Sports Entertainment Gaming Global Corp 10-Q for FY2025 Q2
Sports Entertainment Gaming Global Corp (SEGG)
About this 10-Q
Sports Entertainment Gaming Global Corp filed this 10-Q on August 19, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $191.76K
- down 25.4% from $257K a year earlier
- Net loss
- $3.88M
- compared with a net loss of $5.88M a year earlier
- Diluted EPS
- -$0.13
- compared with -$1.12 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
☒
For the quarterly period ended
OR
For the transition period from _______________ to _________________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) | |
| (Address of principal executive offices) | (zip code) |
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
| ||||
| The Stock Market LLC |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☐
Yes ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
As of August 18, 2025, shares of common stock, par value $ per share were issued and outstanding.
TABLE OF CONTENTS
| i |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10Q (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements about the financial condition, results of operations, earnings outlook and prospects of Lottery.com Inc. (“Lottery.com”, the “Company”, “we” or “us”). Forward-looking statements appear in a number of places in this Report, including, without limitation, under the heading in Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements are based on the current expectations of the management of Lottery.com and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors discussed and identified in the section entitled “Risk Factors” in our Annual Report on Form 10-K/A for the year ended December 31, 2024 (the Amended “Annual Report”) which was filed on April 22, 2025 and in this Report, as such factors may be updated in our periodic reports filed with the Securities and Exchange Commission (the “SEC”), as well as the following:
| ● | The findings of the previously disclosed internal investigations and other matters have exposed us to legal proceedings, regulatory investigations and inquiries, and have resulted in significant legal and other expenses, and significant time and attention from our senior management, as well as causing other adverse impacts. | |
| ● | We and certain of our former officers are, and in the future, we or our officers and directors may become, the subject of legal proceedings, investigations and inquiries by governmental agencies with respect to the findings of the above matters, which could have a material adverse effect on our reputation, business, financial condition, and results of operations, which could result in additional claims and material liabilities. | |
| ● | We have been named as a defendant in a number of lawsuits filed by purchasers of our securities, including class action lawsuits that could have a material adverse impact on our business, financial condition, results of operation and cash flows, and our reputation. | |
| ● | Matters relating to or arising from our previous restatement and the internal investigations, including adverse publicity and potential concerns from our users, customers or others with whom we do business, have had and could continue to have an adverse effect on our business and financial condition. | |
| ● | We need additional capital to, among other things, support and restart our operations, re-hire employees, complete acquisitions and pay expenses. Such capital may not be available on commercially acceptable terms, if at all. If we do not receive the additional capital, we may be forced to curtail or abandon our plans to recommence our operations and we may need to permanently cease our operations. |
| ii |
| ● | If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the trading price of our common stock and warrants may be materially and adversely affected. | |
| ● | Our inability to compete with other forms of entertainment for consumers’ discretionary time and income. | |
| ● | Economic downturns, inflation, geopolitical and political and market conditions beyond our control. | |
| ● | Negative events or media coverage relating to our business, our management and directors. | |
| ● | Our inability to attract and retain users, including our ineffectiveness to appear in Internet search engine listings. | |
| ● | Our continued ability to successfully use domain names to promote and increase the value of our brand. | |
| ● | Scrutiny by stakeholders with respect to responsible gaming conduct. | |
| ● | Our ability to achieve profitability and growth in our primary markets: sports, gaming, and entertainment. | |
| ● | The effectiveness of our marketing efforts in developing and maintaining our brand and reputation. | |
| ● | The vulnerability of our information systems to disruptions in communications, cyberattacks and disruptions caused with respect thereto, including an inability to securely maintain personal and other proprietary user information. | |
| ● | Our inability to adapt to changes in the Internet, mobile or personal devices, or new technology platforms or network infrastructures, including AI. | |
| ● | The exposure of our online infrastructure to risks relating to distributed ledger technology. | |
| ● | Our inability to comply with complex, ever-changing and multi-jurisdictional regulatory regimes and other legal requirements applicable to the gaming industries. | |
| ● | Geopolitical shifts and changes in applicable laws or regulations or the manner in which they are interpreted. | |
| ● | Our inability to successfully expand geographically and acquire and integrate new operations. | |
| ● | Our dependence on third-party service providers to timely perform services or provide software component products for our product offerings and the processing of user payments and withdrawals. | |
| ● | Our inability to maintain successful relationships and/or agreements with third-party service provider affiliates. |
| iii |
| ● | Failure of third-party service providers to protect, enforce, or defend intellectual property rights required to fulfill contractual obligations required for the operation of our business. | |
| ● | The ongoing responsibility of maintaining compliance with the regulatory and other requirements of being a public company. | |
| ● | We have had periods of non-compliance with Nasdaq listing standards in the past and we may not be able to maintain compliance with Nasdaq’s continued listing standards in the future. | |
| ● | Limited liquidity and trading of our securities. | |
| ● | Lenders may not loan us the amounts they agreed to under existing loan agreements. | |
| ● | Our obligations under certain loan agreements are secured by a first priority security interest in substantially all of our assets and if we were to default, we could be required to curtail or abandon our business plans and operations. | |
| ● | The issuance and sale of common stock upon conversion of the amounts owed or upon exercise of the warrants issued to Woodford, UCIL, Univest, or Generating Alpha Ltd (as defined herein) under their loan agreements may depress the market price of our common stock and cause substantial dilution. | |
| ● | We currently owe a significant amount of money under our loan agreements, which we may not be able to repay on the terms provided therein. |
The risks described herein or in the “Risk Factors” sections of our other public filings referenced above are not exhaustive. Other sections of this Report describe additional factors that could adversely affect our business, financial condition or results of operations. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| iv |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
| 1 |
LOTTERY.COM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2025 | December 31, 2024 | |||||||
| (UNAUDITED) | (AUDITED) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Notes receivable | ||||||||
| Investments | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Property and equipment, net | ||||||||
| Other long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Trade payables | $ | $ | ||||||
| Deferred revenue | ||||||||
| Notes payable - current | ||||||||
| Accrued interest | ||||||||
| Accrued and other expenses | ||||||||
| Other liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Convertible debt, net - non current | ||||||||
| Other long-term liabilities | ||||||||
| Total long-term liabilities | ||||||||
| Commitments and contingencies (Note 13) | ||||||||
| Total liabilities | ||||||||
| Equity | ||||||||
| Controlling Interest | ||||||||
| Equity Controlling Interest | ||||||||
| Preferred Stock, par value $, shares authorized, issued and outstanding | ||||||||
| Common stock, par value $, shares authorized, and issued and outstanding June 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Lottery.com Inc. stockholders’ equity | ||||||||
| Noncontrolling interest | ||||||||
| Total Equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-1 |
LOTTERY.COM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Personnel costs | ||||||||||||||||
| Professional fees | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (loss) from operations | ( | ) | $ | ( | ) | ( | ) | $ | ( | ) | ||||||
| Other expenses | ||||||||||||||||
| Interest (income) expense | ( | ) | ||||||||||||||
| Other (income) expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other expenses (income), net | ( | ) | ||||||||||||||
| Net loss before income tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income tax expense (benefit) | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive loss | ||||||||||||||||
| Foreign currency translation adjustment, net | ||||||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income attributable to noncontrolling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to Lottery.com Inc. | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss per common share | ||||||||||||||||
| Basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-2 |
LOTTERY.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
For the Three and Six Months Ended June 30, 2025 and 2024
| Shares | Amount | Capital | Deficit | Income | Equity | Interest | Equity | |||||||||||||||||||||||||
| Common Stock | Additional Paid-In | Accumulated | Accumulated Other Comprehensive |
Total AutoLotto Inc. Stockholders’ |
Noncontrolling | Total Stockholders’ | ||||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Income | Equity | Interest | Equity | |||||||||||||||||||||||||
| Balance as of December 31, 2023 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | ||||||||||||||||||||||||||||||||
| Stock issued in lieu of cash | ||||||||||||||||||||||||||||||||
| Stock issued in lieu of cash, shares | ||||||||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( |
) | ( |
) | $ | $ | $ | ||||||||||||||||||||||
| Stock based compensation | ( |
) | ||||||||||||||||||||||||||||||
| Conversion of Debt to Equity | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance as of June 30, 2024 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||
| Stock issued in lieu of cash | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance as of March 31, 2025 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Balance | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||||||
| Conversion of Debt to Equity | ||||||||||||||||||||||||||||||||
| Stock issued in lieu of cash | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | ||||||||||||||||||||||||||||||||
| Prior Period Adjustment | (225,928 |
) | (225,928 |
) | (1,166,154 |
) | (1,392,082 |
) | ||||||||||||||||||||||||
| Net loss | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Balance as of June 30, 2025 | ||||||||||||||||||||||||||||||||
| Balance | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-3 |
LOTTERY.COM INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30, 2025 and 2024
| 2025 | 2024 | |||||||
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss attributable to Lottery.com Inc. | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Loss Attributable to noncontrolling interest | ( | ) | ||||||
| Depreciation and amortization | ||||||||
| Common stock granted for compensation and as payment in lieu of cash payments for accrued liabilities | ||||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | |||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Other current assets | ( | ) | ||||||
| Other long term assets | ||||||||
| Trade payables | ||||||||
| Accrued and other expenses | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Other liabilities | ( | ) | ||||||
| Accrued interest | ( | ) | ||||||
| Other long-term liabilities | ||||||||
| Net cash (used in) provided by operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from collection of note receivable | ||||||||
| Payments made as deposits made for acquisitions | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds (Payments) from sale of common stock under put arrangement | ||||||||
| Proceeds/ (Payments) from exercise of options and warrants | ( | ) | ||||||
| Proceeds (Payments) from convertible notes | ||||||||
| Net cash provided by financing activities | ||||||||
| Net effect of exchange rate changes on Cash | ( | ) | ( | ) | ||||
| NET CHANGE IN NET CASH AND RESTRICTED CASH | ( | ) | ||||||
| CASH AND RESTRICTED CASH - BEGINNING OF YEAR | ||||||||
| CASH AND RESTRICTED CASH - END OF PERIOD | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Interest paid in cash | $ | $ | ||||||
| Taxes paid in cash | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| F-4 |
LOTTERY.COM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2025
Note 1. Nature of Operations
Description of Business
Lottery.com Inc. (formerly Trident Acquisitions Corp) (“TDAC”, “Lottery.com”. “SEGG Media” 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”). 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 the Company moved its headquarters from New York, New York to Texas. In July 2025, the Company began doing business as SEGG Media Corporation. The name change is reflective of the Company’s shift to focusing on market segments in sports, entertainment, and gaming.
The Company owns and operates three premium domain brands: Sports.com, Concerts.com, and Lottery.com representing the Company’s three operating focuses: Sports, Entertainment, and Gaming.
Sports
Sports.com is a next-generation global sports streaming and content platform designed to meet the evolving demands of digital audiences. Focused on delivering premium short-form video, curated articles, and eventually live event coverage, the platform combines mobile-first accessibility, AI-driven personalization, and community engagement to create a unified experience for fans worldwide.
The business will launch with an ad-supported freemium model and scale toward subscription and pay-per-view offerings upon achieving key user milestones. Initial target markets include the United States, Latin America (LATAM), India, and the Gulf Cooperation Council (GCC) regions with fast-growing streaming adoption and underserved sports segments. The platform will also build strategic partnerships with regional sports leagues, influencers, and brands to accelerate content acquisition and market penetration.
Additionally, the Company will develop, produce and distribute compelling sports-focused films, docuseries, and premium digital content. This new arm of the business will serve as the cornerstone of the Company’s global expansion into entertainment media and immersive storytelling.
The Company has two wholly-owned subsidiaries to support the operations of the Sports-related activities: Sports.com Media Group Ltd and Sports.com Studios Ltd.
Entertainment
The Company is pursuing multiple revenue models in the entertainment vertical. Through TicketStub.com, the Company has a platform which allows it to generate revenue via direct-to-consumer ticket sales and through affiliate commissions with both first and second tier ticketing services. Concerts.com will focus on delivering free and subscription-based content related to the music industry. Features will include live and recorded concert streaming, music instruction, a licensed and fan-produced merchandise marketplace, and entertainment news.
The Company’s majority owned subsidiary, DotCom Ventures, Inc., operates two brands to support the operations of entertainment related activities: TicketStub.com and Concerts.com.
Gaming
The Company is an independent third-party lottery game service. It offers a platform that it developed and operates to enable the remote purchase of legally sanctioned lottery games in the U.S. and abroad (the “Platform”). The Company’s 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”); (ii) offering an internally developed, created and operated business-to-business application programming interface (“API”) of the Platform to enable commercial partners in permitted U.S. and international jurisdictions to purchase certain legally operated lottery games from the Company and resell them to users located within their respective jurisdictions (“B2B API”); (iii) delivering global lottery data, such as winning numbers and results, and sports data, such as scores and statistics, to commercial digital subscribers and provide access to other proprietary, anonymized transaction data pursuant to multi-year contracts (“Data Service”); and (iv) transition Lottery.com into a high-authority, content-rich website that provides comprehensive information about lotteries, including results, analysis, comparisons, tools, and regulatory context and drive revenue through a Cost-per-Acquisition (CPA) or Revenue-Share model with third-party partners .
As a provider of lottery products and services, the Company is required to comply with, and its business is subject to, regulation in each jurisdiction in which the Company offers the B2C Platform, or a commercial partner offers users access to lottery games through the B2B API. In addition, it must also comply with the requirements of federal and other domestic and foreign regulatory bodies and governmental authorities in jurisdictions in which the Company operates or with authority over its business. The Company’s business is additionally 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.
| F-5 |
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”) and include the accounts of the Company and its wholly owned operating subsidiaries. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). All intercompany accounts and transactions have been eliminated in consolidation.
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 $
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 London Limited. (“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, launch additional international lottery operations, and expand operations in Mexico and offerings of sweepstake, as well as 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.
| F-6 |
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 reflects 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.
| F-7 |
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 $
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. Global Gaming operates in Mexican Pesos and the base currency for Sports.com Media Group Ltd. (formerly S&MI Ltd.) is British Pounds. Assets and liabilities are translated 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, 2025 and December 31, 2024, 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
| F-8 |
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. In the fall of 2024, the
Company completed a project whereby certain older items in accounts receivable for the TinBu subsidiary were offset against the allowance
for uncollectible receivables, resulting in a reduction in the number of individual items in accounts receivable which were aged greater
than 90 days and the total amount for them. At the completion of this project, the balance in the allowance for uncollectible receivables
was $
Prepaid Expenses for Advertising Credits
Prepaid expenses consist of payments made on contractual obligations for
services to be consumed in future periods. The Company entered into an agreement with two third parties 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 parties. 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 $
Investments
On
August 2, 2018, AutoLotto purchased shares of Class A-1 common stock of a third-party business development partner representing
% of the total outstanding shares of the Company. As this investment resulted in less than
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
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 | ||||
| Furniture and fixtures | ||||
| Software |
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 would use its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Otherwise, the implicit rate would be 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 has 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).
| F-9 |
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)”, the Company recognizes revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists; (ii) identifiable performance obligations under the contract exist; (iii) the transaction price is determinable for each performance obligation; (iv) the transaction price is allocated to each performance obligation; and (v) when the performance obligations are satisfied. Revenues are recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services.
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, and 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 whether 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 whether 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.
| F-10 |
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 period 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
Lottery Specific Operations. 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.
From Non-Lottery Operations. Cost of revenue consists of (i) fixed direct costs and/or variable costs incurred for content or services provided by third parties in connection with generating revenue; and (ii) payment processing fees on user fees, including chargebacks imposed on the Company. Other variable costs include underlying costs of tickets for events and sweepstakes prizes.
Effective October 1, 2019, the Company adopted ASU 2018-07, Compensation - “Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting” (“ASC 718”), which addresses aspects of the accounting for nonemployee share-based payment transactions and accounts for share-based awards to employees in accordance with ASC 718, Stock Compensation. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method.
| F-11 |
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” (“ASC 740”), using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences 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 provided for those deferred tax assets for which it is more likely than not that the related benefit will not be realized.
The
Company records uncertain tax positions in accordance with ASC 740
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 2024 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 2024 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 (“ASC 820”), which establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:
| ● | 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.
| F-12 |
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) (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. The amendments in this ASU are effective for goodwill impairment tests in fiscal years beginning after December 15, 2021, and early adoption is permitted. The Company is currently evaluating this new standard and management does not currently believe it will have a material impact on its consolidated financial statements, depending on the outcome of future goodwill impairment tests.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Adoption of ASU 2016-13 will require the Company to use forward-looking information to formulate its credit loss estimates. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating this new standard and currently does not expect it to have a significant impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU No 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2021, and early adoption is permitted. The Company is currently evaluating this new standard and currently does not expect it to have a significant impact on the Company’s consolidated financial statements.
In October 2020, the FASB issued ASU No. 2020-09, Debt (Topic 470) (“ASU 2020-09”). ASU 2020-09 amendments to SEC paragraphs pursuant to SEC release NO. 33-10762 amends terms related to Debt Guarantors and Issuers of Guaranteed Securities Registered or to be Registered with the SEC. The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial statements.
In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to enhance the reportable segment disclosures. The guidance will require additional disclosures about significant segment expenses. The guidance is effective for the public companies with fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of this standard.
Note 3. Business Combination
TDAC Combination
On October 29, 2021, the Company and AutoLotto consummated the transactions contemplated by the Merger 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 Merger (other than excluded shares as contemplated by the Merger Agreement) was cancelled and converted into the right to receive approximately shares (the “Exchange Ratio”) of Lottery.com. common stock.
| F-13 |
The
Merger closing was a triggering event for the Series B convertible notes, of which $
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 Merger 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 2, Summary of Significant Accounting Policies, for further details. 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.
The accompanying 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 Business Combination.
Upon
the closing of the transaction, AutoLotto received total gross proceeds of approximately $
Pursuant to the terms of the Business Combination Agreement, the holders of issued and outstanding shares of AutoLotto immediately prior to the Closing (the “Sellers”) were entitled to receive up to additional shares of Common Stock (the “Seller Earnout Shares”) and Vadim Komissarov, Ilya Ponomarev and Marat Rosenberg (collectively the “TDAC Founders”) were also entitled to receive up to additional shares of Common Stock (the “TDAC Founder Earnout Shares” together with the Seller Earnout Shares, the “Earnout Shares”). One of the earnout criteria had not been met by the December 31, 2021 deadline thus no earnout shares were granted specific to that criteria. of the Seller Earnout Shares and TDAC Founder Earnout Shares were still eligible Earnout Shares until December 31, 2022. The criteria were not met by December 31, 2022 and those earnout shares were not granted. All of the potential earnout shares were forfeited as of December 31, 2022.
Global Gaming Acquisition
On
June 30, 2021, the Company completed its acquisition of
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.
| F-14 |
The
total purchase price of $
Schedule of Identified Tangible and Intangible Asset Acquired
| Cash | $ | |||
| Accounts receivable, net | ||||
| Accounts receivable - Other | ||||
| VAT (net) | ||||
| Prepaids | ||||
| Property and equipment, net | ||||
| Other assets, net | ||||
| Intangible assets | ||||
| Goodwill | ||||
| Total assets | $ | |||
| Accounts payable and other liabilities | $ | ( | ) | |
| Director’s Loan * | ||||
| Customer deposits | ( | ) | ||
| Related party loan | ( | ) | ||
| Total liabilities | $ | ( | ) | |
| Total net assets of Acquirees | $ |
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.
Following are details of the purchase price allocated to the intangible assets acquired.
Schedule of Intangible Assets Acquired
| Category | Fair Value | |||
| Customer relationships | $ | |||
| Gaming licensees | ||||
| Trade names and trademarks | ||||
| Technology | ||||
| Total Intangibles | $ | |||
S&MI Ltd Acquisition
On September 1, 2024, the Company finalized an agreement for the acquisition of S&MI, Ltd. (the “Share Purchase and Sale Agreement”), wherein the Purchase Price was the total equivalent of One Million Dollars USD ($) in restricted stock units of common shares in the Company (the “Payment-In-Kind”) fixed at Three Dollars USD ($) per share (the “Fixed Price”). The Purchase Price is to be paid out over five payments on the following schedule: The first payment of $ in restricted common stock ( shares) of the Company is due and payable on September 1, 2024 (the “Completion Date” the “First Issuance Date”). The remaining payments in restricted common stock to the shareholders of S&MI Ltd. by the Company will be made as follows: (i) a second payment of $ ( shares) due on or before the 31st day following ninety days after the Completion Date (the Second Issuance Date”); (ii) a third payment, of $ ( shares) due on or before the 31st day following ninety days after the Second Issuance Date (the Third Issuance Date”); (iii) a fourth payment of $ ( shares) due on or before the 31st day following ninety days after the Third Issuance Date (the “Fourth Issuance Date”); and (vi) a fifth and final payment of $ ( shares) due on or before the 31st day following ninety days after the Fourth Issuance Date.
In the event that the closing price of the restricted stock units of common shares of the Company to be issued to the shareholders of S&MI, Ltd. is lower than the Fixed Purchase Price on the six (6) month anniversary of any issuance date of said shares (collectively the “Anniversary Issuance Price”), then the Fixed Purchase Price shall be adjusted downward to the volume-weighted average price (“VWAP”) of the common stock for the five (5) consecutive trading days immediately preceding the six (6) month anniversary date of said issuance date. Accordingly, the Company shall be obligated to tender to the shareholders of S&MI, Ltd. additional restricted common shares of the Company to make up the difference between the Fixed Purchase Price and the Anniversary Issuance Price.
The opening balance of S&MI Ltd has
been included in our consolidated balance sheet since the date of the acquisition. Since the S&MI Ltd’s financial statements
were denominated in British Pounds, the exchange rate of
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 the valuation analysis performed by a third-party valuation firm.
The total purchase price of $
Schedule of Identified Tangible and Intangible Asset Acquired
| Accounts receivable, net | ||||
| Other Receivables | ||||
| Intangible assets | ||||
| Goodwill | ||||
| Total assets | $ | |||
| Accounts payable and other liabilities | $ | ( | ) | |
| Director’s Loan | ( | ) | ||
| Total liabilities | $ | ( | ) | |
| Total net assets of Acquiree | $ |
| F-15 |
Note 4. Property and Equipment, net
Property and equipment, net as of June 30, 2025 and December 31, 2024, consisted of the following:
Schedule of Property and Equipment
| June 30, 2025 | December 31, 2024 | |||||||
| Computers and equipment | $ | $ | ||||||
| Furniture and fixtures | ||||||||
| Software | ||||||||
| Property and equipment | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation
expense for the three months ended June 30, 2025 was $
Note 5. Prepaid Expenses
Prepaid expenses consist primarily of advertising credits from two top tier media organizations that operate in the United States. The advertising credits were obtained in return for warrants, shares of common stock and shares of preferred stock. The agreements do not specify a time period for utilizing these credits and there is no requirement to provide cash or other consideration in connection with utilizing them. The balance can be utilized at any time at the mutual consent of the parties. The Company expects to begin utilizing these credits in the second half of 2025 and anticipates fully utilizing all of them by the end of 2026. Accordingly, they are presented as current assets.
Note 6. Notes Receivable
On
March 22, 2022, the Company entered into a
This note was received in consideration for a portion of the development work that the Company performed for the borrower who had intended 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.
Note 7. 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 for the period ended December 31, 2024, management conducted a review as to whether there are conditions or circumstances that may indicate the impairment of its long-lived assets, goodwill and other indefinite-lived intangible assets.
The Company reviewed the goodwill and intangibles acquired in the acquisitions of TinBu, LLC and Global Gaming Enterprises, Inc., the domain names and software purchased from third parties, and software developed in-house. Each of TinBu, Global Gaming, and Lottery.com is considered a reporting unit for application of the annual review for potential impairment.
The
Company performed a valuation of each of the reporting units described above, using discounted cash flow methodologies and estimates
of fair market value. Given the results of the quantitative assessment, the Company determined that the goodwill for the TinBu and Global
Gaming reporting units was impaired. For the year ended December 31, 2023, the Company recognized goodwill impairment charges of $
Additionally,
in connection with completion of the tax provision for 2023, a transaction which had been recorded for the year ended December 31, 2021
was reevaluated and a decision was made that it should not have been recorded and should be reversed. Specifically, at the end of 2021,
a decision was made to increase goodwill related to the acquisition of Global Gaming Enterprises, Inc. due to an incorrect conclusion
that “an adjustment should be made to goodwill for the recording of related deferred tax liabilities as the Company released $
Similarly, the Company performed an impairment analysis for the three months ended September 30th,
2024 and as a result of that analysis it was determined that impairment charges were necessary. Impairments of goodwill for $
| F-16 |
Note 8. Intangible assets, net
Gross carrying values and accumulated amortization of intangible assets:
Schedule of Finite Lived Intangible Assets Amortization Expenses
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||
| Gross | Gross | |||||||||||||||||||||||||||
| Useful | Carrying | Accumulated | Carrying | Accumulated | ||||||||||||||||||||||||
| Life | Amount | Amortization | Net | Amount | Amortization | Net | ||||||||||||||||||||||
| Amortizing intangible assets | ||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Trade name | ( | ) | ( | ) | ||||||||||||||||||||||||
| Technology | ( | ) | ( | ) | ||||||||||||||||||||||||
| Software agreements | ( | ) | ( | ) | ||||||||||||||||||||||||
| Gaming license | ( | ) | ( | ) | ||||||||||||||||||||||||
| Internally developed software | ( | ) | ( | ) | ||||||||||||||||||||||||
| Domain name | ( | ) | ( | ) | ||||||||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
Amortization
expense with respect to intangible assets for the three months ended June 30, 2025 and 2024 totaled $
Similarly, the Company performed an impairment analysis for the three months ended September 30, 2024 and as a result
of that analysis it was determined that impairment charges were necessary. Impairments of goodwill for $
Estimated amortization expense for years of useful life remaining is as follows:
Schedule of Estimated Amortization Expense
| Years ending December 31, | Amount | |||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
The
Company had software development costs of $
| F-17 |
Note 9. Notes Payable and Convertible Debt
Secured Convertible Note
In
connection with the Lottery.com domain purchase, the Company issued a secured convertible promissory note (“Secured Convertible
Note”) with a fair value of $
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 $
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 $
During
the year ended December 31, 2021, the Company entered into multiple Convertible Promissory Note agreements with unaffiliated investors
for an aggregate amount of $
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 $
As
of October 29, 2021, all except $
| F-18 |
Short term loans
On
June 29, 2020, the Company entered into a Promissory Note with the U.S. Small Business Administration (“SBA”) for $
In
August 2020, the Company entered into three separate note payable agreements with three individuals for an aggregate amount of $
Notes payable
On
August 28, 2018, in connection with the purchase of the entire membership interest of TinBu, the Company entered into several notes payable
for $
As
of both June 30, 2025 and December 31, 2024, the balance of the notes was $
Note 10. Stockholders’ Equity
Reverse Split
On
August 9, 2023, the Company amended its Charter to implement, effective at 5:30 p.m., Eastern time, a
The effects of the Reverse Stock Split have been reflected in this Quarterly Report on Form 10Q for all periods presented.
Preferred Stock
Pursuant to the Company’s charter, the Company is authorized to issue shares of preferred stock, par value $ per share. Our board of directors has the authority without action by the stockholders, to designate and issue shares of preferred stock in one or more classes or series, and the number of shares constituting any such class or series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock, including, without limitation, dividend rights, conversion rights, redemption privileges and liquidation preferences, which rights may be greater than the rights of the holders of the common stock. As of June 30, 2025, there were shares of preferred stock issued and outstanding.
| F-19 |
Common Stock
Our
Charter authorizes the issuance of an aggregate of shares of Common Stock, par value $ per share. The shares of Common
Stock are duly authorized, validly issued, fully paid and non-assessable. Our purpose is to engage in any lawful act or activity for
which corporations may now or hereafter be organized under the DGCL. Unless our Board determines otherwise, we will issue all shares
of our common stock in an uncertificated form.
As of June 30, 2025 and December 31, 2024, and shares of Common Stock, respectively, were outstanding. During the three months ended June 30, 2025, the Company issued the following shares of common stock.
Schedule of Common Stock
| Schedule of Common Stock | ||||
| Conversion of debt to equity | ||||
Stock issued in lieu of cash | ||||
| Issuance of Common Stock converted for Convertible Notes | ||||
| Total | ||||
| Shares outstanding, balance |
Public Warrants
The
Public Warrants became exercisable 30 days after the Closing; 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
The Company may redeem the Public Warrants:
| ● | in whole and not in part; | |
| ● | at
a price of $ | |
| ● | upon
a minimum of | |
| ● | if,
and only if, the last sale price of the Company’s common stock equals or exceeds $ per share for any | |
| ● | 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 |
| F-20 |
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,
as of March 31, 2025 there were Public Warrants outstanding for the issuance of
An adjustment was made to the Company’s
warrants based on the
Private Warrants
Private warrants of TDAC issued before the business combination were forfeited and did not transfer to the surviving entity.
Common Stock Warrants
The
Company did not issue any warrants during the three months ended June 30, 2025. During the year ended December 31, 2024, the Company
issued
Schedule of Common Stock Warrant
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Shares | Price | Life (years) | Value | |||||||||||||
| Outstanding at December 31, 2024 | ||||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited/cancelled | - | |||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | ||||||||||||||
| F-21 |
Earnout Shares
As detailed in Note 4 - as part of the TDAC Combination as of December 31, 2021 a total of Earnout Shares were eligible for issuance until December 31, 2022. Conditions for the earnout were not met and the potential earnout shares were forfeited on December 31, 2022.
Expense 2015 Stock Option Plan
Prior
to the closing of the Business Combination, AutoLotto had the AutoLotto, Inc. 2015 Stock Option/Stock Issuance Plan (the “2015
Plan”) in place. Under the 2015 Plan, incentive stock options may be granted at a price not less than fair market value of the
common stock (110% of fair value to holders of 10% or more of voting stock). If the Common Stock is at the time of grant listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the
Stock Exchange, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall 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 shall 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.
2021 Equity Incentive Plan
In connection with the Business Combination, our board of directors adopted, and our stockholders approved, the Lottery.com 2021 Incentive Award Plan (the “2021 Plan”) under which shares of Class A common stock were initially reserved for issuance. The 2021 Plan allows for the issuance of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock or cash-based awards. The number of shares of the Company’s Class A common stock available for issuance under the 2021 Plan increases annually on the first day of each calendar year, beginning on and including January 1, 2022 and ending on and including January 1, 2031 by a number of shares of Company common stock equal to five percent (%) of the total outstanding shares of Company common stock on the last day of the prior calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no such increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of Company common stock than would otherwise occur pursuant to the preceding sentence.
| F-22 |
Stock Options
The Company did not issue any new stock options during the quarter ended June 30, 2025. The following table shows stock option activity for the year ended December 31, 2024 and quarter ended June 30, 2025:
| Weighted | ||||||||||||||||||||
| Weighted | Average | |||||||||||||||||||
| Shares | Outstanding | Average | Remaining | Aggregate | ||||||||||||||||
| Available | Stock | Exercise | Contractual | Intrinsic | ||||||||||||||||
| for Grant | Awards | Price | Life (years) | Value | ||||||||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||||||
| Granted | - | |||||||||||||||||||
| Exercised | - | |||||||||||||||||||
| Forfeited/cancelled | - | |||||||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | ||||||||||||||||||
Restricted awards
The Company awards restricted stock to employees, directors, and certain outside consultants from time to time which are granted with various vesting terms including immediate vesting, service-based vesting, and performance-based vesting. In accordance with ASC 718, the Company has classified the restricted stock as equity.
For such 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 time 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 June 30, 2025 and December 31, 2024, unrecognized stock-based compensation associated with the restricted stock awards is $ and $ respectively.
Schedule of Restricted Stock Awards Activity
| Weighted | ||||||||
| Average | ||||||||
| Number of | Grant | |||||||
| Shares | Fair Value | |||||||
| Outstanding at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited/cancelled | ||||||||
| Restricted shares unvested at June 30, 2025 | ||||||||
| Granted ** | ||||||||
| Vested ** | ||||||||
| Forfeited/cancelled | ||||||||
| Restricted shares unvested at June 30, 2025 | $ | |||||||
| ** |
| F-23 |
Note 12. 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 basis. 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.
Note 13. 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 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 June 30, 2025 and December 31, 2024.
Digital Securities
In
2018, the Company commenced an offering and issuance (the “LDC Offering”) of
| F-24 |
Leases
The Company leased office space in
Spicewood, Texas which expired
As of June 30, 2025, future minimum rent payments due under non-cancellable leases with initial are as follows:
Schedule of Future Minimum Rent Payments Due Under Non-Cancellable Leases
| Years ending December 31, | Amount | |||
| 2025 | ||||
| Thereafter | ||||
| Total | $ | |||
Litigation and Other Loss Contingencies
As of June 30, 2025, 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 Part II, Item 1 for additional information.
Note 14. 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.
Christopher
Gooding, a director of the Company appointed on August 10, 2023, is an attorney licensed in the United Kingdom who previously
provided some limited consulting services to the Company’s outside general counsel on few select U.K. legal matters that could
potentially impact the Company. Mr. Gooding was compensated for his limited services separately from his compensation as a director
of the Company. Mr. Gooding began providing the limited consulting service to the Company outside general counsel in February 2024.
He was paid a total of $
During
the quarter ended September 30, 2024, the Company entered into a borrowing arrangement with Robert Stubblefield, the Company’s
Chief Financial Officer, to provide funding for certain operating expenses of the Company. At September 30, 2024 the Loan amount was
$
Note 16. Subsequent Events
Corporate Name Change
On July 7, 2025. the Company announced that it was rebranding under the name Sports Entertainment Gaming Global Media Corporation (SEGG) to reflect the broadened focus on three key pillars: sports, entertainment, and gaming. The legal name of the Company will remain “Lottery.com Inc.” until the formal name change to “SEGG Media Corporation” is approved by the Company’s shareholders which is expected to occur before the end of September 2025. The Company’s shares began trading under the ticker symbol (Nasdaq: SEGG) effective July 8, 2025. The Company’s warrants continue to trade under the ticker symbol (Nasdaq: LTRYW).
Sports.com All-Sports Arena, designed by David Lloyd
The
Company announced that it had entered into a binding Letter of Intent (“LOI”) with David Lloyd on July 9, 2025. The LOI allows
the Company to acquire the rights to David Lloyd’s All-Sports Area in Boca Raton, FL at a $
Veloce Esports Limited Investment
On
July 14, 2025, the Company announced that it had entered into a Subscription Agreement (the “Subscription Agreement”)
and a Call Option Agreement (the “Call Option”) with Veloce Esports Limited (“Veloce”). The agreements
outline the intent of the Company to purchase a minimum of
The
Subscription Agreement calls for the Company to pay Veloce £
The
separate Call Option Agreement allows the Company to purchase newly issued share capital in Veloce at a pre-money £
| F-25 |
Super League Kerala (“SLK”) Partnership
On
July 17, 2025,
The partnership will allow SEGG Media to deliver a free and paid subscription model through the Sports.com super app, enabling fans to engage with SLK matches in multiple languages, backed by real-time stats, fantasy integration, and on-demand replays. The deal also includes commercial inventory for local and global sponsors, creating a scalable paid advertising engine tied to viewership growth.
DotCom Ventures Inc. Acquisition
One July 22, 2025, the Company entered into a Share Purchase and Sale Agreement (the “Agreement”) with DotCom Ventures Inc. (“DVI”) which outlined the intent of the Company to purchase the entire issued share capital and assets including the domain names concerts.com and ticketstub.com from DVI.
The
Agreement calls for the Company to pay DVI Five Million Dollars ($
In the event the closing price of the restricted stock units of common shares in the Company to be issued to Seller as Payment-In-Kind at Closing is lower than the Fixed Price at the close of trading on April 30, 2026 (the “Reprice Date”), then the Fixed Price will be adjusted downward to the VWAP of the common stock for the five (5) consecutive trading days immediately preceding the Reprice Date (the “Market Price”). Accordingly, Buyer will be obligated to tender Seller additional restricted stock units of common shares in the Company to true up the difference between the Fixed Price and the Market Price (the “True-Up”).
At
Closing, Seller will grant to Buyer the right to purchase the balance of the issued and outstanding shares of common stock of DVI held
by Seller in excess of the Subject Shares as follows (the “Option”):
GXR World Sports Platform Acquisition
On
July 29, 2025, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Galaxy Racer Holdings Limited,
a BVI entity (“GXR”) As consideration for the Assets, Buyer will, at Closing pay and deliver to Seller (or its designees)
the sum of Ten Million Dollars USD ($
The
Agreement calls for the Company to pay GXR Five Million One Hundred Thousand Dollars ($
As part of the transaction, Paul Roy, Founder and CEO of GXR, will serve as a Director of Newco” which is being created to house the Sports.com Super App. With more than two decades of leadership experience spanning video gaming, esports, and global sports media, Paul Roy will contribute to the integration strategy and long-term growth of Sports.com’s global operations.
| F-26 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and the related notes appearing elsewhere in this Report contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those expressed or implied in such forward-looking statements as a result of various factors, including those set forth in the section entitled “Cautionary Note Regarding Forward-Looking Statements” included herein and the sections entitled “Risk Factors” included in this Report and in our Annual Report on Form 10-K/A for the year ended December 31, 2024 (our “Annual Report”).
Overview
During FY 2024, the Company addressed legacy issues while successfully regaining full compliance with Nasdaq’s continued listing rules and restarting operations on a limited basis in order to stage Lottery.com for growth in FY 2025. The cornerstone of the Company’s operational progress for FY 2025 has been driven by technology, product and service/capability enhancements. This progress is driven primarily by the execution of the Company’s “Buy-and-Build” strategy which identifies revenue-producing assets which have the capability to accelerate the Company’s operations in the sports, entertainment, and gaming markets.
This Report is reflective of the Company’s commitment to transparency, integrity, and responsible corporate governance. The investment commitments from United Capital Investments London Limited and Generating Alpha outlined in this report are evidence of investor belief in Management’s capability to resume core lottery and gaming operations, launch additional international lottery operations, and expand operations in Mexico and offerings of sweepstakes, as well as successful monetization of Sports.com, entrance into the entertainment market, and expand all the Company’s brand across the globe.
Nasdaq Listing
On May 2, 2025, Lottery.com Inc. (the “Company” or “Lottery.com”) received a letter from the Nasdaq Listings Qualifications Staff (“Nasdaq Staff”) Indicating they had determined that the Company failed to comply with Nasdaq’s shareholder approval requirements set forth in Listing Rule 5635(c) (the “Approval Rule”).
The Company was notified that it was required to obtain shareholder approval under the Approval Rule prior to the establishment of a 2023 Employees’ Directors’ and Consultants Stock Issuance and Option Plan (the “2023 Plan”) and the Ad Hoc Grants and the shares issued in connection therewith. The Company reported on a Form 8-K on July 3, 2025 that the only Incentive Award Plan for the Company is “The Lottery.com 2021 Incentive Award Plan” (the “2021 Plan”) which was approved by the shareholders and registered by the Company on Form S-8 dated April 6, 2022, and that all Awards granted from October 2023 forward have been granted in accordance with the 2021 Plan.
As reported on form 8-K filed on May 9, 2025, the Company received written notice from Nasdaq indicating that its bid price for its common stock had closed at less than $1 per share over the previous 30 consecutive business days, and as a result, the Company did not comply with Nasdaq Listing Rule 8510©(3)(A) (the “Bid Price Listing Rule”). However, under the Listing Rules, the Company was provided a 180-calendar day grace period to regain compliance
On June 20, 2025 Lottery.com received a letter from Nasdaq determining that as a result of the Company’s common stock closing at a bid price at or above $1.00 for twenty consecutive business days, the Company had regained compliance with the Bid Price Listing Rule. Nasdaq has closed the matter.
If the Company’s securities are delisted from Nasdaq due to non-compliance with listing rules, it could be more difficult to buy and sell the Company’s common stock and warrants or to obtain accurate quotations, and the price of the Company’s common stock and warrants could suffer a material decline. Delisting could also impair the Company’s ability to raise capital and/or trigger defaults and penalties under its outstanding agreements or securities. Further, even if we lose but are able to regain compliance with Nasdaq listing requirements, there is no guarantee that we will be able to maintain our listing for any period of time.
Delisting from Nasdaq could also result in negative publicity. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and/or warrants and the ability of our stockholders to sell our common stock and/or warrants in the secondary market. If our common stock and/or warrants are delisted by Nasdaq, our common stock and/or warrants may be eligible to trade on an over-the-counter quotation system, such as the OTCQB Market, where an investor may find it more difficult to sell our stock or obtain accurate quotations as to the market value of our common stock and/or warrants. In the event our common stock and/or warrants are delisted from The Nasdaq Global Market, we may not be able to list our common stock and/or warrants on another national securities exchange or obtain quotation on an over-the counter quotation system.
| 2 |
Loan Agreement with Woodford
On December 7, 2022, the Company entered into a loan agreement with Woodford Eurasia Assets, Ltd. (“Woodford”), (the “Woodford Loan Agreement”) pursuant to which Woodford agreed to provide the Company with up to $52.5 million, subject to certain conditions and requirements, of which, per the Company’s books and records $798,351 was received by June 30, 2025 and is owed pursuant to the terms of the Woodford Loan Agreement. Amounts borrowed accrue interest at the rate of 12% per annum (or 22% per annum upon the occurrence of an event of default) and are due within 12 months of the date of each loan advance. Amounts borrowed can be repaid at any time without penalty.
Amounts borrowed pursuant to the Woodford Loan Agreement are convertible, at Woodford’s option, into shares of the Company’s common stock, beginning 60 days after the first loan date at the rate of 80% of the lowest publicly available price per share of common stock within 10 business days of the date of the Loan Agreement (which was equal to $5.60 per share), subject to a 4.99% beneficial ownership limitation and a separate limitation preventing Woodford 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 Woodford Loan Agreement included the resignation of four prior members of the Board (Lisa Borders, Steven M. Cohen, Lawrence Anthony DiMatteo and William Thompson, all of whom resigned from the Board in September 2022), and the appointment of two new independent directors. Subsequent loans under the Woodford Loan Agreement also required the Company to comply with all listing requirements, unless waived by Woodford. The Woodford Loan Agreement also allowed Woodford to nominate another director to the Board of Directors, in the event any independent member of the Board of Directors resigned.
Proceeds of the loans could only be used by to restart the Company’s operations and for general corporate purposes agreed to by Woodford.
The Woodford Loan Agreement included 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 an amount exceeding $1 million without the consent of Woodford, which consent 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.
The Company also agreed to grant warrants to purchase shares of common stock to Woodford (the “Woodford Warrants”) in an amount equal to 15% of the Company’s then issued and outstanding shares of common stock. Each Woodford Warrant has an exercise price equal to the average of the closing price of the Company’s common stock for each of the ten days prior to the first amount being debited from the bank account of Woodford, which equates to an exercise price of $5.60 per share. In the event the Company fails to repay the amounts borrowed when due or Woodford fails to convert the amount owed into shares, the exercise price of the warrants may be offset by amounts owed to Woodford, and in such case, the exercise price of the warrants will be subject to a further 25% discount.
In connection with our entry into the Woodford Loan Agreement, the Company also entered into a Loan Agreement Deed, Debenture Deed and Securitization, with Woodford (the “Security Agreement”), which provides Woodford with a first floating charge security interest over all present and future assets of the Company in order to secure the repayment of amounts owed under the Loan Agreement.
On June 12, 2023, the Company entered into an amendment of the Woodford Loan Agreement (the “Woodford Loan Agreement Amendment”). The Woodford Loan Agreement Amendment provides that Woodford shall henceforth be able to convert, in whole or in part, the outstanding balance of its loan into the conversion shares at a conversion price that represents a further 25% discount to the original conversion price of 20%. The validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.
Despite requests from the Company, Woodford has repeatedly amongst other things: failed to prove the amounts borrowed by the Company or claimed to have been advanced by Woodford to the Company; failed to indicate if it would accept accelerated payment of those verified amounts; failed to provide an anti-money laundering acceptable account to which payment could be made by the Company and failed to explain failure to respond to requests for other funding to be accepted in the context of the Woodford Loan Agreement; failed to respond to requests for funding under the accordion facility of the Woodford Loan Agreement; and failed to respond to allegations of money laundering and conspiracy to defraud the Company and the matter has been referred to the Company’s legal counsel.
Information regarding ongoing legal proceedings with Woodford can be found in the “Legal Proceedings” section of this form.
| 3 |
Loan Agreement with United Capital Investments London Limited
The Company entered into a credit facility (the “UCIL Credit Facility”), which is represented by a loan agreement, which was initially entered into on July 26, 2023, and was amended and restated on August 8, 2023, and subsequently amended on August 18, 2023 and amended and restated on February 16, 2024, the “UCIL Loan Agreement”). The UCIL Loan Agreement is with United Capital Investments London Limited (“UCIL”), an entity in which each of Matthew McGahan, the Company’s Chief Executive Officer and Chair of the Company’s Board, and Barney Battles, a former member of the Board, have a direct or indirect interest. The decision by the Company to enter into the UCIL Loan Agreement followed an acknowledgment by the Company that it had not received the requisite funding on a timely basis that it expected from Woodford, despite the Company making several requests to Woodford for said funding under the Woodford Loan Agreement. Moreover, the Board of Directors determined that it was in the best interest of the Company and its stockholders to enter into the UCIL Loan Agreement with UCIL, as an alternative lender to Woodford, upon receiving an event of default notice on July 21, 2023 (the “Default Notice”) and an event of default and crystallization notice on July 25, 2023 (the “Crystallization Notice”) from Woodford under the Woodford Loan Agreement. Neither McGahan or Battles participated in the vote on the UCIL agreement to ensure proper independence and correct corporate governance. On July 24, 2023, the Company responded to the Default Notice disputing that an event of default had occurred given the Company’s earlier announcement that UCIL had agreed to enter into a funding arrangement with the Company. On July 27, 2023, the Company replied to the Crystallization Notice denying that an event of default occurred or continued, and further asserted that Woodford’s attempt for crystallization was inappropriate and unlawful under the Woodford Loan Agreement. Given the uncertainty of the continued financing under the Woodford Loan Agreement, the Board of Directors sought to secure and formalize the Company’s alternative funding by entering into the UCIL Loan Agreement.
Placement Agent Agreement with Univest Securities, LLC
As reported on form 8-K filed with the SEC on February 6, 2024, on December 6, 2023, the Company entered into a placement agent agreement (the “Placement Agent Agreement”) with Univest Securities, LLC (the “Placement Agent”), whereby the Placement Agent agreed to act as placement agent in connection with the Company’s offering (“Offering”) of convertible debt with warrant coverage at 50% up to $1,000,000; consisting of a convertible promissory note (each, a “Convertible Note” or collectively, the “Convertible Notes”), and a common stock purchase warrant (each, a “Warrant”, or collectively, the “Warrants”) to purchase shares of common stock of the Company, par value $0.001 per share (the “Common Stock”) which include specific registration rights (“Registration Rights”), directly to one or more investors (each, an “Investor” and, collectively, the “Investors”) through the Placement Agent.
On February 1, 2024, the parties agreed to increase the offering amount from $1,000,000 to $5,000,000. All other terms and conditions of the offering remained the same. The Securities shall be offered and sold pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”).
Business Combination
On October 29, 2021, we, as AutoLotto, Inc (“AutoLotto”), consummated the Business Combination with Trident Acquisitions Corp. (“TDAC” and after the Business Combination described herein, the “Company”), pursuant to the terms of that certain Business Combination Agreement, dated as of February 21, 2021 (the “Business Combination Agreement”), by and among TDAC, Trident Merger Sub II Corp., a wholly-owned subsidiary of TDAC (“Merger Sub”) and AutoLotto. Pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into AutoLotto with AutoLotto surviving the merger as a wholly owned subsidiary of TDAC, which was renamed “Lottery.com Inc.” The aggregate value of the consideration paid by TDAC to the holders of AutoLotto common stock in the Business Combination (excluding shares that could have been be issued to former AutoLotto stockholders (the “Sellers”) as earnout consideration) was approximately $440 million, consisting of approximately 2,000,000 shares of common stock valued at $220.00 per share. In addition, each Seller was eligible to receive its pro rata portion of 150,000 Seller Earnout Shares and each Founder Holder was eligible to receive one-third of 100,000 Founder Holders Earnout Shares, subject to adjustments in the normal course of business. Conditions for the Earnout Shares were not met and all of the potential Earnout Shares were forfeited.
Board of Directors
On May 13, 2025, the Board of Directors of the Company appointed Mr. Marc Bircham as a member of its Board of Directors. Mr. Bircham will also serve as Executive Director of Sports.com. He is a seasoned executive, entrepreneur, and former international footballer with a dynamic career that spans professional sports, business development, and strategic leadership. In his career, Marc has spearheaded international growth, led complex acquisition projects, and forged high-value partnerships across the sports and entertainment industries.
Mr. Bircham is eligible to participate in the Company’s equity compensation plans commensurate with all other Directors.
Reverse Stock Split
On August 9, 2023, the Company amended its Charter to implement, effective at 5:30 p.m., Eastern time, a 1-for-20 Reverse Stock Split. At the effective time of the Reverse Stock Split, every 20 shares of common stock either issued and outstanding or held as treasury stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share. Stockholders who would have otherwise been entitled to fractional shares of common stock as a result of the Reverse Stock Split received a cash payment in lieu of receiving fractional shares. In addition, as a result of the Reverse Stock Split, proportionate adjustments will be made to the number of shares of common stock underlying the Company’s outstanding equity awards, the number of shares issuable upon the exercise of the Company’s outstanding warrants and the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards and warrants, as applicable. The Reverse Stock Split was approved by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders on August 7, 2023 and was subsequently approved by the Board of Directors on August 7, 2023.
The effects of the Reverse Stock Split have been reflected in this Quarterly Report on Form 10Q for all periods presented.
International Expansion
In June 2021, we closed the acquisition of Global Gaming, which holds 80% of the equity of each of Aganar and JuegaLotto. Aganar operates in the licensed Online Lottery market in Mexico and is licensed to sell Mexican National Lottery draw games, instant win tickets, and other games of chance online with access to a federally approved online casino and sportsbook gaming license. JuegaLotto is licensed by Mexico authorities to commercialize international lottery games in Mexico through an authorized gaming portal and to commercialize games of chance in other countries throughout Latin America. As of the date of this Report, according to Statista, the estimated size of the Latin American lottery market is $.68 billion with a compound annual growth rate projected at 6.05% through 2028. Furthermore, it is projected that there will be 3,000,000 online lottery players in the South American lottery market alone by 2028. Based on these projections, we believe these acquisitions will provide opportunities for growth of our international operations throughout Mexico and Latin America as we expand our portfolio of products and expose our existing products to new markets.
The Company completed the acquisition of Spektrum Ltd from PlusEvo Ltd through a Share Purchase Agreement (SPA) executed on March 13, 2025. This acquisition, valued at $1.5 million in common stock at $3 per share, supports Lottery.com’s strategic expansion and the development of Lottery.com International. The acquisition provides the Company with a compliant platform to support lottery, sweepstakes and social gaming operations in dozens of international jurisdictions.
| 4 |
Operations Prior to Operational Cessation
Prior to the Operational Cessation, the Company was a provider of domestic and international lottery products and services. As an independent third-party lottery game service, we offered a platform that we developed and operated to enable the remote purchase of legally sanctioned lottery games in the U.S. and abroad (the “Platform”). Our revenue generating activities included (i) offering the Platform via our Lottery.com app and our websites to users located in the U.S. and international jurisdictions where the sale of lottery games was legal and our services were enabled for the remote purchase of legally sanctioned lottery games (our “B2C Platform”); (ii) offering an internally developed, created and operated business-to-business application programming interface (“API”) of the Platform, which enabled our commercial partners, in permitted U.S. and international jurisdictions, to purchase certain legally operated lottery games from us and to resell them to users located within their respective jurisdictions (“B2B API”); and (iii) delivering global lottery data, such as winning numbers and results, and subscriptions to data sets of our proprietary, anonymized transaction data pursuant to multi-year contracts to commercial digital subscribers (“Data Service”).
Mobile Lottery Game Platform Services
Both our B2C Platform and our B2B API provided users with the ability to purchase legally sanctioned draw lottery games via a mobile device or computer, securely maintain their acquired lottery game, automatically redeem a winning lottery game, as applicable, and receive support, if required, for the claims and redemption process. Our registration and user interfaces were designed to be easy to use, provide for the creation of an account and purchase of a lottery game with minimum friction and without the creation of a mobile wallet or requirement to pre-load minimum funds and - importantly - to provide instant confirmation of the user’s lottery game numbers, whether selected at random or picked by the user. Users of our B2C Platform services paid a service fee and, in certain non-U.S. jurisdictions, a mark-up on the purchase price. Prior to the Operational Cessation, we generated revenue from this service fee and mark-up. Our B2B API Platform resumed limited operations during the month of April 2023. As of the date of this Report, our B2C Platform is not currently available in the US.
The WinTogether Platform
Prior to the Operational Cessation, we operated and administered all sweepstakes offered by WinTogether, a registered 501(c)(3) charitable organization (“WinTogether”), which was formed in April 2020 to support charitable, educational, and scientific causes. In consideration of our operation of the WinTogether platform and administration of the sweepstakes, we received a percentage of the gross donations to a campaign, from which we paid certain dividends and all administration costs.
On April 1, 2024, Lottery.com resumed its sweepstakes offerings through its partnership with the WinTogether.org foundation. In April 2025, Sports.com sponsored a sweepstakes to support the Florida International University surrounding the Formula 1 Crypto.com Miami Grand Prix 2025.
Current Operations
Despite the Operational Cessation, the Company’s subsidiaries have continued to operate. While the operational activities of these subsidiaries vary, from the Operational Cessation through the date of this Report, each of TinBu, Aganar and JuegaLotto has decreased its expenses and has had its revenue decrease from pre-Operational Cessation levels.
Data Services
In 2018, we acquired TinBu, LLC (“TinBu”), a digital publisher and provider of lottery data results, jackpot results, and other data, as a wholly-owned subsidiary. Through TinBu, our Data Service delivers daily results of over 800 domestic and international lottery games from more than 40 countries, including the U.S., Canada, and the United Kingdom, to over 400 digital publishers and media organizations.
Our technology pulls real time primary source data, and, in some instances, we acquire data from dedicated data feeds from the lottery authorities. Our data is constantly monitored to ensure accuracy and timely delivery. We are not required to obtain licenses or approvals from the lottery authorities to pull this primary source data or to acquire the data from such dedicated feeds. Commercial acquirers of our Data Service pay a subscription for access to the Data Service and, for acquisition of certain large data sets, an additional per record fee.
We additionally enter into multi-year contracts pursuant to which we sell proprietary, anonymized transaction data pursuant to multi-year agreements and in accordance with our Terms of Service in consideration of a fee and in other instances provide the Data Service within a bundle of provided services.
| 5 |
Lottery.com
On June 24, 2025, The Company appointed Tim Scoffham and CEO of Lottery.com International Limited,. In this role, Scoffham will oversee, the Company’s iGaming and international lottery division focused on delivering secure, compliant, and entertaining lottery experiences across key global markets. His leadership will focus on aligning commercial, media, and technology platforms, bolstering regulatory partnerships, and unlocking scalable, revenue-generating opportunities in high-growth jurisdictions.
Aganar and JuegaLotto
On June 30, 2021, we acquired 100% of the equity of Global Gaming Enterprises, Inc., a Delaware corporation (“Global Gaming”), which holds 80% of the equity of each of Medios Electronicos y de Comunicacion, S.A.P.I de C.V. (“Aganar”) and JuegaLotto, S.A. de C.V. (“JuegaLotto”). JuegaLotto is federally licensed by the Mexican regulatory authorities with jurisdiction over the ability to commercialize lottery games in Mexico through an authorized federal gaming portal and to commercialize games of chance in other countries throughout Latin America. Aganar has been operating in the licensed Online Lottery market in Mexico since 2007 and has certain rights to sell Mexican National Lottery draw games, instant win tickets, and other games of chance online.
Nook Holdings, Ltd
On September 28, 2023, the Company entered into Stock Purchase Agreement with the shareholders of Nook Holdings Limited (“Nook”), a private limited Company incorporated and registered in the Abu Dhabi Global Market, Abu Dhabi, United Arab Emirates (“UAE”). The total purchase price is approximately $2.314 million. The Company made payments totaling $137,500 in the fourth quarter of 2023 and made additional deposits totaling $323,606 in the first six months of 2025 for a cumulative total of $461,002 as of June 30, 2025 and anticipates the transaction closing in the third quarter of 2025 or as otherwise agreed by the parties. Nook is known for its innovative approach to co-working in Dubai and has procured 200 licenses for individuals and companies in the sports, health and wellness sector seeking access to Dubai and the broader Middle Eastern market. With its exclusive partnership with the Dubai Multi-Commodities Centre Free Zone (DMCC), Nook offers a wide range of services, including business setup support, insurance, VAT registration, and networking opportunities for like-minded sports entrepreneurs. As part of the acquisition, Nook will be rebranded under the Sports.com umbrella.
Sports.com
In December 2021, we finalized the acquisition of the domain name https://sports.com. On March 26, 2025, the Company registered Sports.com as a fictious name in the state of Florida under AutoLotto, Inc. Content provided by Sports.com is currently available worldwide as a website and a mobile application. The website was relaunched in August 2025.
As reported on form 8-K filed with the SEC on August 20, 2024, the Company entered into a Share Purchase and Sale Agreement (the “Purchase Agreement”) with S&MI Ltd. (“S&MI”), whereby it agreed to pay the shareholders of S&MI a total of $1,000,000 in restricted common stock at a valuation of $3.00 per share for the acquisition of S&MI. In accordance with the Purchase Agreement:
The first payment of $150,000 in restricted common stock (50,000 shares) of the Company is due and payable not later than the first business date following the Completion Date. The remaining payments in restricted common stock to the shareholders of S&MI Ltd. by the Company will be made as follows:
(i) a second payment of $212,500 (70,833 shares) due on or before one hundred and twenty-one (121) days following the Closing Date; (ii) a third payment, of $212,500 (70,833 shares) due on or before two hundred and twelve (212) days following the Completion Date; (iii) a fourth payment of $212,500 (70,833 shares) due on or before three hundred and one (301) days following the Closing Date and (vi) a final and fifth payment of $212,500 (70,834 shares) due on or before three hundred and ninety-six (396) days following the Closing Date. The terms and conditions set forth in the MOU shall be incorporated into a definitive agreement to be entered into by the parties with a Closing Date on or before September 1, 2024 or as otherwise agreed to by the parties.
In addition, the Company has agreed to make available to the business of SportLocker.com, cash, media credits or combination thereof over the twelve months following the Closing Date as additional capital investment into the business plan, to facilitate brand awareness, user acquisition and general performance marketing and promotion, influencer and subscription campaigns and branding activities of S&MI’s streaming and social engagement, subject to the Company successfully raising a minimum of new capital.
On March 7, 2024, the Company, announced by press release that it had launched the “Sports.com App”. The App (which is available for download for free from all major app stores) connects sports content with audiences worldwide. By uniting a diverse community of sports enthusiasts across various genres, demographics, and countries, Sports.com plans to eliminate multiple cultural barriers and foster a global sports community.
On March 28, 2024, the Company, announced by press release that it had obtained the rights to live stream the March 31, 2024 heavyweight title fight between Frazier Clarke and Fabio Wardley. The live stream was available to view for free for millions of sports fans in Africa, via the Sports.com website.
The live streaming event is the result of a partnership between Sports.com, BOXXER, the fast-growing UK boxing promotional company, and Sky Sports in the UK and Ireland. Sports.com has entered into an agreement with BOXXER to provide live coverage through the Sports.com platform in Africa, via local telecom partners such as Vodacom, which will provide free access to millions of viewers.
This partnership underscores Sports.com’s commitment to bringing inclusivity, innovation, and entertainment to sports. To view the live streaming event on Sports.com, African-based sports fans were able to sign up via local mobile operators to watch the fight on the Sports.com platform. Sports.com’s strategic intent is to provide more such content to sports fans in underserved markets including those in the Middle East and Africa.
In February 2025, the Company entered into a multi-year multi-year global partnership with Soccerex, the world’s leading soccer business event organizer. The Agreement makes Sports.com the title sponsor for six global events including Soccerex 2025 for MENA, Europe and USA to be held in Cairo, Amsterdam and Miami, respectively.
This collaboration provides the Company with an influential platform to engage with key stakeholders in the football industry, further solidifying Sports.com’s position at the intersection of sports, technology and entertainment. Working with the Soccerex team and its community presents an opportunity to build brand awareness internationally for the Company’s gaming, content and entertainment brands.
In May 2025, the Company entered into sponsorship agreements with Louis Foster and Calum Ilott, drivers in the NTT IndyCar Series, and Sebastain Murray, a driver in the INDY NXT by Firestone series. The agreements provide the Company’s brands with exposure throughout the 2025 racing seasons with vehicle and attire logo placement and social media postings by the drivers.
| 6 |
On June 17, 2025, the Company appointer Tamer Hassan as president of Sports.com Studios, Ltd. In this role, Hassan will lead the division’s creative and strategic efforts to develop, produce and distribute compelling sports-focused films, docuseries, and premium digital content. This new arm of the business will serve as the cornerstone of Sports.com’s global expansion into entertainment media and immersive storytelling.
On June 24, 2025, The Company appointed Tim Scoffham and CEO of Sports.com Media Group, Ltd. In this role, Scoffham will oversee the strategic integration and international expansion of Sports.com Media, a premium digital sports content and engagement platform. His leadership will focus on aligning commercial, media, and technology platforms, bolstering regulatory partnerships, and unlocking scalable, revenue-generating opportunities in high-growth jurisdictions.
Plans for Recommencement of Company Operations
As noted above, since the Operational Cessation, the Company has had minimal day-to-day operations and has primarily focused on restarting certain of its core businesses. The Company has developed a three-phase plan to recommence its gaming operations, which plan is outlined below The sequence is subject to change.
Phase 1 - Resume Sweepstakes Operations. The Company resumed its sweepstakes operations in April 2025 in conjunction with the WinTogether trust. The event was marketed under the DonateTo.Win brand. The launch was limited to Florida residents and awarded a prize for a VIP experience at the 2025 Formula 1 Crypto.com Miami Grand Prix 2025. The launch confirmed that the core sweepstakes platform is fully operational and ready to scale for nationwide events. The Company is planning additional events in the remainder of 2025 offering pirzes related the Company’s business’ in the entertainment and sports markets.
Phase 2 - Resume B2C Platform Operations. The Company believes that it will be in a position to relaunch its B2C Platform by the end of 2025. As of the date of this Report, the Company expects that it will initially relaunch its B2C Platform to customers in international jurisdictions for a period of time before rolling it out to other jurisdictions, including the resumption of sales in the US. The Company plans to limit the rollout in order to give it additional time to properly vet and confirm compliance with local, state and federal rules related to ticket procurement and distribution. For more information, see “Item 1A. Risk Factors. The Company has also maintained various pre-paid media credits that it expects to use to launch and maintain promotional campaigns geared towards encouraging prior customers to return to the Platform and to acquire new customers.
Phase 3 - Other Business Lines and Projects. The Company expects to monetize the Sports.com brand, offer TicketStub.com services in international jurisdictions, and expand the Concerts.com platform beyond ticket reselling, and partnering with licensed providers in international jurisdictions to supply digital lottery games, and reviving other products and services that were under development when the Operational Cessation occurred.
| 7 |
As of the date of this Report, the current estimated cash balance of the Company and subsidiaries is approximately $36,799. The Company believes that this cash on hand, along with future borrowings, will be sufficient for the Company to resume its core operations.
As of the date of this Report, our common stock and warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbols “SEGG” and “LTRYW,” respectively. As of the date of this Report, we are not in compliance with Nasdaq’s continued listing requirements (the “Listing Rules”). Under its new management, the Company continues to work to improve its disclosure and reporting controls. Also, the Company plans to continue to strengthen and improve its systems of internal control over financial reporting and invest in additional legal, accounting, and financial resources.
If the Company’s securities are delisted from Nasdaq, it could be more difficult to buy or sell the Company’s common stock and warrants or to obtain accurate quotations, and the price of the Company’s common stock and warrants could suffer a material decline. Delisting could also impair the Company’s ability to raise additional capital needed to fund its operations and/or trigger defaults and penalties under outstanding agreements or securities of the Company.
There can be no assurance that we will have sufficient capital to support our operations and pay expenses, repay our debt, or that additional funds will be available on favorable terms, if at all. We may not be able to restart our operations or generate sufficient funding to support such operations in the future. The Company’s ability to continue its current operations, prepare and refile required reports, and restart its prior operations, is dependent upon obtaining new financing. Future financing options available to the Company include equity financings, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. Equity financings may include sales of common stock. Such financing may not be available on terms favorable to the Company or at all. The terms of any financing may adversely affect the holdings or rights of the Company’s stockholders and may cause significant dilution to existing stockholders. There can be no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company, if at all, which would have a material adverse effect on its business, financial condition and results of operations, and it could ultimately be forced to discontinue its operations and liquidate. These matters, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is defined as within one year after the date that the financial statements are issued. The accompanying financial statements do not contain any adjustments to reflect the possible future effects on the classification of assets or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
| 8 |
Components of Our Results of Operations
Our Revenue
Revenue from B2C Platform [when operational]. Our revenue is the retail value of the acquired lottery game and the service fee charged to the user, which we impose on each lottery game purchased from our B2C Platform. The amount of the service fee is based upon several factors, including the retail value of the lottery game purchased by a user, the number of lottery games purchased by a user, and whether such user is located within the U.S. or internationally. Currently, in the U.S, the minimum service fee is $0.50 for the purchase of a $1 lottery game and $1 for the purchase of a $2 lottery game; the service fee for additional lottery games purchased in the same transaction is 6% of the face value of all lottery games purchased. For example, the service fee for the purchase of five $2 tickets is $1.60, comprised of the $1 base service fee, plus 6% of the aggregate value of the face value of all lottery games purchased. The Company has not operated its B2C platform in the US since July 2022. The Company does operate B2C business in Mexico through our wholly-owned subsidiary, Global Gaming.
Internationally, B2C sales in jurisdictions where we do not have direct or indirect authority generate an immaterial amount of revenue, and we are assessing our operations in these jurisdictions. As discussed above, our B2C Platform is not currently operational in the US.
Data Services. Commercial acquirers of our Data Service pay a subscription for access to the Data Service and, for acquisition of certain large data sets, an additional per record fee. The Company additionally enters into multi-year contracts pursuant to which it sells proprietary, anonymized transaction data pursuant to multi-year agreements and in accordance with our Terms of Service in consideration of a fee. Our Data Services operations were not impacted by the Operational Cessation.
Our Operating Costs and Expenses
Personnel Costs. Personnel costs include salaries, payroll taxes, health insurance, worker’s compensation and other benefits for management and office personnel.
Professional Fees. Professional fees include fees paid for legal and financial services, accountants and other professionals.
General and Administrative. General and administrative expenses include marketing and advertising expenses, office and facilities lease payments, travel expenses, bank fees, software dues and subscriptions, expensed research and development (“R&D”) costs and other fees and expenses.
Depreciation and Amortization. Depreciation and amortization expenses include depreciation and amortization expenses on real property and other assets.
| 9 |
Key Trends and Factors Affecting Our Results
The following describes the trends associated with our business prior to the Operational Cessation that have impacted, and which we expect will continue to impact, our business and results of operations in a material way:
International operations. We face challenges related to expanding our footprint globally and the related process of obtaining the licenses and regulatory approvals necessary to provide services and products within new and emerging markets. The international jurisdictions where we operate and seek to expand have been subject to increasing foreign currency fluctuations against the U.S. dollar, inflationary pressures and political and economic instability. We expect these trends to continue during fiscal 2025 and believe they are likely to affect consumer spending, which could have a material impact on our revenues. As a result, it may take longer to achieve projected revenue gains or generate cash in any such regions affected or any new foreign jurisdiction into which we expand.
Introduction of a new gaming platform. We developed a proprietary, blockchain-enabled gaming platform, which we named Project Nexus. Project Nexus is designed to handle high levels of user traffic and transaction volume, while maintaining expediency, security, and reliability in (i) the processing of lottery game sales, (ii) fulfillment of retail requirements of the B2C Platform, (iii) the administrative and back-office functionality required by our B2B API, and (iv) the requirements of our claims and redemption process. We expect to utilize this platform to launch new products, including any proprietary products we may introduce. The introduction of new technology like Project Nexus is subject to risks including, among other things, implementation delays, issues successfully integrating the technology into our solutions, or the possibility that the technology does not produce the expected benefits.
Our growth plans and the competitive landscape. Our direct competitors operate in the global entertainment and gaming industries and, like us, seek to expand their product and service offerings with integrated products and solutions. Our short-to-medium term focus is on increasing our penetration in our existing U.S. jurisdictions by increasing direct to consumer marketing campaigns, introducing our B2C Platform into new U.S. and select foreign jurisdictions and acquiring synergistic regulated and sports betting enterprises domestically and abroad.
Competition in the sale of online lottery games has significantly increased in recent years, is currently characterized by intense price-based competition, and is subject to changing technology, shifting needs and frequent introductions of new games, development platforms and services. To maintain our competitive edge alongside other established industry players (many of which have more resources, or capital), we expect to incur greater operating expenses, such as increased marketing expenses, increased compliance expenses, increased personnel and advisory expenses associated with being a public company, additional operational expenses and salaries for personnel to support expected growth, additional expenses associated with our ability to execute on our strategic initiatives including our aim to undertake merger and acquisition activities, as well as additional capital expenditures associated with the ongoing development and further implementation of Project Nexus.
Current Plan of Operations
As of the date of this Report, the Company’s primary revenue drivers are its data business and lottery ticket sales in Mexico and describe the revenue from S&MI. It is anticipated that operational costs for the next 12 months through August 31, 2026 will be greater than revenues. It is anticipated that the liquidity gap will be satisfied by equity investment or debt incurred, of which there is no assurance.
Within the next 12 months, the Company plans to continue to resume domestic lottery operations and expand international operations. Moreover, the Company plans to enhance its mobile application to include pool plays, ticket subscriptions, loyalty programs and various gamification modules.
The Company is moving forward with its previously announced plans to monetize the Sports.com brand. Those plans include introducing an advertising-supported subscription model; the creation and licensing of original content through Sports.com Studios; and completing the acquisition of Nook and marketing business licenses to companies in the sports, health and wellness markets seeking access to Dubai and the broader Middle Eastern market.
The acquisition of DotCom Ventures Inc. introduces additional revenue streams for us including concert and sporting events ticket sales, an entertainment focused marketplace of concert memorabilia, live streaming of concert events, and ticket sales in international jurisdictions.
| 10 |
Results of Operations
Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
The following table summarizes our results of operations for the three months ended June 30, 2025 and June 30, 2024, respectively.
For the three months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Revenue | $ | 191,762 | $ | 256,998 | (65,236 | ) | -25 | % | ||||||||
| Cost of revenue | 162,733 | 45,570 | 117,163 | 257 | % | |||||||||||
| Gross profit | 29,029 | 211,428 | (182,399 | ) | -86 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Personnel costs | 438,966 | 1,789,986 | (1,351,020 | ) | -75 | % | ||||||||||
| Professional fees | 1,339,869 | 1,545,083 | (205,214 | ) | -34 | % | ||||||||||
| General and administrative | 1,123,574 | 1,435,307 | (311,733 | ) | -22 | % | ||||||||||
| Depreciation and amortization | 1,074,132 | 1,330,746 | (256,614 | ) | -19 | % | ||||||||||
| Total operating expenses | 3,976,541 | 6,101,122 | (2,124,581 | ) | -35 | % | ||||||||||
| Loss from operations | (3,947,512 | ) | $ | (5,889,694 | ) | 1,942,182 | -33 | % | ||||||||
| Other expenses | ||||||||||||||||
| Interest expense | 64,422 | 121,814 | (57,392 | ) | -47 | % | ||||||||||
| Other (income) expense | (24,033 | ) | (43,992 | ) | 19,959 | -45 | % | |||||||||
| Total other expenses, net | 40,389 | 77,822 | (37,433 | ) | -48 | % | ||||||||||
| Net loss before income tax | $ | (3,987,901 | ) | $ | (5,967,516 | ) | 1,979,615 | -33 | % | |||||||
| Income tax expense (benefit) | 4,150 | 4,150 | 0 | 0 | % | |||||||||||
| Net loss | (3,992,051 | ) | (5,971,666 | ) | 1,979,615 | -33 | % | |||||||||
Revenue.
Revenue. Revenue for the three months ended June 30, 2025 was $192,000, a decrease of $65,000, or 25%, compared to revenue of $257,000 for the three months ended June 30, 2024. The decrease is the net effect of decreases of $50,000 for Global Gaming and $62,000 for TinBu in 2025 vs 2024 offset by $47,000 in revenue for the S&MI subsidiary which was not present in the three months ended June 30, 2024.
Cost of Revenue. Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing fees. Cost of revenue for the three months ended June 30, 2025 was $163,000 thousand, an increase of $117,000, or 257%, compared to cost of revenue of $46,000 for the three months ended June 30, 2024. The primary driver of the increase is $130,000 in cost of revenue for the S&MI subsidiary which was not present in the three months ended June 30, 2024 which was partially offset by a decrease of $13,000 for Global Gaming in the three months ended June 30, 2025.
Gross Profit. Gross profit for the three months ended June 30, 2025 was $29,000 compared to $211,000 for the three months ended June 30, 2024, a decrease of $182,000, or 86%. The decrease in gross profit resulted from the decreases in revenue for Global Gaming and Tinbu and the net impact of costs and revenue for S&MI during the period which were not present in the three months ended June 30, 2025.
| 11 |
Operating Costs and Expenses.
For the three months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Personnel costs | 438,966 | 1,789,986 | (1,225,603 | ) | -75 | % | ||||||||||
| Professional fees | 1,339,869 | 1,545,083 | (205,214 | ) | -13 | % | ||||||||||
| General and administrative | 1,123,574 | 1,435,307 | (311,733 | ) | -22 | % | ||||||||||
| Depreciation and amortization | 1,074,132 | 1,330,746 | (256,614 | ) | -19 | % | ||||||||||
| Total Operating Expenses | 3,976,541 | 6,101,122 | (2,124,581 | ) | -35 | % | ||||||||||
| Loss from operations | (3,947,512 | ) | (5,889,694 | ) | 1,942,182 | -33 | % | |||||||||
Operating expenses for the three months ended June 30, 2025 were $3.9 million, a decrease of $2.1 million, or 35%, compared to $6.1 million for the three months ended June 30, 2024. The decrease was primarily driven by a decrease of $1.4 million in personnel costs accompanied by decreases in professional fees $205,000, along with decreases in general and administrative expenses by $312,000 and depreciation and amortization by $257,000. Reasons for these decreases are described below.
Personnel Costs. Personnel costs were $439,000 for the three months ended June 30, 2025, a decrease of $1.4 million from $1.8 million for the three months ended June 30, 2024. The decrease is because expenses recorded in the three months ended June 30, 2024 for shares of common stock and related payroll taxes granted to officers for retention and their contributions to the turnaround and accrual of wages related to the TinBu subsidiary did not reoccur during the three months ended June 30, 2025.
Professional Fees. Professional fees decreased by $205,000 or 13%, from $1.5 million for the three months ended June 30, 2024 to $1.3 million for the three months ended June 30, 2025. The increase was due to expenses incurred for outside attorneys, other consultants, and directors in the three months ended June 30, 2025. Activity levels for the business, and these types of expense were lower for the same period in 2024.
| 12 |
General and Administrative. General and administrative expenses were $1.1 million, for the three months ended June 30, 2025, a decrease of $312,000 or 22% from $1.4 million for the three months ended June 30, 2024. A primary driver of the reduction is lower accrual for franchise taxes in the three months ended June 30, 2025 than the three months ended June 30, 2024.
Depreciation and Amortization. Depreciation and amortization decreased $257,000, or 19%, from $1.33 million for the three months ended June 30, 2024 to $1.07 million for the three months ended June 30, 2025. The decrease was primarily driven by write-offs to intangible assets related to Global Gaming in 2023 and 2024 resulting in a decrease of approximately $112,000 for the three months ended June 30, 2025, a decrease of approximately $99,000 because Tinbu intangibles became fully amortized in the summer of 2024, and a decrease of approximately $46,000 related to other intangible assets becoming fully amortized at the end of 2024.
Other (Income) Expense, Net.
For the three months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Other expenses | ||||||||||||||||
| Interest expense | 64,422 | 121,814 | (57,392 | ) | -47 | % | ||||||||||
| Other (income) expense | (24,033 | ) | (43,992 | ) | 19,959 | -45 | % | |||||||||
| Total other expenses, net | 40,389 | 77,822 | (37,433 | ) | -48 | % | ||||||||||
Interest Expense. Interest expense for the three months ended June 30, 2025 was $64,000 vs interest expense of $122,000 for the three months ended June 30, 2024, a decrease of $57,000 or 47%. Interest expense relates to notes payable from the time of the business combination plus interest on more recent convertible notes from Woodford, UCIL, and Univest. Interest accrual for convertible debt was lower for the three months ended June 30, 2025 due to lower balances for convertible debt as a result of conversions to equity.
Other (Income) Expense. Other (Income) for the three months ended June 30, 2025 was $24,000 vs $44,000 for the three months ended June 30, 2024, an decrease of $20,000 or 45%. The amount for June 30 2024 is the result of a reclassification of expenses.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
The following table summarizes our results of operations for the six months ended June 30, 2025 and June 30, 2024, respectively.
For the six months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Revenue | $ | 415,611 | $ | 516,317 | (100,706 | ) | -20 | % | ||||||||
| Cost of revenue | 325,201 | 129,357 | 195,844 | 151 | % | |||||||||||
| Gross profit | 90,410 | 386,960 | (296,550 | ) | -77 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Personnel costs | 1,125,603 | 2,774,665 | (1,649,062 | ) | -59 | % | ||||||||||
| Professional fees | 2,429,077 | 3,564,038 | (1,134,961 | ) | -32 | % | ||||||||||
| General and administrative | 1,862,541 | 2,917,052 | (1,054,511 | ) | -36 | % | ||||||||||
| Depreciation and amortization | 2,100,958 | 2,615,728 | (514,770 | ) | -20 | % | ||||||||||
| Total operating expenses | 7,518,179 | 11,871,483 | (4,353,304 | ) | -37 | % | ||||||||||
| Loss from operations | (7,427,769 | ) | $ | (11,484,523 | ) | 4,056,754 | -35 | % | ||||||||
| Other expenses | ||||||||||||||||
| Interest expense | (60,119 | ) | 224,031 | (284,150 | ) | -127 | % | |||||||||
| Other expense | (88,605 | ) | 8,684 | (97,289 | ) | -1,120 | % | |||||||||
| Total other expenses, net | (148,724 | ) | 232,715 | (381,439 | ) | -164 | % | |||||||||
| Net loss before income tax | $ | (7,279,045 | ) | $ | (11,717,238 | ) | 4,438,193 | -38 | % | |||||||
| Income tax expense (benefit) | 8,300 | 8,300 | 0 | 0 | % | |||||||||||
| Net loss | (7,287,345 | ) | (11,725,538 | ) | 4,438,193 | -38 | % | |||||||||
| 13 |
Revenue. Revenue for the six months ended June 30, 2025 was $416,000, a decrease of $101,000, or 20%, compared to revenue of $516,000 for the six months ended June 30, 2024. The decrease is the net effect of decreases of $103,000 for Global Gaming and $86,000 for TinBu in 2025 vs 2024 offset by $88,000 in revenue for the S&MI subsidiary which was not present in the six months ended June 30, 2024.
Cost of Revenue. Cost of revenue includes product costs, commission expense to affiliates and commercial partners, and merchant processing fees. Cost of revenue of $325,000 for the six months ended June 30, 2025 was an increase of $196,000 or 151% compared with $129,000 for the six months ended June 30, 2024. The primary driver of the increase is $239,000 in cost of revenue for the S&MI subsidiary which was not present in the six months ended June 30, 2024 which was partially offset by a decrease of $43,000 for Global Gaming in the six months ended June 30, 2025.
Gross Profit. Gross profit for the six months ended June 30, 2025 was $90,000 compared to $387,000 for the six months ended June 30, 2024, a decrease of $297,000, or 77%. The decrease in gross profit resulted from the decreases in revenue for Global Gaming and Tinbu, the decrease in cost of revenue for Global Gaming, and the net impact of costs and revenue for S&MI during the period which were not present in the three months ended June 30, 2025.
Operating Costs and Expenses.
For the six months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Personnel costs | 1,125,603 | 2,774,665 | (1,649,062 | ) | -59 | % | ||||||||||
| Professional fees | 2,429,077 | 3,564,038 | (1,134,961 | ) | -32 | % | ||||||||||
| General and administrative | 1,862,541 | 2,917,052 | (1,054,511 | ) | -36 | % | ||||||||||
| Depreciation and amortization | 2,100,958 | 2,615,728 | (514,133 | ) | -20 | % | ||||||||||
| Total operating expenses | 7,518,179 | 11,871,483 | 4,353,304 | -37 | % | |||||||||||
| Loss from operations | (7,427,769 | ) | $ | (11,484,523 | ) | 4,056,754 | -35 | % | ||||||||
Operating expenses for the six months ended June 30, 2025 were $7.5 million, a decrease of $4.4 million, or 37%, compared to $11.9 million for the six months ended June 30, 2024. The decrease was primarily driven by a decrease of $1.6 million in personnel costs accompanied by an decreases in professional fees of $1.1million, a decrease in general and administrative expenses of $1.05 million and a decrease in depreciation and amortization by $515,000. Reasons for these decreases are described below.
Personnel Costs. Personnel costs decreased by $1.6 million or 59% from $2.8 million for the six months ended June 30, 2024, to $1.1 million for the six months ended June 30, 2025. The decrease is because expenses recorded in the six months ended June 30, 2024 for shares of common stock and related payroll taxes granted to officers for retention and their contributions to the turnaround and accrual of wages related to the TinBu subsidiary did not reoccur during the six months ended June 30, 2025.
Professional Fees. Professional fees decreased by $1.1 million, or 32%, from $3.6 million for the six months ended June 30, 2024 to $2.4 million for the six months ended June 30, 2025. The increase was due to expenses incurred for outside attorneys, other consultants, and directors in the six months ended June 30, 2025.
| 14 |
General and Administrative. General and administrative expenses decreased $1.0 milliion, or 36%, from $2.9 for the six months ended June 30, 2024 to $1.9 milliion for the six months ended June 30, 2025. A primary driver of the reduction is lower accrual for franchise taxes in the six months ended June 30, 2025 than the six months ended June 30, 2024.
Depreciation and Amortization. Depreciation and amortization decreased $515,000 or 20%, from $2.62 million for the three months ended June 30, 2024 to $2.1 million for the six months ended June 30, 2025. The decrease was primarily driven by write-offs to intangible assets related to Global Gaming in 2023 and 2024 resulting in a decrease of approximately $225,000 for the six months ended June 30, 2025, a decrease of approximately $139,000 because Tinbu intangibles became fully amortized in the summer of 2024, and a decrease of approximately $146,000 related to other intangible assets becoming fully amortized at the end of 2024.
Other (Income) Expense, Net.
For the six months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Other expenses | ||||||||||||||||
| Interest expense | (60,119 | ) | 224,031 | (284,150 | ) | -127 | % | |||||||||
| Other expense | (88,605 | ) | 8,684 | (97,289 | ) | -1,120 | % | |||||||||
| Total other expenses, net | (148,724 | ) | 232,715 | (381,439 | ) | -164 | % | |||||||||
Interest Expense (Income). Interest income for the six months ended June 30, 2025 was $60,000 vs interest expense of $224,000 for the six months ended June 30, 2024, a decrease of $284,000 or 127%. Interest accrual for convertible debt was lower for the six months ended June 30, 2025 due to lower balances for convertible debt as a result of conversions to equity. Additionally, an accrual for $196,000 was recorded in the three months ended March 31, 2025 for accrued interest income on a note receivable.
Other Expense. Other income was $89,000 for the six months ended June 30, 2025 vs. $9,000 of other expense for the six months ended June 30, 2024.
Liquidity and Capital Resources
Prior to the Operational Cessation, our primary need for liquidity was to fund working capital requirements of our business, growth, capital expenditures and for general corporate purposes. Our primary source of liquidity had historically been funds generated by financing activities. Upon the Closing of the business combination on October 29, 2021, we received net proceeds of approximately $42.8 million in cash.
Following the Operational Cessation, our primary need for liquidity has been to fund the restart of our business operations, re-hire employees and pay our expenses. The most likely source of such future funding presently available to us is through additional borrowings under loan agreements or through the issuance of equity or debt securities. If lenders do not advance us amounts as agreed under loan agreements or we are otherwise not able to secure the necessary capital to restart our operations, hire new employees, and obtain funding sufficient to support and restart our operations, we may be forced to permanently cease our operations, sell off our assets and operations, and/or seek bankruptcy protection, which could cause the value of our securities to become worthless.
These conditions, along with our current lack of material revenue producing activities, and significant debt, raise substantial doubt about our ability to continue as a going concern for the next 12 months. For more information, see Note 2 - Significant Accounting Policies, Going Concern to the consolidated financial statements included herein.
Prior Convertible Debt Obligations
Prior to the Closing, we funded our operations through the issuance of convertible promissory 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. The notes bore interest at 10% per year, were unsecured, and were due and payable on June 30, 2019. The Company and the noteholders executed amendments in February 2021 to extend the maturity date to December 21, 2021.
From November 2019 through October 28, 2021, we issued approximately $48.2 million in aggregate principal amount of Series B convertible promissory notes. The notes bore interest at 8% per year, were unsecured, and were due and payable on dates ranging from December 2020 to December 2022. For those promissory notes that would have matured on or before December 31, 2020, the parties extended the maturity date to December 21, 2021 through amendments executed in February 2021. The amendments also allowed for automatic conversion to equity as a result of the Business Combination. Nearly all of the aforementioned promissory notes automatically converted into shares of Common Stock or were terminated pursuant to their terms, as applicable, in connection with the Closing. Those that remain outstanding do not have conversion terms that were triggered by the Closing.
Immediately prior to the Closing, approximately $60.0 million of convertible debt was converted into equity of AutoLotto.
As of June 30, 2025, we had $1,925,242 of convertible debt outstanding. A portion of this debt has matured and is theoretically in default.
See “-Recent Developments- Loan Agreement with Woodford” and “Loan Agreement with United Capital Investments London Limited” above for additional information.
Cash Flows
Net cash used in operating activities was $1.4 million for the three months ended June 30, 2025, compared to net cash used in operating activities of $1.4 million for the three months ended June 30, 2024.
Net cash used in investing activities during the three months ended June 30, 2025 was $0, which was the same as for the prior year.
Net cash provided by financing activities was $965,000 for the three months ended June 30, 2025, compared to net cash provided of $965,000 for the three months ended June 30, 2024, which was $320 thousand lower year over year.
| 15 |
Emerging Growth Company Accounting Election
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and have elected to take advantage of the benefits of this extended transition period. We expect to remain an emerging growth company through the end of the 2026 fiscal year and we expect to continue to take advantage of the benefits of the extended transition period. This may make it difficult or impossible to compare the financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions for emerging growth companies because of the potential differences in accounting standards used.
Critical Accounting Policies and Estimates
Our financial statements and the related notes thereto included elsewhere in this Report are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The preparation of financial statements requires management to make estimates and assumptions that affect the reporting values of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The more significant estimates and assumptions are those used in determining the recoverability of long-lived assets. Accordingly, actual results could differ from those estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flow will be affected.
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report and the notes to the audited financial statements appearing elsewhere in the Annual Report. During the six months ended June 30, 2025, there were no material changes to our critical accounting policies from those discussed in our Amended 2024 Annual Report. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This guidance requires recognition of most lease liabilities on the balance sheet to give investors, lenders, and other financial statement users a more comprehensive view of a company’s long-term financial obligations, as well as the assets it owns versus leases. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2021, and for interim periods within annual periods after December 15, 2022. In July 2018, the FASB issued ASU 2018-11 making transition requirements less burdensome. The standard provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the Company’s financial statements. We are currently evaluating the impact that this guidance will have on our financial statements as well as the expected adoption method. The adoption of this standard did not have a material impact on our financial statements.
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments”, as additional guidance on the measurement of credit losses on financial instruments. The new guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. In addition, the guidance amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The new guidance is effective for all public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. In October 2019, the FASB approved a proposal which grants smaller reporting companies additional time to implement FASB standards on current expected credit losses (CECL) to January 2023. As a smaller reporting company, we will defer adoption of ASU No. 2016-13 until January 2023. We are currently evaluating the impact this guidance will have on our condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this information.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As previously disclosed, in connection with the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Original 2021 Annual Report”) on April 1, 2022, our management, with the participation of our then Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021. Based on their evaluation, our then Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process.
In connection with the filing of Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2021 (the “Amended 2021 Annual Report”), our management, with the participation of our Chief Executive Officer, reevaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021 and determined they were not effective due to the material weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosures.
Material Weakness in Internal Control Over Financial Reporting
In connection with the audit of our condensed consolidated financial statements included in this Report, our management identified material weaknesses in our internal control over financial reporting as of December 31, 2024 and 2023 relating to deficiencies in the design and operation of the procedures relating to the closing of our financial statements. These include: (i) our lack of a sufficient number of personnel with an appropriate level of knowledge and experience in accounting for complex or non-routine transactions, (ii) the fact that our policies and procedures with respect to the review, supervision and monitoring of our accounting and reporting functions were either not designed and in place or not operating effectively; (iii) our inability to complete the timely closing of financial books at the quarter and fiscal year end, and (iv) incomplete segregation of duties in certain types of transactions and processes.
Specifically, management did not design and maintain sufficient procedures and controls related to revenue recognition including those related to ensuring accuracy of revenue recognized from non-routine transactions such as the sales of LotteryLink Credits. As a result, we determined that there was an overstatement of revenue in the consolidated statement of operations of approximately $52.1 million during the year ended December 31, 2021, which required a restatement of the previously issued financial statements for the year ended December 31, 2021 contained in the Amended 2021 Annual Report.
| 16 |
We have begun implementing remediation steps to improve our internal control over financial reporting and to remediate the identified material weaknesses, including (i) adding personnel with sufficient accounting knowledge; (ii) adopting a more rigorous period-end review process for financial reporting; (iii) adopting improved period close processes and accounting processes, and (iv) clearly defining and documenting the segregation of duties for certain transactions and processes. Management has expanded and will continue to enhance our system of identifying transactions and evaluating and implementing the accounting standards that apply to our financial statements, including through enhanced analyses by our personnel and third-party professionals with whom we consult regarding complex accounting applications. We intend to continue take steps to remediate the material weaknesses described above and further continue re-assessing the design of controls, the testing of controls and modifying processes designed to improve our internal control over financial reporting. The Company plans to continue to assess its internal controls and procedures and intends to take further action as necessary or appropriate to address any other matters it identifies or are brought to its attention. We will not be able to fully remediate these material weaknesses until these steps have been completed and have been operating effectively for a sufficient period of time. The implementation of our remediation will be ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. We may also conclude that additional measures may be required to remediate the material weaknesses in our internal control over financial reporting.
We cannot assure you that the measures we take will be sufficient to remediate the material weaknesses we identified or avoid the identification of additional material weaknesses in the future. If the steps we take do not remediate the material weaknesses in a timely manner, there could continue to be a reasonable possibility that this control deficiency or others could result in another material misstatement of our annual or interim financial statements that would not be prevented or detected on a timely basis.
For more information, see “Item 1A. Risk Factors - Public Company Operating Risks - If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the trading price of our common stock and warrants may be materially and adversely affected.”
Changes in Internal Control Over Financial Reporting
Except as otherwise described herein, there was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 17 |
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
The Company is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. In addition, the Company is a party to several material legal proceedings, which are described below. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts in excess of management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.
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 it owes 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 “Streicher Judgment”). On October 27, 2022, the Chancery Court further awarded the Company $397,037 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 for legal fees unpaid by Company (“Skadden’s Motion”). On December 30, 2022, the Company filed its response to Skadden’s Motion, alleging that the Chancery Court should deny Skadden’s Motion for a Charging Lien as a matter of law or, in the alternative, limit the charging lien to the amount of the attorneys’ fees awarded by the Fee Order. As of the date of this Report, the Chancery Court has not set Skadden’s Motion for an oral hearing, nor has it entered an order on the motion. 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. On February 13, 2023, Streicher made another payment towards the Judgment in the amount of $50,000 and had agreed to make another payment in the amount of $75,000 on February 28, 2023, which it failed to make. The Company intends to fully collect on the Judgment and shall pursue all legal and equitable means to enforce the Judgment against Streicher until the Judgment is fully satisfied.
Preston Million Class Action
On August 19, 2022, Preston Million filed a 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 costs 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 were 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 February 6, 2024, the SDNY granted the Company’s Motion to Dismiss. On June 12, 2024, plaintiffs amended their complaint (the “Third Amended Complaint”). On July 12, 2024, the Company filed its motion to dismiss the Third Amended Complaint (the “MTD Third Amended Complaint”). On August 8, 2024, the plaintiffs filed their response in opposition to the MTD Third Amended Complaint. The Company filed its reply on August 22, 2024 to plaintiffs’ response in opposition to the MTD Third Amended Complaint. On February 25, 2025, the Court granted in part and denied in part the MTD Third Amended Complaint (the “Order). As set forth in the Order, the Class Plaintiffs’ Section 10(b) claim shall proceed against Defendant Dickinson and the Company based on post−merger representations regarding Lottery’s financial performance and financial reporting. Class Plaintiffs’ and Hoffman’s Section 20(a) claim premised on Section 10(b) shall likewise proceed against Defendant Dickinson. Class Plaintiffs’ Section 14(a) claim shall proceed against the Company and Defendants DiMatteo, Clemenson and Dickinson with respect to certain legal and regulatory compliance statements in the Proxy. The remainder of Plaintiffs claims were dismissed, including all claims against Komissarov. The Court also ordered that Plaintiffs shall have leave to amend within twenty−one (21) days of this opinion and order. On March 13, 2025, the Court granted Plaintiff Hoffman’s motion for leave for additional time to amend his complaint. Accordingly, Hoffman’s’ Third Amended Complaint shall be due April 24, 2025. Defendants’ motions to dismiss shall be due June 30, 2025; Plaintiff Hoffman’s opposition brief will be due August 14, 2025; and Defendants’ reply briefs shall be due September 17, 2025.
TinBu Complaint
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 13th Judicial District in and for Hillsborough County, Florida (the “TinBu Complaint”). The Complaint alleges breach of contract(s) and misrepresentation with alleged damages in excess of $4.6 million. The parties agreed to extend the Company’s and its subsidiary’s deadline to respond until May 1, 2023. On May 2, 2023, the Company and its subsidiary retained local counsel who filed a Notice of Appearance on behalf of the Company and TinBu and filed a Motion for Enlargement requesting the Court to extend its deadline to file its initial response to the Complaint by an additional 30 days (the “Motion for Enlargement”). As of the date of this Amended Report, the Motion for Enlargement has not been set for a hearing. On May 5, 2023, Plaintiffs filed their Motion for Court Default (“Plaintiffs’ Motion for Default”), despite Company’s Motion for Enlargement. As of the date of this Amended Report, the Motion for Enlargement has not been set for a hearing. The Company intends to oppose Plaintiffs’ Motion for Default. On May 9, 2023, Plaintiffs served Plaintiffs’ First Request for Admissions (the “RFA”) to the Company. On October 13, 2023, the Court granted the Defendants’ Motion to Stay Litigation and Discovery pending a ruling on its Motion to Compel Arbitration. On November 16, 2023, the Court granted Defendants’ Motion to Compel Arbitration in Texas. The parties await a signed written order from the Court to that effect. The TinBu Plaintiffs have appealed the Court’s Order to Compel Arbitration in Texas.
On July 19, 2024, the Company received notice that the Tinbu Plaintiff’s requested a voluntary dismissal of their claims. The Tinbu Complaints have been voluntarily dismissed without prejudice by the District Court of Appeal of the State of Florida Second District and the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, indicating that no further action will be pursued by the plaintiffs in Florida State Court at this time. The District Court of Appeals also denied the Tinbu Plaintiff’s motion for attorney’s fees and costs.
| 18 |
Global Gaming Data
On November 14, 2023, the Company and its wholly owned subsidiary TinBu, LLC (“TinBu”) (collectively, “Plaintiffs”) filed a separate lawsuit in the United States District Court for the Middle District of Florida (“MDF”) against John J. Brier, Jr. (“Brier”), Bin Tu (“Tu”), and Global Gaming Data, LLC (“GGD”) (collectively, “Defendants”), which was subsequently amended on November 21, 2023, for damages and injunctive relief arising out of Defendants’ various violations of the Federal Defend Trade Secrets Act (“DTSA”), the Florida Uniform Trade Secrets Act (“FUTSA”) and the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), and for breaches of contract and breaches of various fiduciary duties, including the duty of loyalty, in a case styled Lottery.com, Inc. f/k/a AutoLotto, Inc. and TinBu, LLC v. John J. Brier, Jr., Bin Tu, & Global Gaming Data, LLC (Case No.: 8:23-cv-2594-KKM-TGW).
In response, Defendants asserted counterclaims against Plaintiffs, essentially filing exactly the same claims they previously alleged in the Hillsborough County Circuit Court Action that had been compelled to arbitration, and they also joined JBBT to the lawsuit. The Company sought dismissal of the counterclaims, as well as a Temporary Restraining Order. The request for temporary injunctive relief was denied by the MDF in February 2024, and on June 11, 2024, the MDF also denied Plaintiffs’ motion to dismiss, allowing the litigation to move forward. On June 25, 2024, Plaintiffs filed their answer and affirmative defenses to Defendants’ counterclaims. On December 5, 2024, the parties participated in a court-ordered mediation; however, no resolution was reached.
On February 25, 2025, Plaintiffs’ claims were dismissed without prejudice for failure to prosecute, and Defendants immediately moved for default judgment on their counterclaims. On March 14, 2025, the Court entered an order denying without prejudice Defendants’ Motion for various deficiencies in the filing. On March 18, 2025, Defendants filed an Amended Motion for Default Judgment on their Counterclaims, followed by additional support for their purported damages on April 25, 2025. The Company engaged new counsel, who made an appearance on June 5, 2025, and thereafter sought and obtained additional time to respond to Defendants’ filings. On August 6, 2025, Plaintiffs filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, or in the Alternative, Motion to Set Aside Default and Compel Arbitration, which was renewed on August 14, 2025. At the same time, Plaintiffs also submitted opposition briefing and supporting evidence to contradict Defendants’ filings relating to damages evidence. Defendants’ reply to Plaintiffs filings is due to be filed on August 29, 2025. In the interim, the MDF has stayed all deadlines in the case management order and has cancelled any pretrial proceedings, pending resolution on the parties’ motions.
Woodford Eurasia Assets, Ltd.
Woodford Eurasia Assets, Ltd. (“Woodford”) filed a complaint in the High Court of Justice in London chancery Division. October 16, 2023, The High Court of Justice in London Chancery Division (“the Court”) dismissed an application for injunctive relief initiated by Woodford against the Company. (Case: FL-2023-000023. Woodford Eurasia Assets Limited v Lottery.com Inc.) The Court characterized Woodford’s application as “fundamentally misconceived” and ordered Woodford to pay the Company’s legal costs. Woodford subsequently, on the Judges’ recommendation, withdrew the proceedings.
Woodford filed an additional action in the United States District Court for the District of Delaware on February 14, 2024 in Case No. 23-1317-GBW. Woodford subsequently filed a Notice of Voluntary Dismissal Without Prejudice, which stated that Woodford provides notice of dismissal of all claims without prejudice against Defendants Lotttery.com and its directors.
With the dismissal of this lawsuit by Woodford, no further action is required by Lottery.com or its directors at this time. The Company is determining its next course of action in resolving any further matters regarding Woodford.
The validity and application of the Woodford Loan Agreement Amendment is disputed by the Company.
Despite requests from the Company, Woodford has repeatedly amongst other things: failed to prove the amounts borrowed by the Company or claimed to have been advanced by Woodford to the Company; failed to indicate if it would accept accelerated payment of those verified amounts; failed to provide an anti-money laundering acceptable account to which payment could be made by the Company and failed to explain failure to respond to requests for other funding to be accepted in the context of the Woodford Loan Agreement; failed to respond to requests for funding under the accordion facility of the Woodford Loan Agreement; and failed to respond to allegations of money laundering and conspiracy to defraud the Company and the matter has been referred to the Company’s legal counsel.
McTurk
On June 10, 2024, the Company and Matthew McGahan (“McGahan”) (Company and McGahan collectively, “Defendants”) filed their Notice of Removal and No Answer Motion to Dismiss a state court complaint filed by Sharon A. McTurk (“McTurk”), Rutherford Enterprises, LLC (“Rutherford”), SJB Solutions, LLC (“SJB”) and Astra Supply Chain, LLC (“Astra”) McTurk, Rutherford, SJB and Astra (collectively, “Plaintiffs” or “Appellant”)) alleging fraudulent and negligent misrepresentation, aiding and abetting, and conspiracy by Defendants. On July 2, 2024, McGahan filed his Motion to Dismiss for Lack of Personal Jurisdiction and Defendants filed their Motion to Dismiss for Failure to State a Claim and Supporting Memorandum of Law (“Motions to Dismiss”). On July 19, 2024, Plaintiffs filed their response to the Motions to Dismiss. Defendants filed their reply on August 29, 2024 to Plaintiffs response to Defendants’ Motions to Dismiss. On February 25, 2025, the Court entered an Order granting Defendants’ Motion to Dismiss for Failure to State a Claim (the “Order”). Accordingly, Plaintiffs’ complaint was dismissed with prejudice. All pending deadlines and hearings were terminated, and any other pending motions were denied as moot. Plaintiffs filed a notice of appeal as to the Order and subsequently filed Appellants’ Brief. On June 16, Appellee’s filed their Answer Brief with the 11th Circuit and on filed and served the Supplemental Appendix to Appellees’ Answer Brief.
Honey Tree Trading
On September 4, 2024, Honey Tree Trading, LLC (“Honey Tree” or “Plaintiff”) filed a verified original complaint (the “Complaint”) against Lottery.com (“Lottery.com” or the “Company”) and directors Matthew Howard McGahan (“McGahan”), Christopher Gooding (“Gooding”), Paul Jordan (“Jordan”), Tamer Hassan (“Hassan”) and Warren Macal (“Macal” together with McGahan, Gooding, Jordan and Hassan, the “Individual Defendants” and, collectively Lottery.com, the “Defendants”) in Delaware Chancery Court alleging, amongst other things, breach of contract by the Company with respect to certain notes and warrants and breach of fiduciary duties by the Individual Defendants. (CA. No. 2024-0921-NAC: styled Honey Tree Trading, LLC v. Lottery.com Inc., et al.). On October 10 ,2024, Honey Tree amended its Complaint by filing an amended verified complaint (the “Amended Complaint”) and a motion to expedite proceedings (the “Motion”). On November 6, 2024, at a hearing on Plaintiff’s Motion (the “Hearing”) and on the issue of breach of fiduciary duties against the Individual Defendants, Honey Tree’s counsel informed the Court that, “[t]here is no question that Honey Tree is presently a shareholder and was a shareholder at the time it presented its pleading.” On November 12, 2024, Plaintiff’s counsel informed the Court that “Honey Tree did own shares prior to the filing of the Amended Complaint but sold them prior to that filing; and (ii) Honey Tree did not subsequently purchase shares of Lottery.com until November 7, 2024, the day after the [H]earing,” (Plaintiff’s Admission”). Following Plaintiff’s Admission on November 13, 2024, Plaintiff dismissed without prejudice its claims against Hassan and Macal (the “Dismissal”). The Court ordered the Dismissal on November 15, 2024. On December 13, 2024, Plaintiff filed amended its Amended Complaint by filing a second amended verified complaint (the “Second Amended Complaint”) and a renewed motion to expedite proceedings (the “Second Motion to Expedite”) against the Company and remaining Individual Defendants. In accordance with a briefing stipulation entered by the Court on December 11, 2023, defendants shall answer the Second Amended Complaint and file its opposition to the Second Motion to Expedite by January 13, 2025. On January 13, 2025, the Company and Individual Defendants timely filed their Answer to the Second Amended Complaint, an Opposition to Motion to Expedite and a Partial Motion to Dismiss. On March 6, 2025, Plaintiff notified the Court that it withdraws its Motion to Expedite. On April 25, 2025, Plaintiff filed its Motion to Dismiss Count IV of the Second Amended Complaint as Moot. The motion was granted and Count IV of the Second Amended Complaint was dismissed by the Court.
| 19 |
Manna World Ministries
On September 8, 2023, Manna World Ministries and Summit Church (collectively, the “Plaintiffs”) filed a civil lawsuit in the San Diego Superior Court, North County Division, under case number 37-2023-00039279-CU-CO-NC. The action was brought against Ryan Dickinson, Matthew Clemenson, Lawrence Dimatteo, Encircle, Inc., Paul King, LAD Holdings Group, LLC, MC Holdings Group, LLC, RD Holdings, LLC, and Jeff Sparrow (collectively, the “Defendants”). The Plaintiffs allege that the Defendants defaulted on a personal loan totaling $2,700,000, which was purportedly secured by their personal shares of stock in Lottery.com Inc. (the “Company”). On April 4, 2024, the Plaintiffs filed an amended complaint naming the Company as an additional defendant. The Company subsequently filed an answer and asserted affirmative defenses on December 6, 2024, denying all allegations of wrongdoing. The Company has stated its intent to vigorously contest the claims and to pursue all legal remedies available.
PR Fire Limited
On April 22, 2024, the Company, by and through its outside legal counsel, issued a cease and desist notice to PR Fire Limited, a U.K. based firm and Mr. Samuel Allcock, its CEO, for unlawful attempts to manipulate the public markets by disseminating false and misleading statements about the Company, its current officers and directors in certain articles caused to be published by PR Fire Limited. The Company’s outside legal counsel reported the matter to the proper authorities.
On April 24, 2024, the Company, by and through its outside legal counsel, issued a cease-and-desist notice to certain individuals and entities in participation with a common scheme and acting in concert to financial harm to the Company by privately and publicly disseminating false and misleading statements about the Company, its current officers and directors. The Company’s outside legal counsel reported the matter to the proper authorities.
Dawn Nettles
On February 14, 2025, Dawn Nettles, et. al (“Nettles” or “Plaintiff”) filed a verified original class action (the “Complaint”) against Lottery.com (“Lottery.com” or the “Company”), Rook TX LP, Gary N. Grief, IGT Solutions Corporation (“IGT”) (collectively the “Defendants”) in the District Court of Harris County, 333rd Judicial District (the “Court”) alleging that the Defendants engaged in systematic fraud, misappropriated lottery funds, illegally sold tickets across state lines, and manipulated the outcome of lottery games, including, but not limited to the April 22, 2023 Lotto Texas drawing. On March 25, 2025, the judge issued a ruling that the claims against IGT be dismissed without prejudice. Nettles filed a notice on May 30, 2025 that she is “taking a Nonsuit Without Prejudice Against All Parties Effective Immediately.” The Notice, under Texas Rule of Civil Procedure 162, terminated the case effective immediately.
Jerry R. Reed
On April 8, 2025, Jerry. R. Reed, “Reed” or the “Plaintiff”) brought an action against AL Tx Management, LLC; AutoLotto, Inc; Matthew Clemeson; Colossus Bets Limited; Ryan Dickinson; Lawrence Anthony Dimatteo III; Lottery Now Inc; Lottery.com, Inc. (“Lottery.com” or the “Company”); Bernard Marantelli; Qawi and Quddus, Inc.; Zeljeko Ranogajec; Rook GP, LLC; Rook TX LP; and White Swan Data Limited (collectively the “Defendants”) (Case No. 25-BC03A-0007), styled Jerry B. Reed vs. Rook TX LP, Rook GP LLC, Colossusbets Limited, Lottery.com, Inc., Autolotto, Inc., Lottery Now, Inc., ALTX Management, LLC, Qawi and Quddus, Inc., d/b/a Luck Zone, Lawrence Anthony “Tony” Dimatteo II , Matthew Clemensen, Ryan Dickinson, Zelko Ranogajec a/k/a John Wilson, White Swan Data Limited, Bernard Marantelli; In the Business Court of Texas, Third Division; REMOVED: Case No. D-1-GN-25-002446; 353rd District Court; Travis County, Texas; alleging illegal game-rigging and money-laundering during the April 22, 2023 Lotto Texas drawing. Plaintiff seeks recovery of funds which he claims should have been included in the Lotto Texas jackpot he won on May 17, 2023.
| 20 |
Item 1A. Risk Factors.
As of the date of this Report, there have been no material changes to the risk factors disclosed in the Company’s Annual Report, other than as set forth below. In addition, we may disclose additional changes to such factors or disclose additional factors from time to time in our future filings with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
Our business model and the conduct of our operations may have to vary in each U.S. jurisdiction where we do business to address the unique features of applicable law to ensure we remain in compliance with that jurisdiction’s laws. Our failure to adequately do so may have an adverse impact on our business, financial condition, and results of operations.
Lottery laws vary among U.S. jurisdictions. This means that our business model and the conduct of our operations may have to vary in each jurisdiction where we do business to ensure we remain in compliance with applicable laws. For example, some jurisdictions prohibit lottery ticket courier services, while some jurisdictions in the U.S. prohibit charging certain fees to the user, and further still, some jurisdictions require us to be licensed or registered, which will require us to incur certain costs in connection with the licensing or registration process. In each U.S. jurisdiction, we may be required to structure our business model and conduct our operations differently to address the unique features of applicable law.
Many of the U.S. jurisdictions in which we have historically done business or anticipate doing business in the future require that lottery game tickets be sold only by licensed retailers and prohibit sale or resale of lottery tickets at prices in excess of the purchase price designated by the applicable regulatory authority. Because lottery tickets are typically considered bearer instruments, we can purchase tickets on behalf of our users and customers and charge certain service fees within the limits of the applicable laws in each U.S. jurisdiction. In most cases, with Virginia being a notable exception, the laws do not specifically prohibit users from engaging our services to purchase lottery tickets on their behalf. However, certain types of fees are prohibited in certain jurisdictions. For example, Pennsylvania prohibits “any fee associated with the acquisition or transportation of lottery tickets or shares” and Illinois law prohibits service charges, handling fees or other costs added to the established price of a ticket. On June 25, 2025, Texas enacted a law to criminalize the sale of lottery tickets by couriers. In those states and other states with similar prohibitions, we need to structure our business model to comply with the relevant laws while still endeavoring to operate profitably.
| 21 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
* Filed herewith.
** Furnished herewith.
| 22 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Lottery.com Inc. | ||
| By: | /s/ Matthew McGahan | |
| Name: | Matthew McGahan | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Lottery.com Inc. | ||
| By: | /s/ Robert J. Stubblefield | |
| Name: | Robert J. Stubblefield | |
| Title: | Chief Financial Officer | |
| (Principal Accounting/Financial Officer) | ||
| Dated: August 19, 2025 | ||
| 23 |
Exhibit 10.5
Definitive Agreement with Nook Holdings Limited.
DATED 11 September 2023
SHARE PURCHASE AGREEMENT
amongst
DANI ALYAMOUR
DAVID COOK
PAUL DAVID SEBRIGHT
NISHANT JOHN FARIA
OSAMA MUNIR RAGHEB ALKALOTI
TRIPLE R HOLDINGS LLC
WEST IRELAND INVESTMENT LIMITED
DUPLAYS HOLDINGS LIMITED
and
LOTTERY.COM, INC.
CONTENTS
| CLAUSE | ||
| 1. | Interpretation | 3 |
| 2. | Sale and purchase | 5 |
| 3. | Purchase Price | 5 |
| 4. | Closings | 6 |
| 5. | Warranties | 6 |
| 6. | Limitations on claims | 6 |
| 7. | Confidentiality and announcements | 7 |
| 8. | Further assurance | 7 |
| 9. | Assignment | 7 |
| 10. | Entire agreement | 7 |
| 11. | Costs and set-off | 7 |
| 12. | Default interest | 8 |
| 13. | Variation and waiver | 8 |
| 14. | Notices | 8 |
| 15. | Severance | 8 |
| 16. | Third party rights | 8 |
| 17. | Governing law and jurisdiction | 8 |
| SCHEDULE | ||
| SCHEDULE 1 PARTICULARS OF THE COMPANY | 10 | |
| SCHEDULE 2 SHAREHOLDINGS AND SALE SHARES | 11 | |
| SCHEDULE 3 SELLER’S CLOSING OBLIGATIONS | 12 | |
| Part 1: First Closing | 12 | |
| 1. | Documents to be delivered at First Closing | 12 |
| 2. | Closing board meeting | 12 |
| 3. | Post-Closing | 12 |
| Part 2: Second Closing | 13 | |
| 1. | Documents to be delivered at Second Closing | 13 |
| 2. | Closing board meeting | 13 |
| SCHEDULE 4 WARRANTIES | 14 | |
| 1. | Power to sell the Sale Shares | 14 |
| 2. | Shares in the Company | 14 |
| 3. | Constitutional and corporate documents | 14 |
| 4. | Information | 14 |
| 5. | Compliance and consents | 14 |
| 6. | Effect of sale of the Sale Shares | 14 |
| 7. | No Insolvency | 15 |
| 2 |
THIS AGREEMENT is dated 11 September 2023
PARTIES
| (1) | DANI ALYAMOUR, a Canadian national with passport number HP123618 and whose residential address is at 107 Burj Khalifa, 500161, Dubai, UAE; |
| (2) | DAVID COOK, a British national with passport number 138948587 and whose residential address is at Masakin Al Furjan, Block B 101, Al Furjan, Dubai, UAE; |
| (3) | PAUL DAVID SEBRIGHT, a British national with passport number 124326446 and whose residential address is Glencruitten House, Oban, Scotland, PA34 4QB; |
| (4) | NISHANT JOHN FARIA, a Canadian national with passport number AS2004407 and whose residential address is at Apt 402, Tower 6, Burj Residences, Downtown Dubai, Dubai, UAE; |
| (5) | OSAMA MUNIR RAGHEB ALKALOTI, a Jordanian national with passport number 9771000767 and whose residential address is at Villa 367, Plot No. 3, Um Al Sheif, Dubai, UAE; |
| (6) | TRIPLE R HOLDINGS LLC, a limited liability company incorporated in Sharjah Media City Free Zone Company (SHAMS) with registered number 1803853.01 and having its registered address at Sharjah Media City, Sharjah, UAE; |
| (7) | WEST IRELAND INVESTMENT LIMITED, a freezone offshore company incorporated in Jebel Ali Free Zone with registered number 197344 and having its registered address at Suite 1901, Level 19, Boulevard Plaza Tower 1, Sheikh Mohammed Bin Rashid Boulevard, Downtown Dubai, Dubai, UAE; |
(together the Sellers); and
| (8) | LOTTERY.COM, INC., a Delaware corporation and having its registered address at 20808 State Highway 71W, Spicewood, TX 78669 or Assignees, as defined by clause 9.2 (jointly or severally the Buyer), each a Party, and together, the Parties. |
BACKGROUND
The Sellers have agreed to sell and the Buyer has agreed to buy the Sale Shares subject to the terms and conditions of this agreement.
AGREED TERMS
| 1. | INTERPRETATION |
| 1.1 | The definitions and rules of interpretation in this clause apply in this agreement. |
ADGM: Abu Dhabi Global Market.
AED: United Arab Emirate Dirham, the lawful currency of the UAE.
Business: the business carried on by the Company and the Subsidiary, namely the provision of coworking space and serviced offices to, and incubation activities for the benefit of, sports- related business customers in the UAE.
Business Day: a day other than a Saturday, Sunday or public holiday in the UAE when banks are open for non-automated business.
Claim: a claim for breach of any of the Warranties.
Closings: First Closing and Second Closing.
Commission: has the meaning given in clause 3.4.
Company: Nook Holdings Limited, a private limited company incorporated and registered in the ADGM with company number 000001429 whose registered office is at DD-15-134-004- 007, Level 15, Wework Hub71, Al Khatem Tower, Al Maryah Island, Al Maryah Island, Abu Dhabi, United Arab Emirates, further details of which are set out in Schedule 1.
| 3 |
Control:
| (a) | owning or controlling (directly or indirectly) more than 50% of the voting share capital of the relevant undertaking; |
| (b) | being able to direct the casting of more than 50% of the votes exercisable at general meetings of the relevant undertaking on all, or substantially all, matters; |
| (c) | having the right to appoint or remove directors of the relevant undertaking holding a majority of the voting rights at meetings of the board on all, or substantially all, matters; or |
| (d) | having the power to determine the conduct of business affairs of an undertaking (whether through ownership of equity interest or partnership or other ownership interests, by contract or otherwise), |
and Controlled and Controlling shall have a corresponding meaning;
Deposit: has the meaning given in clause 3.1(a).
Encumbrance: any interest or equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement.
First Closing: the completion of the sale and purchase of the First Closing Shares in accordance with this agreement.
First Closing Consideration has the meaning given in clause 3.1(b).
First Closing Date: has the meaning given in clause 4.1.
First Closing Shares: the Sale Shares set out in column 4 of the table at Schedule 2.
Group:
| (a) | in respect of any person, any other person directly or indirectly Controlled by, or Controlling of, or under common Control with, that person; and |
| (b) | in respect of any individual, any Relative of that individual. |
Purchase Price: the purchase price for the Sale Shares, as set out in clause 3.1.
Relative: in relation to an individual:
| (a) | the spouse, parent, son, daughter, brother or sister (whether by blood or adoption) of that individual; or |
| (b) | any person married to any of the persons specified in paragraph (a) of this definition; |
Relevant Percentage: the percentage of Sale Shares held by each Seller as set out in column 6 of the table at Schedule 2.
Sale Shares: 8,000,000 preference shares and 500,000 ordinary shares of USD0.0001 each in the Company, all of which have been issued and are fully paid and which are held by the Sellers in the numbers shown in column 3 of the table at Schedule 2 comprising the First Closing Shares and the Second Closing Shares.
Second Closing: the completion of the sale and purchase of the Second Closing Shares in accordance with this agreement.
Second Closing Consideration: has the meaning given in clause 3.1(c).
Second Closing Shares: the Sale Shares set out in column 5 of the table at Schedule 2.
Sellers’ Bank Account: in respect of:
| (a) | the Deposit, means the account of the Company having the following details: |
| Bank name: | Emirates NBD |
| Account name: | Nook Office DMCC |
| IBAN: | AE74 0260 0010 1550 5051 701; and |
| (b) | in respect of all other payments due to the Sellers, such bank accounts as each Seller shall notify the Buyer and the Company; 4 |
| 4 |
Subsidiary: Nook Office DMCC, a limited liability company incorporated under the laws of the Dubai Multi Commodities Centre with registration number DMCC107621 and having its registered address at OneJLT-02-02, One JLT, DMCC-EZ1-1AB, Jumeirah Lakes Towers, Dubai, UAE, and which is a wholly-owned subsidiary of the Company.
UAE: United Arab Emirates.
USD: United States Dollars, the lawful currency of the United States of America.
Warranties: the warranties set out in Schedule 4.
| 1.2 | References to clauses and Schedules are to the clauses of and Schedules to this agreement and references to paragraphs are to paragraphs of the relevant Schedule. |
| 1.3 | The Schedules form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Schedules. |
| 1.4 | This agreement shall be binding on and enure to the benefit of, the Parties to this agreement and their respective successors and permitted assigns, and references to a Party shall include that Party’s successors and permitted assigns. |
| 1.5 | A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated or established. |
| 1.6 | A reference to writing or written includes email (unless otherwise expressly provided in this agreement). |
| 1.7 | A subsidiary is a corporate entity Controlled by another corporate entity and a wholly-owned subsidiary is a subsidiary which is owned 100 per cent. by the other corporate entity. |
| 1.8 | Any words following the terms including, include, in particular, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms. |
| 1.9 | References to a document in agreed form are to that document in the form agreed by the Parties and initialled by them or on their behalf for identification. |
| 1.10 | Unless otherwise provided, a reference to a statute, statutory provision or subordinate legislation is a reference to it as it is in force as at the date of this agreement. A reference to a statute or statutory provision shall include all subordinate legislation made as at the date of this agreement under that statute or statutory provision. |
| 2. | SALE AND PURCHASE |
The Sellers shall sell and the Buyer shall buy, with effect from each Closing, the Sale Shares with full title guarantee, free from all Encumbrances and together with all rights attached or accruing to them on the terms and subject to the conditions of this agreement.
| 3. | PURCHASE PRICE |
3.1 The Purchase Price is AED8,500,000 and shall be paid by the Buyer in cash as follows:
| (a) | AED500,000 as a non-refundable deposit on the Business Day following the date of this agreement (Deposit); |
| (b) | AED5,000,000 on or before First Closing (First Closing Consideration); |
| (c) | AED2,000,000 on or before Second Closing (Second Closing Consideration); |
| (d) | AED1,000,000 on or before 30 November 2024. |
3.2 The Purchase Price shall be deemed to be reduced by the amount of any payment made to the Buyer in respect of any Claim.
| 3.3 | The Deposit constitutes part of the Purchase Price but shall in no circumstances be refundable and the Parties agree that the Deposit represents a reasonable pre-estimate of the losses suffered by the Sellers as a result of the transactions contemplated in this agreement not completing for any reason whatsoever. |
| 3.4 | The Sellers have agreed pursuant to prior arrangements to pay to Duplays Holdings Limited a commission of AED425,000 being 5 per cent. of the total Purchase Price (the Commission) and, provided always that the Buyer shall under no circumstances have any liability to any person in respect of the Commission, agrees to pay, at the request and on behalf of the Sellers, 5 per cent. of all payments in respect of the Purchase Price to such account as Duplays Holdings Limited shall notify to the Buyer in respect of the Commission. |
| 5 |
3.5 Each Seller shall be entitled to its Relevant Percentage of the Purchase Price (less the Commission).
| 4. | CLOSINGS |
| 4.1 | First Closing shall take place on 31 October 2023 or such date as the Parties may agree in writing (the First Closing Date) at such place as the Parties agree. |
| 4.2 | At First Closing, the Sellers shall comply with their obligations in Part 1 of Schedule 3. |
| 4.3 | Subject to the Sellers complying with clause 4.2, the Buyer shall pay, to the extent not paid prior to First Closing, the First Closing Consideration to the Sellers’ Bank Account. |
| 4.4 | Second Closing shall take place on 30 November 2023 or such date as the Parties may agree in writing at such place as the Parties agree in writing. |
| 4.5 | At Second Closing, the Sellers shall comply with their obligations in Part 2 of Schedule 3. |
| 4.6 | Subject to the Sellers complying with clause 4.5, the Buyer shall: |
| (a) | to the extent not paid prior to Second Closing, pay the Second Closing Consideration; |
| (b) | pay the residual part of the Purchase Price pursuant to, and (to the extent not paid prior to such date) on the date stated in, clause 3.1(d), to the Sellers’ Bank Account. |
| 4.7 | Payment of the Purchase Price made in accordance with clause 3.4 and this clause shall be a good and valid discharge of the Buyer’s obligation towards the Sellers to pay the Purchase Price. |
| 4.8 | This agreement (other than obligations that have already been fully performed) remains in full force after each Closing. |
| 5. | WARRANTIES AND UNDERTAKINGS |
| 5.1 | The Sellers warrant to the Buyer that each Warranty is, to the best of their knowledge, true, accurate and not misleading in any material respect. |
| 5.2 | Each of the Warranties is separate and, unless expressly provided otherwise, is not limited by reference to any other Warranty or any other provision in this agreement. |
| 5.3 | The Sellers covenant with the Buyer: |
| (a) | not to sell, transfer, assign or create (or allow to exist) any Encumbrance on any Sale Share during the term of this agreement; and |
| (b) | to hold all Sale Shares as encumbered in favour of the Buyer pending transfer to the Buyer on the terms of this agreement, provided that the obligations of the Sellers pursuant to this clause 5.3 shall: |
| (y) | cease to apply to the extent that the Sellers are no longer obliged to transfer shares to the Buyer, whether because of the termination or expiry of this agreement, on default of the Buyer or otherwise; and |
| (z) | not include an obligation to create any kind of registered or registerable security over the Sale Shares. |
| 6. | LIMITATIONS ON CLAIMS |
| 6.1 | The Sellers shall be jointly, but not severally, liable for any Claims. |
| 6.2 | The aggregate liability of the Sellers for all Claims shall not exceed an amount equal to 30 per cent. of the Purchase Price. |
| 6 |
| 6.3 | The Sellers shall not be liable for a Claim unless notice in writing of the Claim, summarising the nature of the Claim and, as far as is reasonably practicable, the amount claimed, has been given by or on behalf of the Buyer to the Sellers on or before the first anniversary of First Closing. |
| 6.4 | Nothing in this clause 6 applies to exclude or limit the Sellers’ liability to the extent that a Claim arises or is delayed as a result of dishonesty, fraud, wilful misconduct or wilful concealment by the Seller, its agents or advisers intended to deceive or induce the Buyer. |
| 7. | CONFIDENTIALITY AND ANNOUNCEMENTS |
| 7.1 | Except to the extent required by law or any legal or regulatory authority of competent jurisdiction: |
| (a) | each Seller shall not (and shall procure that no member of its Group shall) at any time disclose to any person (other than its professional advisers) the terms of this agreement or any trade secret or other confidential information relating to the Company, the Business or the Buyer, or make any use of such information other than to the extent necessary for the purpose of exercising or performing its rights and obligations under this agreement; and |
| (b) | subject to clause 7.2, no Party shall make, or permit any person to make, any public announcement, communication or circular concerning this agreement without the prior written consent of the other Parties. |
| 7.2 | The Buyer may, at any time after First Closing, announce its acquisition of the Sale Shares to any employees, clients, customers or suppliers of the Company or any other member of the Buyer’s Group. |
| 7.3 | Nothing in this agreement shall prevent the Buyer from complying with any reporting, disclosure or press release obligations arising from the Buyer being listed on NASDAQ or any other regulatory obligations. |
| 8. | FURTHER ASSURANCE |
The Sellers shall (and shall use reasonable endeavours to procure that any relevant third Party shall) promptly execute and deliver such documents and perform such acts as the Buyer may reasonably require from time to time for the purpose of giving full effect to this agreement.
| 9. | ASSIGNMENT |
| 9.1 | Sellers may not assign, mortgage, charge, declare a trust of, or deal in any other manner with any or all of its rights and obligations under this agreement without the prior written consent of the Buyer. |
| 9.2 | At any time, the Buyer at its sole discretion shall have the right to assign this agreement, including any of its rights or obligations, in whole or in part, to any affiliated entities or third parties it deems necessary in the performance of this agreement or in the operations of the Company (the Assignees), and no consent on the part of Seller shall be required for such assignment(s). Seller shall not be released from this agreement by any such assignment(s). |
| 10. | ENTIRE AGREEMENT |
This agreement constitutes the entire agreement between the Parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to their subject matter.
| 11. | COSTS AND SET-OFF |
| 11.1 | Each Party shall pay its own costs and expenses incurred in connection with the negotiation, preparation, execution and implementation of this agreement and the transaction contemplated by this agreement. |
| 11.2 | The Parties shall be entitled to set-off any amount which is due by one Party to the other Parties under this agreement against any amount owed to the first Party by the second Party. |
| 7 |
| 12. | DEFAULT INTEREST |
Any sums not paid when due pursuant to this agreement shall accrue interest at the rate of two per cent. per calendar month or part thereof from the due date until the date of actual payment.
| 13. | VARIATION AND WAIVER |
| 13.1 | No variation of this agreement shall be effective unless it is in writing and signed by the Parties (or their authorised representatives). |
| 13.2 | No failure or delay by a Party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy. A waiver of any right or remedy under this agreement or by law is only effective if it is in writing. |
| 13.3 | Except as expressly provided in this agreement, the rights and remedies provided under this agreement are in addition to, and not exclusive of, any rights or remedies provided by law. |
| 14. | NOTICES |
| 14.1 | Any notice or other communication (Notice) to be given under this agreement must be given in English and in writing and may be delivered in person or sent by pre-paid international courier or email (to the extent details are set out below) to the relevant Party as follows: |
| to the Buyer: | |
| Address: | Lottery.com, Inc., 20808 State Highway 71W, Spicewood, Texas 78669 |
| Email: | matthew.mcgahan@lottery.com |
| to the Sellers: | |
| Address: | Nook Holdings Limited, DD-15-134-004-007, Level 15, Wework Hub71, Al Khatem Tower, Al Maryah Island, Al Maryah Island, Abu Dhabi, United Arab Emirates |
| Email: | ravi@duplays.com |
or at any such other address or email address as it may notify the other Parties under this clause 14.
| 14.2 | Any Notice shall be effective upon receipt and shall be deemed to have been received: |
| (a) | if delivered in person, at the time of delivery; |
| (b) | if sent by pre-paid international courier, at 9.00am on the fifth Business Day after posting or at the time recorded by the delivery service; or |
| (c) | if sent by email, on the date a delivery receipt is received by the sender in respect of the Notice. |
| 14.3 | If any Notice is sent by email, a hard copy of such Notice shall be couriered to the recipient of the Notice immediately at the address set out in clause 14.1. No Notice in relation to the service of proceedings under clause 17 may be served by email. |
| 15. | SEVERANCE |
If any provision or part-provision of this agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part- provision shall be deemed deleted. Any modification to or deletion of a provision or part- provision under this clause shall not affect the validity and enforceability of the rest of this agreement.
| 16. | THIRD PARTY RIGHTS |
A person who is not a party to this agreement shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement.
| 17. | GOVERNING LAW AND JURISDICTION |
| 17.1 | This agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales. |
| 17.2 | Each Party irrevocably agrees that the courts of the ADGM shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this agreement or its subject matter or formation. |
This agreement has been entered into on the date stated at the beginning of it.
| 8 |
SIGNATURES
| /s/ Dani Alyamour | |
| Dani Alyamour | |
| Date:9/11/2023 | |
| /s/ David Cook | |
| David Cook | |
| Date:9/11/2023 | |
| /s/ Paul David Sebright | |
| Paul David Sebright | |
| Date: 9/11/2023 | |
| /s/ Nishant John Faria | |
| Nishant John Faria | |
| Date: 9/12/2023 | |
| /s/ Osama Munir Ragheb Alkaloti | |
| Osama Munir Ragheb Alkaloti | |
| Date:9/11/2023 | |
| /s/ Ravi Bhusari | |
| Ravi Bhusari for and on behalf of Duplays Holdings Limited | |
| Date: 9/11/2023 | |
| /s/ Mahesh Gobind Dalamal | |
| Mahesh Gobind Dalamal for and on behalf of Triple R Holdings LLC | |
| Date:9/12/2023 | |
| /s/ Steven Daniel Mayne | |
| Steven Daniel Mayne for and on behalf of West Ireland Investment Limited | |
| Date: 9/10/2023 | |
| /s/ Matthew McGahan | |
| Matthew McGahan for and on behalf of Lottery.com, Inc. | |
| Date: 9/13/2023 |
| 9 |
| Schedule 1 Particulars of the Company | |
| Registered name: | Nook Holdings Limited |
| Registration number: | 000001429 |
| Place of incorporation: | ADGM |
| Registered office: | DD-15-134-004–007, Level 15, WeWork Hub71, Al Khatem Tower, Abu Dhabi Global Market Square, |
| Al Maryah Island, Abu Dhabi, United Arab Emirates, | |
| Issued share capital: | Amount: USD1,000 |
| Divided into: 1,500,000 ordinary shares and 8,500,000 preference shares of USD0.0001 each | |
| Directors and shadow directors: | Ravi Nagesh Bhusari |
| Dani Alyamour | |
| David Cook | |
| Paul David Sebright | |
| Davinder Rao | |
| Vilhelm Nikolai Paus Hedberg | |
| Steven Daniel Mayne | |
| Authorised signatories: | Ravi Nagesh Bhusari |
| Secretary: | None |
| 10 |
Schedule 2 Shareholdings and Sale Shares
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | ||||||||||||||||||||||||||||||||||
| Number and | Number of Sale | First Closing | Second Closing | Purchase | ||||||||||||||||||||||||||||||||||||
| class of shares held | Shares | Shares | Shares | Price | ||||||||||||||||||||||||||||||||||||
| Preference | Ordinary | Preference | Ordinary | Preference | Ordinary | Preference | Ordinary | Relevant | allocation | |||||||||||||||||||||||||||||||
| Shareholder | shares | shares | shares | shares | shares | shares | shares | shares | Percentage | in AED | ||||||||||||||||||||||||||||||
| Duplays Holdings Limited | 0 | 1,000,000 | - | - | - | - | - | - | - | 425,000 | ||||||||||||||||||||||||||||||
| 500,000 | 0 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Dani Alyamour | 0 | 500,000 | 0 | 500,000 | 0 | 325,000 | 0 | 175,000 | 11.7647 | 950,000 | ||||||||||||||||||||||||||||||
| 500,000 | 0 | 500,000 | 0 | 325,000 | 0 | 175,000 | 0 | |||||||||||||||||||||||||||||||||
| David Cook | 2,000,000 | 0 | 2,000,000 | 0 | 1,300,000 | 0 | 700,000 | 0 | 23.5294 | 1,900,000 | ||||||||||||||||||||||||||||||
| Paul David Sebright | 1,500,000 | 0 | 1,500,000 | 0 | 975,000 | 0 | 525,000 | 0 | 17.6471 | 1,425,000 | ||||||||||||||||||||||||||||||
| Nishant John Faria | 1,000,000 | 0 | 1,000,000 | 0 | 650,000 | 0 | 350,000 | 0 | 11.7647 | 950,000 | ||||||||||||||||||||||||||||||
| Osama Munir Ragheb Alkaloti | 1,000,000 | 0 | 1,000,000 | 0 | 650,000 | 0 | 350,000 | 0 | 11.7647 | 950,000 | ||||||||||||||||||||||||||||||
| Triple R Holdings LLC | 1,000,000 | 0 | 1,000,000 | 0 | 650,000 | 0 | 350,000 | 0 | 11.7647 | 950,000 | ||||||||||||||||||||||||||||||
| West Ireland Investment Limited | 1,000,000 | 0 | 1,000,000 | 0 | 650,000 | 0 | 350,000 | 0 | 11.7647 | 950,000 | ||||||||||||||||||||||||||||||
| Totals | 8,500,000 | 1,500,000 | 8,000,000 | 500,000 | 5,200,000 | 325,000 | 2,800,000 | 175,000 | 100.00 | % | 8,500,000 | |||||||||||||||||||||||||||||
| 11 |
Schedule 3 Seller’s Closing obligations
PART 1: FIRST CLOSING
| 1. | DOCUMENTS TO BE DELIVERED AT FIRST CLOSING At First Closing, the Sellers shall deliver to the Buyer: |
| (a) | transfers of the First Closing Shares executed by the Sellers in favour of the Buyer; |
| (b) | the share certificates for the Sale Shares or an indemnity for any lost certificates; |
| (c) | resignations of all directors of the Company other than Ravi Bhusari, Davinder Rao and David Cook; |
| (d) | where required, a written resolution of the board of the Company appointing Matthew McGahan to the board of the Company and accepting the resignations of the resigning directors; |
| (e) | executed copies of all documents required by the Company’s registered agent to transfer the First Closing Shares from the Sellers to the Buyer and removing the resigning directors from the board of the Company; |
| (f) | signed minutes, in agreed form, of the board meeting held by the Company pursuant to paragraph 2 of this Schedule 3; |
| 2. | CLOSING BOARD MEETING |
The Sellers shall cause a board meeting of the Company to be held at First Closing at which the matters set out in this agreement as they relate to First Closing shall be resolved and approved.
| 3. | POST-CLOSING |
The Sellers shall cause the issuance of share certificates to the Buyer and each Seller reflecting the post-First Closing shareholdings, as follows:
Preference shares held | Ordinary shares held | |||||||
| Shareholder | post-First Closing | post-First Closing | ||||||
| Lottery.com, Inc. or Assignee | 5,200,000 | 325,000 | ||||||
| Duplays Holdings Limited | 500,000 | 1,000,000 | ||||||
| Dani Alyamour | 175,000 | 0 | ||||||
| 0 | 175,000 | |||||||
| David Cook | 700,000 | 0 | ||||||
| Paul David Sebright | 525,000 | 0 | ||||||
| Nishant John Faria | 350,000 | 0 | ||||||
| Osama Munir Ragheb Alkaloti | 350,000 | 0 | ||||||
| Triple R Holdings LLC | 350,000 | 0 | ||||||
| West Ireland Investment Limited | 350,000 | 0 | ||||||
| Totals | 8,500,000 | 1,500,000 | ||||||
| 12 |
PART 2: SECOND CLOSING
| 1. | DOCUMENTS TO BE DELIVERED AT SECOND CLOSING At Second Closing, the Sellers shall deliver to the Buyer: |
| (a) | transfers of the Second Closing Shares executed by the Sellers in favour of the Buyer; |
| (b) | the share certificates for the Second Closing Shares or an indemnity for any lost certificates; |
| (c) | resignations of all directors of the Company other than Ravi Bhusari and Matthew McGahan; |
| (d) | where required, the written resolution of the board of the Company appointing a person designated by the Buyer to the board of the Company and as the Company’s authorised signatory and accepting the resignations of Davinder Rao and David Cook; |
| (e) | executed copies of all documents required by the Company’s registered agent to transfer the shares from the Sellers to the Buyer and removing all directors from the board and authorised signatory positions of the Company, other than Ravi Bhusari and any person appointed by the Buyer; |
| (f) | any corporate credit card, debit card, and all other banking documents, credentials and instruments relating to the bank accounts of the Company and the Subsidiary; |
| (g) | signed minutes, in agreed form, of the board meeting held by the Company pursuant to paragraph 2 of this Schedule 1; |
| 2. | CLOSING BOARD MEETING |
The Sellers shall cause a board meeting of the Company to be held at Second Closing at which the matters set out in this agreement and not previously resolved upon pursuant to paragraph 2 of Part 1 of this Schedule 3 shall be resolved and approved.
| 13 |
Schedule 4 Warranties
| 1. | POWER TO SELL THE SALE SHARES |
| 1.1 | Each Seller has the requisite power and authority to enter into and perform this agreement and the documents referred to in it (to which it is a party), and they constitute valid, legal and binding obligations on each Seller in accordance with their respective terms. |
| 1.2 | The execution and performance by the Sellers of this agreement and the documents referred to in it will not breach or constitute a default under any Seller’s articles of association, or any agreement, instrument, order, judgment or other restriction which binds any Seller. |
| 2. | SHARES IN THE COMPANY |
| 2.1 | The Sale Shares constitute 85 per cent. of the allotted and issued share capital of the Company and are fully paid or credited as fully paid. |
| 2.2 | Each Seller is the sole legal and beneficial owner of the Sale Shares set against its name in column 3 of the table at Schedule 2 and is entitled to transfer the legal and beneficial title to such Sale Shares to the Buyer free from all Encumbrances, without the consent of any other person. |
| 2.3 | No person has any right to require at any time the transfer, creation, issue or allotment of any share, loan capital or other securities of the Company (or any rights or interest in them), and no person has agreed to confer or has claimed any such right. |
| 2.4 | No Encumbrance has been granted to any person or otherwise exists affecting the Sale Shares or any unissued shares, debentures or other unissued securities of the Company, and no commitment to create any such Encumbrance has been given, nor has any person claimed any such rights. |
| 2.5 | The Subsidiary is a wholly-owned subsidiary of the Company. |
| 3. | CONSTITUTIONAL AND CORPORATE DOCUMENTS |
So far as each Seller is aware, all deeds and documents belonging to the Company Group (or to which it is a party) are in the possession of the Company Group.
| 4. | INFORMATION |
| 4.1 | The particulars set out in Schedule 1 are true, accurate and complete. |
| 4.2 | All information (excluding information received by the Sellers from the Buyer) given by or on behalf of the Sellers to the Buyer (or its agents or advisers) in the course of the negotiations leading up to this agreement, was when given, and is now, true, accurate and, so far as the Sellers are aware, complete. |
| 5. | COMPLIANCE AND CONSENTS |
| 5.1 | The Company Group has at all times conducted its business in accordance with, and has acted in compliance with, all applicable laws and regulations. |
| 5.2 | The Company Group holds all licences, consents, permits and authorities necessary to carry on the Business in the places and in the manner in which it is carried on at the First Closing Date (Consents). |
| 5.3 | Each of the Consents is valid and subsisting, the Company Group is not in breach of the terms or conditions of the Consents (or any of them) and there is no reason why any of the Consents may be revoked or suspended (in whole or in part) or may not be renewed on the same terms. |
| 6. | EFFECT OF SALE OF THE SALE SHARES |
The acquisition of the Sale Shares by the Buyer will not:
| (a) | cause the Company Group to lose the benefit of any right, asset or privilege it presently enjoys; or |
| (b) | relieve any person of any obligation to the Company Group, or enable any person to determine any such obligation, or any right or benefit enjoyed by the Company Group, or to exercise any other right in respect of the Company Group. |
| 14 |
| 7. | NO INSOLVENCY |
No insolvency event has occurred in relation to any Seller.
AMENDMENT TO SHARE PURCHASE AGREEMENT
THIS AMENDMENT TO SHARE PURCHASE AGREEMENT (“First Amendment”), is made as of the 18th day of December, 2023 (the “Effective Date”), by and between LOTTERY.COM, INC., a Delaware corporation (the “Buyer”), with its principal place of business located at 20808 State Hwy. 71, Spicewood, Texas 78669 and RAVI BHUSARI (on behalf of the “Sellers”).
W I T N E S S E T H:
WHEREAS, Buyer and Sellers entered into that certain Share Purchase Agreement dated September 11, 2023 (the “Agreement”), under which Buyer agreed to purchase from Sellers, and Sellers agreed to sell to Buyer the Sale Shares in Nook Holdings Limited, a private company incorporated and registered in Abu Dhabi Global Market (“ADGM”), under and subject to the terms and conditions set forth in such Agreement;
WHEREAS, the Agreement is incorporated into this Amendment by reference and made a part of this Amendment;
WHEREAS, pursuant to the Agreement, the parties were to perform the completion of the sale and purchase of the First Closing Shares on October 31, 2023 (the “First Closing”);
WHEREAS, pursuant to the Agreement, the parties were to perform the completion of the sale and purchase of the Second Closing Shares on November 30, 2023 (the “Second Closing”);
WHEREAS, Buyer and Sellers have agreed to amend the Agreement under the terms and conditions contained in this Amendment in order to facilitate the delay of the parties completion of the First Closing and Second Closing.
NOW, THEREFORE, with the foregoing background incorporated herein by reference, and in consideration of the mutual covenants and agreements set forth herein, intending to be legally bound, the parties hereto agree to amend the Agreement as follows:
1. Interpretation of Agreed Terms. Save as defined in this Amendment, the terms, words and expressions defined in the Agreement shall have the same effect and meaning in this Amendment.
2. Date of Closing: The Closing shall occur on or before March 30, 2024 (the “Amended Closing”).
3. Deposit. Sellers acknowledge that the balance of the Deposit has been paid in full on or before the Effective Date of this Amendment.
4. Miscellaneous.
a. Except as specifically set forth above in this Amendment, the Agreement shall continue unmodified and otherwise remain in full force and effect in accordance with its terms in all respects and Buyer and Sellers hereby ratify and restate all the terms and conditions thereof. This Amendment does not address any other provision or rights under the Agreement or Applicable Law.
b. This Amendment may be executed in counterparts. Each such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall further constitute and be but one and the same instrument. Facsimile/PDF copies shall be deemed originals.
c. In the event of a conflict between this Amendment and the Agreement, the terms of this Amendment shall prevail. This Amendment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, executors, personal representatives, successors and assigns. All capitalized terms used but not defined in this Amendment shall have the meanings ascribed to such terms in the Agreement.
-BALANCE OF PAGE INTENTIONALLY LEFT BLANK-
| 15 |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Effective Date.
BUYER: LOTTERY.COM, INC., a Delaware corporation
| By: | /s/ Matthew McGahan | |
| Name: | Matthew McGahan | |
| Title: | Chairman, CEO and President | |
| Date: | December 18, 2023 |
ON BEHALF OF SELLERS: RAVI BHUSARI
| By: | /s/ Ravi Bhusari | |
| Name: | Ravi Bhusari | |
| Title: | Authorized Representative | |
| Date: | December 18, 2023 |
| 16 |
Exhibit 10.6
Exhibit 10.7
Exhibit 10.40
SHARE PURCHASE AND SALE AGREEMENT
This SHARE PURCHASE AND SALE AGREEMENT (the “Agreement”) is made and entered into as of July 22, 2025 (the “Effective Date”), by, between, and among LOTTERY.COM INC., a corporation organized and existing under the laws of the State of Delaware, and having its principal office at 5049 Edwards Road, 4th Floor, Fort Worth, Texas 76109 (“Buyer” or “LTRY”), CONCERTS INC., a corporation organized and existing under the laws of the State of Nevada, and having its principal office at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701 (“Seller”), and DOTCOM VENTURES INC., a corporation organized and existing under the laws of the State of Nevada, and having its principal office at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701 (“Company” or “DVI”). Each of Buyer, Seller, and Company may be referred hereinafter as a “Party” or collectively as the “Parties”.
WHEREAS, Buyer, is a publicly traded company listed on The Nasdaq Stock Market (“Nasdaq”) with the ticker symbol “SEGG” (formerly trading as “LTRY”);
WHEREAS, Seller owns one hundred percent (100%) of the issued and outstanding common stock, $0.0001 par value, of DVI, its sole series and class of capital stock (the “Company Stock”);
WHEREAS, Seller sold and DVI purchased all of the assets owned by Seller with respect to “Concerts.com” and “TicketStub.com” pursuant to the Asset Purchase Agreement between Seller and DVI dated May 1, 2025 (“Seller and DVI Asset Purchase Agreement”)1, and DVI now owns one-hundred percent of all of the assets (tangible, intangible, and intellectual property) set forth in Exhibit A of this Agreement (the “Assets”); and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, up to the entire issued share capital of Company, as set forth in this Agreement, thereby acquiring all assets (tangible, intangible, and intellectual property) held by DVI, including, but not limited to, any domain names and related assets for the domain names <concerts.com> and <ticketstub.com> as further described in Exhibit A, upon the terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, Buyer, Company, and Seller agree as follows:
Article
I.
PURCHASE AND SALE
1.01 Purchase and Sale of Shares. Upon the terms and conditions of this Agreement, Buyer agrees to purchase and accept delivery from Seller and Seller agrees to sell, assign, transfer, and deliver to Buyer, at the Closing set forth in Section 1.04, subject to receipt of full and timely consideration set forth in Section 1.03, the following shares of Company set forth below, free and clear of all liens, security, collateralization, pledge, claims, charges, equities, or encumbrances of any kind:
Fifty-One Thousand (51,000) shares of common stock in DVI held by Seller, which represents a Fifty-One Percent (51.00%) ownership and majority interest in Company (the “Subject Shares”).
1 The foregoing description of Seller and DVI Asset Purchase Agreement is qualified in its entirety by reference to Seller and DVI Asset Purchase Agreement. For a complete description of Seller and DVI Asset Purchase Agreement, Seller and DVI acknowledge, warrant and represent that a true and accurate copy of Seller and DVI Asset Purchase Agreement is incorporated by reference and attached herein as Exhibit A-1.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 1 OF 31 |
1.02 [Intentionally Omitted.]
1.03 Consideration. Subject to Due Diligence (as defined in Section 4.02 below), as consideration for the purchase of the Subject Shares, Buyer will satisfy the purchase price of Five Million Dollars USD ($5,000,000.00) (the “Purchase Price”) as follows:
Purchase Price: The Parties mutually agree that, at Closing (as defined in Section 1.04), Buyer will have the option at its sole discretion to pay Seller the Purchase Price as follows: (i) in cash; (ii) as Payment-In-Kind (as defined below) equivalent to the Purchase Price; or (iii) a combination of cash and Payment-In-Kind (as defined below); together totaling the equivalent of the Purchase Price. The term “Payment-In-Kind” means restricted stock units of common shares in LTRY to be applied towards the Purchase Price at a fixed price of Three Dollars USD ($3.00) per share (the “Fixed Price”), irrespective of the trading price of LTRY stock at the execution of this Agreement or the Closing Date. At Closing, in the event that Buyer elects to make a Payment-In-Kind for any portion of the Purchase Price, Buyer will cause to be issued to Seller the equivalent in restricted stock units of common shares in LTRY to be applied towards the Purchase Price. Seller will receive at Buyer’s transfer agent, Continental Stock Transfer & Trust Company (the “Transfer Agent”), the Payment-In-Kind within three (3) business days following the Closing Date. Any Payment-In-Kind made as part of the consideration to satisfy any portion of the Purchase Price due at Closing will carry full piggyback registrations rights (as defined below) for the benefit of Seller and Seller’s transferees, if any.
True-Up and Downside Protection: In the event the closing price of the restricted stock units of common shares in Lottery.com Inc. to be issued to Seller as Payment-In-Kind at Closing is lower than the Fixed Price at the close of trading on April 30, 2026 (the “Reprice Date”), then the Fixed Price will be adjusted downward to the VWAP of the common stock for the five (5) consecutive trading days immediately preceding the Reprice Date (the “Market Price”). Accordingly, Buyer will be obligated to tender Seller additional restricted stock units of common shares in LTRY to true up the difference between the Fixed Price and the Market Price (the “True-Up”). The True-Up is designed to provide downside protection to Seller for consideration tendered by Buyer as Payment-In-Kind for the Purchase Price at Closing. Any Payment-In-Kind made as part of the True-Up will carry full piggyback registrations rights for the benefit of Seller and Seller’s transferees, if any.
The term “business day” means any day of the week other than Saturday, Sunday, or any other day on which Nasdaq is closed for business. The term “piggyback registration rights” means the right for all Payment-In-Kind shares of LTRY issued at Closing or upon True-Up to be registered alongside any other shares of LTRY that are registered for sale from time to time with the Securities and Exchange Commission (“SEC”) for offer or sale to the public, including pursuant to any amendment of any existing effective or pending registration as at Closing; provided, however, that such term will exclude: (i) any such registration statement that is for the benefit of reselling shareholders who have received shares from LTRY in exchange for cryptocurrency; and (ii) any prior registration statement that excludes the shares of reselling shareholders.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 2 OF 31 |
Each of the Parties hereby acknowledges and agrees that this Section 1.03 will survive Closing.
1.04 Closing. The completion of the purchase and sale of the Subject Shares (the “Closing”) will take place remotely on or before July 25, 2025 (the “Closing Date”). Buyer will provide notice of its intent to close, at its sole discretion, to Seller and Company at least one (1) business day prior to Closing. Closing will occur on a business day.
Closing will take place in accordance with Section 3.01, and each Party will have performed all of the obligations set forth in Section 3.01 on or before Closing, but not later than the Closing Date.
1.05 Broker Fee/Commission. No broker is entitled to a fee or commission by any Party in connection with this Agreement.
1.06 Call Option. At Closing, Seller will grant to Buyer the right to purchase the balance of the issued and outstanding shares of common stock of DVI held by Seller in excess of the Subject Shares as follows (the “Option”): (i) Ten Thousand (10,000) shares for One Million Dollars ($1,000,000.00) cash by not later than December 31, 2025; (ii) Fifteen Thousand (15,000) shares for One Million Five Hundred Thousand Dollars ($1,500,000.00) cash by not later than May 31, 2026; (iii) Five Thousand (5,000) shares for Five Hundred Thousand Dollars ($500,000.00) cash by not later than December 31, 2025; and (iv) Nineteen Thousand (19,000) shares for Two Million Dollars ($2,000,000.00) in either shares or cash by not later than May 16, 2025 (the “Final Payment”). The Final Payment will be made by Buyer in cash or stock or a combination of both at the election of Buyer; provided that the issuance price of any such shares of LTRY common stock will be at the VWAP of the common stock for the five (5) consecutive trading days immediately preceding the exercise date. At Closing, the Option will be deemed to be coupled with an interest and irrevocable, except that a portion of the Option will be revoked automatically upon the expiration of the funding deadlines set forth above without full payment of the corresponding funding obligation to Seller. All cash proceeds from the exercise of the Option will be used first to satisfy the outstanding obligations set forth below in Section 2.03.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 3 OF 31 |
Article
II.
ASSETS ACQUIRED IN STOCK PURCHASE AND SALE
2.01 Definitions. Under this Article and this Agreement generally, unless there is something in the subject matter or context inconsistent therewith, the following terms will have the following meanings, respectively:
| Assets | the assets described in Exhibit A; | |
| Data Room | the virtual data room accessed via the link set out immediately below the table of definitions; | |
| Disclosed | fairly disclosed to Buyer in such manner and with sufficient detail to enable Buyer to make an informed assessment of the nature and scope of the matters, facts or circumstances disclosed and the extent and impact of their consequences; | |
| Disclosure Documents | the documents contained in the Data Room at Closing; and |
Data Room link: https://www.dropbox.com/home/DotCom%20Ventures%20Inc.%20-%20LTRY%20Data%20Room
2.02 Assets. Company owns the Assets set forth in Exhibit A, which were acquired from Seller pursuant to the Asset Purchase Agreement attached as Exhibit A-1 and are further detailed in the Data Room, and such Assets are free and clear of all liens, security, collateralization, pledge, claims, charges, equities or encumbrances of any kind (“Encumbrances”), except as set forth in Section 2.03 of this Agreement.
2.03 Encumbrances on Assets. The Assets set forth in Exhibit A, are and will remain subject to the Encumbrances described below in this Section 2.03 until such time as the related obligations are paid in full, in cash, in accordance with the terms and conditions of such obligations.
(a) “Concerts.com” Domain Name and Assets. The domain name <concerts.com> and all associated and ancillary assets related to the <concerts.com> domain name, as described in Exhibit A, are subject to:
(i) BYP Note and BYP Security. A Senior Secured Promissory Note payable to Bill Young Productions Inc. (“BYP”) by DVI dated May 1, 2025, in the amount of One Million Dollars USD ($1,000,000.00) (the “BYP Note”), and a Senior Security Agreement in favor of BYP dated May 1, 2025 (the “BYP Security”), created an Encumbrance on certain Assets described below. The BYP Note is by and between DVI (as Borrower) and BYP (as Lender) whereby DVI promises to pay BYP the principal sum of $1,000,000.00 in United States currency and accrued interest on or before the maturity date of December 31, 2025 (the “BYP Note Maturity Date”). As security for the obligations under the BYP Note and every extension or renewal thereof, DVI granted, pledged, conveyed, and delivered to BYP a security interest in all of the right, title, and interest of DVI, in and to the personal property set forth in Schedule A of the BYP Security as the “Collateral” (the term “Collateral” as defined in the BYP Security). The foregoing description of the BYP Note and BYP Security is qualified in its entirety by reference to the BYP Note and BYP Security. For a complete description of the BYP Note and BYP Security, DVI acknowledges, warrants and represents that a true and accurate copy of the BYP Note and BYP Security are incorporated by reference and attached herein as Exhibit B; and
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 4 OF 31 |
(ii) Seller’s Junior Note and Seller’s Junior Security Agreement. A Junior Secured Promissory Note payable to Seller in the amount of One Million Five Hundred Thousand Dollars USD ($1,500,000.00) (“Seller’s Junior Note”) and Seller’s Junior Security Agreement in favor of Seller dated May 1, 2025 (the “Seller’s Junior Security Agreement”) created an Encumbrance on certain Assets described below. Seller’s Junior Note is by and between DVI (as Borrower) and Seller (as Lender) whereby DVI promises to pay Seller the principal sum of $1,500,000.00 in United States currency and accrued interest on or before the maturity date of May 31, 2026 (“Seller’s Junior Note Maturity Date”). As security for the obligations under Seller’s Junior Note and every extension or renewal thereof, DVI granted, pledged, conveyed, and delivered to Seller a security interest in all of the right, title, and interest of DVI, in and to the personal property set forth in Schedule A of Seller’s Junior Security Agreement as the “Collateral” (the term “Collateral” as defined in the BYP Security). The foregoing description of Seller’s Junior Note and Seller’s Junior Security Agreement is qualified in its entirety by reference to Seller’s Junior Note and Seller’s Junior Security Agreement. For a complete description of Seller’s Junior Note and Seller’s Junior Security Agreement, Seller and DVI acknowledge, warrant, and represent that a true and accurate copy of Seller’s Junior Note and Seller’s Junior Security Agreement are incorporated by reference and attached herein as Exhibit C.
(b) “TicketStub.com” Domain Name and Assets. The domain name <ticketstub.com> and all associated and ancillary assets related to the <ticketstub.com> domain name, as described in Exhibit A, will be subject to:
(i) TicketStub.com Note and TickeStub.com Security. A Senior Secured Note payable to Seller in the amount of Five Hundred Thousand Dollars USD ($500,000.00) (the “TicketStub.com Note”) and Senior Security Agreement in favor of Seller dated May 1, 2025 (the “TicketStub.com Security Agreement”) created an Encumbrance on certain Assets described below. The TicketStub.com Note is by and between DVI (as Borrower) and Seller (as Lender) whereby DVI promises to pay Seller the principal sum of $500,000.00 in United States currency and accrued interest on or before the maturity date of December 31, 2025 (“TicketStub.com Note Maturity Date”). As security for the obligations under TicketStub.com Note and every extension or renewal thereof, DVI granted, pledged, conveyed, and delivered to Seller a security interest in all of the right, title, and interest of DVI, in and to the personal property set forth in Schedule A of TicketStub.com Security Agreement as the “Collateral” (the term “Collateral” as defined in the TicketStub.com Security Agreement). The foregoing description of TicketStub.com Note and TicketStub.com Security Agreement is qualified in its entirety by reference to TicketStub.com Note and TicketStub.com Security Agreement. For a complete description of TicketStub.com Note and TicketStub.com Security Agreement, DVI acknowledges, warrants and represents that a true and accurate copy of TicketStub.com Note and TicketStub.com Security Agreement are attached herein as Exhibit D.
Each of the BYP Note, Seller’s Junior Note, and the TicketStub.com Note may be referred to herein as a “Note” or collectively as the “Notes”.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 5 OF 31 |
Each of the BYP Security, Seller’s Junior Security Agreement and the TicketStub.com Security Agreement may be referred to herein as a “Security Agreement” or collectively as the “Security Agreements”.
2.04 Limitations of Assumed Obligations. Except as expressly set forth in Section 2.03 above and this Section 2.04 and ordinary and customary trade payables and related-party loans not to exceed Twenty Thousand Dollars ($20,000 USD), no obligation or liability of Seller or DVI, or relating to Seller’s or DVI’s business, of any nature whatsoever (whether express or implied, fixed or contingent, liquidated or unliquidated, known or unknown, accrued, due or to become due), is being assumed by Buyer, nor will Buyer be liable to pay, perform, or discharge any such obligation or liability, nor will the Assets be subject to any such obligation or liability, save for those shown in the balance sheet of DVI in the Data Room and any disclosed liabilities (in writing) incurred in the ordinary course of business between the date of the balance sheet (June 30, 2025) and the Closing Date.
Article
III.
DOCUMENTS TO BE DELIVERED
3.01 Documents to be Delivered by Seller and DVI to Buyer. At or before the Closing, Seller will deliver or procure for delivery to Buyer:
(a) A certificate of Seller and DVI (separately) in the exact forms attached as Exhibit F-1 (“Certificate of Seller”) and Exhibit F-2 (“Certificate of Company”) certifying that: (i) the representation and warranties made by Seller and DVI in this Agreement are true and accurate at and as of the Closing; and (ii) Seller and DVI have performed and complied with all of the terms, provisions, and conditions to be performed and complied with by Seller and DVI at or before the Closing;
(b) Duly executed transfers of the Subject Shares in favor of Buyer, together with the relative share certificate(s) or an indemnity in a form reasonably required by Buyer in the case of any missing share certificate(s);
(c) The certificate of incorporation, certificate(s) of incorporation on change of name (if applicable), and all other statutory records of Company made up to the Closing Date;
(d) All of the books or account, financial and accounting records, correspondence, documents, files memoranda and other papers relating to Company; and
3.02 Corporate Authorization. Procure that a meeting of the board of directors of Company is held at which the transfer of the Subject Shares will be approved for registration and the entry of Buyer into the register of members of Company will be approved, in each case subject only to the transfers being duly stamped and will supply duly signed minutes of that meeting to Buyer.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 6 OF 31 |
3.03 Documents to be Delivered by Buyer to Seller. At the Closing, Buyer will deliver to Seller:
(a) Payment of the Purchase Price in the form specified in Section 1.03 of this Agreement;
(b) A certificate of Buyer in the exact form attached as Exhibit F-3 (“Certificate of Buyer”) certifying that: (i) the representations and warranties made by Buyer in this Agreement are true and accurate at and as of the Closing; and (ii) Buyer has performed and complied with all of the terms, provisions, and conditions to be performed and complied with by Buyer at or before the Closing; and
(c) Any such other certificates and/or documents as Seller or its counsel may reasonably request, such as corporate documents or resolutions pertaining to this transaction.
Article
IV.
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties by Seller and Company. The following Representations and Warranties of Seller and Company are given subject to those matters Disclosed. Subject thereto, Seller and Company represent and warrant to Buyer as follows:
(a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada.
(b) The Company is not required to be qualified or licensed to do business as a foreign corporation in any jurisdiction other than Nevada, except where the failure to be so qualified or licensed will not have a material adverse effect on the conduct of its business or the ownership or use of any of its properties or assets.
(c) That attached Exhibit E sets forth a true and complete list of the names, addresses, and titles of the directors and officers of Company.
(d) All of the shares of the Subject Shares (if any) have been duly authorized and validly issued and are fully paid and none of them was issued in violation of any preemptive or other right. The Company is not a party to or bound by any contract, agreement, or arrangement to issue, sell, or otherwise dispose of or redeem, purchase, or otherwise acquire the Subject Shares, and, except for this Agreement, there is no outstanding option, warrant, or other right to subscribe for or purchase, or contract, agreement, or arrangement with respect to the Subject Shares.
(e) Seller owns all of the Subject Shares, free and clear of all liens, claims, charges, restrictions, equities, and encumbrances of any kind and has full authority, power, and legal right to sell, assign, transfer, and deliver the same.
(f) The execution, delivery, or performance of this Agreement:
(i) will not violate or conflict with the articles of incorporation, certificate of formation, the bylaws, or any other of the governing documents of Company;
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 7 OF 31 |
(ii) will not conflict with or result in any breach of or default under any provision of any contract or agreement of any kind to which Seller or Company is bound or to which any property or asset of any of them is subject;
(iii) is not prohibited by any statute, law, ordinance, regulation, rule, judgment, decree, or order of any court or governmental agency;
(iv) does not require Seller or Company to obtain or make any consent, authorization, approval, of any other person;
(v) will not cause any acceleration of the maturity of any note, instrument, or other obligation to which Company is bound or with respect to which Company is an obligor or guarantor; and
(vi) will not result in the creation or imposition of any lien, claim, charge, restriction, equity, or encumbrance of any kind whatsoever upon or give to any other person any interest or right (including any right of termination or cancellation) in or with respect to the Subject Shares or any of the properties, assets, businesses, agreement, or contracts of Company.
(g) The Data Room contains all material agreements, financial statements (including a balance sheet for Company), bank records, and other documents supporting the accounting records, and since the date for such financial statements (that include a balance sheet), Company has not:
(i) incurred any material liability or obligation (absolute, accrued, contingent, or otherwise) of any nature, other than in the ordinary course of business;
(ii) had any change in its condition (financial or otherwise), operations (present or prospective), business (present or prospective), properties, assets, or liabilities, other than changes in the ordinary course of business, none of which has been materially adverse;
(iii) suffered any damage, destruction, or loss of physical property (whether or not covered by insurance) materially or adversely affecting its condition (financial or otherwise) or operations (present or prospective);
(iv) save for the Notes, incurred or agreed to incur any indebtedness for borrowed money, other than in the ordinary course of business;
(v) suffered any substantial loss or waived any substantial right;
(vi) save for the Notes, pledged or subjected to any charge, lien, claim, or encumbrance, or agreed to mortgage, pledge, or subject to any charge, lien, claim, or encumbrance, any of its properties or assets;
(vii) declared, set aside, or paid any dividend or made any distribution (whether in cash, property or interest) with respect to any of its capital or redeemed, purchased, or otherwise acquired, or agreed to redeem, purchase, or otherwise acquire, any of its Membership Interest;
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 8 OF 31 |
(viii) increased, or agreed to increase, the compensation or bonuses or special compensation of any kind of any of its officers, employees, or agents other than normal merit and/or cost-of-living increases pursuant to customary arrangements consistently followed, or adopted or increased any benefit under any insurance, pension, or other employee benefit plan, payment, or arrangement made to, for, or with any such officer, employee, or agent;
(ix) lost any major customer or had any material order canceled or knows of any threatened cancellation of any material order;
(x) made or permitted any material amendment or termination of any material contract, agreement, or license to which it is a party other than in the ordinary course of business;
(xi) had any resignation or termination of employment of any of its key officers or employees or knows of any impending or threatened resignation or resignations or termination or terminations of employment that would have a material adverse effect on its operations (present or prospective) or business (present or prospective);
(xii) had any labor trouble or work stoppage or knows of any impending or threatened labor trouble or work stoppage that would adversely affect Company; or
(xiii) become a party to any shareholders agreement or like arrangement regulating the relationship between Company and its shareholder nor between the shareholders themselves analogous to any so-called ‘fundamental business transaction’ or ‘fundamental action’ involving major corporate actions like mergers, consolidations, sales of assets, or charter amendments that require both board of directors and stockholder approval (e.g., Delaware General Corporation Law (DGCL) § 251 (mergers), § 271 (sales of assets), § 242 (charter amendments), and § 144 (interested director transactions)).
(h) All federal, state, local, and foreign tax returns, reports, and statements required to be filed by Company with requisite authorities as of the Closing Date have been properly and timely filed with the appropriate governmental agencies in all jurisdictions in which such returns, reports, and statements are required to be filed, and all federal, state, county, city, municipal, local, foreign, or other governmental taxes, levies, assessments, and charges, liens, claims, or encumbrances upon or relating to Company and its employees, payroll, income, gross receipts, and assets and assets have been paid, including any penalties and interest. Seller further represents and warrants that Seller is responsible for the filing of all federal, state, county, city, municipal, local, foreign, or other governmental tax returns as of the Closing date. Seller will provide Buyer with copies all tax returns filed by Company, copies of which will include all reports, financial or otherwise, filed with the Nevada Secretary of State or United State Internal Revenue Service upon which these returns were prepared. The Tax Computation for the period ending June 30, 2025, contained in the Data Room shows a loss and accordingly there is no corporation tax payable by Company.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 9 OF 31 |
(i) There are no actions, suits, proceedings, or investigations, either at law or in equity, or before any commission or other administrative authority in any United States or foreign jurisdiction, of any kind now pending or threatened or proposed in any manner involving Seller or Company or the Assets of Company that, if asserted and decided adversely to Seller or Company, could materially and adversely affect the present or prospective operations or business of Company.
(j) The Company has never issued any security covered by a registration statement filed with the SEC pursuant to the Securities Act of 1933, as amended, or the Investment Company Act of 1940, as amended, and no security issued by Company has ever been registered pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(k) The Company is under the control of one (1) director as described in Exhibit E, and all minute books of board meetings and other actions of the members/managers and committees thereof are contained in the Data Room.
(l) All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by Seller directly with Buyer and without the intervention of any other person and in such manner as not to give rise to any valid claim against any of the Parties for any finder’s fee, brokerage commission, or like payment.
(m) No statement by Seller or Company contained in this Agreement and no written statement contained in any certificate or other document required to be furnished by Seller, Company or any counsel or other agent of Seller or Company to Buyer made pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements therein contained not misleading.
(n) All financial documentation and information delivered by Seller or Company and Company to Buyer have been prepared in accordance with generally accepted accounting principles, and fairly and accurately reflect the financial position of Company. There are no undisclosed financial obligations of Company which might adversely affect the value of the Assets to Buyer.
(o) Exhibits B-D are true and correct copies of the Notes and Security Agreements attached hereto as of the dates set forth therein and as of the Effective Date and Closing Date.
(p) Neither Seller nor Company is in breach or default of the BYP Note or BYP Security Agreement as of the Effective Date or the Closing Date.
(q) Neither Seller nor Company is in breach or default of Seller’s Junior Note, Seller’s Junior Security Agreement, TicketStub.com Note, or TicketStub.com Security Agreement as of the Effective Date or the Closing Date.
(r) The Extension Fee, as that term is defined in the recitals of the BYP Note attached hereto as Exhibit B, has been paid or caused to be paid by Seller and Company.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 10 OF 31 |
(s) There is no other class or series of capital stock of Company other than the 100,000 shares of Company Stock authorized, issued, or outstanding, including, but not limited to, any options, warrants, convertible debt, or other rights agreement for the issuance of any such capital stock.
4.02 Representations and Warranties by Buyer. Buyer represents and warrants to Seller as follows:
(a) Buyer has full authority, power, and legal right to enter into this Agreement and acquire the Subject Shares, along with certain assets held by Company as identified as the Assets.
(b) All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by Buyer directly with Seller and without the intervention of any other person, except for each Parties’ counsel, and in such manner as not to give rise to any valid claim against any of the Parties for any finder’s fee, brokerage commission, or like payment.
(c) No statement by Buyer contained in this Agreement and no written statement contained in any certificate or other document required to be furnished by Buyer or any counsel or other agent of Buyer to Seller made pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements therein contained not misleading.
(d) Buyer has conducted its own due diligence and sought independent third-party advice and is entering into this Agreement based upon Buyer’s independent judgment and the documents provided by Seller. Buyer is not relying upon any representations of Seller not contained herein (collectively, “Due Diligence”).
(e) Buyer is not aware of any matter that might give rise to a claim against Seller under the Representations and Warranties given by Seller to Buyer under this Agreement.
(f) As at the Closing, Buyer is fully compliant with all Nasdaq listing and maintenance requirements, free of any pending or current deficiency or delinquency notices, except with respect to any such deficiency or delinquency notice arising out of any prior issuances of shares of LTRY common stock or rights of exercise or exchange into or for such common stock pursuant to an issuer stock option, rights, or incentive plan.
(g) As at the Closing, Buyer is fully compliant with all SEC reporting requirements pursuant to the Exchange Act and otherwise.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 11 OF 31 |
Article
V.
CONDITIONS PRECEDENT
5.01 Conditions Precedent to Seller’s Obligation to Sell the Subject Shares. The obligation of Seller to sell the Subject Shares is subject to the fulfillment prior to or at the Closing of the following conditions:
(a) There will not be any uncured material error, misstatement, or omission in the representations and warranties made by Buyer in this Agreement; all representations and warranties by Buyer contained in this Agreement or in any written statement delivered by Buyer to Seller pursuant to this Agreement will be true in all material respects at and as of the Closing as though such representations and warranties were made at and as of said.
(b) Buyer will have performed and complied with all the terms, provisions, and conditions of this Agreement to be performed and complied with by Buyer at or before the Closing including, but not limited to, this Section 5.01.
(c) Buyer will pay the Purchase Price within the timelines mentioned under this Agreement.
5.02 Conditions Precedent to Buyer’s Obligation to Purchase the Stock. The obligation of Buyer to purchase the Subject Shares is subject to the fulfillment prior to or at the Closing of the following conditions:
(a) There will not be any uncured material error, misstatement, or omission in the representations and warranties made by Seller or Company in this Agreement; all representations and warranties by Seller or Company contained in this Agreement or in any written statement delivered by Seller and Company to Buyer pursuant to this Agreement will be true in all material respects at and as of the Closing as though such representations and warranties were made at and as of said time (except as contemplated by this Agreement and to the extent, if any, Buyer will waive the same);
(b) Seller and Company will have performed and complied with all the terms, provisions, and conditions of this Agreement to be performed and complied with by Seller at or before the Closing.
Article
VI.
TERMINATION
6.01 Termination by Buyer. Buyer may, without liability to Seller or Company, terminate this Agreement by written notice to Seller: (i) at any time prior to the Closing if default occurs by Seller or Company in the observance or in the due and timely performance of any of the terms hereof to be performed by Seller or Company that cannot be cured at or prior to the Closing; or (ii) at the Closing if any of the conditions precedent to the performance of Seller’s or Company’s obligations at the Closing will not have been fulfilled, including, but not limited to, the condition precedent contained in Section 5.02(a). In the event of such termination due to an uncured default by Seller or Company, or non-fulfillment of conditions precedent by Seller or Company pursuant to Section 5.01, by the Closing Date, Seller will pay Buyer liquidated damages in the amount of Fifty Thousand Dollars ($50,000 USD) (the “Earnest Money”).
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 12 OF 31 |
6.02 Termination by Seller. Seller may, without liability to Buyer, terminate this Agreement by written notice to Seller: (i) at any time prior to the Closing if default will be made by Buyer in the observance or in the due and timely performance of any of the terms hereof to be performed by Buyer that cannot be cured at or prior to the Closing; (ii) at the Closing if any of the conditions precedent to the performance of Buyer’s obligations at the Closing will not have been fulfilled, including, but not limited to, the condition precedent contained in Section 5.01; (iii) if Buyer fails to pay the Purchase Price in accordance with Section 1.03 of this Agreement; or (iv) if Buyer breaches any terms of this Agreement. In the event of such termination due to an uncured default by Buyer or non-fulfillment of conditions precedent by Buyer pursuant to Section 5.02: (i) the Extension Fee (if applicable) will be forfeited by Buyer; (ii) Seller will not be liable to refund any amounts under this Agreement; and (iii) Seller will be relieved from any further obligation under this Agreement.
6.03 Effect of Termination. Except as set forth in Section 6.03 below, if this Agreement is terminated for any reason whatsoever, this Agreement will no longer be of any force or effect, and there will be no liability on the part of any Party except, in the case of termination because of a material default or material breach resulting from the willful fault of another Party, the aggrieved Party or Parties may recover from the defaulting Party the amount of expenses incurred by such aggrieved party or Parties in connection with this Agreement and the transactions contemplated hereby which the aggrieved Party or Parties would otherwise have to bear. If this Agreement is terminated, each Party will: (i) redeliver all documents, work papers, and other materials of any other Party relating to the transactions contemplated hereby, whether so obtained before or after the execution of this Agreement, to the Party furnishing the same; and (ii) destroy all documents, work papers, and other materials developed by its accountants, agents, and employees in connection with the transactions contemplated hereby that embody proprietary information or trade secrets furnished by any party hereto or deliver such documents, work papers, and other materials to the Party furnishing the same or excise such information or secrets therefrom and all information received by any Party hereto with respect to the business of any other Party or any of its subsidiaries (other than information that is a matter of public knowledge or that has heretofore been or is hereafter published in any publication for public distribution or filed as public information with any governmental authority) will not at any time be used for personal advantage or disclosed by such Party to any third person to the detriment of the Party furnishing such information or any of its subsidiaries.
6.04 Survival. Notwithstanding the Closing or any other provision of this Agreement to the contrary: (i) Section 1.03 (Consideration) of this Agreement will survive until all obligations set forth therein have been fully satisfied and extinguished; and (ii) Section 7.03 (Survival of Representations and Warranties), Section 7.08 (Indemnity), and Section 7.13 (Confidential Information) of this Agreement will survive in perpetuity unless otherwise provided therein.
Article
VII.
OTHER PROVISIONS
7.01 Post-Closing Obligations. Buyer will pay all Asset transfer costs and monthly operating costs for Company after the Closing Date (the “Post-Closing Operating Costs”), subject to Buyer’s written approval.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 13 OF 31 |
7.02 Commercial Licenses and Permits Held by Company. Each of Seller and Company represents that, other than as evidenced in the Data Room, no permits, licenses, or authorizations are required to conduct the business of Company on the Closing Date. Seller or Company will provide Buyer with copies of all permits prior to Closing for Buyer’s inspection and approval. Seller and Company warrants that Company’s permits and distributor licenses are validly issued and in full force and effect and fully authorize and allow the conduct of business by Company. Seller or Company have not received notice of default, violation, or termination under any of the permits, and all the requirements, conditions, and obligations to be performed under the permits have been fully performed as of the date hereof and will continue to be performed through the Closing Date. Seller and Company agree that all commercial licenses, permits, or authorizations held by Company for use in business will survive the stock interest transfer and this Agreement. Seller and Company agree to relinquish any and all rights to the use of these permits, licenses, and/or authorizations, and that these permits, licenses, or authorizations will remain the property of Company and be transferred to Buyer at Closing. For the purposes of this Section 7.02, “licenses”, “permits”, and “authorizations” will mean all operating authorities, licenses, certificates, and other approvals or authorizations required or desirable to conduct Seller’s wholesale business in accordance with all applicable laws, regulations, by-laws, and ordinances.
7.03 Survival of Representations and Warranties. All statements contained in any certificate or other instrument delivered by or on behalf of Seller, Company, or Buyer pursuant to this Agreement will be deemed representations and warranties hereunder by the party delivering such certificate or instrument. All representations, warranties, and agreements made by Seller, Company, and Buyer in this Agreement or pursuant hereto will survive the Closing.
7.04 Legal Fees Incurred. Whether or not the Closing is consummated, except as otherwise set forth in Section 6.03 of this Agreement, each of the Parties will pay all of its own legal, consulting and accounting fees and other expenses incurred in the preparation of this Agreement and the performance of the terms and provisions of this Agreement.
7.05 [Intentionally Omitted.]
7.06 Waiver. The Parties hereto may by written agreement: (i) extend the time for or waive or modify the performance of any of the obligations or other acts of the Parties hereto; or (ii) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement.
7.07 Entire Agreement. This Agreement embodies the entire agreement among the Parties and there have been and are no agreements, representations or warranties, oral or written among the Parties other than those set forth in this Agreement. No other writing may be introduced to determine the Parties’ intent. The Parties acknowledge that no other representations, promises or inducements exist, except as expressly set forth in these agreements. The Parties further acknowledge and understand that these agreements can be modified only through a written instrument executed by both Parties. Any other purported changes, modifications, or alterations to these agreements that are not in written form executed by both Parties will be null and void.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 14 OF 31 |
7.08 Indemnification. Seller and Company will indemnify and hold Buyer harmless from any and all liabilities under any and all obligations of Seller or Company, which arise or accrue before Closing. If Seller or Company fail to indemnify and hold the other harmless after written notice and failure to cure for thirty (30) days, such failure will be considered a default or breach of this Agreement. After Closing, Seller will indemnify Buyer and its affiliates, successors, and assigns of all causes of action in law or equity for any judgments, liens, rights, damages, costs, expenses, compensation, and direct loss monetary damages (collectively “Losses”), but excluding any potential loss of profits (whether direct or indirect), business opportunities, revenues, damage to goodwill, or any special, indirect, consequential, or pure economic loss, costs, damages, charges or expenses that have arisen before Closing or would arise as a result of transactions, dealings, or services of Seller or Company before Closing. Seller will, at its own cost, expense, and risk and responsibility promptly defend, pay, and settle all such third-party claims and actions in such manner as Buyer may reasonably deem fit and will bear and make payment of all reasonable legal costs incurred by Buyer in defending such claims. The advocates and counsels representing Buyer will be appointed at the sole discretion of Buyer, and Seller will have no say. In the event Seller does not defend, pay, or settle any of the third-party claims or actions against Buyer, Buyer will have right and be entitled, but will not be obligated, to defend, pay, or settle such third-party claims and actions, at the sole cost and risk of Seller. This right of Buyer is without prejudice to Buyer’s other rights and remedies in law or in equity. Each of the Parties hereby acknowledges and agrees that this Section 7.08 will survive the Closing and termination of this Agreement; provided, however, that this Section 7.08 will not survive if this Agreement is terminated by Seller pursuant to Section 6.02.
7.09 Pending Litigation. Seller and Company warrant and represent that neither Seller nor Company have any awareness of the existence of any actual or potential claim, demand, suit, cause of action, charge, or grievance possessed by Seller or Company that conflict with the subject matter of this Agreement. Seller and Company warrant and represent that neither Seller nor Company have assigned, authorized, or transferred (in any way, whether directly or indirectly) any claims, demands, suits, causes of action, charges, or grievances of any kind or character that Seller or Company had or may have had prior to the Effective Date or at Closing concerning the subject matter of this Agreement.
7.10 Governing Law. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE VALIDITY, CONSTRUCTIONS, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT. The Parties agree that venue of any and all disputes arising from this Agreement or in any way related to the contractual relationship between the Parties will be in the Chancery Courts of Delaware, and the Parties waive any objections to the jurisdiction of such courts. In the event of a dispute arising from this Agreement, the prevailing party will be entitled to recover reasonable attorney’s fees in addition to any other relief awarded. Subject to approval by such courts, each Party consents to remote attendance by each other Party in any court proceedings.
7.11 Headings. The headings of the articles and paragraphs and subparagraphs of this Agreement are solely for convenience and reference and will not limit or otherwise affect the meaning of any of the terms or provisions of this Agreement.
7.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be an original, but which together constitute one and the same instrument.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 15 OF 31 |
7.13 Confidential Information. Each Party will preserve and maintain all proprietary information and trade secrets of the other Party received or confirmed in documentary form by each Party pursuant to the transaction contemplated under this Agreement and will not disclose to any third person or use any such proprietary information or trade secret for personal advantage, except that each Party will be free to use and disclose all or any of such proprietary information and trade secrets that: (i) were already in such Party’s possession at the time of disclosure; (ii) are a matter of public knowledge; (iii) have been or are hereafter published other than through other Party; or (iv) are lawfully obtained by such Party from a third person without restrictions of confidentiality. The obligation of each Party contained in this Section 7.13 will terminate at the Closing, or, in the event that a Closing does not occur, will terminate five (5) years after the execution of this Agreement. On or after Closing Date, each Party will have the right to issue a press release, public statement, or other communication in relation to the transactions consummated under this Agreement without the consent of each other Party; provided, however, that such disclosures must be made in good faith and be true and correct. After the Effective Date and prior to Closing or termination of this Agreement, Buyer will be permitted to make such press releases and public filings as may be reasonably necessary or required to satisfy all material disclosure requirements under applicable securities laws; provided, however, that Buyer will give Seller reasonable notice prior to each such disclosure and an opportunity to provide comments to each draft.
7.14 No Unreasonable Interference. Prior to Closing or termination of this Agreement, Buyer will not take any action that reasonably could be expected to interfere unreasonably with the business or operations of Seller or Company.
7.15 Assignment. No Party will have the right to assign this Agreement or its rights hereunder to any third party (including affiliates of any Party) without the express written consent of each other Party.
7.16 Exclusivity and Confidentiality. Seller and Company hereby agree that this Agreement is exclusive to the Parties and that Buyer would suffer irreparable harm should the details of this Agreement be disclosed by Seller or Company. Accordingly, Seller and Company agree that all terms of this Agreement will remain confidential until publicly disclosed by Buyer. Disclosure by Seller of any term of this Agreement to any party (other than Buyer, Seller, Buyer’s counsel, or Seller’s counsel, and Seller’s shareholders who are bound to the same confidentiality obligations set forth in this Agreement) will be deemed a material breach of this Agreement, and Buyer will be entitled to all rights and remedies provided in this Agreement. It is further agreed and acknowledged by Seller that disclosure of the terms of this Agreement or the Agreement in its entirety may be required by Buyer in accordance with the rules and requirements of the SEC or Nasdaq. Such disclosure will not constitute a breach, nor will any announcements or press releases distributed by Buyer pursuant to Section 7.13 constitute a breach of this Agreement. Seller will fully cooperate with Buyer for any disclosures authorized pursuant to Section 7.13.
7.17 Severability. In the event that any provision of this Agreement is determined to be unenforceable for any reason, every other provision of this Agreement will remain in full force and effect. Notwithstanding the foregoing, the Parties will thereupon negotiate in good faith in order to agree to the modified terms of a mutually satisfactory provision, achieving as nearly as possible the same commercial effect, to be substituted for the provisions so found to be unenforceable.
7.18 Anti-Disparagement. Neither Party will disparage, derogate, undermine, embarrass, or otherwise impair the reputation, goodwill, or commercial interests of the other Party or any of its executive officers, directors, partners, or control persons, or portray the other Party or any of its executive officers, directors, partners, and control persons, in a false, competitively adverse, or poor light.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 16 OF 31 |
7.19 Notices. Notices under this Agreement will not be deemed valid unless given or served in writing and forwarded by mail, postage prepaid, addressed to the Party at the appropriate address set forth below. Such addresses may be changed from time to time by a Party by providing notice as set forth below. Notices mailed in accordance with these provisions will be deemed received on the third (3rd) day after posting.
SELLER:
Concerts
Inc.
With a copy to:
intentionally
omitted |
COMPANY:
DotCom
Ventures Inc.
With copy:
intentionally
omitted |
BUYER:
Lottery.com
Inc.
With copies to:
intentionally
omitted
and
intentionally
omitted |
Such addresses may be changed from time to time by a Party by providing notice as set forth above.
*** Signatures follow. ***
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 17 OF 31 |
EXECUTED in one or more counterparts, each of which will be deemed an original, effective July 22, 2025 (the “Effective Date”).
Seller | ||
CONCERTS INC. (“SELLER”): | ||
| By: | ||
Patrick Ogle, its President & CEO | ||
COMPANY | ||
| dotcom ventures inc. (“dvi” “COMPANY”): | ||
| By: | ||
Patrick Ogle, its President & CEO | ||
BUYER | ||
LOTTERY.COM INC. (“BUYER”): | ||
| By: | ||
Matthew McGahan, its President & CEO | ||
*** Exhibits follow. ***
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 18 OF 31 |
EXHIBIT A
ASSETS
| I. SCHEDULE OF CONCERT.COM ASSETS | ||
| A. | Licensed Assets: | |
| 1. | Domain Names. The domain name “concerts.com”. | ||
| 2. | Social Media Accounts. |
| a. | Facebook: https://www.facebook.com/concerts/. | |||
| b. | Twitter: https://x.com/concerts/. | |||
| c. | Instagram: https://instagram.com/concerts/. | |||
| d. | LinkedIn: https://www.linkedin.com/company/concerts-com/. |
| 3. | Access Rights: All top-level administrative logins, passwords, and codes for the restricted access hardware, software, and cloud-based systems related to the Concerts Assets (e.g., GoDaddy.com hosting account for concerts.com). | ||
| 4. | Contract and Vendor Assignments: All contract and vendor accounts to which ownership or license of any of the Concerts Assets are derived (e.g., GoDaddy.com hosting account for concerts.com). | ||
| B. | Quitclaim Assets: | ||
| 1. | Trademarks: | ||
| a. | Word Mark: “Concerts.com” (Serial No. 85033403) [Abandoned]. | |||
| b. | Word Mark: “Concerts.com” (Serial No. 75200228) [Abandoned]. | |||
| 2. | Trade Names: “Concerts” and “Concerts.com”. Such trade names will include all U.S. and international trademarks and trademark applications that may be derived therefrom. | |||
| II. | SCHEDULE OF TICKETSTUB.COM ASSETS | |||
| A. | Licensed Assets: | |||
| 1. | Domain Names: The domain name “TicketStub.com”, and the following related domain names: Ticketstub.com, Ticketstub.net, Ticketstub.org, Ticketstubs.com, Ticketstubs.info, Ticketstub.info, Ticketstub.us, Ticketstubs.us, Ticketstubnews.com, Ticketstubonline.com, Ticketstubsonline.com, Ticketstubclub.com, Ticketstubhub.com, Ticket-stub.com, Ticketstubtravel.com, eticketstub.com, eticketstubs.com, Ticketddtun.com, Ticketsnub.com, Ticketsstub.com, ticketstub.tv, Metaticketstubs.com, Ticketstb.com, Ticketstbu.com, Ticketstib.com, Ticketstubb.com, Tickesttub.com, Ticketstube.com, Ticketstubz.com, Ticketstuv.com, Ticketstyb.com, Ticketsub.com, Ticketsutb.com, Tickettsub.com, Tickettub.com, Ticketub.com, Tickstub.com, Ticktestub.com, wwwticketstub.com, wwwticketstubs.com, MyTicketstub.com, iticketstubs.com, TicketstubBlog.com, and Ticketstub.xyz. | |||
| 2. | Social Media Accounts: | |||
| a. | Facebook: https://www.facebook.com/ticketstubcom/. | |||
| b. | Twitter/X.com: https://x.com/TicketStub/. | |||
| c. | Instagram: https://www.instagram.com/ticketstub_com/. |
| 3. | Access Rights. All top-level administrative logins, passwords, and codes for the restricted access hardware, software, and cloud-based systems related to the TicketStub Assets (e.g., GoDaddy.com hosting account for TicketStub.com). | ||
| 4. | Contract and Vendor Assignments: All contract and vendor accounts to which ownership or license of any of the TicketStub.com Assets are derived (e.g., GoDaddy.com hosting account for TicketStub.com). | ||
| 5. | Trademark: US TM Reg. No. 3,065,118, “TICKETSTUB.COM” for “ticket agency services, namely, providing tickets for sporting events, concerts, and theater nation-wide”. | ||
| III. | SCHEDULE OF TECHNOLOGY ASSETS | ||
| A. | Vendor Accounts: | ||
| 1. | Amazon Web Services AWS.Amazon.com (data and hosting services) | ||
| 2. | 1PASSWORD (secure access management) | ||
| 3. | LARAVEL VAPOR (serverless deployment platform) | ||
| 4. | TERMLY.IO (internet disclosure compliance) | ||
| 5. | SIMPLEMAPS.COM (geographic data services) | ||
| 6. | USPS (postal services tied to internet services) | ||
| 7. | Google Ads / Adsense (advertising services) | ||
| 8. | Facebook Ads (advertising services) | ||
| 9. | Adcreative.ai (advertising creation services) |
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 19 OF 31 |
EXHIBIT A-1
SELLER AND DVI ASSET PURCHASE AGREEMENT
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 20 OF 31 |
EXHIBIT B
BYP NOTE AND BYP SECURITY
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 21 OF 31 |
EXHIBIT C
SELLER’S JUNIOR NOTE AND SELLER’S JUNIOR SECURITY AGREEMENT
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 22 OF 31 |
EXHIBIT D
TICKETSTUB.COM NOTE AND TICKETSTUB.COM SECURITY AGREEMENT
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 23 OF 31 |
EXHIBIT E
Directors
and Officers of DotCom Ventures Inc.
(the “Company” or “DVI”)
The names and respective addresses of Company directors are as follows:
| Name | Address | |
| Patrick Ogle | P.O. Box 682725 | |
| Franklin, TN 37068 |
The names and respective addresses of Company officers are as follows:
| Name | Office Held | Address | ||
| Patrick Ogle | CEO & President | P.O. Box 682725 | ||
| Franklin, TN 37068 |
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 24 OF 31 |
EXHIBIT F-1
CERTIFICATE OF SELLER
CONCERTS INC., a corporation organized and existing under the laws of the State of Nevada, and having its principal office at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701(“Seller”), makes the representations and warranties below to LOTTERY.COM INC., a corporation organized and existing under the laws of the State of Delaware, and having its principal office at 5049 Edwards Road, 4th Floor, Fort Worth, Texas 76109 (the “Buyer” or “LTRY”), in connection with the Share Purchase and Sale Agreement for DOTCOM VENTURES INC., a corporation organized and existing under the laws of the State of Nevada, and having its principal office at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701 (the “Company” or “DVI”):
(a) One Hundred Percent (100.00%) of the Company Stock is owned and possessed by Seller.
(b) Fifty-One Thousand (51,000) shares of common stock in DVI held by Seller, represent a Fifty-One Percent (51.00%) ownership and majority interest in Company (i.e., the Subject Shares).
(c) DVI is a corporation, duly organized, validly existing, and in good standing under the laws of the State of Nevada.
(d) The Company is not required to be qualified or licensed to do business as a foreign corporation in any other jurisdiction, except where the failure to be so qualified or licensed will not have a material adverse effect on the conduct of its business or the ownership or use of any of its properties or assets.
(e) Exhibit E attached to the Agreement sets forth a true and complete list of the names, addresses, and titles of the directors and officers of Company.
(f) All the Subject Shares have been duly authorized and validly issued and are fully paid and none of them was issued in violation of any preemptive or other right. The Company is not a party to or bound by any contract, agreement, or arrangement to issue, sell, or otherwise dispose of or redeem, purchase, or otherwise acquire the Subject Shares, and, except for this Agreement, there is no outstanding option, warrant, or other right to subscribe for or purchase, or contract, agreement, or arrangement with respect to the Subject Shares.
(g) Seller owns all of the Subject Shares, free and clear of all liens, claims, charges, restrictions, equities, and encumbrances of any kind and has full authority, power, and legal right to sell, assign, transfer, and deliver the same.
(h) The execution, delivery, or performance of this Agreement:
| i. | will not violate or conflict with the articles of incorporation, certificate of formation, the bylaws, or any other of the governing documents of Company; |
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 25 OF 31 |
| ii. | will not conflict with or result in any breach of or default under any provision of any contract or agreement of any kind to which Seller or Company is bound or to which any property or asset of any of them is subject; | |
| iii. | is not prohibited by any statute, law, ordinance, regulation, rule, judgment, decree, or order of any court or governmental agency; | |
| iv. | does not require Seller or Company to obtain or make any consent, authorization, approval, registration, or filing under any statute, law, ordinance, regulation, rule, judgment, decree, or order of any court or governmental agency, board, bureau, body, department or authority, or of any other person; | |
| v. | will not cause any acceleration of the maturity of any note, instrument, or other obligation to which Company is bound or with respect to which Company is an obligor or guarantor; and | |
| vi. | will not result in the creation or imposition of any lien, claim, charge, restriction, equity, or encumbrance of any kind whatsoever upon or give to any other person any interest or right (including any right of termination or cancellation) in or with respect to the Interest or any of the properties, assets, business, agreements, or contracts of Company. |
(i) All federal, state, local, and foreign tax returns, reports, and statements required to be filed by Company have been properly and timely filed with the appropriate governmental agencies in all jurisdictions in which such returns, reports, and statements are required to be filed, and all federal, state, county, city, municipal, local, foreign or other governmental taxes, levies, assessments, and charges, liens, claims, or encumbrances upon or relating to Company and its employees, payroll, income, gross receipts, and assets and assets have been paid, including any penalties and interest.
(j) There are no actions, suits, proceedings, or investigations, either at law or in equity, or before any commission or other administrative authority in the United States or any foreign jurisdiction, of any kind now pending or threatened or proposed in any manner involving Seller or Company or the assets of Company that, if asserted and decided adversely to Seller or Company, could materially and adversely affect the present or prospective operations or business of Company.
(k) The Company has complied with and is in compliance with all federal, state, local, and foreign statutes, laws, environmental laws, ordinances, regulations, rules, permits, judgments, orders, and decrees applicable to it or any of its properties, assets, operations, and businesses, and there does not exist any basis for any claim of default under or violation of any such statute, law, ordinance, regulation, rule, judgment, order, or decree. The Company has received no opinion or memorandum or legal advice from any legal counsel to the effect that it is exposed to any liability or disadvantage that is or may be material to Company.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 26 OF 31 |
(l) The Company has never issued any security covered by a registration statement filed with the SEC pursuant to the Securities Act of 1933, as amended, or the Investment Company Act of 1940, as amended, and no security issued by Company has ever been registered pursuant to the Exchange Act.
(m) All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by Seller directly with Buyer and without the intervention of any other person, other than the individual Parties’ counsel, and in such manner as not to give rise to any valid claim against any of the Parties for any finder’s fee, brokerage commission, or like payment.
(n) No statement by Seller contained in this Agreement and no written statement contained in any certificate or other document required to be furnished by Seller or any counsel or other agent of Seller to Buyer made pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements therein contained not misleading.
(o) The Company is under the control of one (1) director as described in Exhibit E, and all minute books of board meetings and other actions of the members/managers and committees thereof are contained in the Data Room.
(p) All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by Seller directly with Buyer and without the intervention of any other person and in such manner as not to give rise to any valid claim against any of the Parties for any finder’s fee, brokerage commission, or like payment.
(q) No statement by Seller or Company contained in this Agreement and no written statement contained in any certificate or other document required to be furnished by Seller, Company, or any counsel or other agent of Seller or Company to Buyer made pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements therein contained not misleading.
(r) All financial documentation and information delivered by Seller or Company and Company to Buyer have been prepared in accordance with generally accepted accounting principles, and fairly and accurately reflect the financial position of Company. There are no undisclosed financial obligations of Company that might adversely affect the value of the Assets to Buyer.
(s) Exhibits B-D attached to the Agreement are true and correct copies of the Notes and Security Agreements attached hereto as of the dates set forth therein and as of the Effective Date and Closing Date.
(t) Neither Seller nor Company is in breach or default of the BYP Note or BYP Security Agreement as of the Effective Date or the Closing Date.
(u) Neither Seller nor Company is in breach or default of Seller’s Junior Note, Seller’s Junior Security Agreement, TicketStub.com Note, or TicketStub.com Security Agreement as of the Effective Date or the Closing Date.
(v) The Extension Fee, as that term is defined in the recitals of the BYP Note attached to the Agreement as Exhibit B, has been paid or caused to be paid by Seller and Company.
(w) There is no other class or series of capital stock of Company other than the 100,000 shares of Company Stock authorized, issued, or outstanding, including, but not limited to, any options, warrants, convertible debt, or other rights agreement for the issuance of any such capital stock.
Capitalized terms used but not defined in this Certificate of Seller have the meanings attributed to them in the Agreement. In the event of any discrepancy between the Agreement and this Certificate of Seller, the representations and warranties contained in this Certificate of Seller will govern, control, and prevail.
“The representations, statements and other statements made in this Certificate of Seller are true and correct, to the best of my personal knowledge.”
Concerts Inc. |
(This page is intentionally left blank.)
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 27 OF 31 |
EXHIBIT F-2
CERTIFICATE OF COMPANY
DOTCOM VENTURES INC., a corporation organized and existing under the laws of the State of Nevada, and having its principal office at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701 (the “Company” or “DVI”), makes the representations and warranties below to LOTTERY.COM INC., a corporation organized and existing under the laws of the State of Delaware, and having its principal office at 5049 Edwards Road, 4th Floor, Fort Worth, Texas 76109 (the “Buyer” or “LTRY”), in connection with the Share Purchase and Sale Agreement for DVI:
(a) One Hundred Percent (100.00%) of the Company Stock is owned and possessed by Seller.
(b) Fifty-One Thousand (51,000) shares of common stock in DVI held by Seller, represent a Fifty-One Percent (51.00%) ownership and majority interest in Company (i.e., the Subject Shares).
(c) DVI is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada.
(d) The Company is not required to be qualified or licensed to do business as a foreign corporation in any other jurisdiction, except where the failure to be so qualified or licensed will not have a material adverse effect on the conduct of its business or the ownership or use of any of its properties or assets.
(e) That attached Exhibit E of the Agreement sets forth a true and complete list of the names, addresses and titles of the directors and officers of Company.
(f) All the Subject Shares have been duly authorized and validly issued and are fully paid and none of them was issued in violation of any preemptive or other right. The Company is not a party to or bound by any contract, agreement, or arrangement to issue, sell, or otherwise dispose of or redeem, purchase, or otherwise acquire the Interest, and, except for this Agreement, there is no outstanding option, warrant, or other right to subscribe for or purchase, or contract, agreement, or arrangement with respect to the Interest.
(g) Seller owns all of the Subject Share, free and clear of all liens, claims, charges, restrictions, equities, and encumbrances of any kind and has full authority, power, and legal right to sell, assign, transfer, and deliver the same.
(h) The execution, delivery, or performance of this Agreement:
| i. | will not violate or conflict with the articles of incorporation, certificate of formation, the bylaws, or any other of the governing documents of Company; |
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 28 OF 31 |
| ii. | will not conflict with or result in any breach of or default under any provision of any contract or agreement of any kind to which Seller or Company is bound or to which any property or asset of any of them is subject; | |
| iii. | is not prohibited by any statute, law, ordinance, regulation, rule, judgment, decree, or order of any court or governmental agency; | |
| iv. | does not require Seller or Company to obtain or make any consent, authorization, approval, registration, or filing under any statute, law, ordinance, regulation, rule, judgment, decree, or order of any court or governmental agency, board, bureau, body, department, or authority, or of any other person; | |
| v. | will not cause any acceleration of the maturity of any note, instrument, or other obligation to which Company is bound or with respect to which Company is an obligor or guarantor; and | |
| vi. | will not result in the creation or imposition of any lien, claim, charge, restriction, equity, or encumbrance of any kind whatsoever upon or give to any other person any interest or right (including any right of termination or cancellation) in or with respect to the Interest or any of the properties, assets, business, agreements, or contracts of Company. |
(i) All federal, state, local, and foreign tax returns, reports, and statements required to be filed by Company have been properly and timely filed with the appropriate governmental agencies in all jurisdictions in which such returns, reports, and statements are required to be filed, and all federal, state, county, city, municipal, local, foreign, or other governmental taxes, levies, assessments, and charges, liens, claims, or encumbrances upon or relating to Company and its employees, payroll, income, gross receipts, and assets and assets have been paid, including any penalties and interest.
(j) There are no actions, suits, proceedings, or investigations, either at law or in equity, or before any commission or other administrative authority in the United States or any foreign jurisdiction, of any kind now pending or threatened or proposed in any manner involving Seller or Company or the assets of Company that, if asserted and decided adversely to Seller or Company, could materially and adversely affect the present or prospective operations or business of Company.
(k) The Company has complied with and is in compliance with all federal, state, local, and foreign statutes, laws, environmental laws, ordinances, regulations, rules, permits, judgments, orders, and decrees applicable to it or any of its properties, assets, operations, and businesses, and there does not exist any basis for any claim of default under or violation of any such statute, law, ordinance, regulation, rule, judgment, order, or decree. The Company has received no opinion or memorandum or legal advice from any legal counsel to the effect that it is exposed to any liability or disadvantage that is or may be material to Company.
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 29 OF 31 |
(l) The Company has never issued any security covered by a registration statement filed with the SEC pursuant to the Securities Act of 1933, as amended, or the Investment Company Act of 1940, as amended, and no security issued by Company has ever been registered pursuant to the Exchange Act.
(m) All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by Seller directly with Buyer and without the intervention of any other person, other than the individual Parties’ counsel, and in such manner as not to give rise to any valid claim against any of the Parties for any finder’s fee, brokerage commission, or like payment.
(n) No statement by Seller contained in this Agreement and no written statement contained in any certificate or other document required to be furnished by Seller or any counsel or other agent of Seller to Buyer made pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements therein contained not misleading.
(o) Exhibits B-D attached to the Agreement are true and correct copies of the Notes and Security Agreements attached hereto as of the dates set forth therein and as of the Effective Date and Closing Date.
(p) Neither Seller nor Company is in breach or default of the BYP Note or BYP Security Agreement as of the Effective Date or the Closing Date.
(q) Neither Seller nor Company is in breach or default of Seller’s Junior Note, Seller’s Junior Security Agreement, TicketStub.com Note, or TicketStub.com Security Agreement as of the Effective Date or the Closing Date.
(r) The Extension Fee, as that term is defined in the recitals of the BYP Note attached to the Agreement as Exhibit B, has been paid or caused to be paid by Seller and Company.
(s) There is no other class or series of capital stock of Company other than the 100,000 shares of Company Stock authorized, issued, or outstanding, including, but not limited to, any options, warrants, convertible debt, or other rights agreement for the issuance of any such capital stock.
Capitalized terms used but not defined in this Certificate of Seller have the meanings attributed to them in the Agreement. In the event of any discrepancy between the Agreement and this Certificate of Seller, the representations and warranties contained in this Certificate of Seller will govern, control, and prevail.
(The remainder of this page is left intentionally blank. Signature and notary page to follow.)
“The representations, statements and other statements made in this Certificate of Company are true and correct, to the best of my personal knowledge.”
DotCom Ventures Inc. |
(This page is intentionally left blank.)
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 30 OF 31 |
EXHIBIT F-3
CERTIFICATE OF BUYER
LOTTERY.COM INC., a corporation organized and existing under the laws of the State of Delaware, and having its principal office at 5049 Edwards Road, 4th Floor, Fort Worth, Texas 76109 (the “Buyer” or “LTRY”), hereby makes the representations and warranties below to CONCERTS INC., a corporation organized and existing under the laws of the State of Nevada, and having its principal office at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701(“Seller”) in connection Share Purchase and Sale Agreement for DOTCOM VENTURES INC., a corporation organized and existing under the laws of the State of Nevada, and having its principal office at 701 S. Carson Street, Suite 200, Carson City, Nevada 89701 (the “Company” or “DVI”):
(a) Buyer has full authority, power, and legal right to enter into this Agreement and acquire the shares of the outstanding interest in Company, along with certain assets held by Company.
(b) All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by Buyer directly with Seller and without the intervention of any other person, except for the individual Parties’ counsel, and in such manner as not to give rise to any valid claim against any of the Parties for any finder’s fee, brokerage commission, or like payment.
(c) No statement by Buyer contained in this Agreement and no written statement contained in any certificate or other document required to be furnished by Buyer or any counsel or other agent of Buyer to Seller made pursuant to or in connection with this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements therein contained not misleading.
(d) Buyer will pay the Purchase Price and True-Up consideration in a timely manner as per the terms of this Agreement, including pursuant to Section 1.03 of this Agreement.
(e) As at the Closing, Buyer is fully compliant with all Nasdaq listing and maintenance requirements, free of any pending or current deficiency or delinquency notices, except with respect to any such deficiency or delinquency notice arising out of any prior issuances of shares of LTRY common stock or rights of exercise or exchange into or for such common stock pursuant to an issuer stock option, rights, or incentive plan.
(f) As at the Closing, Buyer is fully compliant with all SEC reporting requirements pursuant to the Exchange Act and otherwise.
Capitalized terms used but not defined in this Certificate of Buyer have the meanings attributed to them in the Agreement. In the event of any discrepancy between the Agreement and this Certificate of Buyer, the representations and warranties contained in this Certificate of Buyer will govern, control, and prevail.
(The remainder of this page is left intentionally blank. Signature and notary page to follow.)
“The representations, statements and other statements made in this Certificate of Buyer are true and correct, to the best of my personal knowledge.”
Lottery.com Inc. |
(This page is intentionally left blank.)
| SHARE PURCHASE AND SALE AGREEMENT FOR DOTCOM VENTURES INC. |
| PAGE 31 OF 31 |
Exhibit 10.50
Exhibit 10.51
Exhibit 10.71
Exhibit 10.72
Exhibit 10.73
Exhibit 10.74
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Matthew McGahan, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10Q of Lottery.com Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 19, 2025 | By: | /s/ Matthew McGahan |
| Matthew McGahan | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert J. Stubblefield, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10Q of Lottery.com Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 19, 2025 | By: | /s/ Robert J. Stubblefield |
| Robert J. Stubblefield | ||
| Chief Financial Officer | ||
| (Principal Financial/Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SS. 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report of Lottery.com Inc. (the “Company”) on Form 10Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Matthew McGahan, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
| Date: August 19, 2025 | By: | /s/ Matthew McGahan |
| Matthew McGahan | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SS. 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report of Lottery.com Inc. (the “Company”) on Form 10Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Robert J. Stubblefield, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
| Date: August 19, 2025 | By: | /s/ Robert J. Stubblefield |
| Robert J. Stubblefield | ||
| Chief Financial Officer | ||
| (Principal Financial/Accounting Officer) |