Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Director
Resignations
On
September 2, 2022, Lisa M. Borders, a member of the Board, the Chair of the Nominating and Governance Committee, a member of the Compensation
Committee, and a member of the Audit Committee, notified the Board of her resignation from the Board, effective immediately. Ms. Borders
indicated that her decision to resign was related to recent Board practices (the “Borders Resignation Letter”).
The
foregoing description of Ms. Borders’ resignation is qualified in its entirety by reference to the text of the Borders Resignation
Letter filed as Exhibit 17.1 and incorporated herein by reference.
Also
on September 2, 2022, Steven M. Cohen, a member and co-Chair of the Board and a member of the Audit Committee, notified the Board of
his resignation from the Board, effective immediately. Mr. Cohen indicated that his decision to resign was related to recent Board practices
(the “Cohen Resignation Letter”).
The
foregoing description of Mr. Cohen’s resignation is qualified in its entirety by reference to the text of the Cohen Resignation
Letter filed as Exhibit 17.2 and incorporated herein by reference.
Also
on September 2, 2022, William C. Thompson, Jr., a member of the Board, the Chair of the Audit Committee and a member of the Compensation
Committee, notified the Board of his resignation from the Board, effective immediately. Mr. Thompson indicated that his decision to resign
was related to recent Board practices (the “Thompson Resignation Letter”).
The
foregoing description of Mr. Thompson’s resignation is qualified in its entirety by reference to the text of the Thompson Resignation
Letter filed as Exhibit 17.3 and incorporated herein by reference.
On
September 8, 2022, Lawrence Anthony “Tony” DiMatteo III, a member of the Board, notified the Board of his resignation from
the Board, effective immediately. Mr. DiMatteo indicated that his decision to resign was pursuant to the Term Sheet described herein
(the “DiMatteo Resignation Letter”).
The
foregoing description of Mr. DiMatteo’s resignation is qualified in its entirety by reference to the text of the DiMatteo Resignation
Letter filed as Exhibit 17.4 and incorporated herein by reference.
Effective
upon Ms. Borders’, Mr. Cohen’s, Mr. Thompson’s and Mr. DiMatteo’s resignations, the size of the Board will be
reduced from five members to one member. The Company is working diligently to identify and appoint new independent directors as soon
as practicable.
Resignation
of Chief Legal Officer and Chief Operating Officer
On
September 5, 2022, Kathryn Lever, the Chief Legal Officer (“CLO”), Chief Operating Officer (“COO”) and Secretary
of the Company, provided a notice of resignation as CLO, COO and Secretary of the Company, its wholly owned subsidiary, AutoLotto, Inc.,
and all of its other subsidiaries and affiliates.
Forward
Looking Statements
This
Current Report on Form 8-K (the “Form 8-K”) contains statements that constitute “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of present or historical fact included in this Form 8-K, regarding the Company’s
strategy, future operations, prospects, plans and objectives of management, are forward-looking statements. When used in this Form 8-K,
the words “could,” “should,” “will,” “may,” “believe,” “anticipate,”
“intend,” “estimate,” “expect,” “project,” “initiatives,” “continue,”
the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain such identifying words. These forward-looking statements are based on management’s current expectations and
assumptions about future events and are based on currently available information as to the outcome and timing of future events. The forward-looking
statements speak only as of the date of this Form 8-K or as of the date they are made. The Company cautions you that these forward-looking
statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control
of the Company. In addition, the Company cautions you that the forward-looking statements contained in this Form 8-K are subject to risks
and uncertainties, including but not limited to, any future findings from ongoing review of the Company’s internal accounting controls,
additional examination of the preliminary conclusions of such review, the Company’s ability to secure additional capital resources,
the Company’s ability to continue as a going concern, the Company’s ability to respond in a timely and satisfactory matter
to the inquiries by Nasdaq, the Company’s ability to regain compliance with the Bid Price Requirement, the Company’s ability
to regain compliance with Nasdaq Listing Rules, including the identification of new independent Board members, the Company’s ability
to become current with its SEC reports, and those additional risks and uncertainties discussed under the heading “Risk Factors”
in the Form 10-K filed by the Company with the SEC on April 1, 2022, and the other documents filed, or to be filed, by the Company with
the SEC. Additional information concerning these and other factors that may impact the operations and projections discussed herein can
be found in the reports that the Company has filed and will file from time to time with the SEC. These SEC filings are available publicly
on the SEC’s website at www.sec.gov. Should one or more of the risks or uncertainties described in this Form 8-K materialize or
should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking
statements. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements,
all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Form
8-K.