8-K: AppYea Acquires Blockchain Lottery Tech, Appoints New Leaders

Sentiment:

Acquisition Completion and Management Appointments 7 January 2026 4:25 PM

AppYea Inc. completed the acquisition of Techlott's blockchain lottery technology and appointed Techlott's former President and CTO to key leadership roles, alongside significant equity issuances.

Capital raiseThe company issued 1,277,922,611 shares of common stock (35% of fully diluted capital) as consideration for the acquisition.49,117 shares of Series B Preferred Stock were issued, which will convert into common shares upon an increase in authorized common stock.Approximately $0.8 million in outstanding convertible promissory notes were converted into 245,013,836 shares of common stock.A holder of $863,840 in convertible promissory notes agreed to extend the maturity date, delaying potential conversion but still representing a future equity obligation.

Summary

AppYea Inc. completed the acquisition of blockchain-based, decentralized lottery ecosystem technology from Techlott Ltd. on December 31, 2025.
The consideration for the acquisition is 1,277,922,611 shares of AppYea's common stock, representing 35% of the company's fully diluted capital.
Pending an increase in authorized common stock, 49,117 shares of newly created Series B Preferred Stock were issued to Techlott, which will automatically convert into the common shares.
Techlott is entitled to certain anti-dilution protection.
Mark Katzenelson, former President of Techlott, was appointed President and to the Board of Directors of AppYea Inc.
Ben Harris, former CTO of Techlott, was appointed Chief Technology Officer and to the Board of Directors of AppYea Inc.
Between December 31, 2025, and January 5, 2026, holders of approximately $0.8 million in convertible promissory notes converted their balance into 245,013,836 shares of common stock.
A holder of $863,840 in convertible promissory notes agreed to extend the maturity date by two years to February 15, 2028, and will refrain from conversion until then, with an 8% annual interest rate.
The Series B Preferred Stock and the common shares from note conversions were issued under Section 4(a)(2) and Rule 506(b) exemptions from registration.
The Series B Preferred Stock has 100,000 authorized shares, converts into 25,000 common shares per preferred share upon authorized common stock increase, has pro-rata liquidation preference, is not redeemable, pays dividends on an as-converted basis, and carries 15,000 votes per preferred share.

Sentiment

Score: 6

Explanation: The strategic acquisition of innovative blockchain technology and the appointment of experienced leadership are positive, indicating a clear growth direction. However, the significant immediate and potential future dilution from equity issuances and convertible note conversions, coupled with substantial executive compensation and severance obligations, introduce considerable financial risk and shareholder value concerns.

Positives

Strategic acquisition of blockchain-based, decentralized lottery technology positions the company in an innovative and potentially high-growth sector.
Appointment of experienced industry executives, Mark Katzenelson (President) and Ben Harris (CTO), from the acquired entity brings specialized knowledge and leadership to the company.
The new management team has extensive experience in real estate development, international investments, high-tech, algorithmic systems, gaming, and finance sectors, including collaborations with industry giants like Playtech and DraftKings.
The extension of maturity for $863,840 in convertible notes provides short-term financial flexibility by delaying potential conversion and associated dilution.

Negatives

The acquisition involves significant dilution, with 1,277,922,611 shares (35% of fully diluted capital) issued to Techlott, plus 245,013,836 shares for convertible note conversions.
The issuance of Series B Preferred Stock, convertible into 25,000 common shares per preferred share, represents substantial future dilution upon the effectiveness of the Authorized Common Stock Share Increase.
The company is incurring significant ongoing consulting fees of $30,000 per month for both the new President and CTO, retroactive to August 20, 2025, totaling $720,000 annually plus retroactive payments.
The consulting agreements include substantial severance payments equal to 36 months of the base fee (totaling $1.08 million per person) if terminated without cause or upon a change of control, creating a significant financial obligation.

Risks

Significant dilution of existing shareholders due to the issuance of 1,277,922,611 common shares for the acquisition and 245,013,836 common shares for note conversions.
Further dilution risk from the mandatory conversion of 49,117 shares of Series B Preferred Stock into 25,000 common shares each, contingent on an increase in authorized common stock.
The need for an 'Authorized Common Stock Share Increase' indicates potential shareholder approval or corporate action required, which could face challenges or delays.
Anti-dilution protection for Techlott could lead to additional share issuances under certain future events, further impacting existing shareholders.
The substantial severance clauses in the consulting agreements for the new President and CTO create a significant financial liability for the company in the event of termination or change of control.
Reliance on Section 4(a)(2) and Rule 506(b) for unregistered sales of equity securities means these shares are restricted and not freely tradable, which could affect liquidity for those holders.

Future Outlook

The company is strategically expanding into the blockchain-based, decentralized lottery ecosystem, leveraging smart contracts and verifiable randomness. This move is supported by the integration of key personnel from the acquired technology provider, indicating a clear intent to develop and scale this new venture. The future success hinges on the effective integration of the acquired technology and the execution capabilities of the new management team.

Management Comments

Mark Katzenelson is a senior business executive and entrepreneur with more than two decades of experience spanning real estate development, international investments, and technology-driven ventures, with a strong focus on long-term value creation, operational excellence, and scalable growth.
Ben Harris is a veteran technology executive with 20 years of experience driving innovation in the gaming and finance sectors, having collaborated with industry giants such as Playtech and DraftKings, and combining extensive gaming background with expertise in blockchain architecture and Web3 integration.

Industry Context

This acquisition positions AppYea Inc. to capitalize on the growing interest in blockchain and Web3 technologies within the gaming and lottery sectors. The move aligns with a broader industry trend towards decentralization, enhanced transparency, and security through smart contracts. Competitors in this space include traditional lottery operators exploring digital transformation and emerging blockchain-native gaming platforms. The expertise of the new management, particularly Ben Harris's background with Playtech and DraftKings, suggests an intent to compete with established players by offering innovative, data-driven solutions.

Comparison to Industry Standards

The acquisition of blockchain lottery technology aligns with a broader industry trend where traditional gaming and lottery companies are exploring or integrating decentralized technologies. For example, companies like DraftKings and FanDuel have expanded into various digital gaming and betting, while others are exploring NFTs and blockchain for enhanced user engagement and verifiable fairness.
The consideration of 35% of fully diluted capital for an acquisition is substantial and would require a strong strategic rationale and growth projections to justify compared to typical technology acquisitions which often involve a mix of cash and equity, with equity portions varying widely based on the target's stage and perceived value.
The consulting agreements with a monthly fee of $30,000 and a 36-month severance package for key executives are on the higher end for a company of this apparent size (based on note conversion amounts) and could be seen as a significant fixed cost, though competitive for highly specialized talent in the blockchain/gaming space, especially for individuals with experience from companies like Playtech and DraftKings.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
President and Director	N/A (new appointment)	Mark Katzenelson	2025-12-31	Appointment in conjunction with the acquisition of Techlott Ltd., where he was formerly President.
Chief Technology Officer and Director	N/A (new appointment)	Ben Harris	2025-12-31	Appointment in conjunction with the acquisition of Techlott Ltd., where he was formerly CTO.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
New Class of Preferred Stock Designation	Filed a Certificate of Designation for Series B Preferred Stock, outlining rights, preferences, privileges, and restrictions. This includes mandatory conversion into common stock (25,000 common shares per preferred share) upon an increase in authorized common stock, pro-rata liquidation preference, non-redeemability, as-converted dividends, and significant voting rights (15,000 votes per preferred share).	2025-11-26	Introduces a new class of equity with significant conversion and voting power, potentially impacting common shareholders' control and future dilution. The mandatory conversion is contingent on a future corporate action (Authorized Common Stock Share Increase).
Amendment to Preferred Stock Designation	An amendment was filed to the Series B Certificate of Designation specifically regarding the number of common shares into which the Series B Preferred Stock are to mandatorily convert.	2025-12-31	Refines the terms of the Series B Preferred Stock conversion, ensuring clarity on the dilution impact once the authorized common stock is increased.
Executive Consulting Agreements	Entered into consulting agreements with newly appointed President Mark Katzenelson and CTO Ben Harris for a three-year term, with a monthly fee of $30,000 each (retroactive to August 20, 2025) and substantial severance provisions (36 months of base fee) upon termination without cause or change of control.	2025-12-31	Establishes significant fixed compensation costs and potential future liabilities for executive talent, aligning their incentives with the company's long-term strategy but also creating a financial burden.

Stakeholder Impact

**Shareholders:** Significant dilution from the issuance of over 1.2 billion common shares for the acquisition and 245 million shares for note conversions. Further dilution is expected from the conversion of Series B Preferred Stock. The anti-dilution protection for Techlott could also impact future share value. The strategic shift into blockchain lottery could offer long-term growth potential but comes with immediate dilution.
**New Management (Mark Katzenelson & Ben Harris):** Appointed to key executive roles (President/CTO) and Board of Directors, receiving substantial consulting fees ($30,000/month each, retroactive) and significant severance packages, indicating strong incentives and commitment.
**Convertible Note Holders:** Those converting notes received common stock, while one holder extended maturity, indicating varying preferences and financial positions among creditors.
**Techlott Ltd.:** Received substantial equity (35% of fully diluted capital) in AppYea Inc. for its technology, becoming a major shareholder with anti-dilution protection.

Next Steps

Increase the number of authorized shares of common stock to facilitate the conversion of Series B Preferred Stock into common shares.
Integrate the acquired blockchain-based, decentralized lottery ecosystem technology.
Develop and scale the new technology under the leadership of the newly appointed President and CTO.
Manage the conversion of the remaining $863,840 in convertible promissory notes upon their extended maturity date of February 15, 2028.

Key Dates

Date	Description
2005	Mark Katzenelson received his Bachelor of Laws (LL.B).
2025-08-20	Intellectual Property Purchase Agreement dated; consulting agreements' monthly fees are retroactive to this date.
2025-08-21	IP Purchase Agreement filed as Exhibit 10.1 to the company's Form 9-K.
2025-11-26	Company filed a certificate of designation for Series B Preferred Stock with the Secretary of State of Nevada.
2025-12-30	End date of the three-year term for consulting agreements (December 31, 2025 + 36 months).
2025-12-31	Date of earliest event reported; completion of Techlott technology acquisition; Mark Katzenelson and Ben Harris appointed to Board, President, and CTO respectively; company entered into consulting agreements with Katzenelson and Harris; amendment filed to Series B Certificate of Designation; holders of $0.8 million convertible notes agreed to convert.
2026-01-05	End date for the conversion period of $0.8 million in convertible promissory notes.
2026-01-07	Date the 8-K report was signed by Ron Mekler, CFO.
2028-02-15	New extended maturity date for $863,840 in convertible promissory notes.

Keywords

blockchain, lottery, acquisition, Techlott, gaming, smart contracts, decentralized, equity issuance, convertible notes, Series B Preferred Stock, management appointment, corporate governance

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