8-K: Lottery.com Inc. to Acquire Significant Stake in Veloce Media Group, Expanding into Esports

Lottery.com Inc., operating as SEGG Media Corporation, has entered into agreements to acquire a minimum 12.4% and up to 51% ownership in Veloce Media Group, a move signaling a strategic expansion into the esports and media sector.

Summary

• Lottery.com Inc. (SEGG Media Corporation) signed a Subscription Agreement and Call Option Agreement with Veloce Esports Limited (Veloce Media Group) on July 11, 2025.
• The agreements outline SEGG Media's intent to purchase a minimum of 12.4% and up to 51% of Veloce.
• The total payment for the initial stake is 5,675,444.74 GBP, approximately $7,594,677.54 USD, structured in two tranches.
• Tranche One is an all-cash payment of 2,000,000 GBP (approximately $2,676,415.77 USD), resulting in 1,663 A1 shares of Veloce stock and a 4.74% ownership stake.
• Tranche Two involves 3,675,444.74 GBP (approximately $4,918,659.05 USD), with a minimum of 1,187,500.00 GBP (approximately $1,589,165.94 USD) in cash and the balance in cash or restricted stock units of SEGG Media common shares at a fixed price of $1.00 USD per share.
• Completion of Tranche Two will result in SEGG Media receiving 3,000 A1 shares of Veloce stock and a 12.4% ownership stake, along with two director seats on the Veloce Board.
• The Call Option allows SEGG Media to purchase new issued share capital in Veloce at a pre-money valuation of 50,000,000 GBP (approximately $66,907,363.01 USD) to achieve 51% ownership.
• To exercise the Call Option, SEGG Media must complete Tranche One and Two and make offers to Veloce shareholders.
• The Call Option expires on October 31, 2025.
• Upon successful completion of the Call Option, SEGG Media will gain control of the Veloce Board of Directors.
• Payments under the Call Option can be made in cash, SEGG Media Common Stock, or a combination.

Sentiment

Score: 7

Explanation: The agreement represents a significant strategic expansion into a high-growth industry, which is generally positive. However, it involves substantial cash outlay and potential shareholder dilution, which introduces some financial considerations.

Positives

• Strategic expansion into the growing esports and media sector through Veloce Media Group.
• Potential to gain significant ownership (up to 51%) and control of Veloce's Board of Directors.
• Acquisition of A1 shares in Veloce, valued at 1,224.74 GBP (approximately $1,639.01 USD) per share.
• Ability to use SEGG Media common stock as part of the payment for Tranche Two and the Call Option, preserving cash.

Negatives

• Significant cash outlay required for Tranche One (2,000,000 GBP) and a minimum cash component for Tranche Two (1,187,500.00 GBP).
• Potential dilution for existing SEGG Media shareholders if common stock is used for payments.
• The fixed price of $1.00 USD per share for SEGG Media stock in Tranche Two might not reflect current market value, potentially impacting the effective cost or dilution.

Risks

• The Call Option expires on October 31, 2025, requiring timely completion of Tranches and offers.
• Integration risks associated with acquiring a significant stake and potentially controlling a new business in a different industry.
• Financial performance of Veloce Media Group and its ability to generate returns on the investment.
• Market acceptance and success of SEGG Media's strategic shift into esports and media.

Future Outlook

Lottery.com Inc., operating as SEGG Media Corporation, is strategically expanding its business into the esports and media sector through a significant investment in Veloce Media Group, with the potential to acquire a controlling 51% stake and board control, signaling a diversification of its business activities.

Management Comments

• The report was signed by Matthew McGahan, Chief Executive Officer of Lottery.com Inc.

Industry Context

This announcement signifies Lottery.com Inc.'s (SEGG Media Corporation) strategic pivot or expansion beyond its traditional lottery business into the rapidly growing esports and digital media industry. Veloce Media Group operates in a dynamic sector characterized by increasing viewership, sponsorship, and content creation, offering a new growth avenue for SEGG Media.

Corporate Governance

Stakeholder Impact

• Shareholders of Lottery.com Inc. (SEGG Media) may experience potential dilution if shares are issued for payments, but also stand to benefit from the strategic expansion into a new growth market.
• Veloce Media Group will receive significant capital investment, enabling further growth and expansion.
• Veloce shareholders will have the opportunity to sell their shares to SEGG Media under the Call Option.
• Employees of both companies may experience changes related to integration and strategic shifts as SEGG Media gains influence or control over Veloce.

Next Steps

• Completion of Tranche One payment.
• Completion of Tranche Two payment, including cash and potential stock issuance.
• SEGG Media receiving 1,663 A1 shares (Tranche One) and 3,000 A1 shares (Tranche Two) of Veloce stock.
• SEGG Media receiving two director seats on the Veloce Board upon completion of Tranche Two.
• SEGG Media making offers to Veloce shareholders to purchase up to 51% of issued and outstanding shares.
• Exercise of the Call Option by October 31, 2025, to achieve 51% ownership.
• SEGG Media gaining control of the Veloce Board of Directors upon successful completion of the Call Option.

Key Dates

Keywords

Esports, Media, Acquisition, Veloce Media Group, Lottery.com Inc., SEGG Media Corporation, Subscription Agreement, Call Option, Strategic Investment, Corporate Governance