Lottery.com has seen its bad year compounded after two board members quit in protest, claiming the company had overlooked clear ‘red flags’ regarding a new investor in the company.
Furthermore, a director resigned due to a breakdown in the board’s ability to cooperate. Founder of the company, Tony DiMatteo, also left the board, soon after his resignation as CEO, which was a requisite term of the new investment from Woodford Eurasia, a subsidiary of investment firm United International Holdings Netherlands B.V.
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The company’s troubles in 2022 stretch back to a financial scandal in which its chief financial officer, Ryan Dickinson, resigned after it was revealed he had deliberately overstated the company’s cash holdings.
Faith in the company plummeted as it revealed it may not have the money to pay all the wages owed to its employees. With Lottery.com’s future in jeopardy, it announced funding from Woodford, which will provide a $2.5m loan to Lottery.com within five days, with the possibility for an additional $50m.
Rather than interest, Woodford will receive warrants to purchase up to 15% of Lottery.com at a 25% discount from current market prices.
As part of the terms of the loan, Woodford Eurasia demanded that four of the five remaining members of the Lottery.com board resign. With this fresh round of resignations, Woodford has got its wish and is set to appoint two new board members itself.
Lisa Borders and William C Thompson Jr criticized the company’s actions, saying: “Questions to determine the viability and credibility of potential investors were met with disdain and were never fully answered. A request for additional time to review ‘red flags’ raised by our compliance team about a potential investor was met with threats to hold an official board meeting without all board members present.”
