Lottery.com has expressed ‘substantial’ doubts over its future following serious solvency issues that have rocked the firm in recent months.
The situation has become so severe that the online lottery retailer has even suggested liquidation as a means of ending the turbulent financial picture.
Lottery.com has now declared that it is unable to file its quarterly report for the period ended June 30, 2022, by the prescribed date of August 15.
“The company anticipates that there will be significant changes in the results of operations for the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021, including a significant decrease in the company’s revenue,” Lottery.com explained in an SEC filing.
Issues at Lottery.com have arisen, chiefly, from overstating its available unrestricted cash balance by approximately $30m and, in the prior fiscal year, improperly recognising revenue in the same amount.
As a result of an independent investigation into the company’s internal accounting controls, the Lottery.com Board terminated the employment of its President, Treasurer and Chief Financial Officer, Ryan Dickinson, effective July 1, 2022.
Later in the month, CEO Tony DiMatteo resigned with immediate effect as the turmoil at Lottery.com showed no signs of abating.
Shortly after, it was reported that the company was $425,000 behind on payroll and was beginning to furlough its employees.
Lottery.com was also advised by Armanino, its registered independent public accountant for the fiscal years ended December 31, 2022 and December 31, 2021, that the audited financial statements for the year ended December 31, 2021, and the unaudited financial statements for the quarter ended March 31, 2022, should no longer be relied upon.
Addressing its recent inability to file its quarterly report, Lottery.com stated: “As the company’s capital resources are not sufficient to fund its operations for a twelve-month period, there is substantial doubt about the company’s ability to continue as a going concern.
“If the company is not able to secure additional capital resources or otherwise fund its operations, the company will be forced to wind down some or all of its operations and pursue options for liquidating the company’s assets, including equipment and intellectual property.”
“As a result, the company has not yet finalised its reviews of its financial statements or its assessment of the impact of the findings of the ongoing review of the company’s internal accounting controls on its historical financial statements or for the financial statements for the quarter ended June 30, 2022, and is therefore unable to file the Form 10- Q on a timely basis.”
Lottery.com further added that it would be unable to file the report within five calendar days following the prescribed date, but said it would be ‘as soon as practicable’.