The board of Lottery.com emphasized the company’s precarious financial situation, stating that it currently lacks the necessary funds to support its operations and fulfill certain obligations, including payroll. Failure to meet these obligations may lead to employee departures and potential legal action. As of July 29, 2022, the company owed approximately $425,000 in outstanding payroll. This financial predicament raises concerns about Lottery.com’s ability to continue operating effectively.
Lottery.com’s dependency on its employees, particularly its developers and engineers, as well as the ongoing provision of services to customers, makes a substantial loss of its workforce detrimental. Such a loss could result in the company being unable to operate its technology, fulfill its customer obligations, maintain key customer relationships, generate revenue, and face claims for breach of contracts. Only Katherine Lever, the Chief Legal and Operating Officer, remains as a C-level employee after several departures.
A report on July 19 revealed that Lottery.com had overstated its cash holdings by $30 million following the dismissal of its President and CFO, Ryan Dickinson. An internal review identified instances of non-compliance with state and federal laws relating to ticket procurement. The company’s compliance and accounting practices have come under scrutiny as a result. Additionally, Chief Executive Tony DiMatteo resigned last week.
The news of these financial irregularities has had a devastating impact on the business’s share price, which has declined from 0.81 to 0.41 since the start of trading, representing a 48.44% drop. This decline occurs despite the announcement of the fourth ever Mega Millions jackpot surpassing $1 billion, which would typically result in a significant increase in business for Lottery.com.
