UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
LOTTERY.COM
INC.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware |
|
7372 |
|
81-1996183 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(Primary
Standard Industrial
Classification
Code Number) |
|
(I.R.S.
Employer
Identification
Number) |
20808
State Hwy 71 W, Unit B
Spicewood,
Texas 78669
(737)
309-4500
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Mathew
McGahan
Principal
Executive Officer
20808
State Hwy 71 W, Unit B
Spicewood,
Texas 78669
Tel:
(737) 309-4500
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
M.
Richard Cutler, Esq.
Cutler
Law Group P.C.
6575
West Loop South
Bellaire,
TX 77401
Tel:
(713) 888-0040
APPROXIMATE
DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check
the following box. ☐
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following
box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective
on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
|
Non-accelerated
filer |
☒ |
Smaller
reporting company |
☒ |
|
|
|
Emerging
growth company |
☒ |
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided
pursuant to Section 7(a)(2)(B) of the Securities Act.
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
Information
contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the
SEC. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.
This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful.
SUBJECT
TO COMPLETION, DATED FEBRUARY 12, 2024
PRELIMINARY
PROSPECTUS
LOTTERY.COM
INC.
Primary
Offering of
$100,000,000
of Company Securities
4,345,404
Shares of Company common stock registered on behalf of Selling
Shareholders
either directly or upon exercise of warrants or conversion of
convertible
promissory notes
Lottery.com,
Inc. may from time to time offer and sell common stock, preferred stock, depositary shares representing preferred stock, debt securities,
warrants, purchase contracts or units in one or more offerings of up to $100,000,000 in the aggregate of the securities identified herein
from time to time in one or more offerings; (1) the issuance by the Company of an aggregate of up to 20,000,000 shares of the Company’s
common stock, par value $0.001 per share (“common stock”), and (2) the offer and resale from time to time by the selling
shareholders named herein (the “Selling Shareholders”), or their permitted transferees, of: (a) shares of common stock, consisting
of (i) 2,197,706 issued and outstanding shares of common stock issued pursuant to private placements conducted in 2023 and 2024, (ii)
1,092,260 shares of common stock issuable upon exercise of the Private Placement Warrants; and (b) 1,055,438 held by certain officers,
directors, employees and consultants of the Company.
Our
registration of the securities covered by this prospectus does not mean that either we or the Selling Shareholders will issue, offer
or sell, as applicable, any of the securities. We and the Selling Shareholders may offer and sell the securities covered by this prospectus
in a number of different ways and at varying prices. We provide more information about how we and the Selling Shareholders may sell the
securities in the section entitled “Plan of Distribution.” In addition, certain of the securities being registered hereby
are subject to vesting and/or transfer restrictions that may prevent the Selling Shareholders from offering or selling such securities
upon the effectiveness of the registration statement of which this prospectus is a part. See “Description of Capital Stock”
for more information.
We
will receive proceeds from the issuance and sale of our common stock, preferred stock, depositary shares representing preferred stock,
debt securities, warrants, purchase contracts or units. We will not receive any proceeds from the sale of shares of common stock or warrants
by the Selling Shareholders pursuant to this prospectus, except with respect to amounts received by us upon exercise of the warrants
to the extent such warrants are exercised for cash.
Our
common stock is listed on The Nasdaq Stock Market LLC under the symbols “LTRY” And “LTRYW”. On February 09, 2024,
the closing price of our common stock was $2.30 per share.
INVESTING
IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” BEGINNING ON PAGE 3 OF THIS PROSPECTUS AND ANY SIMILAR
SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR
SECURITIES.
Investing
in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the
heading “Risk Factors” beginning on page 3 of this prospectus, and under similar headings in any amendment or
supplements to this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is February 12, 2024.
TABLE
OF CONTENTS
No
one has been authorized to provide you with information that is different from that contained in this prospectus. This prospectus is
dated as of the date set forth on the cover hereof. You should not assume that the information contained in this prospectus is accurate
as of any date other than that date.
For
investors outside the United States: We have not done anything that would permit this offering or possession or distribution of this
prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform
yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.
CERTAIN
DEFINED TERMS
Unless
otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” “ours,”
“Company,” or “Lottery.com” refer to Lottery.com Inc. and its subsidiaries.
In
this document:
“Board”
means the Board of Directors of Lottery.com, Inc.
“Bylaws”
means the Amended and Restated Bylaws adopted by Lottery.com, Inc.
“Charter”
means the Second Amended and Restated Certificate of Incorporation adopted by Lottery.com, Inc.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Common
Stock” means the common stock, par value $0.001 per share, of Lottery.com, Inc.
“DGCL”
means the General Corporation Law of the State of Delaware.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“GAAP”
means United States generally accepted accounting principles.
“JOBS
Act” means the Jumpstart Our Business Startups Act of 2012.
“Lottery.com”
means Lottery.com Inc. (formerly known as Trident Acquisitions Corp.), a Delaware corporation, following the consummation of a business
combination.
“Nasdaq”
means The Nasdaq Global Market.
“Public
Shareholders” means holders of common shares held by the public.
“SEC”
means the U.S. Securities and Exchange Commission.
“Securities
Act” means the Securities Act of 1933, as amended.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements, including statements about the financial condition, results of operations, earnings outlook
and prospects of Lottery.com. Forward-looking statements appear in a number of places in this prospectus, including, without limitation,
in the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and “Business.” In addition, any statements that refer to projections, forecasts or other characterizations of future
events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically
identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,”
“outlook,” “estimate,” “forecast,” “project,” “continue,” “could,”
“may,” “might,” “possible,” “potential,” “predict,” “should,”
“would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.
The
forward-looking statements are based on the current expectations of the management of Lottery.com and are inherently subject to uncertainties
and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that
future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties
or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, but are not limited to, those factors discussed and identified in
public filings made with the SEC by Lottery.com and the following:
| ● | Our
inability to compete with other forms of entertainment for consumers’ discretionary
time and income; |
| | |
| ● | Our
inability to attract and retain users; |
| | |
| ● | Our
inability to successfully acquire and integrate new operations; |
| | |
| ● | Our
inability to profitably expand into new markets; |
| | |
| ● | changes
in applicable laws or regulations; |
| | |
| ● | the
failure of third-party service providers to perform services and protect intellectual property
rights required for the operation of our business; |
| | |
| ● | limited
liquidity and trading of our securities; |
| | |
| ● | geopolitical
risk and changes in applicable laws or regulations; |
| | |
| ● | the
possibility that Lottery.com may be adversely affected by other economic, business, and/or
competitive factors; |
| | |
| ● | operational
risk; |
| | |
| ● | the
risk that the COVID-19 pandemic, and local, state, and federal responses to addressing the
pandemic may have an adverse effect on our business operations, as well as our financial
condition and results of operations; |
| | |
| ● | other
factors detailed under the section entitled “Risk Factors.” |
The
risks described under the heading “Risk Factors” are not exhaustive. Other sections of this prospectus describe additional
factors that could adversely affect the business, financial condition or results of operations of Lottery.com. New risk factors emerge
from time to time and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our
business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained
in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on
these statements, which speak only as of the date hereof. All forward-looking statements attributable to Lottery.com or persons acting
on their behalf are expressly qualified in their entirety by the foregoing cautionary statements. Lottery.com undertakes no obligations
to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except
as required by law.
SUMMARY
OF THE PROSPECTUS
This
summary highlights selected information from this prospectus and does not contain all of the information that is important to you in
making an investment decision. This summary is qualified in its entirety by the more detailed information included in this prospectus.
Before making your investment decision with respect to our securities, you should carefully read this entire prospectus, including the
information under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” and the financial statements included elsewhere in this prospectus.
Unless
otherwise indicated or the context otherwise requires, references in this prospectus to the “Company,” “Lottery.com,”
“we,” “our,” “us” and other similar terms refer to Lottery.com, Inc. and our consolidated subsidiaries.
General
We
are transforming how, where and when lottery is played. Our engaging mobile and online technologies are built on Nexus, our proprietary
single tenant iGaming solution. Combined with a suite of integrated interface functionalities, we enable players and commercial partners
located in the U.S. and internationally to remotely purchase legally sanctioned lottery games. The world’s largest digital publishers
including Google and Amazon, along with fans and subscribers look to us for compelling, real-time results on more than 800 lottery games
from more than 40 countries. Through our affiliation with WinTogether, a registered 501(c)(3) charitable trust, we are fundamentally
changing how non-profit donors are incentivized to action by gamifying charitable giving. In all that we do, our mission remains the
same: an uncompromising passion to innovate, grow a new demographic of enthusiasts, deliver responsible and trusted solutions, and promote
community and philanthropic initiatives.
The
rights of holders of our Common Stock are governed by our second amended and restated certificate of incorporation (our “Charter”),
our amended and restated bylaws (our “Bylaws”) and the Delaware General Corporation Law (the “DGCL”). See the
sections entitled “Description of Securities.”
The
mailing address of our principal executive office is 20808 State Hwy 71 W, Unit B, Spicewood, TX, 78669, and our telephone number is
(737) 309-4500.
RISK
FACTORS
Our
business is subject to a number of risks and uncertainties, including those highlighted in the section entitled “Risk Factors”
immediately following this summary. The occurrence of one or more of the events or circumstances described in that section, alone or
in combination with other events or circumstances, may have a material adverse effect on our business, cash flows, financial condition
and results of operations. Important factors and risks that could cause actual results to differ materially from those in the forward-looking
statements include, among others, the following:
Business,
Market and Economic Risks
| ● | Competition
within the global entertainment and gaming industries is intense and if we fail to compete
effectively, our existing and potential users may be attracted to our competitors or to competing
forms of entertainment such as television, movies, online gaming and sports betting, as well
as other entertainment and gaming options on mobile devices and web applications. If our
offerings do not continue to be popular, we could experience price reductions, reduced margins,
loss of market share, and our business, financial condition and results of operations could
be harmed. |
| ● | Economic
downturns and political and market conditions beyond our control could adversely affect our
business, financial condition and results of operations. |
| ● | Reductions
in discretionary consumer spending could have an adverse effect on our business, financial
condition, and results of operations. |
| ● | Negative
events or negative media coverage relating to, or a declining popularity of, the lottery
or lottery games in general, or other negative coverage relating to lottery, forms of online
gaming or betting, or the gaming industry, may adversely impact our ability to retain or
attract users, which could have an adverse impact on our business, financial condition, and
results of operations. |
| ● | Our
growth will depend on our ability to attract players and retain users, and the loss of our
users, failure to attract new users in a cost-effective manner, or failure to effectively
manage our growth could adversely affect our business, financial condition, results of operations. |
| ● | Internet
search engines drive traffic to our B2C Platform and our new user growth could decline and
our business, financial condition, and results of operations would be adversely affected
if we fail to appear prominently in search results. |
| ● | We
face risks related to health epidemics and other widespread outbreaks of contagious disease,
which could disrupt our operations and impact our operating results. |
| ● | We
are subject to risks related to corporate social responsibility, responsible gaming, reputation
and ethical conduct. |
General
Operational Risks
| ● | The
mobile lottery market is still in relatively early stages of growth, and if such market does
not continue to grow, grows slower than we expect, or fails to grow as we forecast, our business,
financial condition, and results of operations could be adversely affected. |
| ● | Our
business may be materially adversely affected if our existing and future products, technology,
services and solutions do not achieve and maintain broad market acceptance, if we are unable
to keep pace with or adapt to rapidly changing technology, evolving industry standards and
changing regulatory requirements, or if we do not invest in product and systems development
and provide services that are attractive to our users and customers. |
| ● | Our
results of operations may fluctuate due to seasonality and other factors and, therefore,
our periodic operating results will not be guarantees of future performance. |
| ● | We
may not be able to capitalize on trends and changes in the gaming and lottery industries,
including due to the operational costs involved, the laws and regulations governing these
industries, and other factors. |
Branding
and Reputational Risks
| ● | Our
business depends on a strong brand and reputation, and if we are not able to develop, maintain
and enhance our brand and reputation, including as a result of negative publicity, our business
and operating results may be harmed. |
| ● | Our
marketing efforts to help grow our business may not be effective. |
| ● | If
we fail to detect fraud or misappropriation of proprietary information, including by our
users, customers and employees, our reputation and brand may suffer, which could negatively
impact our business, financial condition and results of operations and can subject us to
investigations and litigation. |
| ● | Our
growth prospects may suffer if we are unable to develop successful offerings or if we fail
to pursue additional offerings. In addition, if we fail to make the right investment decisions
in our offerings and technology, we may not attract and retain key users and customers and
our revenue, business, financial condition, and results of operations may decline. |
| ● | Any
failure to offer high-quality user support may harm our relationships with users and could
adversely affect our reputation, brand, business, financial condition and results of operations. |
Information
Technology Risks
| ● | We
rely on information technology and other systems and services, and any failures, errors,
defects or disruptions in our systems or the availability of our services could diminish
our brand and reputation, subject us to liability, disrupt our business, affect our ability
to scale our technical infrastructure and adversely affect our operating results and growth
prospects. Our software applications and systems, and the third-party platforms upon which
they are made available, could contain undetected errors. |
| ● | Despite
our security measures, our information technology and infrastructure may be vulnerable to
attacks by hackers, breached due to employee error, malfeasance or other cybersecurity risks
or disruptions. Any such breach could compromise our networks and the information stored
there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure
or other loss of information could result in legal claims or proceedings, liability under
laws that protect the privacy of personal information, and regulatory penalties, fines and
the payment of damages, restrictions on our ability to use data, disruption of our operations
and the services we provide to users, damage to our reputation, and a loss of confidence
in our products, services and systems, which could adversely affect our business. |
| ● | Because
we maintain certain information about our users, we are subject to various privacy laws both
in the United States and internationally. Our failure to comply with such laws could expose
us to penalties, fines, and litigation, adversely impact our reputation and brand, any of
which could adversely affect our business. |
| ● | Our
business could be adversely impacted by changes in the Internet and mobile device accessibility
of users. |
| ● | We
operate in a rapidly evolving industry and if we fail to successfully develop, market or
sell new products or adopt new technology platforms, it could materially adversely affect
our business, results of operations and financial condition. |
| ● | We
may not timely and effectively scale and adapt our existing technology and network infrastructure
to ensure that our Platform is accessible, which would adversely affect our business, reputation,
financial condition, and results of operations. |
| ● | Our
Platform may be vulnerable to risks, both foreseen and unforeseen, arising from the new and
untested nature of distributed ledger technology. |
Regulatory
and Compliance Risks
| ● | There
is no certainty that in the future a jurisdiction will not enact, amend, or reinterpret laws
and regulations governing our operations in ways that impair our revenues, cause us to incur
additional legal and compliance costs and other operating expenses, or are otherwise not
favorable to our existing operations or planned growth, all of which may have a material
adverse effect on us or our results of operations, cash flow, or financial condition. |
| ● | If
there is a final determination on the applicability of the Wire Act to our operations and
it is determined or codified that the Wire Act extends to transmission of lottery games in
interstate or foreign commerce, certain of our operations that are not currently restricted
by statute or practice to a state’s territorial boundaries may be negatively impacted
or eliminated, which may have a material adverse effect on our business, financial conditions,
and results of operations. |
| ● | If
the Interstate Wagering Amendment is interpreted or applied to prohibit transmissions to
foreign countries, it could have a negative impact on our business, financial condition,
and results of operations. |
| ● | Our
business model and the conduct of our operations may have to vary in each U.S. jurisdiction
where we do business to address the unique features of applicable law to ensure we remain
in compliance with that jurisdiction’s laws. Our failure to adequately do so may have
an adverse impact on our business, financial condition, and results of operations. |
| ● | Rules
and regulations governing sweepstakes, promotions and giveaways vary by jurisdiction and
country, which could restrict or eliminate our ability to generate revenues on the WinTogether
Platform and our ability to increase our brand reputation and recognition by sweepstakes
participants, all of which could harm our business, financial condition and results of operations. |
| ● | In
some jurisdictions our key executives, certain employees or other individuals related to
the business may be subject to licensing or compliance requirements. Failure by such individuals
to obtain the necessary licenses or comply with individual regulatory obligations, could
cause the business to be non-compliant with its obligations, or imperil its ability to obtain
or maintain licenses that may be necessary for the conduct of our business. In some cases,
the remedy to such situation may require the removal of a key executive or employee and the
mandatory redemption or transfer of such person’s equity securities. |
| ● | A
court may find that part or all of the provision included in the Charter pertaining to the
redemption right with respect to capital stock held by any Shareholders who are deemed “disqualified”
or “unsuitable” holders is not enforceable, either in general or as to a particular
fact situation. |
| ● | We
will continually develop internal compliance programs and requirements in an effort to ensure
that we comply with legal requirements imposed in connection with our activities and generally
applicable to all publicly traded companies, however, we cannot ensure that they will prevent
the violation of one or more laws, which may have an adverse impact on our business, financial
condition, and results of operations. |
| ● | We
take our corporate responsibility to our users, customers, and the requirements of the regulatory
authorities in the jurisdictions in which operate very seriously and are focused on maintaining
a safe and responsible gaming environment. Our failure to remain in compliance with underage
and responsible gaming requirements or any amendments or additions to such requirements could
have a material adverse effect on us, our reputation and brand, or on our business, results
of operations, or financial condition. |
| ● | We
are subject to governmental laws and requirements of the U.S. and various international jurisdictions
in which we operate regarding anti-bribery, anti-corruption, economic and trade sanctions,
anti-money laundering and counter-terror financing. Alleged or actual violation of any of
these laws or requirements could negatively impact our brand and reputation, our ability
to obtain or maintain any governmental licenses, findings of suitability, registrations,
permits and approvals, any of which could negatively impact our business, financial condition
and results of operations. |
| ● | We
are subject to domestic and foreign laws relating to processing certain financial transactions,
including payment card transactions, and failure to comply with those laws, even if inadvertent,
could have a material adverse effect on our business, financial condition and results of
operations. |
| ● | Tax
and other regulatory authorities may successfully assert that we have not properly collected
or remitted withholding taxes, and as a result may successfully impose additional obligations,
fines, penalties or other financial liability on us, any of which could adversely affect
our business, financial condition, and results of operations. |
Human
Capital Risks
| ● | Continued
growth and success will depend on the performance of our current and future employees, including
certain key employees. Recruitment and retention of these individuals is vital to growing
our business and meeting our business plans. The loss of any of our key executives or other
key employees could harm our business. |
| ● | Illegal,
improper, or otherwise inappropriate activity of our couriers, whether or not occurring while
performing their employment duties, could expose us to liability and adversely affect our
business, reputation, brand, financial condition, and results of operations. |
Dependence
on Third Party Risks
| ● | Our
business model depends upon the continued compatibility between our B2C Platform and the
major mobile operating systems and upon third-party platforms for the distribution of our
product offerings. If Google Play or the Apple App Store or other mobile download sites prevent
users from downloading our apps or if our advertising is blocked or rejected from being delivered
to our users, our ability to grow our revenue, profitability and prospects may be adversely
affected. |
| ● | We
rely on third-party providers for validation services regarding our users, and if such providers
fail to perform adequately, provide accurate information or we do not maintain business relationships
with them, our business, financial condition and results of operations could be adversely
affected. |
| ● | We
rely on third-party payment processors to process payments and withdrawals made by our users,
and if we cannot manage our relationships with such third parties and other payment-related
risks, our business, financial condition and results of operations could be adversely affected. |
| ● | Our
technology contains third-party open-source software components, and failure to comply with
the terms of the underlying open-source software licenses could restrict our ability to provide
our offerings. |
| ● | If
we cannot license rights to use third-party technologies on reasonable terms, we may not
be able to commercialize new products or services in the future. |
| ● | We
rely on relationships with lottery organizations from which we acquire lottery information
for the provision of our Data Services. Loss of existing relationships or failure to expand
existing relationships may cause loss of competitive advantage or require us to modify, limit
or discontinue certain offerings, which could materially affect our business, financial condition
and results of operations. |
Geographic
Expansion and Acquisition Risks
| ● | Our
business plan includes the evaluation and potential acquisition and integration of businesses
or their assets. Our business may suffer if we are unable to successfully undertake the integrations
into the Company or otherwise manage the growth associated with such acquisitions, which
could adversely affect our operating results and result in charges to earnings, impairing
our business, financial condition, and results of operations. |
| ● | Our
strategy anticipates substantial growth, and if we fail to adequately scale product offerings
and manage our entry into new territories, our business and reputation may be harmed. |
| ● | We
may require additional capital to support our growth plans, including in connection with
our expansion into new markets and our strategic acquisitions, and such capital may not be
available on reasonable terms or at all. This could hamper our growth and adversely affect
our business. |
| ● | We
may face difficulties as we expand our operations into new markets in which we have limited
or no prior operating experience. |
International
Operations Risks
| ● | The
international scope of our operations may expose us to increased legal and regulatory risks,
and our international operations and corporate and financing structure may expose us to potentially
adverse tax consequences. |
| ● | Fluctuating
foreign currency and exchange rates may negatively impact our business, results of operations
and financial position. |
Intellectual
Property Risks
| ● | If
we are unable to protect our intellectual property and proprietary rights or prevent its
unauthorized use by third parties, our ability to compete in the market or our business,
financial condition and results of operations may be harmed. |
| ● | The
intellectual property rights of others, including claims of third parties that we are infringing
on their intellectual property and proprietary rights, may prevent us from developing new
products, services and systems, entering new markets or may expose us to significant license
fees, liability or costly litigation. |
Legal
Proceedings Risks
| ● | We
are party to pending litigation and investigations in various jurisdictions and with various
plaintiffs and we may be subject to future litigation or investigations in the operation
of our business. An adverse outcome in one or more proceedings could adversely affect our
business, financial condition and results of operations. |
| ● | Failure
to perform under agreements regarding our Platform or our Data Services, affiliate agreements,
or other contracts that we are party to may result in litigation, substantial monetary liquidated
damages and contract termination, which would materially and adversely affect our business,
financial condition and results of operations. |
Public
Company Operating Risks
| ● | Our
projections are subject to significant risks, assumptions, estimates and uncertainties, including
assumptions regarding future legislation and changes in regulations, both inside and outside
of the United States. As a result, our projected revenues, market share, expenses and profitability
may differ materially from our expectations. |
| ● | The
requirements of being a public company may strain our resources and divert management’s
attention, and the increases in legal, accounting and compliance expenses may be greater
than we anticipate. |
| ● | The
exclusive forum provision in our Charter may have the effect of discouraging lawsuits against
our directors and officers. |
| ● | Anti-takeover
provisions contained in our Charter and Bylaws, as well as provisions of Delaware law, could
impair a takeover attempt. |
Risks
Related to our Common Stock
| ● | There
can be no assurance we will be able to comply with the standards required to have our securities
remain listed on Nasdaq. |
| ● | The
exercise of registration rights may adversely affect the market price of our Common Stock. |
| ● | Future
offerings of debt or offerings or issuances of equity securities by Lottery.com may adversely
affect the market price of our Common Stock or otherwise dilute all other Shareholders. |
THE
OFFERING
We
are registering: (1) the issuance by us of up to $100,000,000 in the aggregate value of the securities identified herein from time to
time in one or more offerings; the issuance by the Company of an aggregate of up to 20,000,000 shares of the Company’s common stock,
par value $0.001 per share (“common stock”); (2) the offer and resale from time to time by the selling shareholders named
herein (the “Selling Shareholders”), or their permitted transferees, of: (a) shares of common stock consisting of (i) 2,197,706
issued and outstanding shares pursuant to private placements conducted in 2023 and 2024. The private placements were conducted through
Convertible Promissory Notes convertible at a conversion price of $2.2751. “Conversion Price” means $2.2751, if the Conversion
Price on the six (6) month anniversary of the Issuance Date is lower than the Conversion Price on the Issuance Date, then the Conversion
Price shall be adjusted downward to the VWAP of the Common Stock for the five (5) consecutive Trading Days immediately preceding the
six (6) month anniversary date. The Conversion Price is subject in each case, to adjustment as provided herein; (b) 1,092,260 shares
of common stock issuable upon exercise of the Private Placement Warrants; and (c) 1,055,438 held by certain officers, directors, employees
and consultants of the Company.
Any
investment in the securities offered hereby is speculative and involves a high degree of risk. You should carefully consider the information
set forth under “Risk Factors” on page 3 of this prospectus.
Issuance
of Common Stock |
|
|
|
|
|
Shares
of Common Stock, preferred stock, debt securities, warrants, purchase contracts or units |
|
20,000,000
shares or other securities up to $100,000,000 |
|
|
|
Use
of proceeds |
|
We
will receive up to an aggregate of approximately $100,000,000 from the issuance of the securities. Unless we inform you
otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the exercise of such warrants
for working capital and general corporate purposes. |
|
|
|
Resale
of shares of Common Stock |
|
|
|
|
|
Shares
of Common Stock offered by the Selling Shareholders |
|
4,345,404
shares upon full conversion of convertible notes, and exercise of warrants, including 1,055,438 shares of Common Stock currently
outstanding held by officers, directors, employees and consultants. |
|
|
|
Use
of proceeds |
|
Other
than possibly in connection with the exercise of warrants, we will not receive any of the proceeds from the sale of the shares of
Common Stock by the Selling Shareholders. |
|
|
|
Ticker
Symbol |
|
Our
shares of Common Stock and public warrants are listed on Nasdaq under the symbol “LTRY” and “LTRYW.” |
|
|
|
Lock-up
restrictions |
|
Certain
of our Shareholders, including the Selling Shareholders, are subject to certain restrictions on transfer until the termination of
applicable lock-up periods. See “Securities Act Restrictions on Resale of Common Stock.” |
(1) |
The
number of shares of Common Stock issued and outstanding of Lottery.com Inc. is 4,747,047 as of February 9, 2024. |
USE
OF PROCEEDS
Our
offering of $100,000,000 in our securities is being made on a best-efforts basis: as if a sale of common stock, the offering price per
share would be $5.00. The table below depicts how we plan to utilize the proceeds in the event that 25%, 50%, 75% and 100% of the securities
in this offering are sold; however, the amounts actually expended for working capital as well as other purposes may vary significantly
and will depend on a number of factors, including the amount of our future revenues and the other factors described under “Risk
Factors.” Accordingly, we will retain broad discretion in the allocation of proceeds of this Offering.
Amount
of Securities Sold | |
25% | | |
50% | | |
75% | | |
100% | |
Gross
proceeds from this Offering (1)(2) | |
| 25,000,000 | | |
| 50,000,000 | | |
| 75,000,000 | | |
| 100,000,000 | |
Underwriting
discounts and commissions (3) | |
| 1,750,000 | | |
| 3,500,000 | | |
| 5,250,000 | | |
| 7,000,000 | |
Other
offering costs and listing fees | |
| 250,000 | | |
| 500,000 | | |
| 750,000 | | |
| 1,000,000 | |
Net
proceeds from this Offering | |
| 23,000,000 | | |
| 46,000,000 | | |
| 69,000,000 | | |
| 92,000,000 | |
Operations | |
| 9,200,000 | | |
| 18,400,000 | | |
| 27,600,000 | | |
| 36,800,000 | |
Acquisitions | |
| 1,104,000 | | |
| 2,208,000 | | |
| 3,312,000 | | |
| 4,416,000 | |
Product
Development | |
| 3,000,000 | | |
| 6,000,000 | | |
| 9,000,000 | | |
| 12,000,000 | |
General
& Administrative | |
| 5,750,000 | | |
| 11,500,000 | | |
| 17,250,000 | | |
| 23,000,000 | |
Additional
General Working Capital | |
| 3,946,000 | | |
| 7,892,000 | | |
| 11,838,000 | | |
| 15,784,000 | |
1.
Expenditures for the 24 months following the completion of this offering. The expenditures are categorized by significant area of activity.
The Company will hire more employees and consultants and scale up its operations based on the amount of funds it receives from this offering.
2.
Due to the uncertainties inherent in product development it is difficult to estimate with certainty the exact amounts of the net proceeds
from this offering that may be used for the above purposes.
3.
Consists of potential broker-dealer commissions of 7% of the offering proceeds.
MANAGEMENT
Board
of Directors and Management
The
following persons serve as the Company’s executive officers and directors
Name |
|
Age |
|
Position |
Executive
Officers |
|
|
|
|
Matthew
McGahan(3) |
|
54 |
|
President,
Chief Executive Officer, Secretary and Chairperson of the Board |
Robert
Stubblefield |
|
60 |
|
Chief
Financial Officer |
Gregory
Potts |
|
53 |
|
Chief
Operating Officer |
|
|
|
|
|
Non-Employee
Directors |
|
|
|
|
Barney
Battles(2) |
|
57 |
|
Director |
Christopher
Gooding(1) |
|
66 |
|
Director |
Paul
S. Jordan(2) |
|
63 |
|
Director |
Tanner
T. Hasan(3) |
|
55 |
|
Director |
(1) |
Class I director, with a term expiring at the annual meeting
of Shareholders to be held in 2026. |
(2) |
Class II director, with a term expiring at the annual meeting
of Shareholders to be held in 2024. |
(3) |
Class III director, with a term expiring at the annual meeting
of Shareholders to be held in 2025. |
Matthew
McGahan, has served as Chairman
of the Board since October 2022 and is Chairman and CEO of Sports.com, its wholly owned subsidiary and a leading sports entertainment
and media content platform. After serving as interim CEO of Lottery.com from July of 2023, he was appointed as CEO in December of 2023.
McGahan established his Automotive Group in 1997, which emerged as one of Europe’s largest Harley-Davidson and BMW dealer Groups.
His leadership propelled the company to substantial success until its sale in 2010. Through his family office established in 2015
with his father, Matt has since invested and advised businesses across a variety of sectors, including motorsports, EV, technology minerals
mining, recycling, fintech, and medical research, showcasing his versatility, keen investment insight and focus on innovation and social
responsibility. His ability to identify and nurture potential across a spectrum of industries has not only contributed to his personal
success but has also driven innovation and growth in each of these fields. His career can be characterised as a blend of entrepreneurial
success, philanthropic leadership, and strategic vision. His journey from the automotive industry to the helm of Lottery.com and Sports.com,
coupled with his profound impact on societal well-being through “Mask Our Heroes,” reflects a legacy of innovation, compassion,
and resilience.
Barney
Battles has been a member of the Board since October 2022. In 2014, Mr. Battles founded The League of Angels, a network of UHNW
international members investing in fast growth British ventures with a global impact and strong corporate values. Mr. Battle is the former
co-owner of Jackpot Games, a Maltese online gaming venture that was then sold to a large German Media Group. Additionally, Mr. Battles
is the former senior advisor to the Rank Group PLC (LSE: RNK), where he focused on the Grosvenor Casinos and Bingo (a UK-based chain
of 53 casinos located in major towns and cities across the UK and 76 bingo clubs located in Belgium, Spain, and the UK). During his time
at Grosvenor Casinos and Bingo, Mr. Battles focused on delivering interactive digital gaming formats across their retail footprint. He
also has extensive FTSE experience, working as Executive Chairman/CFO in turnaround or high growth sectors and is a former CFO of London’s
largest digital agency. Mr. Battles earned a Master in Computing Science from the University of Aberdeen, and was a Scottish Chartered
Accountant with Ernst & Young.
Christopher
Gooding has been a member of the Board of Directors since August of 2023. Mr. Gooding brings decades of service at respected law
firms, predominantly within the heart of London’s financial district. His professional journey began as an Assistant Solicitor
at Clifford Turner in London and Dubai, advancing to a 15-year tenure at Clyde & Co. A consummate legal strategist, he also served
as a partner at LeBoeuf Lamb Greene & MacRae and Howard Kennedy. Notably, from 1999 to 2009, he held the position of Director at
the Sovereign Trade Corporation. Adding to his diverse portfolio, Gooding subsequently held partner roles at Fasken Martineau and Nabarro
LLC (now CMS). Since 2022, he has honed his expertise as a Consultant at Crowell and Morsing.
Paul
S. Jordan is a motorsport commercial specialist with extensive international sponsorship, acquisitions and communication skills and
experience. With an active career in motorsport that spans more than four decades, Mr. Jordan has held senior positions with the world’s
top Formula One Teams and some of most recognizable motorsport brands.
Tamer
T. Hassan is a former boxer and worked in football management before becoming a British actor with a slate of over 60 films. He is
best known for his role as the leader of the Millwall firm, opposite Danny Dyer, in “The Football Factory”
(2004), “Layer Cake (2004) opposite Daniel Craig, “Batman Begins” (2005), “The Business”
(2005), and “Game of Thrones” (2016). Mr. Hasan has recently completed filming for “The Witcher” (Season
2) on Netflix with Henry Cavil. He also remains involved with creative content and participates in voice-over roles. Mr. Hassan’s
entrepreneurial skills have led him to participate in large-scale projects in entertainment, sports & leisure, and hospitality. He
has a passion for supporting emerging acting talent in Cyprus and is the founder of The Tamer Hassan Academy for Acting.
Robert
Stubblefield has served as the chief financial officer of Demeta, Inc. since January 2022 and of Regnum Corp. since March 2020. Mr.
Stubblefield was the chief financial officer of Wookey Project Corp. and Wookey Search Technologies Corporation from March 2020 to December
2021. Further, Mr. Stubblefield served as a contract chief financial officer of Sherpa Digital Media, Inc. from February 2019 to December
2021. Prior to this role, from October 2017 to December 2019, Mr. Stubblefield served as a consulting chief financial officer for various
start-ups and growth companies in the San Francisco Bay Area and has experience in senior finance, accounting, and operations roles in
public companies. He has held a CPA License from the state of California since the late 1980’s.
Gregory
Potts has over 25 years of strategic marketing experience, including the implementation of growth strategies for consumer brands
and their channel affiliates through targeted, local marketing efforts using co-op funding mechanisms. At Lottery.com, he will be leading
the execution of the Company’s B2B growth strategy and will oversee the recently launched Global
Affiliate Marketing Program. Prior to coming to Lottery.com Mr. Potts served as a Senior Sales Executive
for Vericast, where he oversaw the channel affiliate program and specialized in co-op marketing, customer activation, and integrated
media campaigns. He also serves as a director of WinTogether.
Limitation
of Liability and Indemnification of Directors and Executive Officers
Lottery.com
has entered into indemnification agreements with each of our directors and executive officers, the form of which is attached as an exhibit
to the registration statement of which this prospectus is a part. The indemnification agreements require Lottery.com to indemnify its
directors and executive officers to the fullest extent permitted by Delaware law.
For
more details regarding the related party transactions between the Company and its other executive officers and directors, see the sections
entitled “Certain Relationships and Related Party Transactions.”
SELLING
SHAREHOLDERS
This
prospectus relates to the resale by the Selling Shareholders of up 4,345,404 shares of Common Stock, including shares held directly,
shares issuable upon the exercise of certain outstanding warrants, shares issuable upon the conversion of certain unsecured convertible
notes. The 4,345,404 shares consist of: (a) 2,197,706 issued and outstanding shares pursuant to private placements conducted in 2023
and 2024. The private placements were conducted through Convertible Promissory Notes convertible at a conversion price of $2.2751. If
the “Conversion Price” on the six (6) month anniversary of the Issuance Date is lower than the Conversion Price on the Issuance
Date, then the Conversion Price shall be adjusted downward to the VWAP of the Common Stock for the five (5) consecutive Trading Days
immediately preceding the six (6) month anniversary date. The Conversion Price is subject in each case, to adjustment as provided herein;
(b) 1,092,260 shares of common stock issuable upon exercise of the Private Placement Warrants; and (c) 1,055,438 shares of common stock
held by certain officers, directors, employees and consultants of the Company.
The
Selling Shareholders may from time to time offer and sell any or all of the shares of Common Stock set forth below pursuant to this prospectus
and any accompanying prospectus supplement. When we refer to the “Selling Shareholders” in this prospectus, we mean the persons
listed in the table below, and the pledgees, donees, transferees, assignees, successors, designees and others who later come to hold
any of the Selling Shareholders’ interest in the Common Stock other than through a public sale. We cannot advise you as to whether
the Selling Shareholders will in fact sell any or all of such shares of Common Stock. In addition, the Selling Shareholders may sell,
transfer or otherwise dispose of, at any time and from time to time, the shares of Common Stock in transactions exempt from the registration
requirements of the Securities Act after the date of this prospectus. For purposes of this table, Selling Shareholders will have sold
all of the securities covered by this prospectus upon the completion of the offering.
The
following table sets forth, as of February 12, 2024 (or such other date as such information was provided to us by the applicable Selling
Shareholders), the name and address of the Selling Shareholders, the number of shares of Common Stock beneficially owned, the number
of shares of Common Stock that the Selling Shareholders may offer pursuant to this prospectus and the number of shares of Common Stock
beneficially owned by the Selling Shareholders after the sale of the securities offered hereby.
Selling
Stockholder information for each additional Selling Stockholder, if any, will be set forth by prospectus supplement to the extent required
prior to the time of any offer or sale of such Selling Stockholder’s shares pursuant to this prospectus. Any prospectus supplement
may add, update, substitute, or change the information contained in this prospectus, including the identity of each Selling Stockholder
and the number of shares registered on its behalf. A Selling Stockholder may sell or otherwise transfer all, some or none of such shares
in this offering. See “Plan of Distribution.”
Selling Stockholder | |
Shares of Common Stock Beneficially Owned Prior to Offering | | |
Percent Owned After Offering | | |
Shares of Common Stock Being Offered | | |
Shares of Common Stock Benefically Owned After Offering | | |
Shares of Common Stock Benefically Owned After Conversion of Promissory Note | | |
Purchase Warrants Shares Being Registered | | |
Purchase Warrants Shares Owned After Purchase | |
Matthew McGahan(1) | |
| 473,985 | | |
| 9.99 | % | |
| 195,720 | | |
| 5.90 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Robert Stubblefield (2) | |
| 120,000 | | |
| 2.53 | % | |
| 75,000 | | |
| 1.49 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Gregory Potts (3) | |
| 50,000 | | |
| 1.00 | % | |
| 20,000 | | |
| 0.60 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Barney Battles(4) | |
| 233,368 | | |
| 4.90 | % | |
| 131,327 | | |
| 2.90 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Christopher Gooding (5) | |
| 152,392 | | |
| 3.20 | % | |
| 90,839 | | |
| 1.89 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Paul S. Jordan(6) | |
| 148,266 | | |
| 3.10 | % | |
| 83,776 | | |
| 1.84 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Tanner T. Hasan(7) | |
| 148,266 | | |
| 3.12 | % | |
| 83,776 | | |
| 1.84 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Amar Ali Law PLLC(8) | |
| 247,150 | | |
| 5.20 | % | |
| 100,000 | | |
| 3.07 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Randall Lanham, Esq.(9) | |
| 75,000 | | |
| 1.58 | % | |
| 50,000 | | |
| 0.93 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Andrew R. Korn, Esq.(10) | |
| 81,000 | | |
| 1.70 | % | |
| 50,000 | | |
| 1.24 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Andrey Nikitin(11) | |
| 300,000 | | |
| 6.30 | % | |
| 100,000 | | |
| 3.73 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Sound Capital, Inc.(12) | |
| 75,000 | | |
| 1.58 | % | |
| 75,000 | | |
| 0.93 | % | |
| 0 | | |
| 0 | | |
| 0 | |
Adam Gefvert(13) | |
| 0 | | |
| 0.00 | % | |
| 43,955 | | |
| 0.54 | % | |
| 43,955 | | |
| 49,700 | | |
| 21,845 | |
Honey Tree Trading, LLC(14) | |
| 0 | | |
| 0.00 | % | |
| 2,043,867 | | |
| 9.99 | %* | |
| 2,043,867 | | |
| 2,311,050 | | |
| 1,015,802 | |
Robert Seguso(15) | |
| 0 | | |
| 0.00 | % | |
| 65,932 | | |
| 0.82 | % | |
| 65,932 | | |
| 74,550 | | |
| 32,768 | |
Asaf Shalev(16) | |
| 0 | | |
| 0.00 | % | |
| 43,955 | | |
| 0.54 | % | |
| 43,955 | | |
| 49,700 | | |
| 21,845 | |
Total | |
| 2,104,427 | | |
| 44.20 | % | |
| 3,253,147 | | |
| 28 | % | |
| 2,197,709 | | |
| 2,485,000 | | |
| 1,092,260 | |
(1) |
Consists of (i) 473,985 shares of Common Stock currently owned
by Matthew McGahan, our President, Chief Executive Officer, Secretary and Chairperson of our Board. Mr. McGahan’s business address
is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood, TX, 78669. |
(2) |
Consists of (i) 120,000 shares of Common Stock currently owned
by Robert Stubblefield, our Chief Financial Officer. Mr. Stubblefield’s business address is c/o Lottery.com, 20808 State Hwy 71
W, Unit B, Spicewood, TX, 78669. |
(3) |
Consists of (i) 50,000 shares of Common Stock currently owned
by Greg Potts, our Chief Operating Officer. Mr. Potts’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(4) |
Consists of (i) 233,368 shares of Common Stock currently owned
by Barney Battles, our Board Member. Mr. Battle’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(5) |
Consists of (i) 152,392 shares of Common Stock currently owned
by Christopher Gooding, our Board Member. Mr. Gooding’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(6) |
Consists of (i) 148,266 shares of Common Stock currently owned
by Paul S. Jordan, our Board Member. Mr. Jordan’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(7) | Consists
of (i) 148,266 shares of Common Stock currently owned by Tanner T. Hasan, our Board Member.
Mr. Hasan’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(8) | Consists
of (i) 247,150 shares of Common Stock issued in the name of Amar Ali Law, PLLC, beneficially
owned by Amar Ali, Esq., our Chief Outside Legal Counsel. Mr. Ali’s business address
is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood, TX, 78669. |
(9) |
Consists of (i) 75,000 shares of Common Stock currently owned
by Randall Lanham, Esq., our Outside Legal Counsel. Mr. Lanham’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit
B, Spicewood, TX, 78669. |
(10) | Consists
of (i) 100,000 shares of Common Stock currently owned by Andrew R. Korn, Esq., our Outside
Legal Counsel. Mr. Korn’s business address is c/o Lottery.com, 20808 State Hwy 71 W,
Unit B, Spicewood, TX, 78669. |
(11) | Consists
of (i) 300,000 shares of Common Stock currently owned by Andrey Nikitin a consultant. Mr.
Nitikin’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(12) | Consists
of (i) 75,000 shares of Common Stock issued in the name of Sound Capital, Inc., beneficially
owned by Richard Chancis a consultant to the Company. Mr. Chancis’ business address
is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood, TX, 78669. |
(13) | Consists
of (i) 43,955 shares of Common Stock upon conversion of promissory note and 49,700 Purchase
Warrant Shares currently owned by Adam Gefvert, a participant in the Company Private Placement.
Adam Gefvert’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(14) | Consists of (i) 2,043,867 shares of Common Stock upon conversion of promissory note and 2,311,050 Purchase Warrant Shares currently owned by Honey Tree Lending, LLC, a participant in the Company Private Placement. Honey Tree Lending’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood, TX, 78669.
*In accordance with the terms of the convertible note, Honey Tree Lending, LLC may not exceed 9.99% ownership at any given time. |
(15) | Consists
of (i) 65,932 shares of Common Stock upon conversion of promissory note and 74,550 Purchase
Warrant Shares currently owned by Robert Seguso, a participant in the Company Private Placement.
Robert Seguso’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B,
Spicewood, TX, 78669. |
(16) | Consists
of (i) 43,955 shares of Common Stock upon conversion of promissory note and 49,700 Purchase
Warrant Shares currently owned by Asaf Shalev, a participant in the Company Private Placement.
Asaf Shalev’s business address is c/o Lottery.com, 20808 State Hwy 71 W, Unit B, Spicewood,
TX, 78669. |
(17) | The
Selling Shareholders own, in the aggregate, approximately 44% of the Common Stock outstanding
prior to this offering. |
PLAN
OF DISTRIBUTION
We
are offering the securities on a best-efforts basis directly from the Company or through placement agents we may later identify. Any
such placement agents would not be purchasing or selling any securities under this prospectus, nor would they be required to arrange
for the purchase or sale of any specific number or dollar amount of securities.
There
is no minimum number of securities that must be sold as a condition to closing this offering; the actual number/amount of securities
sold in this offering is not presently determinable.
The
Company in good faith determined the offering price for the Securities in this offering. The factors considered in determining the price
included the history of, and the prospects for the industry in which we compete, our past and present operations and our prospects for
future revenues.
In
the event we engage any placement agents we would pay them an aggregate placement agent fee equal to 7% of the gross proceeds of the
sale of securities in the offering. The estimated offering expenses payable by us, in addition to any placement agent fees, are approximately
1% of the gross offering amount raised (i.e. $25,000,000 raised, costs would approximate $250,000), which includes our legal and accounting
costs and various other fees and costs associated with offering. After deducting our estimated offering expenses, we expect the net proceeds
from this offering to be approximately 92% of the offering, assuming all securities offered are sold in this offering, the net proceeds
to the Company would be $92,000,000.
We
will pay all of the expenses incident to the registration, offering, and sale of the securities to the public other than commissions
or discounts of underwriters, broker-dealers, or agents. This does not include payment for any costs or expenses incurred by shareholders
related to ownership or sales of their shares.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons,
we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act
and is therefore, unenforceable.
ERISA
Considerations
Special
considerations apply when contemplating the purchase of securities on behalf of employee benefit plans that are subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), plans, individual retirement accounts (“IRAs”)
and other arrangements that are subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or
provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of the Code or
ERISA, and entities whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement
(each, a “Plan”). A person considering the purchase of the offered securities on behalf of a Plan is urged to consult with
tax and ERISA counsel regarding the effect of such purchase and, further, to determine that such a purchase will not result in a prohibited
transaction under ERISA, the Code or a violation of some other provision of ERISA, the Code or other applicable law. We will rely on
such determination made by such persons, although no securities will be sold to any Plans if management believes that such sale will
result in a prohibited transaction under ERISA or the Code.
Foreign
Regulatory Restrictions on Purchase of the Offered Shares
We
have not taken any action to permit a public offering of our securities outside the United States or to permit the possession or distribution
of this Offering Circular outside the United States. Persons outside the United States who come into possession of this Offering Circular
must inform themselves about and observe any restrictions relating to this offering of Offered Shares and the distribution of the Offering
Circular outside the United States.
Selling
Shareholders
The
Selling Shareholders, as used here includes donees, pledgees, transferees or other successors-in-interest selling shares of Common Stock
or interests in shares of Common Stock received after the date of this prospectus from a Selling Shareholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of Common Stock
or interests in shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or in private
transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing
market price, at varying prices determined at the time of sale, or at negotiated prices.
The
Selling Shareholders may use any one or more of the following methods when disposing of shares or interests therein:
| ● | ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block
trades in which the broker-dealer will attempt to sell the shares as agent, but may position
and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases
by a broker-dealer as principal and resale by the broker-dealer for their account; |
| ● | an
exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately
negotiated transactions; |
| ● | short
sales effected after the date the registration statement of which this prospectus is a part
is declared effective by the SEC; |
| ● | through
the writing or settlement of options or other hedging transactions, whether through an options
exchange or otherwise; |
| ● | broker-dealers
may agree with the Selling Shareholders to sell a specified number of such shares at a stipulated
price per share; |
| ● | a
combination of any such methods of sale; and |
| ● | any
other method permitted by applicable law. |
Certain
Selling Shareholders may, from time to time, pledge or grant a security interest in some or all of the shares of Common Stock owned by
them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares
of Common Stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act by amending the list of Selling Shareholders to include the pledgee, transferee or other successors in
interest as Selling Shareholders under this prospectus. The Selling Shareholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes
of this prospectus.
In
connection with the sale of our shares of Common Stock or interests therein, certain Selling Shareholders may enter into hedging transactions
with broker-dealers or other financial institutions, which may in turn engage in short sales of the shares of Common Stock in the course
of hedging the positions they assume. The Selling Shareholders may also sell our shares of Common Stock short and deliver these securities
to close out their short positions, or loan or pledge the shares of Common Stock to broker-dealers that in turn may sell these securities.
The Selling Shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or the
creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction).
Each
of the Selling Shareholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in
part, any proposed purchase of shares of Common Stock to be made directly or through agents. We will not receive any of the proceeds
from the offering by Selling Shareholders. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise
price of the warrants.
The
Selling Shareholders and any underwriters, broker-dealers or agents that participate in the sale of the shares of Common Stock or interests
therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act.
Any
discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under
the Securities Act. Selling Shareholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act
will be subject to the prospectus delivery requirements of the Securities Act.
In
addition, a Selling Shareholder that is an entity may elect to make a pro rata in-kind distribution of securities to its members, partners
or Shareholders pursuant to the registration statement of which this prospectus is a part by delivering a prospectus with a plan of distribution.
Such members, partners or Shareholders would thereby receive freely tradeable securities pursuant to the distribution through a registration
statement.
To
the extent required, the shares of Common Stock to be sold, the names of the Selling Shareholders, the respective purchase prices and
public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular
offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement
that includes this prospectus.
In
order to comply with the securities laws of some states, if applicable, the shares of Common Stock may be sold in these jurisdictions
only through registered or licensed brokers or dealers. In addition, in some states the shares of Common Stock may not be sold unless
they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied
with.
We
have advised the Selling Shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares
in the market and to the activities of the Selling Shareholders and their affiliates. In addition, to the extent applicable we will make
copies of this prospectus (as it may be supplemented or amended from time to time) available to the Selling Shareholders for the purpose
of satisfying the prospectus delivery requirements of the Securities Act. The Selling Shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities
Act.
We
have agreed to indemnify the Selling Shareholders against liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.
We
have agreed with the Selling Shareholders to keep the registration statement of which this prospectus constitutes a part effective until
all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or the
securities have been withdrawn.
LEGAL
MATTERS
Cutler
Law Group, P.C. has opined upon the validity of our Common Stock offered by this prospectus and certain other legal matters related to
this prospectus.
EXPERTS
The
consolidated balance sheet as of December 31, 2022 and 2021 and related consolidated statements of operations, Shareholders’ equity,
and cash flows are incorporated into this prospectus and in the registration statement by reference and have been incorporated in reliance
on the reports of Yusufali & Associates, LLC, independent registered public accounting firms, included herein, given on the authority
of said firm as experts in accounting and auditing.
Legal
and Administrative Proceedings
We
are currently not a party to any material legal or administrative proceedings other than ordinary routine litigation incidental to our
business and we are not aware of any pending or threatened material legal or administrative proceedings against us other than ordinary
routine matters incidental to our business except for the below items previously disclosed in our 10-Ks and 10-Qs. We may from
time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.
J.
Streicher
On
July 29, 2022, the Company filed its original Verified Complaint for Breach of Contract and Specific Performance (the “Streicher
Complaint”) against J. Streicher Financial, LLC (“Streicher”) in the Court of Chancery of the State of Delaware (the
“Chancery Court”), On September 26, 2022, the Chancery Court entered an order in favor of the Company, Granting with Modifications
Company’s Motion for Partial Summary Judgment in the amount of $16,500,000.00 (the “Streicher Judgment”). On October
27, 2022, the Chancery Court further awarded the Company $397,036.94 in attorney’s fees (the “Fee Order”). The Company
intends to fully collect on the Judgment and shall pursue all legal and equitable means to enforce the Judgment against Streicher until
the Judgment is fully satisfied.
Preston
Million Class Action
On
August 19, 2022, Preston Million filed the Class Action Complaint (the “Class Action Complaint”) against the Company
and certain former officers and directors of the Company in the United States District Court for Southern District of New York (the “SDNY”),
styled Preston Million, Individually and on Behalf of All Others Similarly Situated vs. Lottery.com, Inc. f/k/a Trident Acquisitions
Corp., Anthony DiMatteo, Matthew Clemenson and Ryan Dickinson (Case No. 1:22-cv-07111-JLR). On February 6, 2024, the United States
District Court for the Southern District of New York granted the Motions to Dismiss filed by Lottery.com in Case No. 1:22-cv-07111 (JLR),
In re Lottery.com, Inc. Securities Litigation. Lottery.com’s Motions to Dismiss sought dismissal of the Amended Class Action
Complaint and the Complaint filed by Plaintiff Harold M. Hoffman. The Court’s ruling is based on the pleadings alone and is not
a determination on the merits of the case. The Court has granted the Class Action Plaintiffs and Plaintiff Harold M. Hoffman leave to
amend their Complaints within twenty-one days of the date of the Court’s ruling.
TinBu
Complaint
On
March 13, 2023, John Brier, Bin Tu and JBBT, LLC (collectively, the “Plaintiffs”) filed its original complaint against Lottery.com,
Inc. f/k/a AutoLotto, Inc. (the “Company”) and its wholly-owned subsidiary TinBu, LLC (“TinBu”) (Company and
TinBu collectively referred to herein as “Defendants”) in the Circuit Court of the 13th Judicial District in and
for Hillsborough County, Florida (the “Complaint”). The Complaint alleges breach of contract(s) and misrepresentation with
alleged damages in excess of $4.6 million. On January 11, 2024, the Court signed and entered the Order Compelling Arbitration in Texas,
as requested Defendants. Plaintiffs are now seeking an appeal of the Court’s order compelling arbitration in Texas.
Global
Gaming Data
On
November 21, 2023, the Company and its wholly owned subsidiary and TinBu, LLC (“TinBu”) (Company and TinBu collectively,
“Plaintiffs”) filed their First Amended Verified Complaint in Federal Court for the Middle District of Florida against
John J. Brier, Jr. (“Brier”), Bin Tu (“Tu”), and Global Gaming Data, LLC (“GGD”) (collectively, “Defendants”)
for violations of the Federal Defend Trade Secrets Act (“DTSA”), the Florida Uniform Trade Secrets Act (“FUTSA”)
and the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), and for breaches of contract and fiduciary duties, including
the duty of loyalty, styled Lottery.com, Inc. f/k/a AutoLotto, Inc. and TinBu, LLC v. John J. Brier, Jr., Bin Tu, and Global
Gaming Data, LLC (Case No.: 8:23-cv-2594-KKM-TGW) Defendants filed certain counterclaims against Plaintiffs. On January 5, 2024,
the Court held a hearing on Plaintiffs’ request for preliminary injunctive relief. The Court has taken Plaintiffs’ request
under advisement and will issue an order accordingly.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed this registration statement on Form S-3, including exhibits, under the Securities Act of 1933, as amended, with respect to
the shares of Common Stock offered by this prospectus. This prospectus does not contain all of the information included in the registration
statement. For further information pertaining to us and our securities, you should refer to the registration statement and our exhibits.
In
addition, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available
to the public on a website maintained by the SEC located at www.sec.gov. We also maintain a website at https://www.lottery.com.
Through our website, we make available, free of charge, annual, quarterly and current reports, proxy statements and other information
as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained on, or
that may be accessed through, our website is not part of, and is not incorporated into, this prospectus.
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth the estimated expenses to be borne by the registrant in connection with the issuance and distribution of the
shares of common stock being registered hereby.
Securities and Exchange Commission registration fee | |
$ | 16,643.70 | |
Accounting fees and expenses | |
$ | 45,000 | |
Legal fees and expenses | |
$ | 80,000 | |
Financial printing and miscellaneous expenses | |
$ | 15,000 | |
Total* | |
$ | 156,643.70 | |
*
Estimates, exact amounts not currently known
Item
14. Indemnification of Directors and Officers.
Section
145 of the DGCL provides, generally, that a corporation shall have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his or her conduct was unlawful. A corporation may similarly indemnify such person for expenses actually
and reasonably incurred by such person in connection with the defense or settlement of any action or suit by or in the right of the corporation,
provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests
of the corporation, and, in the case of claims, issues and matters as to which such person shall have been adjudged liable to the corporation,
provided that a court shall have determined, upon application, that, despite the adjudication of liability but in view of all of the
circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.
In
accordance with Section 102(b)(7) of the DGCL, Lottery.com’s charter provides that a director will not be personally liable to
Lottery.com or Lottery.com’s Shareholders for monetary damages for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director’s duty of loyalty to Lottery.com or Lottery.com’s Shareholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv)
for any transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability
of a director for any act or omission occurring prior to the date when such provision became effective. Accordingly, these provisions
will have no effect on the availability of equitable remedies such as an injunction or rescission based on a director’s breach
of his or her duty of care.
Lottery.com’s
bylaws provide that it will indemnify its present and former directors and officers to the maximum extent permitted by the DGCL and that
such indemnification will not be exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw
provision, agreement, vote of Shareholders or disinterested directors or otherwise.
Lottery.com’s
charter provides for indemnification of Lottery.com’s directors, officers, employees and other agents to the maximum extent permitted
by the DGCL, and Lottery.com’s bylaws provide for indemnification of Lottery.com’s directors, officers, employees and other
agents to the maximum extent permitted by the DGCL.
Lottery.com
has entered into indemnification agreements with each of its current directors and officers containing provisions which are in some respects
broader than the specific indemnification provisions contained in the DGCL. The indemnification agreements require Lottery.com, among
other things, to indemnify its directors against certain liabilities that may arise by reason of their status or service as directors
and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Item
15. Recent Sales of Unregistered Securities.
From
December 2023 through February 2024 the Company sold and has contracted to sell an aggregate of $5,000,000 in unsecured convertible notes.
The notes are convertible at a Conversion Price of $2.2751 per share until December 5, 2024. The holders of the convertible notes also
received warrants equivalent to the value of their convertible note divided by $2.2751 which are exercisable at an exercise price of
$2.2751.
“Conversion
Price” means $2.2751. If the Conversion Price on the six (6) month anniversary of the Issuance Date is lower than the Conversion
Price on the Issuance Date, then the Conversion Price shall be adjusted downward to the VWAP of the Common Stock for the five (5) consecutive
Trading Days immediately preceding the six (6) month anniversary date. The Conversion Price is subject in each case, to adjustment as
provided herein.
Item
17. Undertakings.
The
undersigned registrant, hereby undertakes:
|
(1) |
To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: |
|
(i) |
To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended; |
|
(ii) |
To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement; and |
|
(iii) |
To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any material change to such information in the registration
statement. |
|
(2) |
That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
|
(3) |
To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of the offering. |
|
(4) |
That, for the purpose of determining liability under the Securities
Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other
than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part
of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
|
(5) |
That, for the purpose of determining liability of the registrant
under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in
a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities
to such purchaser: |
|
(i) |
Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule 424; |
|
(ii) |
Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
|
(iii) |
The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned
registrant; and |
|
(iv) |
Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser. |
Insofar
as indemnification for liabilities arising under the Securities may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on February 13, 2024.
|
LOTTERY.COM
INC. |
|
|
|
By: |
/s/
Mathew McGahan |
|
Name: |
Mathew
McGahan |
|
Title: |
President
and CEO |
EXHIBIT
INDEX
Exhibit
Number |
|
Description |
2.1† |
|
Business
Combination Agreement, dated as of February 21, 2021, by and among Trident Acquisitions Corp., Trident Merger Sub II Corp., and AutoLotto,
Inc. (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K, filed by Lottery.com with the SEC on February 23,
2021). |
3.1 |
|
Second
Amended and Restated Certificate of Incorporation of Lottery.com Inc. (incorporated by reference to Exhibit 3.1 of the Current Report
on Form 8-K filed by Lottery.com with the SEC on November 4, 2021). |
3.2 |
|
Amended
and Restated Bylaws of Lottery.com Inc. (incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K filed by Lottery.com
with the SEC on November 4, 2021). |
4.1 |
|
Warrant
Agreement, dated as of May 29, 2018, between TDAC and Continental Stock Transfer & Trust Company, as warrant agent (incorporated
by reference to Exhibit 4.1 of the Current Report on Form 8-K, filed by Lottery.com with the SEC on June 4, 2018). |
4.2 |
|
Description
of Capital Stock (incorporated by reference to Exhibit 4.2 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on
April 1, 2022). |
5.01* |
|
Legal Opinion |
10.1 |
|
Letter
Agreement among Trident Acquisitions Corp., Trident Acquisitions Corp.’s officers, directors and stockholders (incorporated
by reference to Exhibit 10.2 to Amendment No. 2 to the Registration Statement on Form S-1/A (File No. 333-223655) filed by Lottery.com
with the SEC on May 21, 2018). |
10.2 |
|
Stock
Escrow Agreement between Trident Acquisitions Corp., Continental Stock Transfer & Trust Company and the initial stockholders
of Trident Acquisitions Corp (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K, filed by Lottery.com with
the SEC on June 4, 2018). |
10.3 |
|
Services
Agreement, dated as of March 10, 2020, by and between AutoLotto, Inc. and Master Goblin Games LLC (incorporated by reference to Exhibit
10.8 of the Registration Statement on Form S-4 (Reg. No. 333-257734), filed by Lottery.com with the SEC on October 5, 2021). |
10.4 |
|
Amendment
No. 1 to Services Agreement, dated as of June 28, 2021, by and between AutoLotto, Inc. and Master Goblin Games LLC (incorporated
by reference to Exhibit 10.9 of the Registration Statement on Form S-4 (Reg. No. 333-257734), filed by Lottery.com with the SEC on
October 5, 2021). |
10.5 |
|
Investor
Rights Agreement, dated as of October 29, 2021, by and among Lottery.com Inc., AutoLotto, Inc. and the security holders party thereto
(incorporated by reference to Exhibit 10.12 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021). |
10.6 |
|
Initial
Stockholder Forfeiture Agreement, dated as of October 29, 2021, by and among Lottery.com Inc., AutoLotto, Inc. and the security holders
party thereto (incorporated by reference to Exhibit 10.13 of the Current Report on Form 8-K filed by Lottery.com with the SEC on
November 4, 2021). |
10.7# |
|
Employment
Agreement, dated as of February 21, 2021, by and between Lawrence Anthony DiMatteo III and AutoLotto, Inc. (incorporated by reference
to Exhibit 10.3 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021). |
10.8# |
|
Employment
Agreement, dated as of February 21, 2021, by and between Matthew Clemenson and AutoLotto, Inc. (incorporated by reference to Exhibit
10.4 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021). |
10.9# |
|
Amendment
to Employment Agreement, dated March 23, 2022, by and between Matthew Clemenson and Lottery.com (incorporated by reference to Exhibit
10.9 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022). |
10.10# |
|
Employment
Agreement, dated as of February 21, 2021, by and between Ryan Dickinson and AutoLotto, Inc. (incorporated by reference to Exhibit
10.5 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021). |
10.11# |
|
Amendment
to Employment Agreement, dated March 23, 2022, by and between Ryan Dickinson and Lottery.com (incorporated by reference to Exhibit
10.11 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022). |
10.12# |
|
Employment
Agreement, dated as of March 19, 2021, by and between Kathryn Lever and AutoLotto, Inc. (incorporated by reference to Exhibit
10.12 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022). |
10.13# |
|
Amendment
to Employment Agreement, dated as of March 28, 2022, by and between Kathryn Lever and Lottery.com Inc. (incorporated by reference
to Exhibit 10.13 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022). |
10.14# |
|
Form
of Indemnification Agreement (incorporated by reference to Exhibit 10.6 of the Current Report on Form 8-K filed by Lottery.com with
the SEC on November 4, 2021). |
10.15# |
|
AutoLotto,
Inc. 2015 Stock Option/Stock Issuance Plan (incorporated by reference to Exhibit 10.8 of the Current Report on Form 8-K filed by
Lottery.com with the SEC on November 4, 2021). |
10.16# |
|
Form
of Restricted Stock Award Agreement under the AutoLotto, Inc. 2015 Stock Option/Stock Issuance Plan (incorporated by reference to
Exhibit 10.9 of the Current Report on Form 8-K filed by Lottery.com with the SEC on November 4, 2021). |
10.17# |
|
Lottery.com
2021 Incentive Plan (incorporated by reference to Exhibit 10.7 of the Registration Statement on Form S-4 (Reg. No. 333-257734), filed
by Lottery.com with the SEC on October 5, 2021). |
10.18# |
|
Form
of Option Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.18 of the Annual Report
on Form 10-K filed by Lottery.com with the SEC on April 1, 2022). |
10.19# |
|
Form
of Restricted Stock Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit 10.19 of the
Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022). |
10.20# |
|
Form
of Director Restricted Stock Award Agreement under the Lottery.com 2021 Incentive Plan (incorporated by reference to Exhibit
10.20 of the Annual Report on Form 10-K filed by Lottery.com with the SEC on April 1, 2022). |
10.21# |
|
Resignation
and Release Agreement, dated July 22, 2022, by and between Lottery.com and Lawrence Anthony DiMatteo III (incorporated by reference
to Exhibit 10.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on July 22, 2022). |
10.22# |
|
Consulting
Agreement by and between AutoLotto, Inc. dba Lottery.com and Simpexe, LLC, specifically Harry Dhaliwal, dated July 1, 2022 (incorporated
by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Lottery.com with the SEC on July 6, 2022). |
10.23+ |
|
Master
Affiliate Agreement, dated as of October 2, 2021 (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q
filed by Lottery.com with the SEC on May 16, 2022). |
10.24 |
|
Loan
Agreement (Deed), dated December 7, 2022, between Lottery.com and Woodford Eurasia Assets Ltd, as lender (incorporated by reference
to Exhibit 10.24 of the Annual Report on Form 10-K/A filed by Lottery.com with the SEC on May 10, 2023). |
10.25 |
|
Loan
Agreement Deed, Debenture Deed and Securitization, dated December 7, 2022, between Lottery.com and Woodford Eurasia Assets Ltd, as
security holder (incorporated by reference to Exhibit 10.25 of the Annual Report on Form 10-K/A filed by Lottery.com with the SEC
on May 10, 2023). |
10.26 |
|
Business
Loan Agreement dated January 4, 2022, between Autolotto, Inc. and The Provident Bank (incorporated by reference to Exhibit 10.1
of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 22, 2023). |
10.27 |
|
$30,000,000
Promissory Note dated January 4, 2022, between Autolotto, Inc. and The Provident Bank (incorporated by reference to Exhibit
10.2 of the Quarterly Report on Form 10-Q filed by Lottery.com with the SEC on May 22, 2023). |
16.1 |
|
Letter
from Marcum LLP to the SEC, dated November 12, 2021 (incorporated by reference to Exhibit 10.13 of the Current Report on Form 8-K
filed by Lottery.com with the SEC on November 15, 2021). |
16.2 |
|
Letter
from Armanino LLP to the SEC, dated October 7, 2022 (incorporated by reference to Exhibit 16.1 of Amendment No. 1 to the Current
Report on Form 8-K filed by Lottery.com with the SEC on October 12, 2022. |
107* |
|
Filing Fee Table |
* |
Filed
herewith. |
** |
Furnished
herewith. |
#
Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally
copies of omitted schedules and exhibits to the Securities and Exchange Commission or its staff upon its request.
POWER
OF ATTORNEY
Each
of the undersigned, whose signature appears below, hereby constitutes and appoints Mathew McGahan, Robert Stubblefield and each of them,
their true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for and in their name, place and
stead, in any and all capacities, to sign any or all amendments to this registration statement and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents full power and authority to do and perform each and every act and thing necessary or appropriate to be done with respect to
this registration statement or any amendments hereto in the premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or his or their substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities
and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/
Matthew McGahan |
|
President,
CEO, Secretary and |
|
February
13, 2024 |
Matthew
McGahan |
|
Chairperson
of the Board (principal |
|
|
|
|
executive
officer) |
|
|
|
|
|
|
|
/s/
Robert J. Stubblefield |
|
Chief
Financial Officer |
|
February
13, 2024 |
Robert
Stubblefield |
|
(principal
financial officer) |
|
|
|
|
|
|
|
/s/
Barney Battles |
|
Director |
|
February
13, 2024 |
Barney
Battles |
|
|
|
|
|
|
|
|
|
/s/
Christopher Gooding |
|
Director
|
|
February
13, 2024 |
|
|
|
|
|
/s/
Paul S. Jordan |
|
Director |
|
February
13, 2024 |
Paul
S. Jordan |
|
|
|
|
|
|
|
|
|
/s/
Tamer T. Hasan |
|
Director |
|
February
13, 2024 |
Tamer
T. Hasan |
|
|
|
|
Exhibit
5.1
|
CutLER
LAW GROUP |
|
M.
Richard Cutler, Esq |
Corporate
Securities Law |
|
Admitted
in California & Texas |
|
|
February
12, 2024
Lottery.com
Inc.
20808
State Highway 71
Spicewood,
TX 78669
Re:
|
Lottery.com,
Inc. |
|
Registration
Statement on Form S-3 |
Ladies
and Gentlemen:
We
have acted as special counsel to Lottery.com Inc., a Delaware corporation (the “Company”), in connection with the preparation
and filing with the Securities and Exchange Commission (the “Commission”) of a Registration Statement on Form S-3 (the “Registration
Statement”) filed by the Company under the Securities Act of 1933, as amended (the “Securities Act”), relating to the
registration under the Securities Act and the issuance and sale of up to (1) $100,000,000 in the aggregate of the securities identified
herein from time to time in one or more offerings; which may include the issuance by the Company of an aggregate of up to 20,000,000
shares of the Company’s common stock, par value $0.001 per share (“common stock”), and (2) the offer and resale from
time to time by the selling shareholders named herein (the “Selling Shareholders”), or their permitted transferees, of: (a)
up to 1,055,438 shares of common stock (b) 2,197,709 shares of common stock issuable upon conversion of certain outstanding convertible
notes and (c) 1,092,259 shares of common stock issuable upon exercise of the warrants issued in connection with convertible promissory
notes (collectively the “Shares”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned
to such terms in the Agreement.
In
arriving at the opinions expressed below, we have examined originals, or copies certified or otherwise identified to our satisfaction
as being true and complete copies of the originals, the Registration Statement, specimen Common Stock certificates, certain Stock Purchase
Agreements, the form of Convertible Notes and such other documents, corporate records, certificates of officers of the Company and other
instruments as we have deemed necessary or advisable to enable us to render these opinions. In our examination, we have assumed the genuineness
of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents submitted to us as copies. As to any facts material to these opinions, we have
relied to the extent we deemed appropriate and without independent investigation upon statements and representations of officers and
other representatives of the Company and others.
Based
on the foregoing and in reliance thereon, and subject to the assumptions, exceptions, qualifications and limitations set forth herein,
we are of the opinion that:the Shares have been duly authorized and, when sold and delivered by the Company against receipt of the purchase
price therefor, in the manner coontemplated by the Prospectus and the Agreements, shall be validly issued, fully paid and nonassessable.
The
opinions expressed above are subject to the following exceptions, qualifications, limitations and assumptions:
A.
We render no opinion herein as to matters involving the laws of any jurisdiction other than the United States of America. We assume
no obligation to revise or supplement this opinion in the event of future changes in such laws or the interpretations thereof or such
facts.
B.
The opinions above are each subject to (i) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar
laws affecting the rights and remedies of creditors’ generally, including the effect of statutory or other laws regarding fraudulent
transfers or preferential transfers, and (ii) general principles of equity, including concepts of materiality, reasonableness, good faith
and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies regardless of
whether enforceability is considered in a proceeding in equity or at law.
6575
West Loop South, Suite 400 |
|
Tel
(800) 606-7150 |
Bellaire,
Texas 77401 |
www.cutlerlaw.com |
Fax
(713) 583-7150 |
|
CutLER
LAW GROUP |
Page
2 of 2 |
C.
We express no opinion regarding the effectiveness of (i) any waiver of stay, extension or usury laws or of unknown future rights or (ii)
provisions relating to indemnification, exculpation or contribution, to the extent such provisions may be held unenforceable as contrary
to public policy or federal or state securities laws.
We
hereby consent to the inclusion of this opinion as an exhibit to a Report on Form S-3 and to the references to our firm under
the caption “Legal Matters” in the Registration Statement. In giving our consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.
|
Best
Regards, |
|
|
|
/s/
M. Richard Cutler |
|
|
|
Cutler
Law Group P.C. |
6575
West Loop South, Suite 400 |
|
Tel
(800) 606-7150 |
Bellaire,
Texas 77401 |
www.cutlerlaw.com |
Fax
(713) 583-7150 |
Exhibit 107
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of Securities to be Registered | |
Shares
to be Registered(1) | | |
Proposed
Maximum Offering Price Per Share | | |
Proposed
Maximum Aggregate Offering Price | | |
Amount
of Registration Fee(5) | |
Primary
Offering: | |
| | | |
| | | |
| | | |
| | |
Common
Stock, par value $0.001 per share(2) | |
| 20,000,000 | | |
| $
5.00 (3) | | |
$ | 100,000,000 | | |
$ | 14,760 | |
Common
stock, par value $0.001 per share, held by Selling Shareholders (4) (8) | |
| 1,055,438 | | |
$ | 5.00 | | |
$ | 5,277,190 | | |
$ | 778.91 | |
Common
stock issuable upon conversion of convertible promissory notes (7) | |
| 2,197,706 | | |
$ | 2.2751 | | |
$ | 5,000,000.92 | | |
$ | 738.00 | |
Common
stock issuable upon exercise of warrants issued in connection with convertible promissory notes (6) (8) | |
| 1,092,260 | | |
$ | 2.2751 | | |
$ | 2,485,000.73 | | |
$ | 366.79 | |
Total | |
| 24,345,404 | | |
| | | |
$ | 112,762,191.65 | | |
$ | 16,643.70 | |
(1) | Pursuant
to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”),
the Registrant is also registering an indeterminate number of additional shares of common
stock, par value $0.001 per share (the “Common Stock”), that may become issuable
as a result of any stock dividend, stock split, recapitalization or other similar transaction. |
(2) | Represents
the issuance of up to 20,000,000 shares of common stock, an equivalent value in preferred
stock, depositary shares representing preferred stock, debt securities, warrants, purchase
contracts or units in one or more offerings of up to $100,000,000 in the aggregate of the
securities identified herein from time to time in one or more offerings. |
(3) | Estimated
solely for the purpose of calculating the registration fee in accordance with Rule 457(i)
under the Securities Act. The price per share is based upon the exercise price of five dollars
($5.00) per share of Common Stock. |
(4) | Estimated
solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the
Securities Act, based upon the average of the high and low selling prices of the Common Stock
on February 12, 2024, as reported on The Nasdaq Global Market. |
(5) | Calculated
by multiplying the proposed maximum aggregate offering price of securities to be registered
by 0.00014760. |
(6) | Calculated
by number of outstanding warrants by the exercise price of $2.2751 those warrants held by
certain Selling Shareholders. |
(7) | The
Company has $5,000,000 in outstanding convertible notes which are convertible at $2.2751
per share. Calculated by dividing the total outstanding convertible notes by the conversion
price. |
(8) | Calculated
by number of outstanding shares held by Selling Shareholders who are officers, directors,
employees, and consultants. |
Lottery dot com (PK) (USOTC:LTRY)
Historical Stock Chart
From May 2024 to Jun 2024
Lottery dot com (PK) (USOTC:LTRY)
Historical Stock Chart
From Jun 2023 to Jun 2024