| Significant Accounting Policies | Note
2. Significant Accounting Policies Basis
of Presentation The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America (“ GAAP ASC ASU FASB 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 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. In connection with 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 $ 247 8.9 5.9 25.5 60.0 53.0 The
Company has historically funded its activities 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 United Capital Investments Ltd. (“UCIL”) on July 21, 2023, the Plans for Recommencement
of Company Operations 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 the business plan for the relaunch of its core business, the successful monetization of Sports.com, and keeping
expenditures in line with available operating capital. Such conditions raise substantial doubt about the Company’s ability to continue
as a going concern. 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 Trident Acquisition Corp. (“TDAC”) as the accounting acquiree. This determination was primarily based on:
● former
AutoLotto stockholders having the largest voting interest in Lottery.com Inc. (“Lottery.com”);
● the
board of directors of Lottery.com having 7 members, and AutoLotto’s former stockholders having the ability to nominate the
majority of the members of the board of directors;
● AutoLotto
management continuing to hold executive management roles for the post-combination company and being responsible for the day-to-day
operations;
● the
post-combination company assuming the Lottery.com name;
● 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 as 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 consolidated financial statements reflect (i) the historical
operating results of AutoLotto prior to the Business Combination; (ii) the combined results of the Company and AutoLotto following the
closing of the Business Combination; (iii) the assets and liabilities of AutoLotto at their historical cost; and (iv) the Company’s
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 the Company’s 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
Interest Non-controlling
interest represents 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 the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. Under the provisions
of ASC 280, Segment Reporting, the Company is not organized around specific services or geographic regions. The Company operates in one
service line, providing lottery products and services. We
determined that our Chief Financial Officer is the Chief Operating Decision Maker, and he 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 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 $ 12,970 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. The Company evaluates its estimates on an ongoing basis and prepares its estimates on historical experience and other assumptions
the Company believes to be reasonable under the circumstances. Reclassifications Certain
balances have been reclassified in the accompanying consolidated financial statements to conform to the current year presentation. These
reclassifications had no effect on the balances of current or total assets and prior year’s net loss or accumulated deficit. Foreign
currency translation Assets
and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. Dollars are translated
into U.S. Dollars using period-end exchange rates. Sales, costs and expenses are translated at the average exchange rates in effect during
the reporting period. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income
(loss). Cash
and Restricted Cash As
of June 30, 2024 and December 31, 2023, cash was comprised of cash deposits. From time-to-time cash deposits with some banks may exceed
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 the Company is subject to unusual credit risk beyond the normal credit
risk associated with commercial banking relationships. The
Company had no Accounts
Receivable The
Company through its various merchant providers pre-authorizes forms of payment prior to the sale of digital representation of lottery
games to minimize exposure to losses related to uncollected payments and does not extend credit to the user of the B2C Platform or the
commercial partner of the B2B API, which are its customers, in the normal course of business. The Company estimates its bad debt exposure
each period and records a bad debt provision for accounts receivable it believes it may not collect in full. The Company increased its
allowance for uncollectible receivables as of June 30, 2024 by $ 6,750 104,270 97,520 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 (“Prepaid advertising credits”). The Company expenses the service as it is performed by the third party. The
value of the services provided were used to value these contracts, except for the year ended December 31, 2021 the Company reserved
for potential inability to realize $ 2,000,000 19,049,284 19,020,159 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 to five years. Leasehold improvements are amortized over the shorter of the lease term or the estimated
useful life of the asset. Routine maintenance and repair costs are expensed as incurred. The costs of major additions, replacements and
improvements are capitalized. Gains and losses realized on the sale or disposal of property and equipment are recognized or charged to
other expense in the consolidated statement of operations. 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 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. Goodwill
and Other Intangible Assets Goodwill
represents the excess of the cost of assets acquired over the fair value of the net assets at the date of acquisition. Intangible assets
represent the fair value of separately recognizable intangible assets acquired in connection with the Company’s business combinations.
The Company evaluates its goodwill and other intangibles for impairment on an annual basis or whenever events or circumstances indicate
that an impairment may have occurred in accordance with the provisions of ASC 350, “ Goodwill and Other Intangible Assets Revenue
Recognition Under
the new standard, Accounting Standards Update (“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, are recognized at
a point in time. The Company receives consideration for lottery game sales at the time of delivery to the customer, which may be 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 Accounting Standards Codification (“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 services before they are transferred to the customer. The Company
also assesses if it is primarily responsible for fulfilling the promise to provide the goods or services, 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 would be responsible for any potential winnings related
to lost or unredeemable tickets at the time of redemption. Finally, while states have the authority to establish lottery game sales prices,
the Company can add service fees to ticket prices evidencing its ability to establish the ultimate price of the lottery tickets being
sold. Other
associated revenue The
Company’s performance obligations in agreements with certain customers are to provide a license of intellectual property related
to the use of the Company’s tradename for marketing purposes by partners of the Company. Customers pay a license fee up front.
The transaction price is deemed to be the license issue fee stated in the contract. The license offered by the Company represents a symbolic
license which provides the customer with the right to use the Company’s intellectual property on an ongoing basis with continued
support throughout the term of the contract in the form of ongoing maintenance of the underlying intellectual property. There is no variable
consideration related to these performance obligations. 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. Other 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” Stock Compensation Income
Taxes For
both financial accounting and tax reporting purposes, the Company reports income and expenses based on the accrual method of accounting. For
federal and state income tax purposes, the Company reports income or loss from their investments in limited liability companies on the
consolidated income tax returns. As such, all taxable income and available tax credits are passed from the limited liability companies
to the individual members. It is the responsibility of the individual members to report the taxable income and tax credits, and to pay
any resulting income taxes. Therefore, the income and losses incurred by the limited liability companies have been consolidated in the
Company’s tax return and provision based upon its relative ownership. Income
taxes are accounted for in accordance with ASC 740, “ Income Taxes The
Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (i) the Company determines
whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position; and
(ii) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax
benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Generally,
the taxing authorities can audit the previous three years of tax returns and in certain situations audit additional years. For federal
tax purposes, the Company’s 2020 through 2023 tax years generally remain open for examination by the tax authorities under the
normal three-year statute of limitations. For state tax purposes, the Company’s 2019 through 2023 tax years remain open for examination
by the tax authorities under the normal four-year statute of limitations. Fair
Value of Financial Instruments The
Company determines the fair value of its financial instruments in accordance with the provisions of ASC 820, Fair Value Measurements
and Disclosures ,
● Level
1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or
liabilities
● Level
2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially
the full term of the asset or liability
● Level
3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable
assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Determination
of fair value and the resulting hierarchy requires the use of observable market data whenever available. The
classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement
of fair value. Fair
value of stock options and warrants Management
uses the Black-Scholes option-pricing model to calculate the fair value of stock options and warrants. Use of this method requires management
to make assumptions and estimates about the expected life of options and warrants, anticipated forfeitures, the risk-free rate, and the
volatility of the Company’s share price. In making these assumptions and estimates, management relies on historical market data. Recent
Accounting Pronouncements In
January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and other (Topic 350) In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses
on Financial Instruments In
December 2019, the FASB issued ASU No 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ( ) In
October 2020, the FASB issued ASU No. 2020-09, Debt (Topic 470) (“ASU 2020-09”). ASU 2020-09 |
