Note 8. Write-Off of Goodwill and Intangibles

As required by ASC 350 Intangibles – Goodwill and Other Impairment and ASC 360 – Impairment Testing: Long-Lived Assets, in connection with preparing the consolidated financial statements management conducts a review as to whether there are any circumstances that might indicate the impairment of its long-lived assets, goodwill and other indefinite-lived intangible assets.

The Company reviews the goodwill and intangibles acquired in the acquisitions of TinBu, LLC and Global Gaming Enterprises, Inc., Sports.com Media Ltd, Spektrum Ltd, DotCom Ventures, Veloce, the domain names and software purchased from third parties, and software developed in-house. Each of TinBu, Global Gaming, Sports.com Media Ltd, Spektrum Ltd, DotCom Ventures, Veloce Esports, Quadrant, and Lottery.com may be considered a reporting unit for application of the annual review for potential impairment.

For the year ended December 31, 2023, the Company performed a valuation of each of the then present reporting units described above, using discounted cash flow methodologies and estimates of fair market value. Based on the results of the quantitative assessment, the Company determined that the goodwill for the TinBu reporting units was impaired. Accordingly, the Company recognized goodwill impairment charges of $5.65 million for the TinBu reporting unit.

Similarly, the Company performed an impairment analysis for the three months ended September 30, 2024. As a result of that analysis, it was determined that impairment charges were necessary, and an impairment of goodwill for $1.6 million was recorded for the TinBu’s reporting unit. Based on results of qualitative analyses, there were no impairments identified or recorded for the years ended December 31, 2024 or 2025.