Inc. Reports Increase in Cash and Cash Equivalents in Q1 2023 and Strong Investment Portfolio Inc. (LTRY) experienced a boost in its cash and cash equivalents for Q1 2023 and maintained a strong investment portfolio, according to the company’s recent quarterly report. As of March 31, 2023, LTRY had cash deposits with certain banks exceeding federally insured limits, primarily held in one financial institution, and no marketable securities in place. The management of LTRY believes the chosen financial institution has high credit quality, and the company is not subject to unusual credit risk beyond the normal risk associated with commercial banking relationships.

Investment Portfolio and Partnerships

Interestingly, LTRY purchased 186,666 shares of Class A-1 common stock of a third-party business development partner on August 2, 2018, representing 4% of the total outstanding shares. Since this investment reflected less than 20% ownership, it was accounted for using the cost basis method. This investment showcases the company’s strategic efforts in seeking and maintaining healthy partnerships outside of its core business.

Accounts Receivable Management

Regarding accounts receivable, LTRY minimizes exposure to losses related to uncollected payments by pre-authorizing payment forms prior to selling digital representation of lottery games. The company does not extend credit to users of the B2C platform, the commercial partners of the B2B API, or their customers. Moreover, LTRY had an allowance for uncollectible receivables of $84,520 as of March 31, 2023, and December 31, 2022, showing its prudence in managing accounts receivable.

Property and Equipment Management

In the realm of property and equipment, LTRY capitalizes costs of major additions, replacements, and improvements, while routine maintenance and repair costs are expensed as incurred. The depreciation of property and equipment is calculated using the straight-line method, with computers and equipment having an estimated useful life of 3 years, furniture and fixtures 5 years, and software 3 years.

Revenue Recognition Process

One noteworthy aspect of LTRY’s revenue recognition process is its focus on delivering lottery games through the B2C platform and B2B API. The company recognizes revenue at the point in which the digital representation of the lottery game is delivered to the user or commercial partner.

Stock-Based Compensation

Lastly, regarding stock-based compensation, LTRY adopted ASU 2018-07, Compensation โ€“ โ€œStock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accountingโ€ (โ€œASC 718โ€) on October 1, 2019. Through this guidance, stock compensation expense is measured at the grant date, factoring in the fair value of the award, and recognized as an expense over the estimated service period.


Overall, Inc.’s robust increase in cash and cash equivalents, along with a strong investment portfolio and prudent financial management strategies, demonstrate the company’s commitment to driving growth and improving shareholder value.

Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!