Online lottery ticket sales platform Lottery.com has been given until 5 October to appoint the required number of independent directors to its board audit and compensation committees to comply with US Nasdaq Stock Market rules.
Nasdaq requires companies to have at least three members, each an independent director, to sit on their audit committee, as well as a further two independent directors on their compensation committee.
Failure to appoint the required directors to the audit committee was deemed in breach of Nasdaq Listing Rule 5605(c)(2), while the compensation committee appointments were in relation to Nasdaq Listing Rule 5605(d)(2).
Lottery.com must make the required appointments by next Wednesday in order to regain compliance with Nasdaq’s rules and regulations.
Nasdaq noted that if Lottery.com’s plan to regain compliance is accepted, it may then grant an extension of up to 180 calendar days from the date of the original notice (21 September) for the platform to regain compliance.
Lottery.com said while it cannot provide any assurances as to timing, it plans to identify new independent audit and compensation committee members “as soon as practicably possible” to regain compliance.
The latest notice came after two board members quit in protest after claiming the business deliberately “thwarted” attempts to look into “red flags” raised regarding a new investor in the business.
Troubles at Lottery.com have been both ongoing and well documented. Lottery.com was last month warned it could be delisted from the US Nasdaq Stock Market after failing to file its most recent quarterly financial report on time.
At the time, the US Securities and Exchange Commission said Lottery.com was yet to submit the final reviews of its financial statements for the period ended 30 June, and therefore was unable to file its quarterly report via form 10-Q for the period.
In July, it was also revealed that Lottery.com owed $425,000 in outstanding payroll obligations, just days after Lawrence (Tony) DiMatteo resigned from his role as chief executive of the business.
DiMatteo’s exit followed that of chief revenue officer Matthew Clemenson, who resigned a week earlier.