Lottery.com Inc (NASDAQ:LTRY) is up 364% since February 4, 2025, and it is up nearly 188% today. It is a digital lottery platform that provides lottery results and ticket sales for over 800 domestic and international games across 40 countries. It is in the gambling industry.
Lottery.com stock has been surging after the launch of its international lottery operations and these operations are expected to generate revenue as early as March 2025. It also invested in a customized tech platform that is tailored to local regulations.
Moreover, it acquired Nook Holdings (rebranded as Sports.com) and S&MI Ltd. Sports.com plans to launch in the U.S. and expand into Europe and the Middle East by mid-2025.
The recent surge has also made the stock Nasdaq compliant since it received a delisting warning in September 2024 for failing to maintain a $1 minimum bid price.
Lottery.com’s revenue fell to $200,655 in Q3 2024 and is down 29.72% quarter-over-quarter. Lottery.com has also had persistent losses for years. Its Altman Z-score of -8.03 places it in the distress zone. To give you an idea of how bad the financials are, the company’s net margin is deep in the red at -563.93%. The company’s new international operations will likely burn a lot more cash as it expands unless it can start out profitable on day one, which is not possible.
The company’s most recent 10-Q showed just $60,466 in cash. On top of that, it also has defaulted notes. Series A ($771K + $319K accrued interest) and Series B ($185K + $76K interest) notes are past maturity and unpaid.
Outstanding convertible notes ($6.4 million current portion) threaten massive dilution if converted. Warrants for 1.2 million shares remain exercisable. The financials are very shaky here.
It is very speculative, and management themselves doubt their ability to continue as a “going concern.” The only way they can do so is to dilute more after the recent rise. I wouldn’t consider buying it.
