Lottery.com Inc. (NASDAQ: LTRY) is at the center of an independent investigation initiated by its shareholders, following unsettling reports that highlight significant governance lapses. The spotlight turned harsher after Matthew McGahan transitioned from his position as an independent director to fill the roles of Chairman, CEO, President, and Company Secretary, a move that stands in violation of NASDAQ’s regulatory framework, thereby questioning the organization’s commitment to ethical practices and transparency.
In a concerning development, it has come to light that under McGahan’s leadership, an alarming 3,253,147 shares were allocated to the management of Lottery.com and external consultants. This act blatantly contravenes the regulations set by NASDAQ and the corporate by-laws of Lottery.com Inc., leading to a considerable [dilution of shareholder value], and has incited shareholders to call for immediate corrective measures.
The breaches are detailed as follows:
- Violation of NASDAQ Rule 5635(d): The board’s decision to distribute more than 3,253,147 shares to its management and external consultants, which constitutes a shocking 44.2% of the total existing shares of LTRY, is a direct violation of Rule 5635(d). This rule mandates the need for shareholder approval for any issuance that constitutes more than 20% of the outstanding shares or voting rights.
- Breach of Lottery.com 2021 Incentive Plan: The share distribution was carried out in stark violation of the guidelines set forth in the Lottery.com 2021 Incentive Plan. The quantity of allocated shares far exceeds the plan’s defined limits, thus rendering the distribution unauthorized and void.
- Unsubstantiated Allocation to External Advisors: A surprising allocation of 300,000 shares was made to LTRY’s external advisors without any solid justification for such a substantial allocation. The lack of transparency regarding the contracts with these external consultants and their unresolved debts raises significant concerns about the legitimacy and intentions of these share distributions.
A spokesperson for the shareholders stated: “Considering these grave violations, we, the shareholders, demand immediate action to deny the registration of LTRY shares to the members of the Board of Directors and external advisors named in the S-3 Form dated February 12, 2024. These individuals include Matthew McGahan, Robert Stubblefield, Gregory Potts, Barney Battles, Christopher Gooding, Paul S. Jordan, Tamer Hassan, Amar Ali Law PLLC, Randall Lanham, Esq., Andrew R. Korn, Esq., and Andrey Nikitin who was previously convicted of fraud and served time in jail as Andrey Ryjenko and is now hiding behind his wife’s surname.”
Lottery.com shareholders stand firm in their resolve to pursue all legal channels should the shares be illegitimately assigned to the mentioned individuals. They demand unwavering accountability, clarity, and adherence to corporate governance principles from Lottery.com Inc.
An in-depth inquiry into McGahan’s past activities, especially his involvement in supplying PPE to the UK Government during the Covid-19 pandemic and his role in the UK charity, Mask Our Heroes, is also in progress.
The outcomes of this analysis, conducted by an independent financial intelligence agency, are slated to be made public soon.
About Lottery.com Inc.
Lottery.com Inc. is a leading provider of online lottery services, offering players a convenient and secure platform to participate in various national and international lotteries. With a commitment to transparency and integrity, Lottery.com Inc. strives to provide an exceptional lottery experience for its users. It is currently listed on NASDAQ.
