Item 9A. Controls and Procedures
Item
9A. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
As
previously disclosed, in connection with the filing of the Company’s Annual Report on Form 10-K for the year ended December 31,
2021 (the “Original 2021 Annual Report”) on April 1, 2022, our management, with the participation of our then Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021. Based on their evaluation, our then Chief Executive Officer
and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective due to
material weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process.
In
connection with the filing of Amendment No. 1 to the Company’s Annual Report on Form 10-K/A for the year ended December 31,
2021 (the “Amended 2021 Annual Report”), our management, with the participation of our Chief Executive Officer,
reevaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of December 31, 2021 and determined they were not effective due to the material weaknesses in our internal control over financial reporting
with respect to our financial statement close and reporting process. Our disclosure and procedures are designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer, to allow timely decisions regarding required disclosures.
Management’s
Report on Internal Control Over Financial Reporting
Management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible
controls and procedures. In connection with this Report, our management, with the participation of our Chief Executive Officer,
reevaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of December 31, 2022. Based on such reevaluation, our Chief Executive Officer concluded that, as of the
end of the period covered by this Report, our disclosure controls and procedures were still not effective due to the material
weaknesses in our internal control over financial reporting with respect to our financial statement close and reporting process, as
described further below. As a result of this conclusion, we retained third-party accounting consultants who performed additional
analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management
believes that the financial statements included in this Report present fairly in all material respects our financial position,
results of operations and cash flows for the periods presented. The issues which were identified during the initial and subsequent review continued until the new management team
for the company began addressing them in the fall of 2022. Efforts to strengthen and improve internal controls over accounting and financial
reporting are ongoing.
71
Material
Weaknesses in Internal Control Over Financial Reporting
In
connection with the audit of our condensed consolidated financial statements included in this Report, our management has identified material
weaknesses in our internal control over financial reporting as of December 31, 2022 and 2021 relating to deficiencies in the design and
operation of the procedures relating to the closing of our financial statements. These include: (i) our lack of a sufficient number of
personnel with an appropriate level of knowledge and experience in accounting for complex or non-routine transactions, (ii) the fact
that our policies and procedures with respect to the review, supervision and monitoring of our accounting and reporting functions were
either not designed and in place or not operating effectively; (iii) our inability to complete the timely closing of financial books
at the quarter and fiscal year end, and (iv) incomplete segregation of duties in certain types of transactions and processes.
Specifically,
management did not design and maintain sufficient procedures and controls related to revenue recognition including those related to ensuring
accuracy of revenue recognized from non-routine transactions such as the sales of LotteryLink Credits. As a result, we determined that
there was an overstatement of revenue in the consolidated statement of operations of approximately $52.1 million during the year ended
December 31, 2021, which required a restatement of the previously issued financial statements for the year ended December 31, 2021 contained
in the Amended 2021 Annual Report.
We
have begun implementing remediation steps to improve our internal control over financial reporting and to remediate the identified
material weaknesses, including (i) adding personnel with sufficient accounting knowledge; (ii) adopting a more rigorous period-end
review process for financial reporting; (iii) adopting improved period close processes and accounting processes, and (iv) clearly
defining and documenting the segregation of duties for certain transactions and processes. Management has expanded and will continue
to enhance our system of identifying transactions and evaluating and implementing the accounting standards that apply to our
financial statements, including through enhanced analyses by our personnel and third-party professionals with whom we consult
regarding complex accounting applications. We intend to continue take steps to remediate the material weaknesses described above and
further continue re-assessing the design of controls, the testing of controls and modifying processes designed to improve our
internal control over financial reporting. The Company plans to continue to assess its internal controls and procedures and intends
to take further action as necessary or appropriate to address any other matters it identifies or are brought to its attention. We
will not be able to fully remediate these material weaknesses until these steps have been completed and have been operating
effectively for a sufficient period of time. The implementation of our remediation will be ongoing and will require validation and
testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. We may
also conclude that additional measures may be required to remediate the material weaknesses in our internal control over financial
reporting.
We
cannot assure you that the measures we take will be sufficient to remediate the material weaknesses we identified or avoid the identification
of additional material weaknesses in the future. If the steps we take do not remediate the material weaknesses in a timely manner, there
could continue to be a reasonable possibility that this control deficiency or others could result in another material misstatement of
our annual or interim financial statements that would not be prevented or detected on a timely basis.
For
more information, see “ Item 1A. Risk Factors - Public Company Operating Risks - If we fail to implement and maintain an effective
system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent
fraud, and investor confidence and the trading price of our common stock and warrants may be materially and adversely affected .”
72
Changes
in Internal Control Over Financial Reporting
Except
as otherwise described herein, there was no change in our internal control over financial reporting identified in connection with the
evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2022 that
has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item
9B. Other Information.
On June 12, 2023, the Company entered into an amendment of its Loan Agreement
with Woodford (the “Loan Agreement Amendment”). The Loan Agreement Amendment provides that Woodford shall henceforth be able
to convert, in whole or in part, the outstanding balance of its loan into the conversion shares at a conversion price that represents
a further 25% discount to the original conversion price of 20%. All other terms and conditions of securitization remain in full force
and effect.
Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not
applicable.
PART
III
Item
10. Directors, Executive Officers and Corporate Governance.
Directors
and Executive Officers
The
following sets forth certain information, as of the date of this report, concerning the directors and officers of the Company.
Name
Age
Position
Mark
Gustavson
54
Chief
Executive Officer
Matthew
McGahan
53
Chairman
of the Board
Barney
Battles
56
Director
Nick
Kounoupias
60
Director
Mark
Gustavson has been our Chief Executive Officer since February 2023. Mr. Gustavson has 17 years of business development, transactional,
alliance management, finance, operational, company formation, and IP experience with emerging businesses. During his career he has acquired
extensive experience in the integration of business disciplines, with an emphasis on turnaround transactions. Mr. Gustavson held senior
management positions in a variety of technology companies.
In
his various executive capacities, Mr. Gustavson was responsible for transactions ranging from acquisitions and strategic collaborations
to ordinary course transactions. He was also engaged in strategic planning for business development, product development, and in-licensing
activities, and participated in the consummation of numerous collaborations. Sector specialties include biotechnology, IP based banking,
mobile payment systems, social media, mobile gaming applications, fiber optics, and mixed and virtual reality technologies.
Mr.
Gustavson is a co-founder and currently serves as Chief Executive Officer of ZENIOS Technologies Corporation, a position he has held
since May 2022. Said company is involved in the business of augmented and mixed-reality based internet search technology.
In
March of 2020, Mr. Gustavson and a group of investors acquired control of Sansar from Linden Labs Corporation, implementing an expansion
plan, and successfully deploying, virtual reality applications for live events and festivals. These included the renowned London based
Lost Horizons festival Glastonbury, gaining an audience in excess of 4.2 million attendees. The assets of Sansar were transferred to
Sansar, Inc, in June 2022, and Mr. Gustavson has served as a Board member of Sansar, Inc. since June 2022.
From
February 2020 to April 2021, Mr. Gustavson served as Chief Executive Officer of Regnum Corp (OTC:RGMP). Mr. Gustavson served as President,
CFO and co-founder of Tri Capital Energy Corporation, from June 2019 to March 2021. From March 2025 to May 2018, Mr. Gustavson served
as Chief Financial Officer and Director of Wookey Search Technologies Corporation. From July 2016 to August 2017, Mr. Gustavson served
as Chief Financial Officer and Director of Sharkreach Corporation.
73
Mr.
Gustavson also previously served as President and co-founder of MedicuRx Corporation, a position he held from February 2013 to June 2015.
During this time, he was responsible for managing the company formation and transactional activities in collaboration with co-founder
Dr. Joseph Rubinfeld, as well as taking care of business development, finance, and research and alliance management. MedicuRx Corporation
business was a pharmaceutical company developing cancer therapeutics addressing Glioblastoma Multiforme.
Mr.
Gustavson began his career as a Private Banker at the banking and financial business known as HSBC in Saipan, Commonwealth of the Northern
Mariana Islands. From April 1997 through February 1999, Mr. Gustavson was Vice President of Private Banking and was charged with co-launching
the Commonwealth of the Northern Mariana Islands branch of the Pacific Regional Division during the bank’s expansion period.
Mr.
Gustavson received a Bachelor of Science in Political Science degree (minor in sociology, concentration in economics) from the University
of Oregon in 1991.
Matthew
McGahan , has been a member of and Chairman of the Board since October 2022. Mr. McGahan is the founder of the U.K. charity, “Mask
Our Heroes” (“MOH”), created in memory of his father Alan, who was a victim of the COVID-19 pandemic. MOH was one of
the first charities to recognize the urgent need for vital personal protection equipment and in the first months of the pandemic, MOH
secured and shipped several plane loads of surgical masks to the U.K. Prior to founding MOH, Mr. McGahan had founded Magic Automotive
Group, a Europe-based Harley-Davidson dealer. In 2010, Mr. McGahan sold Magic Automotive Group to pursue other endeavors. In 1997, prior
to founding Magic Automotive Group, Mr. McGahan had joined his family’s business, Pinewood Motor Group, which his father founded
in 1969. In the early 1990s Mr. McGahan left a public UK multi-brand automotive group to set up an international company specializing
in the importing and exporting of luxury automotive brands, race cars and classics. Mr. McGahan is a graduate of the Purley Boys and
Guildford Engineering Technology College.
Barney
Battles has been a member of the Board since October 2022. In 2014, Mr. Battles founded The League of Angels, a network of UHNW
international members investing in fast growth British ventures with a global impact and strong corporate values. Mr. Battle is the former
co-owner of Jackpot Games, a Maltese online gaming venture that was then sold to a large German Media Group. Additionally, Mr. Battles
is the former senior advisor to the Rank Group PLC (LSE: RNK), where he focused on the Grosvenor Casinos and Bingo (a UK-based chain
of 53 casinos located in major towns and cities across the UK and 76 bingo clubs located in Belgium, Spain, and the UK). During his time
at Grosvenor Casinos and Bingo, Mr. Battles focused on delivering interactive digital gaming formats across their retail footprint. He
also has extensive FTSE experience, working as Executive Chairman/CFO in turnaround or high growth sectors and is a former CFO of London’s
largest digital agency. Mr. Battles earned a Master in Computing Science from the University of Aberdeen, and was a Scottish Chartered
Accountant with Ernst & Young.
Nick
Kounoupias has been a member of the Board since April 2023. Mr. Kounoupias is a respected attorney with almost 40-years of experience
with digital, media and technology companies with a strong practice focus on corporate governance, legal issues, regulations, and Intellectual
Property (IP), with varying skills across multiple sectors. He has worked both within private practice and in-house, including a 16 year
period in a senior position in the consumer entertainment industry. He also has extensive experience in branding, media, news and related
industries; and he has held non-executive directorships and senior positions within the computer software, design, branded goods and
newspaper and magazine publishing industries. He is the founder and CEO of Kounoupias IP, a boutique Intellectual Property consultancy
operating out of offices in England and Cyprus providing strategic guidance on digital technology and IP matters internationally. He
is recognized as a leading specialist in anti-piracy and anti-counterfeiting and possesses extensive experience in managing and conducting
investigations in IP and other sectors. He regularly contributes to journals and books, as well as providing professional training on
legal matters at seminars and webinars.
74
Our
Executive Officer
Mr.
Gustavson, our Chief Executive Officer (“CEO”), serves at the discretion of our Board and holds office until his successor
is duly appointed or until his earlier resignation or removal. Mr. Gustavson also serves as the principal financial/accounting officer
of the Company until a replacement is found.
Board
Composition
Our
Board consists of three directors. Each of our current directors will continue to serve as a director until the election and qualification
of his successor or until his earlier death, resignation or removal. The authorized number of directors may be changed by resolution
of our Board. Vacancies on our Board may be filled by resolution of our Board.
Our
Board consists of Matthew McGahan, Barney Battles and Nick Kounoupias, with Mr. McGahan acting as chairman of the Board.
Our
Board has affirmatively determined that each of Messrs.McGahan, Battles and Kounoupias is an “independent director” under
the Nasdaq listing rules applicable to board members. For more details, see the section entitled “Independence of our Board.”
Our
Board is divided into three classes with only one class of directors being elected in each year, and with each class serving a three-year
term:
●
our
Class I director is Mr. McGahan, and his term will expire at the 2025 annual meeting of stockholders;
●
our
Class II director is Mr. Kounoupias, and his term will expire at the 2023 annual meeting of stockholders; and
●
our
Class III director is Mr. Battles, and his term will expire at the 2024 annual meeting of stockholders.
As
a result of the staggered Board, only one class of directors will be elected at each annual meeting of stockholders, with the other classes
continuing for the remainder of their respective terms. At any meeting of stockholders at which directors are to be elected, the number
of directors elected may not exceed the greatest number of directors then in office in any class of directors. The members of each class
will hold office until the annual meeting stated above when their term expires and until their successors are elected and qualified.
At each succeeding annual meeting of the stockholders, the successors to the class of directors whose term expires at that meeting will
be elected by plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders
held in the third year following the year of their election and until their successors are elected and qualified. Subject to the rights,
if any, of the holders of any series of preferred stock to elect additional directors under circumstances specified in a preferred stock
designation, directors may be elected by the stockholders only at an annual meeting of stockholders.
Independence
of our Board and Executive Officer
Based
on information provided by each director concerning his background, employment, and affiliations, our Board has determined that the Board
meets independence standards under the applicable rules and regulations of the SEC and the listing standards of Nasdaq. There are no
family relationships among any of our directors and executive officer. In making these determinations, our Board considered the current
and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board deemed relevant
in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions
involving them described under the heading “ Item 13. Certain Relationships and Related Party Transactions, and Director Independence. ”
Board
Committees
Our
Board has two standing committees: an Audit Committee and a Compensation Committee. Each of the committees reports to the Board as it
deems appropriate and as the Board may request. The composition, duties and responsibilities of these committees are set forth below.
In the future, our Board may establish other committees, as it deems appropriate, to assist it with its responsibilities.
75
Audit
Committee
All
of the members of our Board serve as members of our Audit Committee. Mr. Battles is the chair of our Audit Committee. All members of
the Audit Committee are “independent” in accordance with the Nasdaq Rules (as defined below) and rules of the U.S. Securities
and Exchange Commission (the “SEC”) applicable to boards of directors in general and Audit Committee members in particular.
The Board has determined that each member of the Audit Committee is “financially literate” within the meaning of the Nasdaq
Rules because each member is able to read and understand fundamental financial statements, including the Company’s balance sheet,
income statement and cash flow statement. In addition, the Board has determined that Mr. Battles qualifies as an “audit committee
financial expert” as defined by Item 407(d) of Regulation S-K, and therefore, also satisfies the “financial sophistication”
requirement in accordance with Nasdaq Rule 5605(c)(2)(A). The Board reached its conclusion as to Mr. Battles’ qualifications based
on, among other things, his background in financial services and accounting, and experience on the audit committees of public, private
and investment companies.
The
duties and responsibilities of the Audit Committee include:
●
those
duties and responsibilities delegated to it by the Board, including overseeing our financial reporting policies, our internal controls,
and our compliance with legal and regulatory requirements applicable to financial statements and accounting and financial reporting
processes;
●
being
directly responsible for the appointment, retention, replacement and oversight of our independent registered public accounting firm
and reviewing and evaluating its qualifications, performance and independence;
●
pre-approving
the audit and non-audit services and the payment of compensation to the independent registered public accounting firm;
●
reviewing
reports from, and material written communications between, management and the independent registered public accounting firm, including
with respect to issues as to the adequacy of the Company’s internal controls;
●
reviewing
and approving any related person transaction that is required to be disclosed pursuant to Item 404(a) of Regulation S-K promulgated
by the SEC and prior to our entering into such transaction;
●
reviewing
and discussing with management and the independent registered public accounting firm our guidelines and policies with respect to
risk assessment and risk management; and
●
reviewing
the Audit Committee Charter and the Audit Committee’s performance at least annually.
With
respect to our reporting and disclosure matters, the Audit Committee is also responsible for reviewing and discussing with the independent
registered public accounting firm and management our annual audited financial statements and our quarterly financial statements prior
to their inclusion in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or other publicly disseminated materials in accordance
with the applicable SEC rules and regulations.
Compensation
Committee
The
members of our Compensation Committee are Messrs. McGahan, Battles and Kounoupias. Mr. Kounoupias is the chair of our Compensation Committee.
All members of the Compensation Committee are “independent” in accordance with the Nasdaq Rules and SEC rules applicable
to boards of directors in general and compensation committees in particular. In addition, at least two members of the Compensation Committee
qualify as “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act.
76
The
Compensation Committee is responsible for reviewing and overseeing our compensation policies and practices, and meets regularly throughout
the year to review and discuss, among other items, our compensation philosophy, changes in compensation governance, and compliance rules
and best practices. With respect to executive compensation, the Compensation Committee:
●
annually
reviews and approves corporate goals and objectives relevant to the compensation of our CEO and other executive officers;
●
evaluates,
as a committee or together with the other independent directors (as directed by the Board), the performance of our CEO and other
executive officers in light of such corporate goals and objectives, as well as their individual achievements;
●
approves
and recommends to our Board for approval of the compensation of our CEO and other executive officers based on this evaluation; and
●
periodically
reviews and approves of all elements of our CEO’s and other executive officers’ compensation, including cash-based and
equity-based awards and opportunities, as well as any employment agreements and severance agreements, change in control agreements
and special or supplemental compensation and benefits.
Director
Nominating Process
We
do not currently have a nominating committee or any other committee serving a similar function. Director nominations are approved by
a vote of a majority of our directors, each of whom is independent, as required under the Nasdaq rules and regulations. We believe that
the current process in place functions effectively to select director nominees who will be valuable members of our Board of Directors.
We
identify potential nominees to serve as directors through a variety of business contacts, including current executive officers, directors
and stockholders. We may, to the extent they deem appropriate, retain a professional search firm and other advisors to identify potential
nominees.
We
believe that our Board as a whole should encompass a range of talent, skill, and expertise enabling it to provide sound guidance with
respect to our operations and interests. Our independent directors evaluate all candidates to our Board by reviewing their biographical
information and qualifications.
Code
of Business Conduct and Ethics and Corporate Governance Guidelines
Corporate
Governance Guidelines . To further our commitment to sound governance, our Board has adopted the Corporate Governance Guidelines to
ensure that the necessary policies and procedures are in place to facilitate the Board’s review and make decisions with respect
to the Company’s business operations that are independent from management. The Corporate Governance Guidelines set forth the practices
regarding Board and committee composition, selection and performance evaluations; Board meetings; director qualifications and expectations,
including with respect to continuing education obligations; and management succession planning, including for the CEO.
Code
of Business Conduct and Ethics . We maintain a Code of Business Conduct and Ethics (the “Code of Conduct”) that is applicable
to all of our directors, officers and employees, including our Chairperson, CEO and other members of management. The Code of Conduct
sets forth standards of ethical business conduct, including conflicts of interest, compliance with applicable laws, rules and regulations,
timely and truthful disclosure, protection and proper use of our assets and reporting mechanisms for illegal or unethical behavior. The
Code of Conduct also satisfies the requirements for a code of ethics as defined by Item 406 of Regulation S-K promulgated by the SEC.
If the Company ever were to amend or waive any provision of the Code of Conduct and that applies to the Company’s principal executive
officer, principal financial officer, principal accounting officer or any person performing similar functions, the Company intends to
satisfy its disclosure obligations, if any, with respect to any such waiver or amendment by posting such information on its website set
forth above rather than by filing a Current Report on Form 8-K. Amendments to the Code of Conduct must be approved by our Board and will
be promptly disclosed (other than technical, administrative or non-substantive changes) on our website. A copy of the Code of Conduct
will be provided free of charge by making a written request and mailing it to our corporate headquarters offices to the attention of
our Compliance Manager.
77
Delinquent
Section 16(a) Reports
Section
16(a) of the Exchange Act requires executive officers, directors and persons who beneficially own more than 10% of a company’s
common stock to file initial reports of ownership (Forms 3) and reports of changes in ownership (Forms 4 and 5) with the SEC. Based solely
on our review of copies of such reports and on written representations from our executive officers and directors, we believe that none
of our executive officers and directors complied with their Section 16(a) filing requirements during our fiscal year ended December 31,
2022 following the Operational Cessation.
Item
11. Executive Compensation.
This
section discusses the material components of the executive compensation program for the executive officers of Lottery.com who were “named
executive officers,” or NEOs for fiscal 2022. This discussion may contain forward-looking statements that are based on our current
plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt
may differ materially from the existing and currently planned programs summarized or referred to in this discussion.
As
an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting
companies” as such term is defined in the rules promulgated under the Securities Act, which, in general, require compensation disclosure
for our principal executive officer and its two other most highly compensated executive officers, referred to herein as our NEOs.
Introduction
The
primary objectives of our executive compensation programs are to attract and retain talented executives to effectively manage and lead
our Company. Our NEOs for fiscal 2022 are:
●
Our
former CEOs, Tony DiMatteo and Sohail S. Quraeshi; and
●
Our
former executive officers, Edward Moffly, Ryan Dickinson and Matthew Clemenson.
Summary
Compensation Table
The
following table provides summary information concerning compensation of our named executive officers for services rendered to us during
the years noted.
Name
and Principal Position
Year
Salary (1)
($)
Bonus
($)
Stock
Awards (2) ($)
Option
Awards ($)
Non-Equity
Incentive Plan Compensation ($)
All
Other Compensation ($)
Total
($)
Tony
DiMatteo
2022
269,231
227,740
496,971
Former
CEO
2021
500,000
—
—
—
—
—
500,000
2020
250,000
—
—
—
—
—
250,000
Sohail
S. Quraeshi
2022
—
—
—
—
—
—
—
Former
CEO
Edward
Moffley
2022
—
—
—
—
—
—
—
Former
CFO
—
—
—
—
—
—
—
Ryan
Dickinson
2022
250,000
227,740
—
477,740
Former
CFO and President
2021
500,000
—
34,504,435
—
—
—
35,004,453
2020
250,000
—
—
—
—
—
250,000
Matthew Clemenson
2022
250,000
227,740
—
—
—
—
477,740
Former
CRO
(1)
Amounts reflect the NEO’s base salary earned during the
fiscal year presented.
(2)
Amount represents the aggregate grant date fair value of restricted
share awards (“Restricted Shares”) made to the named executive officer computed in accordance with Financial Accounting Standards
Codification Topic 718, Compensation - Stock Compensation (“Topic 718”). As required by SEC rules, awards are reported in
the year of grant. For more information, see “ Narrative Disclosure to Summary Compensation Table — Supplemental Table ”
below.
Narrative
Disclosure to Summary Compensation Table
78
Equity
Awards
Fiscal 2021
On
October 28, 2021, AutoLotto awarded 778,250 restricted shares of common stock (which were exchanged for 2,339,286 restricted shares of
Common Stock (“Restricted Shares”) in connection with the Business Combination Closing) to Mr. Dickinson and 155,809 restricted
shares of common stock (which were exchanged for 468,335 Restricted Shares in connection with the Business Combination Closing) to Ms.
Lever, in each case, under the AutoLotto, Inc. 2015 Stock Option/Stock Issuance Plan (the “2015 Plan”) (together, such equity
grants are referred to herein as the “Fiscal 2021 Equity Awards”).
The
Fiscal 2021 Equity Awards rewarded Mr. Dickinson and Ms. Lever for their respective service to the Company during a critical period for
the Company and as a result of their significant efforts in growing the Company’s business and preparing the Company to be a public
company, as well as for completing the Business Combination during fiscal 2021. In particular, Mr. Dickinson joined the Company in June
2018, serving the Company for over three years, including through the Business Combination process, but had not previously received equity
compensation for his services to the Company and previously had no equity in the Company. Ms. Lever joined the Company in March 2021,
heading the Company’s legal function through the Business Combination process, without previously receiving any grant of equity
for her services.
Vesting
Terms
Mr.
Dickinson’s Restricted Shares vest in full six months following the Business Combination Closing, or on April 29, 2022. In the
event Mr. Dickinson’s Service terminates for any reason, all unvested Restricted Shares at the time of such termination will be
forfeited.
With
respect to Ms. Lever’s grant:
●
234,168
of Ms. Lever’s Restricted Shares are subject to time vesting, with 25% (or 58,542 Restricted Shares) vesting on October 28,
2022 (the one year anniversary of the Grant Date) and the remaining 75% vesting monthly over the subsequent 36 month period (with
4,878 Restricted Shares vesting each month).
●
234,167
of Ms. Lever’s Restricted Shares are subject to performance vesting, with 79,617 Restricted Shares (or 34%) vesting six months
following the Business Combination Closing, or on April 29, 2022, and 154,550 of her Restricted Shares (or 66%) vesting based on
stock price performance hurdles, with half of such shares vesting if the stock price equals or exceeds $14.50 for any 20 trading
days in any 30 consecutive day trading period during the one year period following the Business Combination Closing and the other
half vesting if the stock price equals or exceeds $16.00 for any 20 trading days in any 30 consecutive day trading period during
the one year period following the Business Combination Closing. In the event that one or both closing price goals are not satisfied
within 12 months following the Business Combination Closing, the remaining unvested performance-vested Restricted Shares will vest
monthly over the 36 month period commencing with the 13 month anniversary of the Business Combination Closing, or on November 29,
2022.
In
the event Ms. Lever’s service terminates for any reason, all unvested Restricted Shares at the time of such termination will be
forfeited.
Fiscal 2022
There were no equity awards granted to our named executive officer during
fiscal 2022.
79
Cash
Compensation
Base
Salary
Base
salaries are generally set at levels deemed necessary to attract and retain our executives. We provide each named executive officer with
a base salary for the services that the executive officer performs for us. This compensation component constitutes a stable element of
compensation while other compensation elements may be variable. Base salaries are generally reviewed annually and may be increased based
on any number of factors at the discretion of the Compensation Committee, including the individual performance of the named executive
officer, company performance, any change in the executive’s position within our business, the scope of their responsibilities and
market data. For fiscal 2022, the amounts earned by our named executive officers are shown in the Summary Compensation Table above.
Bonuses
In
addition to base salaries, the named executive officers may receive discretionary annual bonuses, guaranteed and/or retention
bonuses in the discretion of the Compensation Committee. Our NEOs did not earn any cash bonuses during fiscal 2020 or fiscal 2021;
however, during fiscal 2022, the Compensation Committee in its discretion awarded one-time retention bonuses to each of Messrs.
DiMatteo, Dickinson and Clemenson, who each received a cash award of $227,740. Such
bonuses are being reported as fiscal 2022 compensation in the Summary Compensation Table above.
Retirement
Benefits, and Termination and Change in Control Provisions at December 31, 2021 and 2020
There
were no pension or retirement benefits pursuant to any existing plan provided or contributed to by the Company or any of its subsidiaries.
In addition, there were no termination and change in control provisions in effect for our NEOs.
Outstanding
Equity Awards at December 31, 2022
None
of our named executive officers have any outstanding equity awards. Any outstanding equity awards were forfeited as of the date of their
resignation or separation from the Company.
DIRECTOR
COMPENSATION
In
February 2022, our Board approved a Non-Employee Director Compensation Program generally providing for an annual cash fee of $62,000,
an annual equity grant of restricted stock units with an award value of $65,000, and an initial equity grant of restricted stock units
with an award value of $85,000. Notwithstanding this program adopted by our Board, no cash fees were paid to our directors during fiscal
2022 and all outstanding equity awards were forfeited in connection with director resignations from the Board.
80
The
following table sets forth the total compensation paid to each of our non-employee directors for their service on the Board during fiscal
2022:
Name (1)
Fee Earned
or Paid in Cash ($)
Stock Awards
($)(1)
Total
($)
Barney Battles(2)
—
—
—
Matthew McGahan(3)
—
—
—
Richard Kivel(4)
—
155,870
155,870
Lisa Borders(5)
—
155,870
155,870
Steven Cohen(5)
—
155,870
155,870
Joseph Kaminkow(6)
—
90,870
90,870
William Thompson (7)
—
155,870
155,870
Amer Rustom(8)
—
—
—
Vladimir Klechtchev(9)
—
—
—
Naila Chowdhury(10)
—
—
—
(1)
Represents
all non-employee directors who served on our Board during fiscal 2022. All stock awards granted to our directors during fiscal 2021
were forfeited in connection with the director resignations from the Board noted below.
(2)
Mr.
Battles was appointed to our Board on November 3, 2022. Mr. Battles did not receive compensation for his service on the Board during
fiscal 2022.
(3)
Mr.
McGahan was appointed to our Board on October 19, 2022. Mr. McGahan did not receive compensation
for his service on the Board during fiscal 2022.
(4)
Mr.
Kivel served on our Board until November 4, 2022.
(5)
Mr. Cohen and Ms. Borders served on our Board until September 2, 2022.
(6)
Mr.
Kaminkow resigned from our Board on June 9, 2022.
(7)
Mr.
Thompson served on our Board from March 10, 2022 to September 2, 2022.
(8)
Dr.
Rustom served on our Board from September 12, 2022 to November 23, 2022. Dr. Rustom did not
receive compensation for his service on the Board during fiscal 2022.
(9)
Mr.
Klechtchev served on our Board from September 12, 2022 to October 19, 2022. Mr. Klechtchev did not receive compensation for his service
on the Board during fiscal 2022.
(10)
Ms.
Chowdhury served on our Board from November 3, 2022 to March 9, 2023. Ms. Chowdhury did not receive compensation for his service on the
Board during fiscal 2022.
Compensation
Committee Interlocks and Insider Participation
None
of the individuals who served as a member of the Compensation Committee during fiscal 2022 is, or has ever been, an officer or employee
of the Company or any of its subsidiaries, or has or had any relationship with the Company requiring disclosure under Item 404 of Regulation
S-K under the Exchange Act. In addition, during the last fiscal year, no executive officer of the Company served as a member of the board
of directors or the compensation committee of any other entity that has or has had one or more executive officers serving on our Board
or our Compensation Committee.
81
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The
following table shows information with respect to the beneficial ownership of our common stock as of June 15, 2023, for:
●
each
person known to us to own beneficially 5% or more of our outstanding common stock;
●
each
of our directors or director nominees;
●
each
of our NEOs; and
●
all
of our directors and executive officers as a group.
As
of June 15, 2023, there were 50,794,707 shares of our common stock outstanding. Except as indicated by footnote and subject to community
property laws where applicable, to our knowledge, the persons named in the table below have sole voting and investment power with respect
to all shares of common stock shown as beneficially owned by them:
The
amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial
ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has
or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person
is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60
days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage,
but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a
beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has
no economic interest.
NAME OF BENEFICIAL OWNER
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
PERCENT OF COMMON STOCK OUTSTANDING
DIRECTORS, NAMED EXECUTIVE OFFICERS AND 5% STOCKHOLDERS (1)
Tony DiMatteo(2)
1,489,484
2.9 %
Matt Clemenson(3)
6,289,487
12.4 %
Ryan Dickinson
2,339,286
4.6 %
Mark Gustavson
—
—
Barney Battles
—
—
Matthew McGahan
—
—
Nick Kounoupias
—
—
Suhail Quraeshi
—
—
Edward Moffly
—
—
Woodford Eurasia Assets Ltd.
10,118,257
19.9 %
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (FOUR PERSONS)
0
0 %
(1)
The
business address of each of these stockholders is c/o Lottery.com Inc., 20808 State Hwy 71 W, Unit B, Spicewood, TX 78669.
(2)
Interests
shown are held by ALD Holdings Group, LLC (“ALD Holdings”). Mr. DiMatteo may be deemed to beneficially own the shares
held by ALD Holdings.
(3)
Interests
shown are held by MC Holdings, LLC (“MC Holdings”). Mr. Clemenson may be deemed to beneficially own the shares held by
MC Holdings.
82
Equity
Compensation Plan Information
The
following table summarizes share and exercise price information about the Company’s equity compensation plans as of December 31,
2022.
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity Compensation plans approved by security holders (1)
—
—
13,130,368
(1)
Relates only to the Lottery.com 2021 Incentive Plan.
In
connection with the Business Combination, the Board and stockholders approved the Lottery.com 2021 Incentive Plan, which enables the
Company to grant non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock
units, unrestricted stock, other share based awards and cash awards to directors, employees, consultants and advisors to improve the
ability of the Company to attract and retain key personnel upon whom the Company’s sustained growth and financial success depend,
by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company.
Item
13. Certain Relationships and Related Transactions, and Director Independence.
Services
Agreement with Master Goblin Games, LLC
In
March 2020, the Company entered into a service agreement (as amended, the “Service Agreement”), with Master Goblin Games,
LLC (“Master Goblin”), an entity that is wholly owned by our President and CFO, Ryan Dickinson. Master Goblin leases retail
locations in certain U.S. jurisdictions from which it operates tabletop game retail stores and, ancillary to such retail operations,
acts as sales agent or retailer licensed by the state lottery commission of such jurisdiction to sell lottery game tickets from such
retail stores. The Company acquires lottery games as requested by users from Master Goblin on a non-exclusive basis in such jurisdictions.
Pursuant
to the Service Agreement, Master Goblin is authorized and approved by the Company to incur up to $100,000 in initial expenses per location
for the commencement of operations at each location, including, without limitation, tenant improvements, furniture, inventory, fixtures
and equipment, security and lease deposits, and licensing and filing fees. Similarly, pursuant to the Service Agreement, during each
month of operation, Master Goblin is authorized to submit to the Company for reimbursement on-going expenses of up to $5,000 per location
for actually incurred lease expenses. The initial expenses are submitted by Master Goblin to the Company upon Master Goblin securing
a lease, and leases are only secured by Master Goblin in any location upon request of the Company. On-going expenses are submitted by
Master Goblin to the Company for reimbursement on a monthly basis, subject to offset. To the extent Master Goblin has a positive net
income in any month, exclusive of the sale of lottery games, such net income reduces or eliminates such reimbursable expenses for that
month. In addition, from time to time Master Goblin may incur certain additional reimbursable expenses for the benefit of the Company.
The Company paid Master Goblin an aggregate of approximately $440,000 and $800,000, including expense reimbursements under the Service Agreement
and additional reimbursable expenses, as of December 31, 2022 and 2021, respectively.
83
Investor
Rights Agreement
Simultaneously
with the closing of the Business Combination on October 29, 2021 (the “Business Combination Closing”), the Company entered
into an investor rights agreement (the “Investor Rights Agreement”) with the initial stockholders of Trident Acquisition
Corp. and certain stockholders of AutoLotto, including Lawrence Anthony DiMatteo III, our former chief executive officer, and Matthew
Clemenson, our former chief revenue officer (collectively, the “Stockholder Parties”). Pursuant to the Investor Rights Agreement,
such parties agreed to vote or cause to be voted all shares owned by them or take such other necessary action to ensure that (i) our
Board was made up of at least five directors at Closing, (ii) one director nominated by the Initial Stockholders (the “Initial
Stockholders Director”) and the remaining directors nominated by the AutoLotto stockholders (the “AutoLotto Directors”)
would be elected to our initial Board, with the Initial Stockholders Director designated as a Class II director, and (iii) following
the nomination of our initial Board, neither the Initial Stockholders nor the AutoLotto Stockholders shall have ongoing nomination rights,
except that in the event that a vacancy is created on our Board at any time by the death, disability, resignation or removal of the Initial
Stockholders Director or any AutoLotto Director during their initial term, then (x) the AutoLotto Stockholders, with respect to a vacancy
created by the death, disability, resignation or removal of an AutoLotto Director, or (y) the Initial Stockholders, with respect to a
vacancy created by the death, disability, resignation or removal of an Initial Stockholders Director, will be entitled to designate an
individual to fill the vacancy. In addition, the Investor Rights Agreement provides that we will register for resale under the Securities
Act, certain shares of Common Stock and other equity securities that are held by the parties thereto from time to time as well as other
customary registration rights for the parties thereto. The Investor Rights Agreement was terminated in connection with the Woodford Loan
Agreement.
Director
Independence and Independence Determinations
The
Board has established the Corporate Governance Guidelines to assist it in making independence determinations for each director of our
Board. The Corporate Governance Guidelines define an “independent director” to align with the definition provided under the
corporate governance requirements of the Nasdaq Stock Market LLC (collectively, the “Nasdaq Rules”). Under Nasdaq Rule 5605(a)(2),
a director is not independent unless the Board affirmatively determines that they do not have a direct or indirect relationship which,
in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director
of the Company. Directors who serve on the Audit Committee and Compensation Committee are subject to the additional independence requirements
under applicable SEC rules and Nasdaq Rules.
It
is the policy of the Board to make affirmative independence determinations for all directors at least annually in connection with the
preparation of the Company’s proxy statement. In making independence determinations, the Board will broadly consider all relevant
facts and circumstances in addition to the requirements of Nasdaq Rule 5605(a)(2).
The
Board undertook its annual review of director independence. As a result of this review, the Board affirmatively determined that Messrs.
McGahan, Battles and Kounoupias are independent within the meaning of the Nasdaq Rules, including with respect to their respective committee
service. The Board has determined that each member of the Audit Committee is “independent” for purposes of service on the
Audit Committee in accordance with Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and that each member of the Compensation Committee is “independent” for purposes of service on the Compensation Committee
in accordance with Section 10C(a)(3) of the Exchange Act.
Item
14. Principal Accounting Fees and Services.
Audit
Fees
On
September 27, 2022, Armanino LLP (“Armanino”) resigned as the independent registered public accounting firm of the Company,
effective immediately. On October 7, 2022, the Audit Committee approved the engagement of Yusufali & Associates, LLC (“Yusufali”)
as the Company’s new independent registered public accounting firm, effective immediately, for the fiscal year ended December 31,
2022. The following table sets forth the aggregate fees billed to us for the fiscal year ended December 31, 2022 by Yusufali:
2022
Audit Fees (1)
$ 325,000
Audit-Related Fees (2)
—
Tax Fees (3)
—
All Other Fees (4)
—
Total:
$ 325,000
(1)
Audit
Fees represent the aggregate fees billed for professional services rendered for the audits of the annual financial statements and
the Company’s internal control over financial reporting; for review of the consolidated financial statements included in the
Company’s Quarterly Reports on Form 10-Q filings; for the audits and reviews of certain of our subsidiaries; and for services
that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings.
(2)
Audit-Related
Fees represent the aggregate fees billed for assurance and other services related to the performance of the audit or review of our
consolidated financial statements and that are not reported under paragraph (1) above. These services include due diligence related
to mergers and acquisitions and consultation concerning financial accounting and reporting standards.
(3)
Tax
Fees represent the aggregate fees billed for international tax compliance, tax advice, and tax planning services.
(4)
All
Other Fees represent fees billed for all other services.
84
Audit
Committee Pre-Approval Procedures for Independent Registered Public Accounting Firm
The
Audit Committee has sole authority to engage and determine the compensation of our independent registered public accounting firm. The
Audit Committee also is directly responsible for evaluating the independent registered public accounting firm, reviewing and evaluating
the lead partner of the independent registered public accounting firm and overseeing the work of the independent registered public accounting
firm. In addition, and pursuant to its charter and the Company’s Audit and Non-Audit Services Pre-Approval Policy, the Audit Committee
annually reviews and pre-approves the audit services to be provided by Armanino LLP, and also reviews and pre-approves the engagement
of Armanino LLP for the provision of other services during the year, including audit-related, tax and other permissible non-audit. For
each proposed service, the Company’s management and the independent registered public accounting firm are required to jointly submit
to the Audit Committee detailed supporting documentation at the time of approval to permit the Audit Committee to make a determination
as to whether the provision of such services would impair the independent registered public accounting firm’s independence, and
whether the fees for the services are appropriate.
Changes
in Independent Registered Public Accounting Firm
Resignation
of Armanino LLP
As
previously disclosed in the Current Report on Form 8-K filed with the SEC on October 12, 2022 (the “October 12, 2022 Form 8-K”),
the Audit Committee approved on October 7, 2022 the engagement of Yusufali as the Company’s independent registered public accounting
firm for the fiscal year ended December 31, 2022, effective on the same day. As previously disclosed in the Current Report on Form 8-K
filed with the SEC on October 6, 2022 (the “October 6, 2022 Form 8-K”), Armanino resigned as the Company’s independent
registered public accounting firm on September 27, 2022, effectively immediately.
As
previously disclosed in the October 6, 2022 Form 8-K, Armanino’s report on the Company’s
financial statements for the fiscal years ended December 31, 2021 and December 31, 2020 did
not contain an adverse opinion or disclaimer of opinion, nor was it qualified or modified
as to uncertainty, audit scope or accounting principles. In addition, there were no disagreements
between the Company and Armanino on accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of
Armanino, would have caused them to make reference to the disagreement in their report for
such period, or any subsequent interim period preceding Armanino’s resignation. However,
on July 20, 2022, the Company was advised by Armanino, its registered independent public
accountant for the fiscal year ended 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. Armanino advised and determined subsequent
to the audit and review of such financial statements, respectively, that a Company subsidiary
entered into a line of credit in January 2022 that was not disclosed in the footnotes to
the December 31, 2021 financial statements and was not recorded in the March 31, 2022 financial
statements.
As
previously disclosed in the October 6, 2022 Form 8-K, during the Company’s two audited fiscal years ended December 31, 2021 and
December 31, 2020, and the subsequent interim period through September 27, 2022, Armanino identified the following reportable events
of the type described in Item 304(a)(1)(v) of Regulation S-K: based on Armanino’s evaluation of the facts and circumstances pertaining
to matters disclosed in the Company’s recent Form 8-K filings regarding the resignations of certain officers and directors, Armanino
is unable to rely on the representations of management.
The
Company provided Armanino with a copy of the foregoing disclosures and has requested that Armanino furnish the Company with a letter
addressed to the SEC stating whether it agrees with the statements made by the Company set forth above. A copy of Armanino’s letter,
dated October 7, 2022, was filed as Exhibit 16.1 to the amendment to the October 12, 2022 Form 8-K.
85
Dismissal
of Marcum LLP in connection with the Business Combination
As
previously disclosed in the Current Report on Form 8-K filed with the SEC on November 15, 2021 (the “November 15, 2021 Form 8-K”),
following the Business Combination Closing, the Audit Committee engaged Armanino LLP as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2021 and approved the dismissal of Marcum LLP as the Company’s independent
registered public accounting firm on November 10, 2021, effective on the same day. Prior to the Business Combination, Marcum LLP served
as TDAC’s independent registered public accounting firm and Armanino LLP served as AutoLotto’s independent registered public
accounting firm.
The
reports of Marcum LLP on the Company’s financial statements as of and for the two most
recent audited fiscal years ended December 31, 2020 and December 31, 2019 did not contain
an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties,
audit scope or accounting principles.
During
the Company’s two audited fiscal years ended December 31, 2020 and December 31, 2019, and the subsequent interim period through
November 10, 2021, there were no disagreements between the Company and Marcum LLP on any matter of accounting principles or practices,
financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum LLP, would have
caused it to make reference to the subject matter of the disagreements in its reports on the Company’s financial statements for
such years.
During
the Company’s two audited fiscal years ended December 31, 2020 and December 31, 2019, and the subsequent interim period through
November 10, 2021, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange
Act).
The
Company provided Marcum LLP with a copy of the foregoing disclosures and has requested that Marcum furnish the Company with a letter
addressed to the SEC stating whether it agrees with the statements made by the Company set forth above. A copy of Marcum’s letter,
dated November 12, 2021, was filed as Exhibit 16.1 to the November 15, 2021 Form 8-K.
PART
IV
Item
15. Exhibits, Financial Statement Schedules.
(1)
Financial Statements
The
consolidated financial statements listed in the accompanying Index to Consolidated Financial Statements are filed as part of this Report.
86
(2)
Exhibits
The
exhibits listed below are filed as part of this Report or incorporated herein by reference to the location indicated.
Exhibit
Number
Description
2.1†
Business Combination Agreement, dated as of February 21, 2021, by and among Trident Acquisitions Corp., Trident Merger Sub II Corp., and AutoLotto, Inc. (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K, filed by Lottery.com with the SEC on February 23, 2021).
3.1
Second Amended and Restated Certificate of Incorporation of Lottery.com Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
3.2
Amended and Restated Bylaws of Lottery.com Inc. (incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
4.1
Warrant Agreement, dated as of May 29, 2018, between TDAC and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K, filed by Lottery.com with the SEC on June 4, 2018).
4.2
Description of Capital Stock (incorporated by reference to Exhibit 4.2 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.1
Letter Agreement among Trident Acquisitions Corp., Trident Acquisitions Corp.’s officers, directors and stockholders (incorporated by reference to Exhibit 10.2 to Amendment No. 2 to the Registration Statement on Form S-1/A (File No. 333-223655) filed by Lottery.com with the SEC on May 21, 2018).
10.2
Stock Escrow Agreement between Trident Acquisitions Corp., Continental Stock Transfer & Trust Company and the initial stockholders of Trident Acquisitions Corp (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K, filed by Lottery.com with the SEC on June 4, 2018).
10.3
Services Agreement, dated as of March 10, 2020, by and between AutoLotto, Inc. and Master Goblin Games LLC (incorporated by reference to Exhibit 10.8 of the Registration Statement on Form S-4 (Reg. No. 333-257734), filed by Lottery.com with the SEC on October 5, 2021).
10.4
Amendment No. 1 to Services Agreement, dated as of June 28, 2021, by and between AutoLotto, Inc. and Master Goblin Games LLC (incorporated by reference to Exhibit 10.9 of the Registration Statement on Form S-4 (Reg. No. 333-257734), filed by Lottery.com with the SEC on October 5, 2021).
10.5
Investor Rights Agreement, dated as of October 29, 2021, by and among Lottery.com Inc., AutoLotto, Inc. and the security holders party thereto (incorporated by reference to Exhibit 10.12 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
10.6
Initial Stockholder Forfeiture Agreement, dated as of October 29, 2021, by and among Lottery.com Inc., AutoLotto, Inc. and the security holders party thereto (incorporated by reference to Exhibit 10.13 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
10.7#
Employment Agreement, dated as of February 21, 2021, by and between Lawrence Anthony DiMatteo III and AutoLotto, Inc. (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
10.8#
Employment Agreement, dated as of February 21, 2021, by and between Matthew Clemenson and AutoLotto, Inc. (incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
10.9#
Amendment to Employment Agreement, dated March 23, 2022, by and between Matthew Clemenson and Lottery.com (incorporated by reference to Exhibit 10.9 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.10#
Employment Agreement, dated as of February 21, 2021, by and between Ryan Dickinson and AutoLotto, Inc. (incorporated by reference to Exhibit 10.5 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
10.11#
Amendment to Employment Agreement, dated March 23, 2022, by and between Ryan Dickinson and Lottery.com (incorporated by reference to Exhibit 10.11 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.12#
Employment Agreement, dated as of March 19, 2021, by and between Kathryn Lever and AutoLotto, Inc. (incorporated by reference to Exhibit 10.12 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.13#
Amendment to Employment Agreement, dated as of March 28, 2022, by and between Kathryn Lever and Lottery.com Inc. (incorporated by reference to Exhibit 10.13 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.14#
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
10.15#
AutoLotto, Inc. 2015 Stock Option/Stock Issuance Plan (incorporated by reference to Exhibit 10.8 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
87
10.16#
Form of Restricted Stock Award Agreement under the AutoLotto, Inc. 2015 Stock Option/Stock Issuance Plan (incorporated by reference to Exhibit 10.9 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
10.17#
Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.7 of the Registration Statement on Form S-4 (Reg. No. 333-257734), filed by Lottery.com with the SEC on October 5, 2021).
10.18#
Form of Option Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.18 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.19#
Form of Restricted Stock Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.19 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.20#
Form of Director Restricted Stock Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.20 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022).
10.21#
Resignation and Release Agreement, dated July 22, 2022, by and between Lottery.com and Lawrence Anthony DiMatteo III (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on July 22, 2022).
10.22#
Consulting Agreement by and between AutoLotto, Inc. dba Lottery.com and Simpexe, LLC, specifically Harry Dhaliwal, dated July 1, 2022 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on July 6, 2022).
10.23+
Master Affiliate Agreement, dated as of October 2, 2021 (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 16, 2022).
10.24
Loan Agreement (Deed), dated December 7, 2022, between Lottery.com and Woodford Eurasia Assets Ltd, as lender (incorporated by reference to Exhibit 10.24 of the Annual Report on Form 10-K/A filed by Lottery.com with the SEC on May 10, 2023).
10.25
Loan Agreement Deed, Debenture Deed and Securitization, dated December 7, 2022, between Lottery.com and Woodford Eurasia Assets Ltd, as security holder (incorporated by reference to Exhibit 10.25 of the Annual Report on Form 10-K/A filed by Lottery.com with the SEC on May 10, 2023).
10.26
Business Loan Agreement dated January 4, 2022, between Autolotto, Inc. and The Provident Bank (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 22, 2023).
10.27
$30,000,000 Promissory Note dated January 4, 2022, between Autolotto, Inc. and The Provident Bank (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 22, 2023).
10.28*
Amendment and Restatement Agreement in respect of Loan Agreement (Deed) dated 7 December 2022, between Lottery.com and Woodford Eurasia Assets Ltd.
16.1
Letter from Marcum LLP to the SEC, dated November 12, 2021 (incorporated by reference to Exhibit 10.13 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 15, 2021).
16.2
Letter from Armanino LLP to the SEC, dated October 7, 2022 (incorporated by reference to Exhibit 16.1 of Amendment No. 1 to the Current Report on Form 8-K filed by Lottery.com with the SEC on October 12, 2022.
21.1*
List of Subsidiaries of Lottery.com Inc. (incorporated by reference to Exhibit 21.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021).
31.1*
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
Inline
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
the Inline XBRL document
101.SCH*
Inline
XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
Inline
XBRL Taxonomy Extension Presentation Linkbase Document.
104*
Inline
XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set.
*
Filed
herewith.
**
Furnished
herewith.
†
Certain
schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish
copies of any of the omitted schedules and exhibits upon request by the U.S. Securities and Exchange Commission.
+
Certain
portions of this exhibit have been omitted pursuant to Regulation S-K Item 601(b)(10)(iv). The Registrant agrees to furnish an unredacted
copy of the exhibit to the SEC upon its request.
#
Indicates
management contract or compensatory plan or arrangement.
Item
16. Form 10-K Summary
None.
88
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized .
LOTTERY.COM
INC.
Date:
June 15, 2023
By:
/s/
Mark Gustavson
Name:
Mark
Gustavson
Title:
Chief
Executive Officer
(Principal
Executive Officer and Principal Financial/Accounting Officer)
POWER
OF ATTORNEY
KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark Gustavson and Matthew McGahan,
and each or any one of them, their true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for
them and in their name, place and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes or substitute, may lawfully do or cause
to be done by virtue hereof.
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on
behalf of the Registrant in the capacities and on the dates indicated.
Name
Title
Date
/s/
Mark Gustavson
Chief
Executive Officer
June 15, 2023
Mark
Gustavson
(Principal
Executive Officer and Principal Financial/Accounting Officer)
/s/
Matthew McGahan
Chairman
of the Board
June 15, 2023
Matthew
McGahan
/s/
Barney Battles
Director
June 15, 2023
Barney
Battles
/s/
Nick Kounoupias
Director
June 15, 2023
Nick
Kounoupias
89
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.