Item
3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On
March 13, 2023, Lottery.com Inc. (the “Company”) received a notice (the “Notice”) from The Nasdaq
Stock Market LLC (“Nasdaq”) stating that, as a result of the resignation of Naila Chowdhry from the Board of Directors
of the Company and the Audit Committee and Compensation Committee of the Board of Directors (as discussed in Item 5.02, below),
the Company is not in compliance with Nasdaq Listing Rule 5605, including Rule 5605(c)(2), which requires the Audit Committee of the
Board of Directors (the “Board”) to consist of at least three members, each of whom is an independent director under
the Nasdaq Listing Rules and who meets heightened independence standards for Audit Committee members.
The
Notice indicates that consistent with Listing Rule 5605(c)(4), Nasdaq is providing the Company a cure period to regain compliance as
follows: (a) until the earlier of the Company’s next annual shareholders’ meeting or March 9, 2024; or (b) if the next annual
shareholders’ meeting is held before September 5, 2023, then the Company must evidence compliance no later than September 5, 2023.
In the event the Company does not regain compliance by this date, Nasdaq rules require the Staff of Nasdaq to provide written notification
to the Company that its securities will be delisted. At that time, the Company may appeal the delisting determination to a Hearings Panel.
While
the Company can provide no assurances as to timing, the Company plans to identify a new independent Audit Committee member as soon as
practicably possible to regain compliance with the Nasdaq Listing Rules.
Separately,
as previously disclosed, on August 24, 2022, the Staff notified the Company that the bid price of its common stock had closed at less
than $1 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5550(a)(2) (the
“Rule”). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until February
20, 2023, to regain compliance with the Rule. On February 23, 2023, the Company received a determination letter from the Staff advising
the Company that the Staff had determined that the Company had not regained compliance with the Rule and that the Company was not eligible
for a second 180 day period as the Company has not filed its periodic reports with the Securities and Exchange Commission (the “SEC”)
and Nasdaq, for the quarters ended June 30, 2022 and September 30, 2022, and it no longer complied with Nasdaq’s Listing Rules
for continued listing. Nasdaq also confirmed to the Company in its February 23, 2023 letter that the failure to timely file those periodic
reports each serve as separate and an individual basis for delisting.
The
Company had until 4:00 p.m. Eastern Time on March 2, 2023 to request an appeal of this determination, which appeal was timely requested.
If the appeal is not granted, then, the Company’s common stock and warrants will be delisted from the Nasdaq Global Market and
trading of the Company’s securities will be suspended, and a Form 25-NSE will be filed with the SEC which will remove the Company’s
securities from listing and registration on The Nasdaq Stock Market.
Hearings
are typically scheduled to occur approximately 30-45 days after the date of the hearing request. A request for a hearing regarding a
delinquent filing will stay the suspension of the Company’s securities only for a period of 15 days from the date of the request,
provided that when the Company requests a hearing, it may also request a stay of the suspension, pending the hearing, and the Company
has requested a stay of the suspension. A hearings panel will review the request for an extended stay and notify the Company of its conclusion
as soon as it is practicable but in any event no later than 15 calendar days following the deadline to request the hearing. In deciding
whether to grant an extended stay, a the panel will consider the Company’s specific circumstances, including the likelihood that
the filing(s) can be made within any exception period that could subsequently be granted, the Company’s past compliance history,
the reasons for the late filing, corporate events that may occur within the exception period, the Company’s general financial status,
and the Company’s disclosures to the market.
At
the panel hearing on the delisting, the Company intends to present a plan to regain compliance with the Rule and to file the Company’s
deficient quarterly reports for the quarters ended June 30, 2022 and September 30, 2022. In this regard, the Company is continuing to
work to become compliant as quickly as possible and is continuing to work to make progress in completing its amended 2021 Annual Report
on Form 10-K for filing with the SEC.
There
can be no assurance that the Company’s plan will be accepted by the hearings panel or that, if it is, the Company will be able
to regain compliance with the applicable Nasdaq listing requirements, or that a hearings panel will stay the suspension of the Company’s
securities. If the Company’s securities are delisted from Nasdaq, it could be more difficult to buy or sell the Company’s
common stock and warrants or to obtain accurate quotations, and the price of the Company’s common stock and warrants could suffer
a material decline. Delisting could also impair the Company’s ability to raise capital and/or trigger defaults and penalties under
outstanding agreements or securities of the Company.
