The board also outlined in strong language the company’s precarious position, saying that it “does not currently have sufficient financial resources to fund its operations or pay certain existing obligations, including its payroll and related obligations.”
“The company’s inability to pay this amount may result in employees terminating their relationship with the company and/or pursuing legal remedies,” it continued.
“As of July 29, 2022, the company owed approximately $425,000 in outstanding payroll obligations.”
The board’s analysis on the consequences of this inability to meet its payroll obligations cast significant doubt on Lottery.com’s ability to continue functioning in its present state.
“Since the company’s business is dependent on the efforts and talents of its employees, particularly its developers and engineers, and the provision of ongoing services to customers by its employees, a material loss of its employee base may result in the inability of the company to operate its technology, meet its obligations to customers, the loss of key customer relationships and revenue and claims for breach of contractual obligations.”
Lottery.com chief legal and operating officer Katherine Lever – the only C-level employee remaining after a wave of exits – signed the filing declaration.
The news follows a report on the 19 July that Lottery.com revealed it had “overstated” its cash holdings by $30m following the sacking of its president and CFO, Ryan Dickinson.
This came in the wake of a review where it found “instances of non-compliance with state and federal laws concerning the state in which tickets are procured.”
The saga has left hanging questions over the business’ compliance and accounting practices.
Chief executive Tony DiMatteo also resigned last week.
The news of financial irregularities has been devastating to the business’ share price – falling from 0.81 to 0.41 today since the start of trading, a decline of 48.44%.
The news follows the announcement of just the fourth ever Mega Millions jackpot over $1 billion, which ordinarily would lead to significantly increased business for Lottery.com.