After more than a month of non-compliance, Lottery.com, a lottery technology broker, has now regained its compliance with Nasdaq Stock Market regulations.
Lottery.com has updated its website to confirm that Nasdaq’s Listing Qualifications Department verified the broker’s compliance with the minimum bid price requirement.
Nasdaq Listing Rule (5450(a)(1)) states that ordinary shares may not fall below $1.00 in the 30 days preceding business. Nasdaq contacted Lottery.com last August to inform them that they had violated this rule.
The provider was flagged as well for violating Listing Rule 5250(c), which mandates that companies file their accounts within set deadlines. Lottery.com submitted its Q2 report late last year. Nasdaq warned it that it might be delisted .
Lottery.com reacts to Nasdaq’s warnings
Lottery.com, in an effort to appease Nasdaq in the last few months, has made changes in order to get back into line with regulations and rules of the stock market.
The reverse stock split was approved by shareholders overwhelmingly last month. Lottery.com’s board voted then to approve a reverse stock split of 1-for-20, which took effect at the close on trading on 9th August.
The Nasdaq Hearings panel gave Lottery.com a deadline of 15 June 2023 for filing an annual report using Form 10-K, for the year ending 31 December 2022, and a quarter report using Form 10-Q covering the period up to 31 March 2023.
The panel gave the provider until August 24 to comply with minimum bids requirements in order for it to continue trading. The minimum bid requirement is that shares must be $1.00 or more for a minimum of 10 consecutive days.
Lottery.com received a notification letter on 8 September confirming that it had met this goal. The closing bid price of shares was $1.00 or more for 10 days between 10 and 31 August.
Lottery.com has been ruled compliant with the minimum price rule. Nasdaq also said Lottery.com is now in compliance with the periodic filing rule.
Lottery.com shares jumped to $4.15 on Tuesday when the news was released, before closing at $3.63.
Lottery.com gets a welcome boost
The news comes against the backdrop of continued uncertainty at Lottery.com. In July, another CEO was fired. Mark Gustavson has resigned, after having only taken on the role of in February. Matthew McGahan, the chairman of Lottery Com, is temporarily in charge.
Gustavson was appointed to replace Sohail Quareshi. Quraeshi, meanwhile, held the position only for a short time after being named permanent CEO at the end of October 2022, following an interim period.
Robert Stubblefield was recently appointed as Lottery.com’s new Chief Financial Officer. Paul Jordan and Tamer hassan have also been appointed as independent board members.
After a few difficult years, the provider has been trying to stabilize its ship for some time. In May, the company revealed that it has “material weaknesses” in its non-compliance with accounting standards in response to ongoing class actions.
In its report for Q2 2022, the company raised issues regarding the effectiveness of their controls and procedures when reporting financial results. All of this was linked to a revenue overstatement in July 2022. This led to Chief Revenue Officer Matthew Clemenson resigning, and CEO Lawrence DiMatteo quitting shortly after.
The business was the target of a lawsuit in March by the founders TinBu , a lottery-data business. John Brier, Bin Tu and others filed a lawsuit against Lottery.com alleging that the company failed to pay them promised compensation following its acquisition.
According to the lawsuit, Lottery.com has failed to pay TinBu for the first payment promised. The suit also claimed that the company failed to deliver tokens promised.
Lottery.com’s former chair criticises it openly
These struggles are well documented. McGahan’s predecessor Richard Kivel said that it was “impossible to function as an independent director” when he resigned . Kivel claimed that his attempts to improve the fortunes of Lottery Com had been “aggressively hindered”.
Kivel stated in a letter of resignation that Woodford Eurasia’s emergency funding had not been received and there was no indication it would be forthcoming. He said that the FBI was investigating the chief compliance officer at the company.
Kivel was a board member at Lottery.com since November 2021. He continued to work at the company despite ongoing problems that caused and other board members to resign from the business in September 2022 .