Online lottery ticket sales platform Lottery.com has been issued another official warning by Nasdaq, this time because of the late filing of its third quarter results.
Lottery.com was required to file its quarterly statement with the US Securities and Exchange Commission (SEC) via a Form 10-Q but said it has been unable to do so as it has not yet completed an evaluation of an ongoing review into its accounting controls.
The operator gave the same reason for not filing its second quarter results on time earlier this year.
Lottery.com said it is working towards filing the Form 10-Q for Q3 as soon as possible, but the late filing means the operator remains out of compliance with Nasdaq rules, specifically Nasdaq Listing Rule 5250(c)(1) that requires timely filing of periodic financial reports with the SEC.
Nasdaq said in order to regain compliance with the Listing Rule, Lottery.com must submit an update to its original plan.
The late filing notice, dated 16 November and received by Lottery.com on November 28, said a business usually has 60 calendar days to regain compliance. However, this deadline was shortened to require Lottery.com to submit a new plan by today (December 1).
“While the company can provide no assurances as to timing, the company plans to file the Form 10-Q’s as soon as practicably possible to regain compliance with the Listing Rule,” Lottery.com said.
The warning marks the latest incident in what has been a turbulent year for Lottery.com.
Lottery.com crisis
The operator’s troubles began back in July with the sacking of its president and CFO in response to instances of non-compliance with state and federal laws, while the business also found that its cash holdings were overstated by $30m.
Later in the same month, Lottery.com said it was not able to pay employee wages and admitted in an SEC filing that as of 29 July 2022 it owed $425,000 in outstanding pay.
As part of an effort improve its fortunes, Lottery.com attempted to secure funding from Woodford Eurasia, a subsidiary of investment firm United International Holdings Netherlands BV.
The investor demanded four of the five remaining members of the Lottery.com board resign as part of the terms of the loan. This led to two board members quitting in protest after claiming the company deliberately “thwarted” attempts to look into “red flags” raised regarding the new investor.
It was amid this turmoil that Armanino resigned as auditors and was replaced by Yusufali & Associates LLC last month.
Last month, Richard Kivel stepped down as chairman, saying it had become “impossible” to perform as an independent director as his efforts to turn round the fortunes of the business had been “aggressively obstructed”.
Just days later, Lottery.com confirmed Matthew McGahan as chairman and announced Sohail Quraeshi as chief executive on a full-time basis.
Quraeshi was brought in on an interim basis in October and had also been serving on the board of directors. He will now take on the role permanently.
McGahan joined Lottery.com as an independent director of its board in October.
