Another Lottery.com director exits, after less than two months on board
Lottery.com did not give a reason for Rustom’s departure but did confirm the resignation was effective immediately from the date it was submitted (7 December).
The resignation was accepted and Lottery.com said that it would seek to fill the vacant role within the next few weeks.
Rustom exits despite having only been appointed as an outside director in October, when he joined the Lottery.com board at the same time as Vladimir Klechtchev. At the time, this fulfilled Nasdaq’s requirements that the company had at least three members of the board.
The latest departure comes in what has been a year of great change at Lottery.com, with the business having experienced a turbulent 12 months.
Ongoing issues at Lottery.com
The upheaval began in July when Lottery.com sacked its president and CFO over instances of non-compliance with state and federal laws, while the business also found that its cash holdings were overstated by $30m.
Also in July, 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.
In an effort to improve its fortunes, Lottery.com attempted to secure funding from Woodford Eurasia, a subsidiary of investment firm United International Holdings Netherlands BV. However, the investor demanded four of the five remaining members of Lottery.com’s 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 also 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”.
Days later, Lottery.com confirmed Matthew McGahan as chairman and announced Sohail Quraeshi as chief executive on a full-time basis. Quraeshi was initially brought in on an interim basis in October and had also been serving on the company’s board.
McGahan joined Lottery.com as an independent director of its board in October.
Earlier this month, Lottery.com was 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.
In other news, Lottery.com’s new Sports.com subsidiary secured two new partnerships over the past two weeks with the Saudi Motorsport Company and sports content provider Data Sports Group. The brand was only launched in November.