Lottery.com regains Nasdaq compliance
In an update, Lottery.com says Nasdaq’s Listing Qualifications Department confirmed the broker evidenced compliance with minimum bid price requirements.
Nasdaq Listing Rule 5450(a)(1) states ordinary shares cannot fall below $1.00 over the previous 30 consecutive business days. Nasdaq contacted Lottery.com in August last year to say that it had breached this rule.
The provider was also flagged for breaching Listing Rule 5250(c), which requires companies to file accounts by set deadlines. Lottery.com was late submitting its Q2 report last year, with Nasdaq at the time warning it could face de-listing.
Lottery.com responds to Nasdaq warnings
To appease Nasdaq, Lottery.com has taken action in recent months to move back in line with stock market rules and regulations.
This included a reverse stock split, overwhelmingly approved by its shareholders last month. Lottery.com’s board then voted to approve a 1-for-20 reverse split, which became effective at the close of trading on 9 August.
In June, the Nasdaq Hearings Panel gave Lottery.com until 15 June 2023 to file an annual report on Form 10-K for the year ended 31 December 2022 and a quarterly report on Form 10-Q for the period to 31 March 2023.
The panel also gave the provider until 24 August to regain compliance with minimum bid requirements so that it could continue trading. This requires shares to be at least $1.00 for at minimum of 10 consecutive business days.
A notification letter received by Lottery.com on 8 September confirmed it had hit this target. Shares had a closing bid price at or greater than the $1.00 for the 10 business days from 10 to 31 August.
As such, Lottery.com was ruled to have regained compliance with the minimum bid price rule. In addition, Nasdaq said Lottery.com was again in compliance with periodic filing rules.
Lottery.com’s share price jumped as high as $4.15 when the news broke on Tuesday before closing at $3.63.
Welcome boost for troubled Lottery.com
The news come against a backdrop of ongoing uncertainty at Lottery.com, which in July lost another CEO. Mark Gustavson stepped down after only taking on the role in February. Chairman Matthew McGahan is currently in temporary charge.
Gustavson had been appointed to replace Sohail Quraeshi. Incidentally, Quraeshi also only held the position for a few months, after he was named as permanent CEO in October of 2022 following an interim spell.
Lottery.com also recently named Robert Stubblefield as its new chief financial. In addition, Paul Jordan and Tamer Hassan were appointed as independent members of the board.
The provider has long been seeking to steady its ship after a tough few years. However, in May the business revealed it faces “material weakness” regarding its accounting non-compliance in the face of ongoing class action.
In its Q2 2022 report, the business outlined issues concerning the effectiveness of its controls and procedures in reporting financial results. This all linked to an overstatement of revenue in July 2022. Ultimately, this led to the resignation of chief revenue officer Matthew Clemenson, with CEO Lawrence DiMatteo stepping down soon after.
In March, the business became the subject of a legal challenge from the founders of lottery data business TinBu. John Brier and Bin Tu filed a lawsuit alleging Lottery.com failed to give them promised compensation after the company was acquired.
The suit says Lottery.com failed to make the first of certain payments promised under a deal with TinBu. It also said the business failed to deliver promised tokens.
Former chair openly criticises Lottery.com
These struggles have been well documented. When McGahan’s predecessor Richard Kivel resigned, he said it had become “impossible” to perform as an independent director. At the time, Kivel said his efforts to turn round the fortunes of the business had been “aggressively obstructed”.
In a resignation letter, Kivel said emergency funding from Woodford Eurasia had not arrived, with no sign of it forthcoming. He also said the chief compliance officer of the business was under FBI investigation.
Kivel had been a member of the Lottery.com board since November of 2021. He remained at the business amid ongoing issues within the business that led other board members to resign in September 2022.