8-K: Lottery.com Inc. Enters Letter of Intent to Acquire Majority Stake in Dotcom Ventures Inc.

Lottery.com Inc. has signed a Letter of Intent to potentially acquire a majority stake in Dotcom Ventures Inc., including assets like concerts.com and ticketstub.com, for $5 million.

Summary

• Lottery.com Inc. entered into a Letter of Intent (LOI) on May 7, 2025, to acquire a minimum of 51% and up to 100% of Dotcom Ventures Inc. (DVI) from Concerts.com Inc.
• DVI's assets include the domain names concerts.com and ticketstub.com.
• The purchase price for the majority interest is $5 million.
• Lottery.com has the option to pay the purchase price in cash, Payment-In-Kind (restricted stock units), or a combination of both.
• The Payment-In-Kind is valued at a fixed price of $3.00 per share, irrespective of the trading price of Lottery.com stock.
• If the closing price of the restricted stock units is lower than $3.00 on April 30, 2026, the fixed price will be adjusted to the VWAP for the five trading days preceding that date, and Lottery.com will issue additional shares to cover the difference.
• The transaction is subject to due diligence, execution of a mutually agreeable agreement (SPA), board and shareholder approval, and regulatory approvals.
• The completion of the transaction is anticipated to occur on or before August 1, 2025, and the execution of the SPA is expected on or before June 30, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The announcement is about a potential acquisition, which could be positive, but it is subject to various conditions and approvals. The Payment-In-Kind structure introduces some uncertainty.

Positives

• The acquisition could expand Lottery.com's business into the events and ticketing space.
• The Payment-In-Kind option provides flexibility in managing cash flow.
• The repricing mechanism protects the seller if Lottery.com's stock price declines significantly.

Negatives

• The deal is subject to various approvals and conditions, creating uncertainty.
• The Payment-In-Kind could dilute existing shareholders if Lottery.com chooses to issue a significant number of shares.
• The fixed price of $3.00 per share for the Payment-In-Kind may not reflect the current market value of Lottery.com's stock.

Risks

• Failure to obtain necessary approvals could prevent the acquisition from closing.
• The due diligence process could reveal issues that make the acquisition less attractive.
• Integration of DVI's assets and operations could be challenging.
• The market price of Lottery.com's stock could decline, impacting the value of the Payment-In-Kind for the seller.
• The ticketing and events industry is competitive and subject to economic fluctuations.

Future Outlook

The company anticipates completing the acquisition of Dotcom Ventures Inc. on or before August 1, 2025, pending various approvals and the execution of a definitive agreement.

Management Comments

• Matthew McGahan, Chief Executive Officer, signed the report on behalf of Lottery.com Inc.

Industry Context

This announcement reflects a trend of companies diversifying their revenue streams through strategic acquisitions. Lottery.com's potential entry into the events and ticketing space could position them to capitalize on the growing demand for online entertainment and experiences.

Comparison to Industry Standards

• Acquisitions in the online ticketing space often involve multiples of revenue or user base, which are not disclosed in this announcement.
• Comparable companies like Live Nation Entertainment and StubHub have pursued similar acquisition strategies to expand their market presence.
• The $5 million purchase price will need to be evaluated against the revenue and profitability of Dotcom Ventures Inc. to determine if it is a fair valuation.

Stakeholder Impact

• Shareholders may experience dilution if Lottery.com chooses to issue a significant number of shares for the Payment-In-Kind.
• Employees of Dotcom Ventures Inc. may be affected by the acquisition, depending on integration plans.
• Customers of concerts.com and ticketstub.com may see changes in the services offered.
• The acquisition could create new opportunities for Lottery.com's suppliers and partners.

Next Steps

• Completion of due diligence on Dotcom Ventures Inc.
• Negotiation and execution of a definitive agreement (SPA).
• Approval by Lottery.com's board of directors and shareholders.
• Obtaining necessary regulatory approvals.
• Closing of the transaction on or before August 1, 2025.

Key Dates

Keywords

acquisition, dotcom ventures, lottery.com, letter of intent, concerts.com, ticketstub.com, payment-in-kind, restricted stock units