Lottery.com received a notice by Nasdaq warning that the company could be delisted from the stock market for not complying with Listing Rule 5605.
This notice was sent on Monday, March. 13 as a result Naila Crumbhry‘s Mar. 9 resignations from the Board of Directors of company, Audit Committee and Compensation Committee of Board of Directors.
Chowdhry quit due to a “disagreement” with the company over ‘issues relating to corporate policies, operations and governance”. This included with the current Board of Directors, specifically regarding the Board’s inability to resolve urgent company problems and the lack of independent and internal directors.
In her resignation letter, she also accused Board members of allegedly violating their fiduciary obligations.
The Lottery.com Board denied the allegations. It stated that it believed all actions were in the best interests of all stockholders and the company. Legal guidance is currently being sought to address the allegations.
This has not been a violation of Nasdaq Listing Rule 5605(c)(2), which requires that the Board be composed of at least three directors. Each director must be an independent director according to the Nasdaq Listing Rules, and each member must meet the higher independence standards for members of the Audit Committee.
Lottery.com may regain compliance with Listing Rule 5605 (c), (4) by addressing the issue ‘until either the company’s annual shareholders’ meeting, or Mar. 9, 2024, or if the company’s next annual shareholders meeting is held prior to Sept. 5, 20,23…no later that Sept. 5, 2020′.
If Lottery.com fails in either of these periods to gain compliance, the firm will be removed from Nasdaq.
This isn’t the first time Lottery.com has violated Nasdaq rules. Similar events took place last September, when four Board members (Lisa Borders Steven Cohen, William Thompson and Tony DiMatteo), whittled down the Board to Richard Kivel.
Lottery.com responded to the latest notice by saying: “While Lottery.com cannot provide any assurances regarding the timing, the company plans on identifying a new independent Audit Committee Member as soon as practicable to regain compliance to the Nasdaq Listing Rules.”
