In light of disconcerting revelations around severe mismanagement, shareholders of Lottery.com Inc. (NASDAQ: LTRY) have instigated an autonomous investigation into the company’s proceedings. The scrutiny intensified after Matthew McGahan transitioned from his initial role as an independent director to occupy the positions of Chairman, CEO, President, and Company Secretary, a move that stands in clear violation of NASDAQ’s regulatory norms and raises substantial concerns regarding the entity’s dedication to ethical governance and transparency.
It has been unsettlingly disclosed that, under the aegis of McGahan, an extensive allocation of 3,253,147 shares was made to Lottery.com’s executive team and external advisors. This act egregiously violates NASDAQ’s regulations as well as the internal by-laws of Lottery.com Inc., resulting in a significant [dilution of shareholder value] and provoking an outcry among shareholders for urgent remedial actions.
The transgressions are enumerated as follows:
- Breach of NASDAQ Rule 5635(d): The LTRY board’s authorization of the issuance of more than 3,253,147 shares to its executive cadre and external consultants, representing an astounding 44.2% of LTRY’s total extant shares, directly infringes Rule 5635(d). This stipulation demands shareholder endorsement for any issuance amounting to more than 20% of the outstanding shares or voting entitlements.
- Infringement of the Lottery.com 2021 Incentive Plan: The allocation of shares was executed in blatant defiance of the conditions prescribed in the Lottery.com 2021 Incentive Plan. The tally of allocated shares considerably surpasses the plan’s set boundaries, thus deeming the distribution unauthorized and nullified.
- Unwarranted Shares to External Advisors: An inexplicable assignment of 300,000 shares to LTRY’s external advisors was made without a credible rationale for such a substantial endowment. The opacity surrounding the arrangements with these external consultants and their pending financial obligations casts significant aspersions on the legitimacy and intent behind these share allocations.
A spokesperson for the shareholders articulated: “Considering these grave violations, we, the shareholders, demand immediate action to deny the registration of LTRY shares to the members of the Board of Directors and external advisors named in the S-3 Form dated February 12, 2024. These individuals include Matthew McGahan, Robert Stubblefield, Gregory Potts, Barney Battles, Christopher Gooding, Paul S. Jordan, Tamer Hassan, Amar Ali Law PLLC, Randall Lanham, Esq., Andrew R. Korn, Esq., and Andrey Nikitin who was previously convicted of fraud and served time in jail as Andrey Ryjenko and is now hiding behind his wife’s surname.”
Lottery.com shareholders are steadfast in their determination to seek all legal remedies if the shares are inappropriately allocated to the designated individuals. They advocate for absolute accountability, transparency, and the upholding of corporate governance norms by Lottery.com Inc.
Moreover, a thorough examination into McGahan’s historical involvements, notably his engagement in the supply of PPE to the UK Government during the Covid-19 pandemic and his association with the UK charity, Mask Our Heroes, is underway.
The findings from this probe, carried out by an independent financial intelligence outfit, are expected to be unveiled imminently.
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