A July 28 filing with the Securities and Exchange Commission (SEC) indicated that the popular lottery tracking website Lottery.com is having serious solvency issues.
The Board of Directors determined the cash flow issues are so serious there might not be enough funds for the company to survive the next year. The company is currently $425,000 behind on payroll and began furloughing employees on Friday.
The company was pessimistic about the near-term, and expressed as much in the 8-K filing:
“The Company’s inability to pay this amount may result in employees terminating their relationship with the Company and/or pursuing legal remedies. 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 is traded on NASDAQ as LTRY. After this latest news, the stock prices sank to a record low of $0.28. As recently as November of last year, shares was valued as high as $15.70
Lottery.com CEO departed last week
As we reported previously, Lottery.com CEO Tony DiMatteo resigned a week ago in the wake of financial issues that already drove share prices down. He is staying on as a consultant with compensation of $1,000 per month for every month he provides service to the organization.
That small number makes more sense with the news the company lacks the funds necessary to continue operating. The 8-K states that, without an additional source of capital, Lottery.com will likely not survive.
Bad timing with Mega Millions drawing
The timing comes as one of the largest Mega Millions jackpots in history drove interest in ticket purchasing and winning numbers, which Lottery.com provides on its app and website. Even though there was a winning ticket sold in Illinois, the results and numbers from Friday’s drawing were not showing on the Lottery.com website at time of publication.