387,353 10,532,638 Total liabilities 10,146,454 387,353 10,533,807 Accumulated deficit (106,232,518 ) (41,955,620 ) -148,188,138 Total Lottery.com Inc. stockholders’ equity 134,224,933 (43,004,826 ) 91,220,107 Total Equity 137,005,024 (43,004,825 ) 94,000,199 Total liabilities and stockholders’ equity $ 147,151,478 $ (42,617,472 ) $ 104,534,006 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 the fair presentation. The operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021 has been derived from our audited 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, 2021, which were included in Amendment No. 1 to our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on May 10, 2023. 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) our combined results 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 holdings are placed with major financial institutions deemed to be of high-credit-quality in order to limit credit exposure. The Company maintains deposits and certificates of deposit with banks which may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit and money market accounts which are not FDIC insured. In addition, deposits aggregating approximately $ 19,790 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 a 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 March 31, 2022 and December 31, 2021, cash and cash equivalents were composed 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 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, as its customers, in the normal course of business. We accrue 100 percent of all expenses associated with LotteryLink prior to issuing accounts payable to a Master Affiliate or receiving associated payments. 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 did not record any allowance for uncollectible receivables as of March 31, 2022 and December 31, 2021. The Company has not incurred bad debt expense historically. 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 were 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 4 20 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 five years Depreciation of property and equipment is computed using the straight-line method over the following estimated useful lives: Schedule of Depreciation of Property and Equipment Computers and equipment 3 Furniture and fixtures 5 Software 3 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 the website domain name and is being amortized on a straight-line method over an estimated useful life. 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. The Company determined that there was no significant impairment of long-lived assets during the three months ended March 31, 2022 or the year ended December 31, 2021. 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) 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” 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. |
Restatement of Financial Statem
Restatement of Financial Statements | 3 Months Ended |
Mar. 31, 2022 | |
Restatement Of Financial Statements | |
Restatement of Financial Statements | 4. Restatement of Financial Statements Management of the Company re-evaluated its accounting for three months ending March 31, 2022, the Company determined to restate its previously issued financial statements as of March 31, 2022 to correct accounting errors related to cash on hand, accounts receivable, other assets , deferred revenue, accrued expenses, revenue, costs of revenue and stock-based compensation which caused the following misstatements. The following tables summarize the effect of the restatements on the specific items presented in our previously reported financial statements: Schedule of Restatements Reported In Financial Statements LOTTERY.COM CONSOLIDATED BALANCE SHEET March 31, March 31, 2022 Adjustments 2022 (As Filed) (As Restated) ASSETS Current assets: Cash $ 50,795,889 (46,500,250 ) (1) (2) $ 4,295,639 (46,500,250 ) Restricted cash - 30,000,000 (1) 30,000,000 Accounts receivable 35,796,548 (34,356,944 ) (1) (2) 1,439,604 (34,356,944 ) Prepaid expenses 12,843,029 9,000,000 (1) 21,843,029 Other current assets 246,599 (4,682 ) 241,917 Total current assets 99,682,065 57,820,189 Long-term assets 54,962,270 8,509,686 (1) (2) 63,471,956 Total assets $ 154,644,335 $ 121,292,145 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Trade payables $ 2,559,846 (167,602 )(3) $ 2,392,244 Deferred revenue 544,643 544,643 Notes payable - current 3,477,339 3,477,339 Accrued interest 180,281 180,281 Accrued and other expenses 4,081,672 391,435 (3) 4,473,107 Total current liabilities 10,843,781 11,067,614 Long-term liabilities: Other long term liabilities 1,522 1,522 Total long-term liabilities 1,522 1,522 Commitments and contingencies (Note 14) - 30,000,000 (1) 30,000,000 Total liabilities 10,845,303 41,069,136 Commitments and contingencies Equity Controlling Interest Preferred Stock, par value $ 0.001 1,000,000 none - - Common stock, par value $ 0.001 500,000,000 50,376,433 50,256,317 46,928 3,448 (7) 50,376 Additional paid-in capital 263,022,161 (2,541,242 ) (4) 260,480,919 Accumulated other comprehensive loss (1,719 ) - (1,719 ) Accumulated deficit (121,919,207 ) (61,019,895 ) (9) (182,939,102 ) Total Lottery.com Inc. stockholders’ equity 141,148,163 77,590,474 Noncontrolling interest 2,650,869 (18,334 )( 9 ) 2,632,535 Total Equity 143,799,032 80,223,009 Total liabilities and stockholders’ equity $ 154,644,335 - $ 121,292,145 LOTTERY.COM CONSOLIDATED STATEMENT OF OPERATIONS 2022 Adjustments 2022 Three Months Ended March 31, 2022 Adjustments 2022 (As Filed) (As Restated) Revenue $ 21,150,892 (17,520,200 ) (1) ( 2 ) $ 3,630,692 Cost of revenue 3,165,469 (780,727 ) (1) ( 2 ) 2,384,742 Gross profit 17,985,423 1,245,950 Operating expenses: 33,804,723 (1,877,805 ) (2) 31,926,918 Loss from operations (15,819,300 ) $ (30,680,968 ) Other expenses Interest expense (953 ) 4,934 (3) 3,981 Other expense (2,436 ) 4,191,580 (2) 4,189,144 Total other expenses, net (3,389 ) 4,193,125 Net loss before income tax $ (15,815,911 ) $ (34,874,093 ) Income tax expense (benefit) - 23,364 (2) 23,364 Net loss (15,815,911 ) (34,897,457 ) Other comprehensive loss Foreign currency translation adjustment, net (1,064 ) 1,064 Comprehensive loss (15,816,975 ) (34,898,521 ) Net income attributable to noncontrolling interest 129,222 18,335 (3) 147,557 Net loss attributable to Lottery.com Inc. (15,687,753 ) (34,750,964 ) Net loss per common share, basic and diluted $ (0.33 ) $ (0.69 ) Weighted average common shares outstanding, basic and diluted 46,832,919 50,376,433 LOTTERY.COM CONSOLIDATED STATEMENT OF CASH FLOWS 2022 Adjustments 2022 Three Months Ending March 31, 2022 Adjustments 2022 (As Filed) (As Restated) Cash flow from operating activities Net loss attributable to Lottery.com Inc. (15,686,689 ) $ (19,064,275 ) (9) (34,750,964 ) Adjustments to reconcile net loss to net cash used in operating activities: 23,419,191 $ ($2,195,301 ) (9) 21,223,890 Changes in assets & liabilities: Accounts receivable (14,099,895 ) 12,739,472 (1) ( 2 ) (1,360,423 ) 12,739,472 Prepaid expenses 1,053,609 1,053,609 Note Receivable - (2,000,000 )(6) (2,000,000 ) Other current assets (20,399 ) 4,682 (9) (15,717 ) Trade payables 1,553,311 (167,602 ) (9) 1,385,709 Deferred revenue (117,692 ) (500,000 ) (1) ( 2 ) (617,692 ) (500,000 ) Accrued interest 4,021 4,021 Accrued and other expenses (10,648 ) 67,587 (9) 56,939 Other long term assets - (13,009,686 )(8) (13,009,686 ) Other long term liabilities 353 353 Net cash provided by operating activities (3,904,838 ) 1,970,039 Cash flow from investing activities Purchases of property and equipment (18,305 ) (18,305 ) Purchases of intangible assets (1,124,873 ) 1,124,873 (9) - Investment in subsidiary, net - - Net cash used in investing activities (1,143,178 ) (18,305 ) Cash flow from financing activities Issuance of digital securities - - Proceeds from exercise of options and warrants - - Proceeds from issuance of convertible debt - - Payment of debt issuance costs - - Issuance of note receivable (6,500,000 ) 6,500,000 (6) - Proceeds from issuance of notes payable - - Principal payments on debt (294,001 ) (294,001 ) Net cash provided by financing activities (6,794,001 ) (294,001 ) Effect of exchange rate changes on cash (1,064 ) - (1,064 ) Net change in net cash and restricted cash (11,843,081 ) 13,499,750 (9) 1,656,669 Cash and restricted cash at beginning of period 62,638,970 (30,000,000 )(1) 3 2,638,970 Cash and restricted cash at end of period 50,795,889 - 34,295,639 The following tables summarize the effect of the restatements on the specific items presented in our previously reported financial statements: The specific explanations for the items noted above in the restated financial statements are as follows: (1) On January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”), pursuant to which the Company borrowed $ 30,000,000 from Provident, which was evidenced by a $ 30,000,000 Promissory Note. In accordance with the terms of the Business Loan, upon entering into the agreement, $ 30,000,000 in a separate account with Provident was pledged as security for the amount outstanding under the loan (“Collateral Security”). The $ 30,000,000 Collateral Security became restricted and remained restricted until October 12, 2022, when AutoLotto defaulted on its obligations under the Business Loan and Provident foreclosed on the $ 30,000,000 of Collateral Security. The Collateral Security, which was in the form of restricted cash, was presented as a contingent liability on the Company’s balance sheet from March 31, 2022 until the obligation was satisfied in October of 2022. (2) After reexamination of various transactions that occurred in 2021 and which were later rescinded or canceled in 2022, the Company has restated revenue on its financial statements for the year ended December 31, 2021, to reflect a change in the recognition of income in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606 a. On September 20, 2021, the Company entered into a purchase agreement with a major customer for the sale of various service credits with a total purchase price of $ 30 million dollars. Upon execution of the purchase agreement, the Company recognized the income and the customer was required make payment within 90 days. The customer provided payment prior to December 31, 2021, in the form of a check accepted by the Company for deposit and included in undeposited funds. During 2022, the Company discovered that the original service credits were non-transferrable and that the Company had pledged its own cash accounts to secure a line of credit in the amount of $ 30,000,000 utilized by the customer to provide the Company with payment towards the purchase of the service credits. Since the Company was prohibited from transferring the advertising portion of the service credits and could not complete the sale of such credits, the Company cancelled the transaction and could not recognize the income, nor recognize a cash payment in the Company’s financial statements. In addition, the Company had recorded cost of sales related to this transaction in the amount of $ 10,000,000 30,000,000 10,000,000 b. In addition, the Company had invoiced the customer a further $ 17,117,472 18,539,472 17,117,472 18,539,472 c. The total adjustment to accounts receivable was an increase of $ 34,356,944 d. The total adjustment to pre-paid expenses was an increase of $ 9,000,000 4,682 e. The total adjustment to trade payables was a decrease of $ 167,602 f. The total adjustment to revenue was a decrease of $ 17,520,200 g. Income tax expense increase of $ 23,364 h. The total adjustment to cost of revenue was an increase of $ 780,727 i. The total adjustment to operating expenses was a decrease of $ 1,877,805 4,191,580 (3) During the Company’s reassessment of all accounts as of December 31, 2021, the Company determined that approximately $ 2,000,000 2,000,000 2,000,000 (4) After the termination of several officers and employees subsequent to December 31, 2022 and the cancelation of various options and/or warrants held by these individuals, the Company decreased Additional paid-in capital in the amount of $ 2,541,242 (5) In an unrelated transaction, the Company entered into an arrangement with another customer totaling $ 5,000,000 in 2021. The Company recognized the full amount of the arrangement and recorded $ 5,000,000 as revenue and accounts receivable for the year ended December 31, 2021. The Company started performing the services under the arrangement during 2021, which services were to be completed in 2022. During October 2021, the customer paid $ 500,000 towards these services. Subsequently, the Company determined that, in accordance with ASC 606, due to an uncertainty of collectability of the remaining accounts receivable, the Company should not have recognized any revenue from this arrangement during the year ended December 31, 2021. As a result of the payment of $ 500,000 received during the year ended December 31, 2021, the Company is allowed to record deferred revenue in the amount of $ 500,000 . As a result, the Company (i) decreased accounts receivable by $ 4,500,000 , increased deferred revenue by $ 500,000 and decreased revenue by $ 5,000,000 , for the year ended December 31, 2021; and (ii) recorded revenue of $ 500,000 for the three months ended March 31, 2022. (6) In addition, related to the transaction stated above, in February 2022, the Company loaned the customer $ 450,000 450,000 6,050,000 4,500,000 1,550,000 6,500,000 4,500,000 6,050,000 1,550,000 450,000 2,000,000 2,000,000 (7) On October 28, 2021, the Company granted 3,832,431 3,448,066 (8) In addition, the Company had placed $ 16,500,000 16,500,000 11,697,163 (9) As a result of all the foregoing adjustments, the Company reevaluated the classifications of accounts on the statements of cash flows accordingly . |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | 5. 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 The Business Combination closing was a triggering event for the Series B convertible notes, of which $ 63.8 3,248,526 9,764,511 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 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 9,460,000 11,068,000 5,475,000 5,593,000 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 6,000,000 4,000,000 3,000,000 2,000,000 Global Gaming Acquisition On June 30, 2021, the Company acquired 100 80 22.0848 The net purchase price was allocated to the assets and liabilities acquired as per the table below. Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The fair values of the acquired intangible assets were determined using Level 3 inputs which were not observable in the market. The total purchase price of $ 10,989,691 10,530,000 687,439 0.67 10,055,214 80 13,215,843 20 Schedule of Tangible and Intangible Assets Acquisition Cash $ 517,460 Accounts receivable, net 34,134 Prepaids 5,024 Property and equipment, net 2,440 Other assets, net 65,349 Intangible assets 8,590,000 Goodwill 4,940,643 Total assets $ 14,155,051 Accounts payable and other liabilities $ (387,484 ) Customer deposits (134,707 ) Related party loan (417,017 ) Total liabilities $ (939,208 ) Total net assets of Acquirees $ 13,215,843 Goodwill recognized in connection with the acquisition is primarily attributed to an anticipated growing lottery market in Mexico that is expected to be achieved from the integration of these Mexican entities. None of the goodwill is expected to be deductible for income tax purposes. The following are details of the purchase price allocated to the intangible assets acquired. Schedule of Intangible Assets Acquired Category Fair Value Customer relationships $ 410,000 Gaming approvals 4,020,000 Trade names and trademarks 2,540,000 Technology 1,620,000 Total Intangibles $ 8,590,000 Subsequently, the Company adjusted Goodwill for the recording of related deferred tax liabilities as the Company released $ 1.6 |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 6. Property and Equipment, net Property and equipment, net as of March 31, 2022 and December 31, 2021, consisted of the following: Schedule of Property and Equipment, Net March 31, December 31, 2022 2021 Computers and equipment $ 110,498 $ 113,151 Furniture and fixtures 31,818 23,760 Software 1,903,121 1,903,121 Property and equipment 2,045,437 2,040,032 Accumulated depreciation (1,924,144 ) (1,898,753 ) Property and equipment, net $ 121,293 $ 141,279 Depreciation expense was $ 4,152 41,185 153,453 191,744 |
Intangible assets, net
Intangible assets, net | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | 7. Intangible assets, net Gross carrying values and accumulated amortization of intangible assets: Schedule of Accumulated Amortization of Intangible Assets March 31, 2022 December 31, 2021 Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortizing intangible assets Customer relationships 6 $ 1,350,000 $ (612,639 ) $ 737,361 $ 1,350,000 $ (556,389 ) $ 793,611 Trade name 6 2,550,000 (429,306 ) 2,120,694 2,550,000 (217,223 ) 2,332,777 Technology 6 3,050,000 (1,056,528 ) 1,993,472 3,050,000 (929,444 ) 2,120,556 Software agreements 6 14,450,000 (3,851,111 ) 10,598,889 14,450,000 (3,145,277 ) 11,304,723 Gaming license 6 4,020,000 (502,500 ) 3,517,500 4,020,000 (335,000 ) 3,685,000 Internally developed software 2 10 1,888,930 (94,451 ) 1,794,479 111,053 (23,323 ) 832,709 Domain name 15 6,935,000 (745,000 ) 6,190,000 6,935,000 (629,416 ) 6,305,584 $ 34,243,930 $ (7,291,535 ) $ 26,952,395 $ 32,466,053 $ (5,836,072 ) $ 26,629,981 Amortization expense with respect to intangible assets for the three months ended March 31, 2022 and 2021 totaled $ 1,455,463 920,583 Estimated amortization expense for years of useful life remaining is as follows: Schedule of Estimated Amortization Expense Years ending December 31, Amount Remainder of 2022 $ 2,584,988 2023 5,169,975 2024 5,169,975 2025 5,169,975 2026 5,169,975 Thereafter $ 2,514,841 The Company had software development costs of $ 2,342,163 2,080,999 |
Notes Receivable
Notes Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Notes Receivable | 8. 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 3.1 2,000,000 This note was received in consideration for a portion of the development work that the Company performed for the borrower who intends 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. |
Notes Payable and Convertible D
Notes Payable and Convertible Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable and Convertible Debt | 9. 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 10 December 31, 2022 771,500 138,822 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 8 December 21, 2021 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 8 0 10,000,000 6 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 71,812 As of October 29, 2021, all except $ 185,095 9,764,511 185,095 38,835 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 3.75 150,000 2,624 In August 2020, the Company entered into three separate note payable agreements with three individuals for an aggregate amount of $ 37,199 13,000 Notes payable – related parties 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 0 March 31, 2022 4.1 2,357,744 2,628,234 |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity | |
Stockholders’ Equity | 10. Stockholders’ Equity Common Stock Our Certificate of Incorporation, as amended, authorizes the issuance of an aggregate of 500,000,000 0.001 one As of March 31, 2022 and December 31, 2021, there were 50,376,433 50,256,317 Schedule of Common Stock Issuance of Common Stock for legal settlement 60,000 Exercise of options (Note 10) 60,116 Total 120,116 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 $ 0.01 ● upon a minimum of 30 ● if, and only if, the last sale price of the Company’s common stock equals or exceeds $ 16.00 20 30 ● 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 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 20,125,002 20,125,000 488,296 Schedule of Common Stock Warrant Weighted Weighted Average Average Remaining Number of Exercise Contractual Aggregate Shares Price Life (years) Intrinsic Value Outstanding at December 31, 2021 395,675 $ 0.11 4.0 $ 2,478,501 Granted 92,621 7.56 3.0 Exercised - - Forfeited/cancelled - - Outstanding at March 31, 2022 488,296 1.52 3.6 $ 1,200,387 Exercisable at March 31, 2022 488,296 $ 1.52 3.6 $ 1,200,387 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 1,750,000 12.00 21,000,000 1,750,000 1,750,000 1,750,000 1,750,000 May 29, 2023 100 1,750,000 Common Stock Warrants On February 15, 2022, the Company issued warrants to purchase an aggregate 92,621 7.56 194,695 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 Issuance Debts Issuance Risk-free interest rate 1.80 % Expected dividend yield 0 % Expected volatility 113.17 % Term 3 Fair value of common stock $ 3.75 The Company did not issue any other warrants during the three months ended March 31, 2022 or the year ended December 31, 2021. All outstanding warrants are fully vested and have a weighted average remaining contractual life of 3.6 194,695 0 Number of Shares Weighted Weighted Aggregate Outstanding at December 31, 2020 573,359 $ 0.28 4.8 $ 272,638 Granted - - - Exercised (177,684 ) 0.66 - Forfeited/canceled - - - Outstanding at December 31, 2021 395,675 0.11 4.0 2,478,501 Granted 92,621 7.56 3.0 Exercised - - - Forfeited/canceled - - - Outstanding at March 31, 2022 488,296 $ 1.52 3.6 $ 1,200,387 Exercisable at March 31, 2022 488,296 $ 1.52 3.6 $ 1,200,387 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 2,795,000 Earnout Shares As detailed in Note 3 – as part of the TDAC Combination as of December 31, 2021 a total of 5,000,000 |
Stock-based Compensation Expens
Stock-based Compensation Expense | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation Expense | 11. 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 Four Hundred Fifty Thousand (450,000). 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 20 1 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 13,130,368 five 13,130,368 Stock Options The Company did not issue any new stock options during the three months ended March 31, 2022 and 2021. The following table shows stock option activity for the three months ended March 31, 2022 and 2021: Schedule of Stock Options Activity Shares Outstanding Weighted Weighted Aggregate Outstanding at December 31, 2020 37,405 1,315,218 $ 0.30 5.5 $ 362,841 Granted - - - - Exercised - (737,732 ) (0.28 ) - Forfeited/canceled 231,825 (231,825 ) (0.65 ) - Outstanding at December 31, 2021 269,230 345,661 0.97 4.4 2,061,303 Granted - - - - Exercised - (60,116 ) (0.67 ) - Forfeited/canceled (uncanceled) (60,116 ) 60,116 0.67 - Outstanding at March 31, 2022 209,114 345,661 $ 0.41 4.2 $ 944,544 Exercisable at March 31, 2022 209,114 345,661 $ 0.41 4.2 $ 944,544 Stock-based compensation expense related to the employee options was $ 0 4,320 No income tax benefit has been recognized related to the stock-based compensation expense, and no tax benefits have been realized from the exercised stock options. As of March 31, 2022 and December 31, 2021, unrecognized stock-based compensation associated with stock options amounted to $ 0 Restricted awards The Company awarded restricted stock to employees on October 28, 2021, which were 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 3,832,431 On April 29, 2022, restricted stock awards for certain employees vested and resulted in withhold tax for those employees. Given the limited trading liquidity of the Company’s common shares, the Company withheld 130,546 2.38 For the three months ended March 31, 2022, the Company recognized $ 20,880,655 11,588,249 The Company had restricted stock activity summarized as follows: Schedule of Restricted Stock Awards Activity Weighted Average Number of Grant Shares Fair Value To Outstanding at December 31, 2021 3,832,431 $ 14.75 Granted - - Vested - - Forfeited/canceled - - Restricted shares unvested at March 31, 2022 3,832,431 $ 14.75 |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Net loss per common share | |
Loss Per Share | 12. Loss Per Share The following table sets forth the computation of basic and diluted net loss per share: Schedule of Basic and Dilutes Net Income Loss Per Share 2022 2021 Three Months Ended 2022 As Restated Comprehensive net loss attributable to stockholders $ (34,750,964 ) $ (5,456,034 ) Weighted average common shares outstanding Basic and diluted 50,376,433 22,888,700 Net loss per common share Basic and diluted $ (.69 ) $ (0.24 ) As of March 31, 2022, the Company excluded 345,661 3,832,431 488,296 5,000,000 1,750,000 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
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 bases. 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021. Digital Securities In 2018, the Company commenced an offering (the “LDC Offering”) of 285 7% 5,632 The Company leases office space in Spicewood, Texas (the “Spicewood Lease”), under an agreement which expires January 21, 2024 219,216 26,950 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 $ 40,221 204,725 As of March 31, 2022, future minimum rent payments due under non-cancellable leases with initial maturities greater than one year are as follows: Schedule of Future Minimum Rent Payments Due Under Non Cancellable Leases Years ending December 31, Amount 2022 (nine months) 144,457 2023 153,222 2024 48,404 Total $ 346,083 Litigation and Other Loss Contingencies As of March 31, 2022, there were no pending proceedings that are deemed to be materially detrimental. The Company is a party to legal proceedings in the ordinary course of its business. The Company believes that the nature of these proceedings is typical for a company of its size and scope. See Note 16 for additional information. J. Streicher Financial On July 29, 2022, the Company filed an original Verified Complaint for Breach of Contract and Specific Performance Complaint Streicher 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 owed 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 Judgment 397,036.94 Fee Order In an effort to avoid post-judgment discovery, Streicher has indicated a willingness to pay the judgment over time with interest and is attempting 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 50,000 75,000 Restricted Cash and Letter of Credit As of March 31, 2022, the Company had restricted cash of $ 30,000,000 30,000,000 30,000,000 30,000,000 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
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 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 operates tabletop game retail stores and, ancillary to such retail operations, acts 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 acquires lottery games as requested by users from Master Goblin on a non-exclusive basis in such jurisdictions. Pursuant to the Service Agreement, Master Goblin is authorized and approved by the Company to incur up to $ 100,000 5,000 133,339.50 In January 2023, Woodford Eurasia Assets, Ltd. signed a letter of intent to acquire Master Goblin. Such letter of intent would give Woodford the right to appoint a director to the Board of Directors of the Company (see Note 16. Subsequent Events). As of the date of this Amended Report, no definitive documentation for this transaction has been signed. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events Effective July 1, 2022, Harry Dhaliwal was named as the Company’s Interim Chief Financial Officer and principal financial officer. The Company entered into a consulting agreement with Mr. Dhaliwal on July 1, 2022 (the “Consulting Agreement”). The Consulting Agreement provided for Mr. Dhaliwal to serve as Interim Chief Financial Officer of the Company for six months, commencing on July 1, 2022 and terminating on December 31, 2022. Mr. Dhaliwal’s consulting services could be terminated earlier than December 31, 2022 (i) upon Mr. Dhaliwal’s resignation or death or (ii) by either the Company or Mr. Dhaliwal without cause or reason upon written notice to the other party 15 days prior to the termination date of the Consulting Agreement. Mr. Dhaliwal agreed to among other things, assist the Company with its financial systems, develop a financial dashboard for the Board of Directors and Senior Management and carry out a comprehensive review of the Company’s finance function. The Consulting Agreement included customer and employee non-solicitation provisions as well as confidentiality obligations. Pursuant to the Consulting Agreement, Mr. Dhaliwal was to be paid a total of $ 209,550 50,000 On July 21, 2022, Lawrence Anthony “Tony” DiMatteo III, the then Chief Executive Officer of the Company and a member of its Board of Directors, provided a notice of resignation as CEO of the Company, its wholly-owned subsidiary, AutoLotto, and all of its other subsidiaries and affiliates with the exception of LTRY WinTogether, Inc., with immediate effect. In connection with Mr. DiMatteo’s resignation, the Company entered into a resignation and release agreement with Mr. DiMatteo effective July 22, 2022 (the “Release Agreement”). Pursuant to the Release Agreement, Mr. DiMatteo resigned as CEO of the Company effective July 22, 2022. Following Mr. DiMatteo’s resignation, he agreed to serve as Senior Advisor to the Board commencing on July 22, 2022 and continuing until the either party gives not less than ten (10) days’ prior notice to the other party (the “Consulting Period”) unless certain conditions for earlier termination become applicable. Mr. DiMatteo agreed to, among other things, (i) provide consulting and advisory services to the Board of Directors of the Company as requested and (ii) cooperate in any ongoing and any future investigation by or related to the Company. Non-compete and customer and employee non-solicitation provisions as well as confidentiality obligations from prior agreements entered into between Mr. DiMatteo and the Company will apply while he consults and for a period of one year thereafter. Mr. DiMatteo may be paid $ 1,000 On July 28, 2022, the Board 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 ceased its operations. Accordingly, the Company furloughed certain employees effective July 29, 2022. As of March 31, 2023, the Company owed approximately $ 1.4 On July 29, 2022, the Company filed its original Verified Complaint for Breach of Contract and Specific Performance (the “Streicher Complaint”) against J. Streicher Financial, LLC (“Streicher”) in the Court of Chancery of the State of Delaware (the “Chancery Court”), styled AutoLotto, Inc. dba Lottery.com v. J. Streicher Financial, LLC (Case No. 2022-0661-MTZ). In the Streicher Complaint, the Company alleged that Streicher breached the contract entered into by the parties on March 9, 2022 and demanded that Streicher return $16,500,000.00 it owed 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 $16,500,000.00 (the “Streicher 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. On December 8, 2022, the Company’s prior attorney Skadden, Arps, Slate, Meagher & Flom, LLP (“Skadden”) filed its Combined Motion to Withdraw as Counsel and For a Charging Lien in amount of $3,024,201.17 for legal fees unpaid by Company (“Skadden’s Motion”). 75,000.00 50,000.00 75,000.00 On August 19, 2022, Preston Million filed the Class Action Complaint (the “Class Action Complaint”) against the Company and certain former officers and directors of the Company in the United States District Court for Southern District of New York (the “SDNY”), styled Preston Million, Individually and on Behalf of All Others Similarly Situated vs. Lottery.com, Inc. f/k/a Trident Acquisitions Corp., Anthony DiMatteo, Matthew Clemenson and Ryan Dickinson (Case No. 1:22-cv-07111-JLR). The Class Action Complaint alleged violations by all defendants of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) 15 U.S.C. §§ 78j(b), 78t(a), as amended by the Private Securities Litigation Reform Act of 1995 (“PSLRA”), U.S.C. § 78u-4 et seq. (collectively “Federal Securities Laws”). On November 18, 2022, the SNDY ordered the appointment of RTD Bros, LLC, Todd Benn, Tom Benn and Tomasz Rzedian (collectively “Lottery Investor Group”) as lead plaintiff and Glancy Prongay & Murray, LLP as lead counsel for plaintiffs and for the class in the case. On December 5, 2022, the Court stipulated a Scheduling Order in the case. On January 12, 2023, the Company’s legal counsel timely filed its Notice of Appearance. On January 31, 2022, plaintiffs filed their Amended Complaint adding Kathryn Lever, Marat Rosenberg, Vadim Komissarov, Thomas Gallagher, Gennadii Butkevych, Ilya Ponomarev as additional defendants in the case. The Amended Complaint alleges, among other things, that defendants made materially false and misleading statements in violation of Section 10(b),14(a) and 20(a) of the Exchange Act and plaintiffs seek compensatory damages, reasonable cost and expenses including counsel fees and expert fees. Pursuant to the Scheduling Order, the Company filed its motion to dismiss the Amended Complaint on April 3, 2023, under the newly consolidated caption and its proposed order to dismiss the matter. Plaintiffs are expected to file their opposition to the motion to dismiss no later than May 18, 2023, which would trigger the Company’s deadline to file its reply brief in support of their motion to dismiss no later than June 20, 2023. On September 8, 2022, the Board appointed Mr. Sohail S. Quraeshi as CEO of the Company effective from September 12, 2022. On September 27, 2022, Armanino LLP (“Armanino”) resigned as the independent registered public accounting firm of the Company effective immediately. On October 7, 2022, the Audit Committee of the Board of Directors of the Company approved the engagement of Yusufali & Associates, LLC, (“Yusufali”) as the Company’s new independent registered public accounting firm. 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. In December 2022, an agreement was signed by and between Sports.com and Data Sports Group, GmbH (“DSG”), that provides Sports.com, Inc. the exclusive North American distribution rights for sports data products offered and maintained by DSG. This suite of offerings is being sold via the same sales resources and sales channels as the lottery data offered by TinBu, another wholly-owned subsidiary of the Company. This relationship is in full effect now and the first signed contracts are expected in the second quarter of 2023. The Company has received funding that became available through Woodford Eurasia Assets, Ltd. (“ Woodford Woodford agreed to fund up to $ 2.5 1.25 1.25 52.5 Amounts borrowed pursuant to the 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 $0.28 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 have subsequently resigned from the Board of Directors), and the appointment of two new directors (who have been appointed). Subsequent loans under the Loan Agreement also require our compliance with all listing requirements, unless waived by Woodford. The 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 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 Loan Agreement are covenants prohibiting us from (a) making any loan in excess of $1 million or obtaining any loan in 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 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 issued and outstanding common stock of the Company 7,619,207 0.28 On January 30, 2023, Mr. Edward K. Moffly resigned as Interim Chief Financial Officer of the Company. On February 1, 2023, the Board of Directors of the Company On March 13, 2023, John Brier, Bin Tu and JBBT, LLC (collectively, the “TinBu Plaintiffs”) filed its original complaint against Lottery.com, Inc. f/k/a AutoLotto, Inc. and its wholly-owned subsidiary TinBu, LLC (“TinBu”) in the Circuit Court of the 13 th 4.6 On March 29, 2023, the WinTogether Foundation Board of Directors voted to suspend its relationship with the Company. On April 22, 2023, the Company signed an exclusive affiliate agreement with International Gaming Alliance (IGA), to supply official Texas lottery tickets in the Dominican Republic. On April 25, 2023, the Company recommenced its ticket sales operations through its Texas retail network. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Restatement | Restatement On January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”), pursuant to which the Company borrowed $ 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 As previously disclosed in the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (“SEC”) on July 22, 2022, as amended on July 22, 2022, the Company’s Management met on July 19, 2022 in consultation with the Chairman of the Board of Directors of the Company, the Company’s legal counsel and the Company’s auditors at that time (Armanino LLP) and concluded that the Company’s previously issued audited consolidated financial statements for the fiscal year ended December 31, 2021, and the unaudited consolidated financial statements for the quarter ended March 31, 2022, previously filed with the SEC should no longer be relied upon and should be restated. The need for the restatement arose out of the Company’s reexamination of various transactions that occurred in 2021 and which were later rescinded or canceled in 2022. The Company has restated its financial statements for the year ended December 31, 2021, as included herein as discussed below and to reflect a change in the recognition of income in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606. On September 20, 2021, the Company entered into a purchase agreement with a major customer for the sale of various service credits with a total purchase price of $ 30 million dollars. Upon execution of the purchase agreement, the Company recognized the income and the customer was required make payment within 90 days. The customer provided payment prior to December 31, 2021, in the form of a check accepted by the Company for deposit and included in undeposited funds. During 2022, the Company discovered that the original service credits were non-transferrable and that the Company had pledged its own cash accounts to secure the customer with a line of credit in the amount of $ 30,000,000 utilized by the customer to provide the Company with payment towards the purchase of the service credits. Since the Company was prohibited from transferring the advertising portion of the service credits and could not complete the sale of such credits, the Company cancelled the transaction and could not recognize the income, or recognize a cash payment in the Company’s financial statements. In addition, the Company had recorded cost of sales related to this transaction in the amount of $ 10,000,000 30,000,000 10,000,000 In addition, the Company had invoiced the customer a further $ 17,117,472 18,539,472 17,117,472 18,539,472 In an unrelated transaction, the Company entered into an arrangement with another customer totaling $ 5,000,000 5,000,000 500,000 500,000 500,000 4,500,000 500,000 5,000,000 500,000 In addition, related to the transaction stated above, in February 2022, the Company loaned the customer $ 450,000 450,000 6,050,000 4,500,000 1,550,000 6,500,000 4,500,000 6,050,000 1,550,000 450,000 2,000,000 2,000,000 Further, during the Company’s reassessment of all accounts as of December 31, 2021, the Company determined that approximately $ 2,000,000 2,000,000 2,000,000 The following table presents the impact of the restatements on the Company’s previously reported consolidated balance sheet for the fiscal year ended December 31, 2021. The values as previously reported were derived from the 2021 consolidated financial statements contained in the Company’s previously reported balance sheet as of December 31, 2021 filed in the Company’s Annual Report on Form 10-K, which were included in the Company’s Annual Report on Form 10-K that was filed with the SEC on May 10, 2023. Schedule of Restatements of Previously Reported Consolidated Balance Sheet Reported Impacts Restated Fiscal Year Ended December 31, 2021 As Previously Restatement As Reported Impacts Restated ASSETS Cash $ 62,638,970 $ (30,000,000 ) $ 32,638,970 Accounts receivable 21,696,653 (21,617,472 ) 79,181 Prepaid expenses 13,896,638 9,000,000 22,896,638 Total Asset $ 147,151,478 $ (42,617,472 ) $ 104,534,006 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue 662,335 500,000 1,162,335 Accrued and other expenses 4,528,815 (112,647 ) 4,416,168 Total current liabilities 10,145,285 387,353 10,532,638 Total liabilities 10,146,454 387,353 10,533,807 Accumulated deficit (106,232,518 ) (41,955,620 ) -148,188,138 Total Lottery.com Inc. stockholders’ equity 134,224,933 (43,004,826 ) 91,220,107 Total Equity 137,005,024 (43,004,825 ) 94,000,199 Total liabilities and stockholders’ equity $ 147,151,478 $ (42,617,472 ) $ 104,534,006 |
Basis of Presentation | 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 the fair presentation. The operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021 has been derived from our audited 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, 2021, which were included in Amendment No. 1 to our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on May 10, 2023. |
Impact of Trident Acquisition Corp. Business Combination | 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) our combined results 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 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 | 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 | Concentration of Credit Risks Financial instruments that are potentially subject to concentrations of credit risk are primarily cash. Cash holdings are placed with major financial institutions deemed to be of high-credit-quality in order to limit credit exposure. The Company maintains deposits and certificates of deposit with banks which may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit and money market accounts which are not FDIC insured. In addition, deposits aggregating approximately $ 19,790 |
Use of Estimates | 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 a historical experience using assumptions we believe to be reasonable under the circumstances. |
Foreign currency translation | 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 | Cash As of March 31, 2022 and December 31, 2021, cash and cash equivalents were composed 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 |
Accounts Receivable | 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, as its customers, in the normal course of business. We accrue 100 percent of all expenses associated with LotteryLink prior to issuing accounts payable to a Master Affiliate or receiving associated payments. 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 did not record any allowance for uncollectible receivables as of March 31, 2022 and December 31, 2021. The Company has not incurred bad debt expense historically. |
Prepaid Expenses | 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 were used to value these contracts. The current portion of prepaid expenses is included in current assets on the condensed consolidated balance sheets. |
Investments | Investments On August 2, 2018, AutoLotto purchased 186,666 4 20 |
Property and equipment, net | 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 five years Depreciation of property and equipment is computed using the straight-line method over the following estimated useful lives: Schedule of Depreciation of Property and Equipment Computers and equipment 3 Furniture and fixtures 5 Software 3 |
Notes Receivable | 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 | 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 | 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 Software license represents the Company’s license agreements for third party software, which are amortized over their estimated economic lives. |
Customer relationships | 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 | 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 | 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 Domain name represents the cost incurred to purchase the website domain name and is being amortized on a straight-line method over an estimated useful life. |
Impairment of Long-Lived Assets | 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. The Company determined that there was no significant impairment of long-lived assets during the three months ended March 31, 2022 or the year ended December 31, 2021. |
Goodwill | 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 | Revenue Recognition Under the new standard, ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606) |
Lottery game revenue | 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 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 | 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” |
Recent Accounting Pronouncements | 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. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Restatements of Previously Reported Consolidated Balance Sheet | The following table presents the impact of the restatements on the Company’s previously reported consolidated balance sheet for the fiscal year ended December 31, 2021. The values as previously reported were derived from the 2021 consolidated financial statements contained in the Company’s previously reported balance sheet as of December 31, 2021 filed in the Company’s Annual Report on Form 10-K, which were included in the Company’s Annual Report on Form 10-K that was filed with the SEC on May 10, 2023. Schedule of Restatements of Previously Reported Consolidated Balance Sheet Reported Impacts Restated Fiscal Year Ended December 31, 2021 As Previously Restatement As Reported Impacts Restated ASSETS Cash $ 62,638,970 $ (30,000,000 ) $ 32,638,970 Accounts receivable 21,696,653 (21,617,472 ) 79,181 Prepaid expenses 13,896,638 9,000,000 22,896,638 Total Asset $ 147,151,478 $ (42,617,472 ) $ 104,534,006 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue 662,335 500,000 1,162,335 Accrued and other expenses 4,528,815 (112,647 ) 4,416,168 Total current liabilities 10,145,285 387,353 10,532,638 Total liabilities 10,146,454 387,353 10,533,807 Accumulated deficit (106,232,518 ) (41,955,620 ) -148,188,138 Total Lottery.com Inc. stockholders’ equity 134,224,933 (43,004,826 ) 91,220,107 Total Equity 137,005,024 (43,004,825 ) 94,000,199 Total liabilities and stockholders’ equity $ 147,151,478 $ (42,617,472 ) $ 104,534,006 |
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: Schedule of Depreciation of Property and Equipment Computers and equipment 3 Furniture and fixtures 5 Software 3 |
Restatement of Financial Stat_2
Restatement of Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Restatement Of Financial Statements | |
Schedule of Restatements Reported In Financial Statements | The following tables summarize the effect of the restatements on the specific items presented in our previously reported financial statements: Schedule of Restatements Reported In Financial Statements LOTTERY.COM CONSOLIDATED BALANCE SHEET March 31, March 31, 2022 Adjustments 2022 (As Filed) (As Restated) ASSETS Current assets: Cash $ 50,795,889 (46,500,250 ) (1) (2) $ 4,295,639 (46,500,250 ) Restricted cash - 30,000,000 (1) 30,000,000 Accounts receivable 35,796,548 (34,356,944 ) (1) (2) 1,439,604 (34,356,944 ) Prepaid expenses 12,843,029 9,000,000 (1) 21,843,029 Other current assets 246,599 (4,682 ) 241,917 Total current assets 99,682,065 57,820,189 Long-term assets 54,962,270 8,509,686 (1) (2) 63,471,956 Total assets $ 154,644,335 $ 121,292,145 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Trade payables $ 2,559,846 (167,602 )(3) $ 2,392,244 Deferred revenue 544,643 544,643 Notes payable - current 3,477,339 3,477,339 Accrued interest 180,281 180,281 Accrued and other expenses 4,081,672 391,435 (3) 4,473,107 Total current liabilities 10,843,781 11,067,614 Long-term liabilities: Other long term liabilities 1,522 1,522 Total long-term liabilities 1,522 1,522 Commitments and contingencies (Note 14) - 30,000,000 (1) 30,000,000 Total liabilities 10,845,303 41,069,136 Commitments and contingencies Equity Controlling Interest Preferred Stock, par value $ 0.001 1,000,000 none - - Common stock, par value $ 0.001 500,000,000 50,376,433 50,256,317 46,928 3,448 (7) 50,376 Additional paid-in capital 263,022,161 (2,541,242 ) (4) 260,480,919 Accumulated other comprehensive loss (1,719 ) - (1,719 ) Accumulated deficit (121,919,207 ) (61,019,895 ) (9) (182,939,102 ) Total Lottery.com Inc. stockholders’ equity 141,148,163 77,590,474 Noncontrolling interest 2,650,869 (18,334 )( 9 ) 2,632,535 Total Equity 143,799,032 80,223,009 Total liabilities and stockholders’ equity $ 154,644,335 - $ 121,292,145 LOTTERY.COM CONSOLIDATED STATEMENT OF OPERATIONS 2022 Adjustments 2022 Three Months Ended March 31, 2022 Adjustments 2022 (As Filed) (As Restated) Revenue $ 21,150,892 (17,520,200 ) (1) ( 2 ) $ 3,630,692 Cost of revenue 3,165,469 (780,727 ) (1) ( 2 ) 2,384,742 Gross profit 17,985,423 1,245,950 Operating expenses: 33,804,723 (1,877,805 ) (2) 31,926,918 Loss from operations (15,819,300 ) $ (30,680,968 ) Other expenses Interest expense (953 ) 4,934 (3) 3,981 Other expense (2,436 ) 4,191,580 (2) 4,189,144 Total other expenses, net (3,389 ) 4,193,125 Net loss before income tax $ (15,815,911 ) $ (34,874,093 ) Income tax expense (benefit) - 23,364 (2) 23,364 Net loss (15,815,911 ) (34,897,457 ) Other comprehensive loss Foreign currency translation adjustment, net (1,064 ) 1,064 Comprehensive loss (15,816,975 ) (34,898,521 ) Net income attributable to noncontrolling interest 129,222 18,335 (3) 147,557 Net loss attributable to Lottery.com Inc. (15,687,753 ) (34,750,964 ) Net loss per common share, basic and diluted $ (0.33 ) $ (0.69 ) Weighted average common shares outstanding, basic and diluted 46,832,919 50,376,433 LOTTERY.COM CONSOLIDATED STATEMENT OF CASH FLOWS 2022 Adjustments 2022 Three Months Ending March 31, 2022 Adjustments 2022 (As Filed) (As Restated) Cash flow from operating activities Net loss attributable to Lottery.com Inc. (15,686,689 ) $ (19,064,275 ) (9) (34,750,964 ) Adjustments to reconcile net loss to net cash used in operating activities: 23,419,191 $ ($2,195,301 ) (9) 21,223,890 Changes in assets & liabilities: Accounts receivable (14,099,895 ) 12,739,472 (1) ( 2 ) (1,360,423 ) 12,739,472 Prepaid expenses 1,053,609 1,053,609 Note Receivable - (2,000,000 )(6) (2,000,000 ) Other current assets (20,399 ) 4,682 (9) (15,717 ) Trade payables 1,553,311 (167,602 ) (9) 1,385,709 Deferred revenue (117,692 ) (500,000 ) (1) ( 2 ) (617,692 ) (500,000 ) Accrued interest 4,021 4,021 Accrued and other expenses (10,648 ) 67,587 (9) 56,939 Other long term assets - (13,009,686 )(8) (13,009,686 ) Other long term liabilities 353 353 Net cash provided by operating activities (3,904,838 ) 1,970,039 Cash flow from investing activities Purchases of property and equipment (18,305 ) (18,305 ) Purchases of intangible assets (1,124,873 ) 1,124,873 (9) - Investment in subsidiary, net - - Net cash used in investing activities (1,143,178 ) (18,305 ) Cash flow from financing activities Issuance of digital securities - - Proceeds from exercise of options and warrants - - Proceeds from issuance of convertible debt - - Payment of debt issuance costs - - Issuance of note receivable (6,500,000 ) 6,500,000 (6) - Proceeds from issuance of notes payable - - Principal payments on debt (294,001 ) (294,001 ) Net cash provided by financing activities (6,794,001 ) (294,001 ) Effect of exchange rate changes on cash (1,064 ) - (1,064 ) Net change in net cash and restricted cash (11,843,081 ) 13,499,750 (9) 1,656,669 Cash and restricted cash at beginning of period 62,638,970 (30,000,000 )(1) 3 2,638,970 Cash and restricted cash at end of period 50,795,889 - 34,295,639 The following tables summarize the effect of the restatements on the specific items presented in our previously reported financial statements: The specific explanations for the items noted above in the restated financial statements are as follows: (1) On January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”), pursuant to which the Company borrowed $ 30,000,000 from Provident, which was evidenced by a $ 30,000,000 Promissory Note. In accordance with the terms of the Business Loan, upon entering into the agreement, $ 30,000,000 in a separate account with Provident was pledged as security for the amount outstanding under the loan (“Collateral Security”). The $ 30,000,000 Collateral Security became restricted and remained restricted until October 12, 2022, when AutoLotto defaulted on its obligations under the Business Loan and Provident foreclosed on the $ 30,000,000 of Collateral Security. The Collateral Security, which was in the form of restricted cash, was presented as a contingent liability on the Company’s balance sheet from March 31, 2022 until the obligation was satisfied in October of 2022. (2) After reexamination of various transactions that occurred in 2021 and which were later rescinded or canceled in 2022, the Company has restated revenue on its financial statements for the year ended December 31, 2021, to reflect a change in the recognition of income in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606 a. On September 20, 2021, the Company entered into a purchase agreement with a major customer for the sale of various service credits with a total purchase price of $ 30 million dollars. Upon execution of the purchase agreement, the Company recognized the income and the customer was required make payment within 90 days. The customer provided payment prior to December 31, 2021, in the form of a check accepted by the Company for deposit and included in undeposited funds. During 2022, the Company discovered that the original service credits were non-transferrable and that the Company had pledged its own cash accounts to secure a line of credit in the amount of $ 30,000,000 utilized by the customer to provide the Company with payment towards the purchase of the service credits. Since the Company was prohibited from transferring the advertising portion of the service credits and could not complete the sale of such credits, the Company cancelled the transaction and could not recognize the income, nor recognize a cash payment in the Company’s financial statements. In addition, the Company had recorded cost of sales related to this transaction in the amount of $ 10,000,000 30,000,000 10,000,000 b. In addition, the Company had invoiced the customer a further $ 17,117,472 18,539,472 17,117,472 18,539,472 c. The total adjustment to accounts receivable was an increase of $ 34,356,944 d. The total adjustment to pre-paid expenses was an increase of $ 9,000,000 4,682 e. The total adjustment to trade payables was a decrease of $ 167,602 f. The total adjustment to revenue was a decrease of $ 17,520,200 g. Income tax expense increase of $ 23,364 h. The total adjustment to cost of revenue was an increase of $ 780,727 i. The total adjustment to operating expenses was a decrease of $ 1,877,805 4,191,580 (3) During the Company’s reassessment of all accounts as of December 31, 2021, the Company determined that approximately $ 2,000,000 2,000,000 2,000,000 (4) After the termination of several officers and employees subsequent to December 31, 2022 and the cancelation of various options and/or warrants held by these individuals, the Company decreased Additional paid-in capital in the amount of $ 2,541,242 (5) In an unrelated transaction, the Company entered into an arrangement with another customer totaling $ 5,000,000 in 2021. The Company recognized the full amount of the arrangement and recorded $ 5,000,000 as revenue and accounts receivable for the year ended December 31, 2021. The Company started performing the services under the arrangement during 2021, which services were to be completed in 2022. During October 2021, the customer paid $ 500,000 towards these services. Subsequently, the Company determined that, in accordance with ASC 606, due to an uncertainty of collectability of the remaining accounts receivable, the Company should not have recognized any revenue from this arrangement during the year ended December 31, 2021. As a result of the payment of $ 500,000 received during the year ended December 31, 2021, the Company is allowed to record deferred revenue in the amount of $ 500,000 . As a result, the Company (i) decreased accounts receivable by $ 4,500,000 , increased deferred revenue by $ 500,000 and decreased revenue by $ 5,000,000 , for the year ended December 31, 2021; and (ii) recorded revenue of $ 500,000 for the three months ended March 31, 2022. (6) In addition, related to the transaction stated above, in February 2022, the Company loaned the customer $ 450,000 450,000 6,050,000 4,500,000 1,550,000 6,500,000 4,500,000 6,050,000 1,550,000 450,000 2,000,000 2,000,000 (7) On October 28, 2021, the Company granted 3,832,431 3,448,066 (8) In addition, the Company had placed $ 16,500,000 16,500,000 11,697,163 (9) As a result of all the foregoing adjustments, the Company reevaluated the classifications of accounts on the statements of cash flows accordingly . |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Tangible and Intangible Assets Acquisition | Schedule of Tangible and Intangible Assets Acquisition Cash $ 517,460 Accounts receivable, net 34,134 Prepaids 5,024 Property and equipment, net 2,440 Other assets, net 65,349 Intangible assets 8,590,000 Goodwill 4,940,643 Total assets $ 14,155,051 Accounts payable and other liabilities $ (387,484 ) Customer deposits (134,707 ) Related party loan (417,017 ) Total liabilities $ (939,208 ) Total net assets of Acquirees $ 13,215,843 |
Schedule of Intangible Assets Acquired | The following are details of the purchase price allocated to the intangible assets acquired. Schedule of Intangible Assets Acquired Category Fair Value Customer relationships $ 410,000 Gaming approvals 4,020,000 Trade names and trademarks 2,540,000 Technology 1,620,000 Total Intangibles $ 8,590,000 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net as of March 31, 2022 and December 31, 2021, consisted of the following: Schedule of Property and Equipment, Net March 31, December 31, 2022 2021 Computers and equipment $ 110,498 $ 113,151 Furniture and fixtures 31,818 23,760 Software 1,903,121 1,903,121 Property and equipment 2,045,437 2,040,032 Accumulated depreciation (1,924,144 ) (1,898,753 ) Property and equipment, net $ 121,293 $ 141,279 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Accumulated Amortization of Intangible Assets | Gross carrying values and accumulated amortization of intangible assets: Schedule of Accumulated Amortization of Intangible Assets March 31, 2022 December 31, 2021 Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortizing intangible assets Customer relationships 6 $ 1,350,000 $ (612,639 ) $ 737,361 $ 1,350,000 $ (556,389 ) $ 793,611 Trade name 6 2,550,000 (429,306 ) 2,120,694 2,550,000 (217,223 ) 2,332,777 Technology 6 3,050,000 (1,056,528 ) 1,993,472 3,050,000 (929,444 ) 2,120,556 Software agreements 6 14,450,000 (3,851,111 ) 10,598,889 14,450,000 (3,145,277 ) 11,304,723 Gaming license 6 4,020,000 (502,500 ) 3,517,500 4,020,000 (335,000 ) 3,685,000 Internally developed software 2 10 1,888,930 (94,451 ) 1,794,479 111,053 (23,323 ) 832,709 Domain name 15 6,935,000 (745,000 ) 6,190,000 6,935,000 (629,416 ) 6,305,584 $ 34,243,930 $ (7,291,535 ) $ 26,952,395 $ 32,466,053 $ (5,836,072 ) $ 26,629,981 |
Schedule of Estimated Amortization Expense | Schedule of Estimated Amortization Expense Years ending December 31, Amount Remainder of 2022 $ 2,584,988 2023 5,169,975 2024 5,169,975 2025 5,169,975 2026 5,169,975 Thereafter $ 2,514,841 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity | |
Schedule of Common Stock | Schedule of Common Stock Issuance of Common Stock for legal settlement 60,000 Exercise of options (Note 10) 60,116 Total 120,116 |
Schedule of Common Stock Warrant | Schedule of Common Stock Warrant Weighted Weighted Average Average Remaining Number of Exercise Contractual Aggregate Shares Price Life (years) Intrinsic Value Outstanding at December 31, 2021 395,675 $ 0.11 4.0 $ 2,478,501 Granted 92,621 7.56 3.0 Exercised - - Forfeited/cancelled - - Outstanding at March 31, 2022 488,296 1.52 3.6 $ 1,200,387 Exercisable at March 31, 2022 488,296 $ 1.52 3.6 $ 1,200,387 Number of Shares Weighted Weighted Aggregate Outstanding at December 31, 2020 573,359 $ 0.28 4.8 $ 272,638 Granted - - - Exercised (177,684 ) 0.66 - Forfeited/canceled - - - Outstanding at December 31, 2021 395,675 0.11 4.0 2,478,501 Granted 92,621 7.56 3.0 Exercised - - - Forfeited/canceled - - - Outstanding at March 31, 2022 488,296 $ 1.52 3.6 $ 1,200,387 Exercisable at March 31, 2022 488,296 $ 1.52 3.6 $ 1,200,387 |
Schedule of Fair Value of Issuance Debts | Schedule of Fair Value of Issuance Debts Issuance Risk-free interest rate 1.80 % Expected dividend yield 0 % Expected volatility 113.17 % Term 3 Fair value of common stock $ 3.75 |
Stock-based Compensation Expe_2
Stock-based Compensation Expense (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options Activity | Schedule of Stock Options Activity Shares Outstanding Weighted Weighted Aggregate Outstanding at December 31, 2020 37,405 1,315,218 $ 0.30 5.5 $ 362,841 Granted - - - - Exercised - (737,732 ) (0.28 ) - Forfeited/canceled 231,825 (231,825 ) (0.65 ) - Outstanding at December 31, 2021 269,230 345,661 0.97 4.4 2,061,303 Granted - - - - Exercised - (60,116 ) (0.67 ) - Forfeited/canceled (uncanceled) (60,116 ) 60,116 0.67 - Outstanding at March 31, 2022 209,114 345,661 $ 0.41 4.2 $ 944,544 Exercisable at March 31, 2022 209,114 345,661 $ 0.41 4.2 $ 944,544 |
Schedule of Restricted Stock Awards Activity | The Company had restricted stock activity summarized as follows: Schedule of Restricted Stock Awards Activity Weighted Average Number of Grant Shares Fair Value To Outstanding at December 31, 2021 3,832,431 $ 14.75 Granted - - Vested - - Forfeited/canceled - - Restricted shares unvested at March 31, 2022 3,832,431 $ 14.75 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Net loss per common share | |
Schedule of Basic and Dilutes Net Income Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share: Schedule of Basic and Dilutes Net Income Loss Per Share 2022 2021 Three Months Ended 2022 As Restated Comprehensive net loss attributable to stockholders $ (34,750,964 ) $ (5,456,034 ) Weighted average common shares outstanding Basic and diluted 50,376,433 22,888,700 Net loss per common share Basic and diluted $ (.69 ) $ (0.24 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rent Payments Due Under Non Cancellable Leases | As of March 31, 2022, future minimum rent payments due under non-cancellable leases with initial maturities greater than one year are as follows: Schedule of Future Minimum Rent Payments Due Under Non Cancellable Leases Years ending December 31, Amount 2022 (nine months) 144,457 2023 153,222 2024 48,404 Total $ 346,083 |
Liquidity and Going Concern (De
Liquidity and Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Retained Earnings (Accumulated Deficit) | $ 182,939,102 | $ 148,188,138 | |
Working capital | 16,800,000 | ||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 34,750,964 | $ 5,456,034 | |
Operations loss | $ 30,680,968 | $ 2,752,266 |
Schedule of Restatements Report
Schedule of Restatements Reported In Financial Statements (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 22, 2022 | Jan. 04, 2022 | Sep. 20, 2021 | |||
Product Information [Line Items] | |||||||||
Escrow deposit amount | $ 16,500,000 | ||||||||
Note receivable | $ 2,000,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||
Preferred Stock, shares issued | 0 | 0 | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |||||||
Common stock, shares outstanding | 50,376,433 | 50,256,317 | 50,256,317 | ||||||
Common stock, shares issued | 50,376,433 | 50,376,433 | 50,256,317 | ||||||
Debt Instrument, Face Amount | $ 2,000,000 | $ 30,000,000 | |||||||
Long-Term Line of Credit | $ 30,000,000 | $ 30,000,000 | |||||||
Decrease in accounts receivable and revenue | 18,539,472 | $ 17,117,472 | |||||||
Accounts receivable | (1,360,423) | ||||||||
Decreased prepaid expenses | (1,053,609) | (894,872) | |||||||
Deferred Revenue, Current | 544,643 | 1,162,335 | |||||||
Accounts Receivable, after Allowance for Credit Loss, Current | 1,439,604 | 79,181 | |||||||
Increase (Decrease) in Deferred Revenue | (617,692) | (2,039,113) | |||||||
Revenues | 3,630,692 | $ 5,461,539 | |||||||
Long term assets | 63,471,956 | 11,697,163 | |||||||
Subsequent Event [Member] | |||||||||
Product Information [Line Items] | |||||||||
Decreased stock-compensation expense | $ 2,541,242 | ||||||||
Advertising Credits [Member] | |||||||||
Product Information [Line Items] | |||||||||
Additional invoice amount | 18,539,472 | 17,117,472 | |||||||
Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Prepaid advertising credits | 2,000,000 | ||||||||
Reserve loss of prepaid advertising credits | 2,000,000 | ||||||||
Revision of Prior Period, Reclassification, Adjustment [Member] | Advertising Credits [Member] | |||||||||
Product Information [Line Items] | |||||||||
Decreased prepaid expenses | 2,000,000 | ||||||||
Revision of Prior Period, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Issuance of note receivable | [1] | (6,500,000) | |||||||
Note receivable | [1] | 2,000,000 | |||||||
Accounts receivable | 12,739,472 | [2],[3] | 34,356,944 | ||||||
Decreased prepaid expenses | 9,000,000 | ||||||||
Decrease in prepaid expeses | 4,682 | ||||||||
Accrued expense and other expenses | 167,602 | ||||||||
Decrease in revenue | 17,520,200 | ||||||||
Increase income tax expense benefit | 23,364 | ||||||||
Increasse in cost of revenue | 780,727 | ||||||||
Decrease in operating expense | 1,877,805 | ||||||||
Increasse in cost of revenue | 4,191,580 | ||||||||
Deferred Revenue, Current | 500,000 | ||||||||
Accounts Receivable, after Allowance for Credit Loss, Current | (34,356,944) | [2],[3] | (21,617,472) | ||||||
Increase (Decrease) in Deferred Revenue | [2],[3] | 500,000 | |||||||
Revenues | [2],[3] | (17,520,200) | |||||||
Long term assets | [2],[3] | 8,509,686 | |||||||
Business Loan Agreement [Member] | |||||||||
Product Information [Line Items] | |||||||||
Escrow deposit amount | 16,500,000 | ||||||||
Debt Instrument, Face Amount | 30,000,000 | ||||||||
Debt Instrument, Debt Default, Amount | 30,000,000 | ||||||||
Business Loan Agreement [Member] | October 12, 2022 [Member] | |||||||||
Product Information [Line Items] | |||||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 30,000,000 | ||||||||
Purchase Agreement [Member] | |||||||||
Product Information [Line Items] | |||||||||
Pre-paid expense related to transaction | 10,000,000 | ||||||||
Purchase Agreement [Member] | Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Decreased in revenue | 30,000,000 | ||||||||
Decrease in cost of sales | 10,000,000 | ||||||||
Agreement With Customer [Member] | |||||||||
Product Information [Line Items] | |||||||||
Additional invoice amount | 5,000,000 | ||||||||
Contract with Customer, Liability, Revenue Recognized | 5,000,000 | ||||||||
Amount received for services provided to customer | 500,000 | 500,000 | |||||||
Deferred Revenue, Current | 500,000 | ||||||||
Agreement With Customer [Member] | Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Decrease in revenue | 500,000 | 5,000,000 | |||||||
Accounts Receivable, after Allowance for Credit Loss, Current | 4,500,000 | ||||||||
Increase (Decrease) in Deferred Revenue | 500,000 | ||||||||
Agreement With Customer [Member] | Revision of Prior Period, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Decrease in revenue | 5,000,000 | ||||||||
Accounts Receivable, after Allowance for Credit Loss, Current | 4,500,000 | ||||||||
Increase (Decrease) in Deferred Revenue | $ 500,000 | ||||||||
Revenues | 500,000 | ||||||||
Secured Promissory Note [Member] | |||||||||
Product Information [Line Items] | |||||||||
Loan | 450,000 | ||||||||
Bridge loan | 450,000 | ||||||||
Escrow deposit amount | 6,050,000 | ||||||||
Issuance of note receivable | 6,500,000 | ||||||||
Secured promissory note | 1,550,000 | ||||||||
Note receivable | 2,000,000 | ||||||||
Secured Promissory Note [Member] | Customer [Member] | |||||||||
Product Information [Line Items] | |||||||||
Escrow deposit, proceeds | 1,550,000 | ||||||||
Secured Promissory Note [Member] | Company [Member] | |||||||||
Product Information [Line Items] | |||||||||
Escrow deposit, proceeds | $ 4,500,000 | ||||||||
Promissory Note [Member] | Business Loan Agreement [Member] | |||||||||
Product Information [Line Items] | |||||||||
Debt Instrument, Face Amount | 30,000,000 | ||||||||
Business Loan [Member] | Business Loan Agreement [Member] | |||||||||
Product Information [Line Items] | |||||||||
Debt Instrument, Collateral Amount | $ 30,000,000 | ||||||||
[1]In addition, related to the transaction stated above, in February 2022, the Company loaned the customer $ 450,000 450,000 6,050,000 4,500,000 1,550,000 6,500,000 4,500,000 6,050,000 1,550,000 450,000 2,000,000 2,000,000 30,000,000 from Provident, which was evidenced by a $ 30,000,000 Promissory Note. In accordance with the terms of the Business Loan, upon entering into the agreement, $ 30,000,000 in a separate account with Provident was pledged as security for the amount outstanding under the loan (“Collateral Security”). The $ 30,000,000 Collateral Security became restricted and remained restricted until October 12, 2022, when AutoLotto defaulted on its obligations under the Business Loan and Provident foreclosed on the $ 30,000,000 of Collateral Security. The Collateral Security, which was in the form of restricted cash, was presented as a contingent liability on the Company’s balance sheet from March 31, 2022 until the obligation was satisfied in October of 2022. |
Schedule of Restatements of Pre
Schedule of Restatements of Previously Reported Consolidated Balance Sheet (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
ASSETS | |||||
Cash | $ 32,638,970 | ||||
Accounts receivable | $ 1,439,604 | 79,181 | |||
Prepaid expenses | 21,843,029 | 22,896,638 | |||
Total Asset | 121,292,145 | 104,534,006 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
Deferred revenue | 544,643 | 1,162,335 | |||
Accrued and other expenses | 4,416,168 | ||||
Total current liabilities | 11,067,614 | 10,532,638 | |||
Total liabilities | 41,069,136 | 10,533,807 | |||
Accumulated deficit | (182,939,102) | (148,188,138) | |||
Total Lottery.com Inc. stockholders’ equity | 77,590,474 | 91,220,107 | |||
Total Equity | 80,223,009 | 94,000,199 | $ 21,375,014 | $ 16,634,973 | |
Total liabilities and stockholders’ equity | 121,292,145 | 104,534,006 | |||
Previously Reported [Member] | |||||
ASSETS | |||||
Cash | 62,638,970 | ||||
Accounts receivable | 35,796,548 | 21,696,653 | |||
Prepaid expenses | 12,843,029 | 13,896,638 | |||
Total Asset | 154,644,335 | 147,151,478 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
Deferred revenue | 544,643 | 662,335 | |||
Accrued and other expenses | 4,528,815 | ||||
Total current liabilities | 10,843,781 | 10,145,285 | |||
Total liabilities | 10,845,303 | 10,146,454 | |||
Accumulated deficit | (121,919,207) | (106,232,518) | |||
Total Lottery.com Inc. stockholders’ equity | 141,148,163 | 134,224,933 | |||
Total Equity | 143,799,032 | 137,005,024 | |||
Total liabilities and stockholders’ equity | 154,644,335 | 147,151,478 | |||
Revision of Prior Period, Adjustment [Member] | |||||
ASSETS | |||||
Cash | (30,000,000) | ||||
Accounts receivable | (34,356,944) | [1],[2] | (21,617,472) | ||
Prepaid expenses | 9,000,000 | [2] | 9,000,000 | ||
Total Asset | (42,617,472) | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
Deferred revenue | 500,000 | ||||
Accrued and other expenses | (112,647) | ||||
Total current liabilities | 387,353 | ||||
Total liabilities | 387,353 | ||||
Accumulated deficit | (61,019,895) | [3] | (41,955,620) | ||
Total Lottery.com Inc. stockholders’ equity | (43,004,826) | ||||
Total Equity | (43,004,825) | ||||
Total liabilities and stockholders’ equity | $ (42,617,472) | ||||
[1]After reexamination of various transactions that occurred in 2021 and which were later rescinded or canceled in 2022, the Company has restated revenue on its financial statements for the year ended December 31, 2021, to reflect a change in the recognition of income in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606[2]On January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”), pursuant to which the Company borrowed $ 30,000,000 from Provident, which was evidenced by a $ 30,000,000 Promissory Note. In accordance with the terms of the Business Loan, upon entering into the agreement, $ 30,000,000 in a separate account with Provident was pledged as security for the amount outstanding under the loan (“Collateral Security”). The $ 30,000,000 Collateral Security became restricted and remained restricted until October 12, 2022, when AutoLotto defaulted on its obligations under the Business Loan and Provident foreclosed on the $ 30,000,000 of Collateral Security. The Collateral Security, which was in the form of restricted cash, was presented as a contingent liability on the Company’s balance sheet from March 31, 2022 until the obligation was satisfied in October of 2022. |
Schedule of Depreciation of Pro
Schedule of Depreciation of Property and Equipment (Details) | 3 Months Ended |
Mar. 31, 2022 | |
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 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 20, 2021 | Aug. 02, 2018 | Dec. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Apr. 30, 2023 | Mar. 22, 2022 | Jan. 04, 2022 | |
Product Information [Line Items] | |||||||||
Loan evidenced amount | $ 30,000,000 | $ 2,000,000 | |||||||
Long-Term Line of Credit | 30,000,000 | $ 30,000,000 | |||||||
Decrease in accounts receivable and revenue | 18,539,472 | $ 17,117,472 | |||||||
Deferred revenue | 544,643 | 1,162,335 | |||||||
Accounts receivable | 1,439,604 | 79,181 | |||||||
Deferred revenue | (617,692) | $ (2,039,113) | |||||||
Increase (Decrease) in Prepaid Expense | (1,053,609) | $ (894,872) | |||||||
Marketable securities | $ 0 | 0 | |||||||
Minimum [Member] | |||||||||
Product Information [Line Items] | |||||||||
Property and equipment, estimated useful lives | 3 years | ||||||||
Maximum [Member] | |||||||||
Product Information [Line Items] | |||||||||
Property and equipment, estimated useful lives | 5 years | ||||||||
AutoLotto [Member] | |||||||||
Product Information [Line Items] | |||||||||
Outstanding shares percentage | 4% | ||||||||
Ownership percentage | 20% | ||||||||
Class A-1 Common Stock [Member] | AutoLotto [Member] | |||||||||
Product Information [Line Items] | |||||||||
Shares purchased | 186,666 | ||||||||
Subsequent Event [Member] | |||||||||
Product Information [Line Items] | |||||||||
Shares purchased | 7,619,207 | ||||||||
Subsequent Event [Member] | Credit Concentration Risk [Member] | |||||||||
Product Information [Line Items] | |||||||||
Deposits | $ 19,790 | ||||||||
Advertising Credits [Member] | |||||||||
Product Information [Line Items] | |||||||||
Invoice amount | $ 18,539,472 | 17,117,472 | |||||||
Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Prepaid Advertising | 2,000,000 | ||||||||
Reserve loss of prepaid advertising credits | 2,000,000 | ||||||||
Revision of Prior Period, Reclassification, Adjustment [Member] | Advertising Credits [Member] | |||||||||
Product Information [Line Items] | |||||||||
Increase (Decrease) in Prepaid Expense | 2,000,000 | ||||||||
Service Credits [Member] | |||||||||
Product Information [Line Items] | |||||||||
Long-Term Line of Credit | 30,000,000 | ||||||||
Business Loan Agreement [Member] | |||||||||
Product Information [Line Items] | |||||||||
Loan evidenced amount | $ 30,000,000 | ||||||||
Debt instrument, debt default, amount | 30,000,000 | ||||||||
Business Loan Agreement [Member] | October 12, 2022 [Member] | |||||||||
Product Information [Line Items] | |||||||||
Debt instrument unused amount | 30,000,000 | ||||||||
Business Loan Agreement [Member] | Promissory Note [Member] | |||||||||
Product Information [Line Items] | |||||||||
Loan evidenced amount | 30,000,000 | ||||||||
Business Loan Agreement [Member] | Business Loan [Member] | |||||||||
Product Information [Line Items] | |||||||||
Debt instrument, collateral amount | $ 30,000,000 | ||||||||
Purchase Agreement [Member] | |||||||||
Product Information [Line Items] | |||||||||
Contract with Customer, Asset, Sale | $ 30,000,000 | ||||||||
Pre-paid expense related to transaction | 10,000,000 | ||||||||
Purchase Agreement [Member] | Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Decreased in revenue | 30,000,000 | ||||||||
Decrease in cost of sales | 10,000,000 | ||||||||
Agreement With Customer [Member] | |||||||||
Product Information [Line Items] | |||||||||
Invoice amount | 5,000,000 | ||||||||
Contract with customer revenue recognized | 5,000,000 | ||||||||
Amount received for services provided to customer | 500,000 | 500,000 | |||||||
Deferred revenue | 500,000 | ||||||||
Agreement With Customer [Member] | Revision of Prior Period, Reclassification, Adjustment [Member] | |||||||||
Product Information [Line Items] | |||||||||
Accounts receivable | 4,500,000 | ||||||||
Deferred revenue | 500,000 | ||||||||
Decrease in revenue | $ 500,000 | $ 5,000,000 |
Schedule of Restatements Repo_2
Schedule of Restatements Reported In Financial Statements (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Oct. 28, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 04, 2022 | ||||
Current assets: | |||||||||
Cash | $ 4,295,639 | $ 32,638,970 | |||||||
Restricted cash | 30,000,000 | ||||||||
Accounts receivable | 1,439,604 | 79,181 | |||||||
Prepaid expenses | 21,843,029 | 22,896,638 | |||||||
Other current assets | 241,917 | 226,200 | |||||||
Total current assets | 57,820,189 | 55,840,989 | |||||||
Long-term assets | 63,471,956 | $ 11,697,163 | |||||||
Total assets | 121,292,145 | 104,534,006 | |||||||
Current liabilities: | |||||||||
Trade payables | 2,392,244 | 1,006,535 | |||||||
Deferred revenue | 544,643 | 1,162,335 | |||||||
Notes payable - current | 3,477,339 | 3,771,340 | |||||||
Accrued interest | 180,281 | 176,260 | |||||||
Accrued and other expenses | 4,473,107 | 4,416,168 | |||||||
Total current liabilities | 11,067,614 | 10,532,638 | |||||||
Long-term liabilities: | |||||||||
Other long term liabilities | 1,522 | 1,169 | |||||||
Total long-term liabilities | 1,522 | 1,169 | |||||||
Commitments and contingencies (Note 14) | 30,000,000 | ||||||||
Total liabilities | 41,069,136 | 10,533,807 | |||||||
Equity | |||||||||
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, 50,376,433 and 50,256,317 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 50,376 | 50,256 | |||||||
Additional paid-in capital | 260,480,919 | 239,358,644 | |||||||
Accumulated other comprehensive loss | (1,719) | (655) | |||||||
Accumulated deficit | (182,939,102) | (148,188,138) | |||||||
Total Lottery.com Inc. stockholders’ equity | 77,590,474 | 91,220,107 | |||||||
Noncontrolling interest | 2,632,535 | 2,780,092 | |||||||
Total Equity | 80,223,009 | $ 21,375,014 | 94,000,199 | $ 16,634,973 | |||||
Total liabilities and stockholders’ equity | 121,292,145 | 104,534,006 | |||||||
Revenue | 3,630,692 | 5,461,539 | |||||||
Cost of revenue | 2,384,742 | 2,946,981 | |||||||
Gross profit | 1,245,950 | 2,514,558 | |||||||
Operating expenses: | 31,926,918 | 5,266,824 | |||||||
Loss from operations | (30,680,968) | (2,752,266) | |||||||
Other expenses | |||||||||
Interest expense | 3,981 | ||||||||
Other expense | 4,189,144 | 231,720 | |||||||
Total other expenses, net | 4,193,125 | 2,703,768 | |||||||
Net loss before income tax | (34,874,093) | (5,456,034) | |||||||
Income tax expense (benefit) | 23,364 | ||||||||
Net loss | (34,897,457) | (5,456,034) | |||||||
Other comprehensive loss | |||||||||
Foreign currency translation adjustment, net | 1,064 | ||||||||
Comprehensive loss | (34,898,521) | ||||||||
Net income attributable to noncontrolling interest | 147,557 | ||||||||
Net loss attributable to Lottery.com Inc. | $ (34,750,964) | ||||||||
Net loss per common share, basic and diluted | $ (0.69) | $ (0.24) | |||||||
Weighted average common shares outstanding, basic and diluted | 50,376,433 | 22,888,700 | |||||||
Cash flow from operating activities | |||||||||
Net loss attributable to Lottery.com Inc. | $ (34,750,964) | $ (5,456,034) | |||||||
Changes in assets & liabilities: | |||||||||
Accounts receivable | (1,360,423) | ||||||||
Prepaid expenses | 1,053,609 | 894,872 | |||||||
Note Receivable | (2,000,000) | ||||||||
Other current assets | (15,717) | (54,853) | |||||||
Trade payables | 1,385,709 | (354,736) | |||||||
Deferred revenue | 617,692 | 2,039,113 | |||||||
Accrued interest | 4,021 | (605,961) | |||||||
Accrued and other expenses | 56,939 | 1,512,125 | |||||||
Other long term liabilities | 353 | ||||||||
Net cash provided by operating activities | 1,970,039 | (3,892,474) | |||||||
Cash flow from investing activities | |||||||||
Purchases of property and equipment | (18,305) | (57,452) | |||||||
Purchases of intangible assets | (3,050,000) | ||||||||
Net cash used in investing activities | (18,305) | (3,107,452) | |||||||
Cash flow from financing activities | |||||||||
Issuance of digital securities | 108,332 | ||||||||
Proceeds from exercise of options and warrants | 895 | ||||||||
Proceeds from issuance of convertible debt | 19,282,619 | ||||||||
Principal payments on debt | (294,001) | ||||||||
Net cash provided by financing activities | (294,001) | 14,535,596 | |||||||
Effect of exchange rate changes on cash | (1,064) | ||||||||
Net change in net cash and restricted cash | 1,656,669 | 7,535,670 | |||||||
Cash and restricted cash at beginning of period | 32,638,970 | 158,492 | 158,492 | ||||||
Cash and restricted cash at end of period | 34,295,639 | $ 7,694,162 | $ 32,638,970 | $ 158,492 | |||||
stock issued during period, shares, restricted stock award, net of forfeitures | 3,832,431 | ||||||||
Stock issued during period, shares, issued for services | 3,448,066 | ||||||||
Previously Reported [Member] | |||||||||
Current assets: | |||||||||
Cash | 50,795,889 | ||||||||
Restricted cash | |||||||||
Accounts receivable | 35,796,548 | $ 21,696,653 | |||||||
Prepaid expenses | 12,843,029 | 13,896,638 | |||||||
Other current assets | 246,599 | ||||||||
Total current assets | 99,682,065 | ||||||||
Long-term assets | 54,962,270 | ||||||||
Total assets | 154,644,335 | 147,151,478 | |||||||
Current liabilities: | |||||||||
Trade payables | 2,559,846 | ||||||||
Deferred revenue | 544,643 | 662,335 | |||||||
Notes payable - current | 3,477,339 | ||||||||
Accrued interest | 180,281 | ||||||||
Accrued and other expenses | 4,081,672 | ||||||||
Total current liabilities | 10,843,781 | 10,145,285 | |||||||
Long-term liabilities: | |||||||||
Other long term liabilities | 1,522 | ||||||||
Total long-term liabilities | 1,522 | ||||||||
Commitments and contingencies (Note 14) | |||||||||
Total liabilities | 10,845,303 | 10,146,454 | |||||||
Equity | |||||||||
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, 50,376,433 and 50,256,317 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 46,928 | ||||||||
Additional paid-in capital | 263,022,161 | ||||||||
Accumulated other comprehensive loss | (1,719) | ||||||||
Accumulated deficit | (121,919,207) | (106,232,518) | |||||||
Total Lottery.com Inc. stockholders’ equity | 141,148,163 | 134,224,933 | |||||||
Noncontrolling interest | 2,650,869 | ||||||||
Total Equity | 143,799,032 | 137,005,024 | |||||||
Total liabilities and stockholders’ equity | 154,644,335 | 147,151,478 | |||||||
Revenue | 21,150,892 | ||||||||
Cost of revenue | 3,165,469 | ||||||||
Gross profit | 17,985,423 | ||||||||
Operating expenses: | 33,804,723 | ||||||||
Loss from operations | (15,819,300) | ||||||||
Other expenses | |||||||||
Interest expense | (953) | ||||||||
Other expense | (2,436) | ||||||||
Total other expenses, net | (3,389) | ||||||||
Net loss before income tax | (15,815,911) | ||||||||
Income tax expense (benefit) | |||||||||
Net loss | (15,815,911) | ||||||||
Other comprehensive loss | |||||||||
Foreign currency translation adjustment, net | (1,064) | ||||||||
Comprehensive loss | (15,816,975) | ||||||||
Net income attributable to noncontrolling interest | 129,222 | ||||||||
Net loss attributable to Lottery.com Inc. | $ (15,687,753) | ||||||||
Net loss per common share, basic and diluted | $ (0.33) | ||||||||
Weighted average common shares outstanding, basic and diluted | 46,832,919 | ||||||||
Cash flow from operating activities | |||||||||
Net loss attributable to Lottery.com Inc. | $ (15,686,689) | ||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | 23,419,191 | ||||||||
Changes in assets & liabilities: | |||||||||
Accounts receivable | (14,099,895) | ||||||||
Prepaid expenses | 1,053,609 | ||||||||
Note Receivable | |||||||||
Other current assets | (20,399) | ||||||||
Trade payables | 1,553,311 | ||||||||
Deferred revenue | (117,692) | ||||||||
Accrued interest | 4,021 | ||||||||
Accrued and other expenses | (10,648) | ||||||||
Other long term assets | |||||||||
Other long term liabilities | 353 | ||||||||
Net cash provided by operating activities | (3,904,838) | ||||||||
Cash flow from investing activities | |||||||||
Purchases of property and equipment | (18,305) | ||||||||
Purchases of intangible assets | (1,124,873) | ||||||||
Investment in subsidiary, net | |||||||||
Net cash used in investing activities | (1,143,178) | ||||||||
Cash flow from financing activities | |||||||||
Issuance of digital securities | |||||||||
Proceeds from exercise of options and warrants | |||||||||
Proceeds from issuance of convertible debt | |||||||||
Payment of debt issuance costs | |||||||||
Issuance of note receivable | (6,500,000) | ||||||||
Proceeds from issuance of notes payable | |||||||||
Principal payments on debt | (294,001) | ||||||||
Net cash provided by financing activities | (6,794,001) | ||||||||
Effect of exchange rate changes on cash | (1,064) | ||||||||
Net change in net cash and restricted cash | (11,843,081) | ||||||||
Cash and restricted cash at beginning of period | 62,638,970 | ||||||||
Cash and restricted cash at end of period | 50,795,889 | 62,638,970 | |||||||
Revision of Prior Period, Adjustment [Member] | |||||||||
Current assets: | |||||||||
Cash | [1],[2] | (46,500,250) | |||||||
Restricted cash | [2] | 30,000,000 | |||||||
Accounts receivable | (34,356,944) | [1],[2] | (21,617,472) | ||||||
Prepaid expenses | 9,000,000 | [2] | 9,000,000 | ||||||
Other current assets | (4,682) | ||||||||
Long-term assets | [1],[2] | 8,509,686 | |||||||
Total assets | (42,617,472) | ||||||||
Current liabilities: | |||||||||
Trade payables | [3] | (167,602) | |||||||
Deferred revenue | 500,000 | ||||||||
Accrued and other expenses | [3] | 391,435 | |||||||
Total current liabilities | 387,353 | ||||||||
Long-term liabilities: | |||||||||
Commitments and contingencies (Note 14) | [2] | 30,000,000 | |||||||
Total liabilities | 387,353 | ||||||||
Equity | |||||||||
Common stock, par value $0.001, 500,000,000 shares authorized, 50,376,433 and 50,256,317 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | [4] | 3,448 | |||||||
Additional paid-in capital | [5] | (2,541,242) | |||||||
Accumulated other comprehensive loss | |||||||||
Accumulated deficit | (61,019,895) | [6] | (41,955,620) | ||||||
Total Lottery.com Inc. stockholders’ equity | (43,004,826) | ||||||||
Noncontrolling interest | [6] | (18,334) | |||||||
Total Equity | (43,004,825) | ||||||||
Total liabilities and stockholders’ equity | (42,617,472) | ||||||||
Revenue | [1],[2] | (17,520,200) | |||||||
Cost of revenue | [1],[2] | (780,727) | |||||||
Operating expenses: | [1] | (1,877,805) | |||||||
Other expenses | |||||||||
Interest expense | [3] | 4,934 | |||||||
Other expense | [1] | 4,191,580 | |||||||
Income tax expense (benefit) | [1] | 23,364 | |||||||
Other comprehensive loss | |||||||||
Net income attributable to noncontrolling interest | [3] | 18,335 | |||||||
Cash flow from operating activities | |||||||||
Net loss attributable to Lottery.com Inc. | [6] | (19,064,275) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | [6] | (2,195,301) | |||||||
Changes in assets & liabilities: | |||||||||
Accounts receivable | 12,739,472 | [1],[2] | 34,356,944 | ||||||
Prepaid expenses | (9,000,000) | ||||||||
Note Receivable | [7] | (2,000,000) | |||||||
Other current assets | [6] | 4,682 | |||||||
Trade payables | [6] | (167,602) | |||||||
Deferred revenue | [1],[2] | (500,000) | |||||||
Accrued and other expenses | [6] | 67,587 | |||||||
Other long term assets | [8] | (13,009,686) | |||||||
Cash flow from investing activities | |||||||||
Purchases of intangible assets | [6] | 1,124,873 | |||||||
Cash flow from financing activities | |||||||||
Issuance of note receivable | [7] | 6,500,000 | |||||||
Effect of exchange rate changes on cash | |||||||||
Net change in net cash and restricted cash | [6] | 13,499,750 | |||||||
Cash and restricted cash at beginning of period | [2] | (30,000,000) | |||||||
Cash and restricted cash at end of period | (30,000,000) | [2] | |||||||
Restated [Member] | |||||||||
Cash flow from operating activities | |||||||||
Net loss attributable to Lottery.com Inc. | (34,750,964) | ||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | 21,223,890 | ||||||||
Changes in assets & liabilities: | |||||||||
Accounts receivable | (1,360,423) | ||||||||
Prepaid expenses | 1,053,609 | ||||||||
Note Receivable | (2,000,000) | ||||||||
Other current assets | (15,717) | ||||||||
Trade payables | 1,385,709 | ||||||||
Deferred revenue | (617,692) | ||||||||
Accrued interest | 4,021 | ||||||||
Accrued and other expenses | 56,939 | ||||||||
Other long term assets | (13,009,686) | ||||||||
Other long term liabilities | 353 | ||||||||
Net cash provided by operating activities | 1,970,039 | ||||||||
Cash flow from investing activities | |||||||||
Purchases of property and equipment | (18,305) | ||||||||
Purchases of intangible assets | |||||||||
Investment in subsidiary, net | |||||||||
Net cash used in investing activities | (18,305) | ||||||||
Cash flow from financing activities | |||||||||
Issuance of digital securities | |||||||||
Proceeds from exercise of options and warrants | |||||||||
Proceeds from issuance of convertible debt | |||||||||
Payment of debt issuance costs | |||||||||
Issuance of note receivable | |||||||||
Proceeds from issuance of notes payable | |||||||||
Principal payments on debt | (294,001) | ||||||||
Net cash provided by financing activities | (294,001) | ||||||||
Effect of exchange rate changes on cash | (1,064) | ||||||||
Net change in net cash and restricted cash | 1,656,669 | ||||||||
Cash and restricted cash at beginning of period | 3 | ||||||||
Cash and restricted cash at end of period | $ 34,295,639 | $ 3 | |||||||
[1]After reexamination of various transactions that occurred in 2021 and which were later rescinded or canceled in 2022, the Company has restated revenue on its financial statements for the year ended December 31, 2021, to reflect a change in the recognition of income in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606[2]On January 4, 2022, AutoLotto entered into a Business Loan Agreement (the “Business Loan”) with The Provident Bank (“Provident”), pursuant to which the Company borrowed $ 30,000,000 from Provident, which was evidenced by a $ 30,000,000 Promissory Note. In accordance with the terms of the Business Loan, upon entering into the agreement, $ 30,000,000 in a separate account with Provident was pledged as security for the amount outstanding under the loan (“Collateral Security”). The $ 30,000,000 Collateral Security became restricted and remained restricted until October 12, 2022, when AutoLotto defaulted on its obligations under the Business Loan and Provident foreclosed on the $ 30,000,000 of Collateral Security. The Collateral Security, which was in the form of restricted cash, was presented as a contingent liability on the Company’s balance sheet from March 31, 2022 until the obligation was satisfied in October of 2022. 2,000,000 2,000,000 2,000,000 3,832,431 3,448,066 2,541,242 450,000 450,000 6,050,000 4,500,000 1,550,000 6,500,000 4,500,000 6,050,000 1,550,000 450,000 2,000,000 2,000,000 16,500,000 16,500,000 11,697,163 |
Schedule of Tangible and Intang
Schedule of Tangible and Intangible Assets Acquisition (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Business Combination and Asset Acquisition [Abstract] | |||
Cash | $ 517,460 | ||
Accounts receivable, net | 34,134 | ||
Prepaids | 5,024 | ||
Property and equipment, net | 2,440 | ||
Other assets, net | 65,349 | ||
Intangible assets | 8,590,000 | ||
Goodwill | $ 19,590,758 | $ 19,590,758 | 4,940,643 |
Total assets | 14,155,051 | ||
Accounts payable and other liabilities | (387,484) | ||
Customer deposits | (134,707) | ||
Related party loan | (417,017) | ||
Total liabilities | (939,208) | ||
Total net assets of Acquirees | $ 13,215,843 |
Schedule of Intangible Assets A
Schedule of Intangible Assets Acquired (Details) | Mar. 31, 2022 USD ($) |
Acquired Indefinite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 8,590,000 |
Customer Relationships [Member] | |
Acquired Indefinite-Lived Intangible Assets [Line Items] | |
Intangible assets | 410,000 |
Gaming Approvals [Member] | |
Acquired Indefinite-Lived Intangible Assets [Line Items] | |
Intangible assets | 4,020,000 |
Trademarks and Trade Names [Member] | |
Acquired Indefinite-Lived Intangible Assets [Line Items] | |
Intangible assets | 2,540,000 |
Technology [Member] | |
Acquired Indefinite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 1,620,000 |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) | 3 Months Ended | |||
Oct. 29, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Gross proceeds | $ 42,794,000 | |||
Business acquisition, transaction costs | 9,460,000 | |||
Repayments of debt | $ 4,856,250 | |||
Repayment of notes payable | 294,001 | |||
Accrued underwriter fees | 5,593,000 | |||
Cash | $ 517,460 | |||
Gross acquirees | 13,215,843 | |||
Deferred tax liabilities | $ 1,600,000 | |||
Global Gaming Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership interest percent | 20% | |||
Global Gaming Enterprises, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership interest percent | 100% | |||
Medios Electronicos [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership interest percent | 80% | |||
Global Gaming [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership interest percent | 80% | |||
Principal amount | $ 10,055,214 | |||
Business Combination Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of eligible earnout shares | 3,000,000 | |||
Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of eligible earnout shares | 1,750,000 | |||
AutoLotto [Member] | ||||
Business Acquisition [Line Items] | ||||
Conversion of stock, shares converted | 3.0058 | 9,764,511 | ||
Repayments of debt | $ 11,068,000 | |||
Repayment of notes payable | $ 5,475,000 | |||
Preferred stock, dividend rate | $ 22.0848 | |||
Principal amount | $ 10,989,691 | |||
Cash | $ 10,530,000 | |||
Number of shares issued for acquisition | 687,439 | |||
AutoLotto [Member] | Global Gaming [Member] | ||||
Business Acquisition [Line Items] | ||||
Shares price | $ 0.67 | |||
AutoLotto [Member] | Common Stock [Member] | Business Combination Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of eligible earnout shares | 6,000,000 | |||
AutoLotto [Member] | Series B Convertible Notes [Member] | ||||
Business Acquisition [Line Items] | ||||
Conversion of stock, shares converted | 3,248,526 | |||
Convertible notes nayable | $ 63,800,000 | |||
TDAC Founders [Member] | Business Combination Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of eligible earnout shares | 2,000,000 | |||
TDAC Founders [Member] | Common Stock [Member] | Business Combination Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of eligible earnout shares | 4,000,000 |
Schedule of Property and Equipm
Schedule of Property and Equipment, Net (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,045,437 | $ 2,040,032 |
Accumulated depreciation | (1,924,144) | (1,898,753) |
Property and equipment, net | 121,293 | 141,279 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 110,498 | 113,151 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 31,818 | 23,760 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,903,121 | $ 1,903,121 |
Property and Equipment, net (De
Property and Equipment, net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 4,152 | $ 153,453 |
Depreciation expense | $ 41,185 | $ 191,744 |
Schedule of Accumulated Amortiz
Schedule of Accumulated Amortization of Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 34,243,930 | $ 32,466,053 |
Accumulated Amortization | (7,291,535) | (5,836,072) |
Finite lived intangible assets net | $ 26,952,395 | 26,629,981 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 6 years | |
Gross Carrying Amount | $ 1,350,000 | 1,350,000 |
Accumulated Amortization | (612,639) | (556,389) |
Finite lived intangible assets net | $ 737,361 | 793,611 |
Trade Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 6 years | |
Gross Carrying Amount | $ 2,550,000 | 2,550,000 |
Accumulated Amortization | (429,306) | (217,223) |
Finite lived intangible assets net | $ 2,120,694 | 2,332,777 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 6 years | |
Gross Carrying Amount | $ 3,050,000 | 3,050,000 |
Accumulated Amortization | (1,056,528) | (929,444) |
Finite lived intangible assets net | $ 1,993,472 | 2,120,556 |
Software Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 6 years | |
Gross Carrying Amount | $ 14,450,000 | 14,450,000 |
Accumulated Amortization | (3,851,111) | (3,145,277) |
Finite lived intangible assets net | $ 10,598,889 | 11,304,723 |
Gaming Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 6 years | |
Gross Carrying Amount | $ 4,020,000 | 4,020,000 |
Accumulated Amortization | (502,500) | (335,000) |
Finite lived intangible assets net | 3,517,500 | 3,685,000 |
Internal Use Software Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,888,930 | 111,053 |
Accumulated Amortization | (94,451) | (23,323) |
Finite lived intangible assets net | $ 1,794,479 | 832,709 |
Internal Use Software Development [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 2 years | |
Internal Use Software Development [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | |
Domain Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | |
Gross Carrying Amount | $ 6,935,000 | 6,935,000 |
Accumulated Amortization | (745,000) | (629,416) |
Finite lived intangible assets net | $ 6,190,000 | $ 6,305,584 |
Schedule of Estimated Amortizat
Schedule of Estimated Amortization Expense (Details) | Mar. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2022 | $ 2,584,988 |
2023 | 5,169,975 |
2024 | 5,169,975 |
2025 | 5,169,975 |
2026 | 5,169,975 |
Thereafter | $ 2,514,841 |
Intangible assets, net (Details
Intangible assets, net (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 1,455,463 | $ 920,583 | |
Aganar And Juega Lotto [Member] | Software Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Payments for software | $ 2,342,163 | $ 2,080,999 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | Mar. 31, 2022 | Mar. 22, 2022 | Dec. 31, 2021 | Sep. 20, 2021 |
Receivables [Abstract] | ||||
Principal amount | $ 2,000,000 | $ 30,000,000 | ||
Interest rate | 3.10% | 6% | ||
Debt instrument outstanding value | $ 2,000,000 |
Notes Payable and Convertible_2
Notes Payable and Convertible Debt (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | 26 Months Ended | |||||||||
Oct. 29, 2021 | Oct. 01, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 22, 2022 | Sep. 20, 2021 | Aug. 31, 2020 | Jun. 29, 2020 | Aug. 28, 2018 | Oct. 31, 2017 | |
Short-Term Debt [Line Items] | ||||||||||||
Principal amount | $ 2,000,000 | $ 30,000,000 | ||||||||||
Interest rate | 6% | 3.10% | ||||||||||
Accrued interest | $ 180,281 | $ 176,260 | ||||||||||
Convertible debt instrument amount | $ 935,000 | |||||||||||
Convertible notes | 935,000 | |||||||||||
Balance of loan amount | 150,000 | 150,000 | ||||||||||
TinBu [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Balance on notes payable | $ 2,357,744 | $ 2,628,234 | ||||||||||
Series A Notes [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Principal amount | $ 821,500 | |||||||||||
Interest rate | 10% | |||||||||||
Maturity date | Dec. 31, 2022 | |||||||||||
Balance on notes payable | $ 771,500 | |||||||||||
Accrued interest | 138,822 | |||||||||||
Series B Notes [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Principal amount | $ 38,893,733 | $ 8,802,828 | ||||||||||
Interest rate | 8% | |||||||||||
Maturity date | Dec. 21, 2021 | |||||||||||
Balance on notes payable | 185,095 | |||||||||||
Accrued interest | 38,835 | |||||||||||
Interest rate | 8% | |||||||||||
Additional principal amount | $ 3,552,114 | |||||||||||
Loss on extinguishment | 71,812 | |||||||||||
Convertible notes | $ 185,095 | |||||||||||
Convertible notes shares | 9,764,511 | |||||||||||
Series B Notes [Member] | Convertible Promissory Note [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Convertible debt instrument amount | 10,000,000 | |||||||||||
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% | |||||||||||
Balance of loan amount | 13,000 | $ 13,000 | ||||||||||
Accrued interest | $ 2,624 | |||||||||||
Notes Payable [Member] | TinBu [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Principal amount | $ 12,674,635 | |||||||||||
Interest rate | 0% | |||||||||||
Maturity date | Mar. 31, 2022 | |||||||||||
Interest rate | 4.10% |
Schedule of Common Stock (Detai
Schedule of Common Stock (Details) | 3 Months Ended |
Mar. 31, 2022 shares | |
Equity | |
Issuance of Common Stock for legal settlement | 60,000 |
Exercise of options (Note 10) | 60,116 |
Total | 120,116 |
Schedule of Common Stock Warran
Schedule of Common Stock Warrant (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Public Warrant [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Number of Shares Outstanding, Beginning balance | 395,675 | |||
Weighted Average Exercise Price Outstanding, Beginning balance | $ 0.11 | |||
Weighted Average Remaining Contractual Life (years) Outstanding | 3 years 7 months 6 days | 4 years | ||
Aggregate Intrinsic Value Outstanding, Beginning balance | $ 2,478,501 | |||
Number of Shares Granted | 92,621 | |||
Weighted Average Exercise Price Granted | $ 7.56 | |||
Weighted Average Remaining Contractual Life (years) Granted | 3 years | |||
Number of Shares Exercised | ||||
Weighted Average Exercise Price Exercised | ||||
Number of Shares Forfeited/cancelled | ||||
Number of Shares Outstanding, Ending balance | 488,296 | 395,675 | ||
Weighted Average Exercise Price Outstanding, Ending balance | $ 1.52 | $ 0.11 | ||
Aggregate Intrinsic Value Outstanding, Ending balance | $ 1,200,387 | $ 2,478,501 | ||
Number of Shares Exercisable, Ending balance | 488,296 | |||
Weighted Average Exercise Price Outstanding, Ending balance | $ 1.52 | |||
Weighted Average Remaining Contractual Life (years) Exercisable | 3 years 7 months 6 days | |||
Aggregate intrinsic value, Exercisable Ending balance | $ 1,200,387 | |||
Number of Shares Exercised | ||||
Common Stock Warrants [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Number of Shares Outstanding, Beginning balance | 395,675 | 573,359 | 573,359 | |
Weighted Average Exercise Price Outstanding, Beginning balance | $ 0.11 | $ 0.28 | $ 0.28 | |
Weighted Average Remaining Contractual Life (years) Outstanding | 3 years 7 months 6 days | 4 years | 4 years 9 months 18 days | |
Aggregate Intrinsic Value Outstanding, Beginning balance | $ 2,478,501 | $ 272,638 | $ 272,638 | |
Number of Shares Granted | 92,621 | |||
Weighted Average Exercise Price Granted | $ 7.56 | |||
Weighted Average Remaining Contractual Life (years) Granted | 3 years | |||
Number of Shares Exercised | (177,684) | |||
Weighted Average Exercise Price Exercised | $ 0.66 | |||
Number of Shares Forfeited/cancelled | ||||
Number of Shares Outstanding, Ending balance | 488,296 | 395,675 | 573,359 | |
Weighted Average Exercise Price Outstanding, Ending balance | $ 1.52 | $ 0.11 | $ 0.28 | |
Aggregate Intrinsic Value Outstanding, Ending balance | $ 1,200,387 | $ 2,478,501 | $ 272,638 | |
Number of Shares Exercisable, Ending balance | 488,296 | |||
Weighted Average Exercise Price Outstanding, Ending balance | $ 1.52 | |||
Weighted Average Remaining Contractual Life (years) Exercisable | 3 years 7 months 6 days | |||
Aggregate intrinsic value, Exercisable Ending balance | $ 1,200,387 | |||
Weighted Average Exercise Price Forfeited/canceled | ||||
Number of Shares Exercised | 177,684 |
Schedule of Fair Value of Issua
Schedule of Fair Value of Issuance Debts (Details) | 3 Months Ended |
Mar. 31, 2022 $ / shares | |
Equity | |
Risk-free interest rate | 1.80% |
Expected dividend yield | 0% |
Expected volatility | 113.17% |
Term | 3 years |
Fair value of common stock | $ 3.75 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Feb. 15, 2022 | Jun. 01, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Preferred stock authorized | 500,000,000 | 500,000,000 | ||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | ||||
Voting rights | one | |||||
Common stock , shares outstanding | 50,376,433 | 50,256,317 | 50,256,317 | |||
Share price | $ 16 | |||||
Number of trading days | 20 days | |||||
Public warrants outstanding | 20,125,002 | |||||
Warants exercisable to purchase of common stock | 488,296 | |||||
Aggregate exercise price | $ 895 | |||||
Warrants outstanding | 194,695 | 0 | ||||
Proceeds to beneficial conversion feature | $ 9,149,683 | |||||
Trident Acquisitions Corp [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Number of additional shares issued | 5,000,000 | |||||
Convertible Debt [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Proceeds to beneficial conversion feature | 8,480,697 | |||||
Corresponding debt discount | $ 2,795,000 | |||||
Public Warrant [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Share price | $ 0.01 | |||||
Minimum days prior written notice of redemption | 30 days | |||||
Maximum trading days | 30 days | |||||
Warrants value | 488,296 | 395,675 | ||||
Weighted average remaining contractual life | 3 years 7 months 6 days | 4 years | ||||
Public Warrants [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Share purchase | 20,125,000 | |||||
Unit Purchase Option [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Proceeds from sale of option | $ 100 | |||||
Share unit exercisable | 1,750,000 | |||||
Price per unit | $ 12 | |||||
Aggregate exercise price | $ 21,000,000 | |||||
Purchase options payment exercised expire date | May 29, 2023 | |||||
Cash payment | $ 100 | |||||
Shares vested | 1,750,000 | |||||
Common Stock [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Share purchase | 1,750,000 | |||||
Number of additional shares issued | 1,750,000 | |||||
Proceeds to beneficial conversion feature | ||||||
Common Stock Warrants [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Number of additional shares issued | 92,621 | |||||
Exercise price per share | $ 7.56 | |||||
Warrants value | 194,695 | 488,296 | 395,675 | 573,359 | ||
Weighted average remaining contractual life | 3 years 7 months 6 days | 4 years | 4 years 9 months 18 days |
Schedule of Stock Options Activ
Schedule of Stock Options Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares available for grant, exercised | 60,116 | ||
Share-Based Payment Arrangement, Option [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares available for grant beginning balance | 269,230 | 37,405 | |
Outstanding stock awards beginning balance | 345,661 | 1,315,218 | |
Weighted average exercise price beginning balance | $ 0.97 | $ 0.30 | |
Weighted average remaining contractual life years | 4 years 2 months 12 days | 4 years 4 months 24 days | 5 years 6 months |
Aggregate intrinsic value, beginning balance | $ 2,061,303 | $ 362,841 | |
Shares available for grant, granted | |||
Outstanding stock awards, granted | |||
Weighted average exercise price granted | |||
Shares available for grant, exercised | |||
Outstanding stock awards, exercised | (60,116) | (737,732) | |
Weighted average exercise price exercised | $ (0.67) | $ (0.28) | |
Shares available for grant, Forfeited/canceled (uncanceled) | (60,116) | 231,825 | |
Outstanding stock awards, forfeited cancelled | 60,116 | (231,825) | |
Weighted average exercise price Forfeited/canceled (uncanceled) | $ 0.67 | $ (0.65) | |
Shares available for grant ending balance | 209,114 | 269,230 | 37,405 |
Outstanding stock awards ending balance | 345,661 | 345,661 | 1,315,218 |
Weighted average exercise price ending balance | $ 0.41 | $ 0.97 | $ 0.30 |
Aggregate intrinsic value, ending balance | $ 944,544 | $ 2,061,303 | $ 362,841 |
Shares available for grant exercisable | 209,114 | ||
Outstanding stock awards exercisable | 345,661 | ||
Weighted average exercise price exercisable | $ 0.41 | ||
Weighted average remaining contractual life years, exercisable | 4 years 2 months 12 days | ||
Aggregate intrinsic value, exercisable | $ 944,544 |
Schedule of Restricted Stock Aw
Schedule of Restricted Stock Awards Activity (Details) - Restricted Stock [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares available for nonvested, beginning balance | 3,832,431 | |
Weighted average grant fair value, beginning balance | $ 14.75 | |
Shares available for nonvested, granted | 3,832,431 | |
Weighted average grant fair value, granted | ||
Shares available for nonvested, vested | ||
Weighted average grant fair value,vested | ||
Shares available for nonvested, forfeited/canceled | ||
Weighted average grant fair value, forfeited/canceled | ||
Shares available for nonvested, ending balance | 3,832,431 | 3,832,431 |
Weighted average grant fair value, ending balance | $ 14.75 | $ 14.75 |
Stock-based Compensation Expe_3
Stock-based Compensation Expense (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Apr. 29, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Employee benefits and share-based compensation | $ 0 | $ 4,320 | ||
Share based compensation nonvested award | 0 | $ 0 | ||
Stock compensation expense | $ 20,880,655 | $ 2,160 | ||
Share-Based Payment Arrangement, Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of shares granted | ||||
Restricted Stock [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of shares grant | 3,832,431 | |||
Liquidity of common shares | 130,546 | |||
Share issued per share | $ 2.38 | |||
Stock compensation expense | $ 20,880,655 | |||
Unrecognized stock based compensation | $ 11,588,249 | |||
2015 Stock Option Plan [Member] | Share-Based Payment Arrangement, 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 Four Hundred Fifty Thousand (450,000). 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% | |||
Share based compensation award vesting period | 1 year | |||
2021 Equity Incentive Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Purchase price of common stock, percent | 5% | |||
Number of shares granted | 13,130,368 | |||
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 | 13,130,368 |
Schedule of Basic and Dilutes N
Schedule of Basic and Dilutes Net Income Loss Per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Net loss per common share | ||
Comprehensive net loss attributable to stockholders | $ (34,750,964) | $ (5,456,034) |
Weighted average common shares outstanding | ||
Basic and diluted | 50,376,433 | 22,888,700 |
Net loss per common share | ||
Basic and diluted | $ (0.69) | $ (0.24) |
Loss Per Share (Details Narrati
Loss Per Share (Details Narrative) | 3 Months Ended |
Mar. 31, 2022 shares | |
Share-Based Payment Arrangement, Option [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive, shares | 345,661 |
Restricted Awards [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive, shares | 3,832,431 |
Warrants [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive, shares | 488,296 |
Earn Out Shares [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive, shares | 5,000,000 |
Units Purchase Options [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive, shares | 1,750,000 |
Schedule of Future Minimum Rent
Schedule of Future Minimum Rent Payments Due Under Non Cancellable Leases (Details) | Mar. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 (nine months) | $ 144,457 |
2023 | 153,222 |
2024 | 48,404 |
Total | $ 346,083 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2023 | Feb. 13, 2023 | Jan. 20, 2023 | Jul. 29, 2022 | Apr. 06, 2022 | Dec. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2021 | Sep. 20, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||||||||
Participation interests | $ 285,000,000 | ||||||||||
Percentage of raffle revenue net | 7% | ||||||||||
Obligation to pay digital securities amount | $ 5,632 | ||||||||||
Lease expiration date | Jan. 21, 2024 | ||||||||||
Rent expense | $ 219,216 | $ 26,950 | |||||||||
Restricted cash | 30,000,000 | ||||||||||
Line of credit | $ 30,000,000 | $ 30,000,000 | |||||||||
Subsequent Event [Member] | |||||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||||||||
Other commitments description | 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 owed 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 “ | ||||||||||
Attorney's fees value | $ 397,036.94 | ||||||||||
Judgement fees | $ 75,000 | $ 50,000 | $ 75,000 | ||||||||
Restricted cash | $ 30,000,000 | ||||||||||
Extinguishment of partner debt | $ 30,000,000 | ||||||||||
Waco Lease [Member] | Subsequent Event [Member] | |||||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||||||||
Rent expense | $ 40,221 | ||||||||||
Dallas Lease [Member] | Subsequent Event [Member] | |||||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||||||||||
Rent expense | $ 204,725 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Related party costs | $ 2,384,742 | $ 2,946,981 | |
Reimbursement on-going expenses | 133,339.50 | ||
Service Agreement [Member] | Maximum [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Capital expenditure | 100,000 | ||
Reimbursement on-going expenses | 5,000 | ||
Related Party [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Related party costs | $ 4,700 | ||
Due from related parties, current | $ 13,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |||||||||
Mar. 13, 2023 | Feb. 28, 2023 | Feb. 13, 2023 | Jan. 20, 2023 | Dec. 07, 2022 | Jul. 29, 2022 | Jul. 21, 2022 | Jul. 01, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | |
Subsequent Event [Line Items] | ||||||||||
Outstanding payroll obligations | $ 1,400,000 | |||||||||
Other commitments description | In the Streicher Complaint, the Company alleged that Streicher breached the contract entered into by the parties on March 9, 2022 and demanded that Streicher return $16,500,000.00 it owed 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 $16,500,000.00 (the “Streicher 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. On December 8, 2022, the Company’s prior attorney Skadden, Arps, Slate, Meagher & Flom, LLP (“Skadden”) filed its Combined Motion to Withdraw as Counsel and For a Charging Lien in amount of $3,024,201.17 for legal fees unpaid by Company (“Skadden’s Motion”). | |||||||||
Judgement fees | $ 75,000 | $ 50,000 | $ 75,000 | |||||||
Shares purchased | 7,619,207 | |||||||||
Warrant exercise price | $ 0.28 | |||||||||
Legal fees | $ 4,600,000 | |||||||||
Woodford Eurasia Assets Ltd [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Line of credit, description | Woodford agreed to fund up to $2.5 million, subject to certain conditions and requirements, of which approximately $1.25 million has been received to date and $1.25 million is currently owed pursuant to the terms of the agreement, upon request from the Company. 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. | |||||||||
Maximum borrowing capacity | $ 2,500,000 | |||||||||
Proceeds from line of credit | 1,250,000 | |||||||||
Current borrowing capacity | 1,250,000 | |||||||||
Increase in line of credit | $ 52,500,000 | |||||||||
Concentration risk, lender | Amounts borrowed pursuant to the 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 $0.28 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. | |||||||||
Loan agreement description | (a) making any loan in excess of $1 million or obtaining any loan in 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 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. | |||||||||
Harry Dhaliwal [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Compensation paid | $ 209,550 | |||||||||
Discretionary bonus | $ 50,000 | |||||||||
Mr. DiMatteo [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Compensation paid | $ 1,000 |