NEW YORK, NY / ACCESSWIRE / September 19, 2022 / Pomerantz LLP announces that a class action lawsuit has been filed against Lottery.com, Inc. f/k/a Trident Acquisitions Corp. ("Lottery.com" or the "Company") (NASDAQ:LTRY), and certain of its officers. The class action, filed in the United States District Court for the Western District of Texas, Austin division, and docketed under 22-cv-00907, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Lottery.com securities between November 15, 2021 and July 28, 2022, both dates inclusive (the "Class Period"). Plaintiff pursues claims against the Defendants under the Securities Exchange Act of 1934.
If you are a shareholder who purchased or otherwise acquired Lottery.com securities during the Class Period, you have until October 18, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Lottery.com, headquartered in Spicewood, Texas, is a technology company that operates a business-to-consumer platform enabling players to remotely purchase legally sanctioned lottery games in the United States and internationally. The Company also provides affiliate marketing services under the LotteryLink brand, and delivers lottery data, such as winning numbers and results, to approximately 400 digital publishers and media organizations. Formerly known as Trident Acquisitions Corp. ("TDAC"), the Company was formed as a Delaware corporation on March 17, 2016, and its securities traded on the Nasdaq Stock Market ("NASDAQ") under the symbols "TDAC", "TDACW", and "TDACU". TDAC completed its initial public offering of 20,125,000 units on June 1, 2018.
On October 29, 2021, pursuant to a Business Combination Agreement dated February 21, 2021, TDAC consummated a business combination (the "Business Combination") with AutoLotto, Inc. ("AutoLotto"), which, since its founding in 2015, conducted business as Lottery.com. Following the closing of the Business Combination, the Company changed its name to Lottery.com, the business of AutoLotto became Lottery.com's business, and the Company's shares began trading on the NASDAQ under the symbol "LTRY".
The Complaint alleges that, throughout the Class Period, Defendants made materially false or misleading statements and/or failed to disclose, inter alia, that: (i) the Company lacked adequate internal accounting controls; (ii) the Company lacked adequate internal controls over financial reporting, including, but not limited to, those pertaining to revenue recognition and the reporting of cash; (iii) the Company was not in compliance with state and federal laws governing the sale of lottery tickets; and (iv) as a result, the Company's public statements were materially false and misleading at all relevant times.
On July 6, 2022, on a Form 8-K filed with the U.S. Securities and Exchange Commission ("SEC"), Lottery.com disclosed that an internal investigation, conducted by independent counsel, had uncovered "instances of noncompliance with state and federal laws concerning the state in which tickets are procured as well as order fulfillment." In addition, the investigation revealed "issues pertaining to the Company's internal accounting controls." The July 6, 2022 8-K further disclosed that, in light of the findings of the independent investigation, on June 30, 2022, the Company's Board of Directors terminated the Company's President, Treasurer, and Chief Financial Officer Ryan Dickinson, effective July 1, 2022.
On this news, Lottery.com's stock price fell $0.15 per share, or more than 12%, from a closing price of $1.22 per share on July 5, 2022 to a closing price of $1.07 per share on July 6, 2022, on abnormally high volume.
On July 15, 2022, in a Form 8-K filed with the SEC after the markets closed, Lottery.com announced that Chief Revenue Officer Matthew Clemenson had resigned on July 11, 2022, effective immediately. Moreover, the Company provided an update on the independent investigation previously disclosed on July 6, 2022. The Company reported that, after a review of its cash balances, its revenue recognition policies and procedures, and other internal accounting controls, Lottery.com had "preliminarily conclude[d] that it has overstated its available unrestricted cash balance by approximately $30 million and that, relatedly, in the prior fiscal year, it improperly recognized revenue in the same amount[,]" and that, "[t]he Company, in consultation with its outside advisors, is currently validating its preliminary conclusion, assessing any impact on previously issued financial reports, and has begun to institute appropriate remedial measures."
On this news, Lottery.com's stock price fell $0.146 per share, or over 15%, from a closing price of $0.966 per share on July 15, 2022 to a closing price of $0.82 per share on July 18, 2022, on abnormally high volume.
The Company made a series of additional adverse disclosures before finally, on July 29, 2022, in another Form 8-K filed with the SEC, informing the market that it did not have "sufficient financial resources to fund its operations or pay certain existing obligations," and that it therefore intended to furlough certain employees effective July 29, 2022. Moreover, because Lottery.com's resources were not sufficient to fund its operations for a twelve-month period, "there is substantial doubt about the Company's ability to continue as a going concern," and the Company may be forced to wind down its operations or pursue liquidation of the Company's assets.
On this news, Lottery.com's stock price lost 64% of its value in a single trading day, falling $0.52 per share, from a closing price of $0.815 per share on July 28, 2022 to a close of $0.295 per share on July 29, 2022.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
SOURCE: Pomerantz LLP