Company: LTRYW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001641172-25-024882
Chunk: 144

Company: Lottery.com Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 144
---
), subject to a 4.99% beneficial ownership
limitation and a separate limitation preventing Woodford from holding more than 19.99% of the issued and outstanding common stock of
the Company, without the Company obtaining shareholder approval for such issuance.

Conditions
to the Woodford Loan Agreement included the resignation of four prior members of the Board (Lisa Borders, Steven M. Cohen, Lawrence Anthony
DiMatteo and William Thompson, all of whom resigned from the Board in September 2022), and the appointment of two new independent directors.
Subsequent loans under the Woodford Loan Agreement also required the Company to comply with all listing requirements, unless waived by
Woodford. The Woodford Loan Agreement also allowed Woodford to nominate another director to the Board of Directors, in the event any
independent member of the Board of Directors resigned.

Proceeds
of the loans could only be used by to restart the Company’s operations and for general corporate purposes agreed to by Woodford.

The
Woodford Loan Agreement included confidentiality obligations, representations, warranties, covenants, and events of default, which are
customary for a transaction of this size and nature. Included in the Loan Agreement are covenants prohibiting us from (a) making any
loan in excess of $1 million or obtaining any loan in an amount exceeding $1 million without the consent of Woodford, which consent may
not be unreasonably withheld; (b) selling more than $1 million in assets; (c) maintaining less than enough assets to perform our obligations
under the Loan Agreement; (d) encumbering any assets, except in the normal course of business, and not in an amount to exceed $1 million;
(e) amending or restating our governing documents; (f) declaring or paying any dividend; (g) issuing any shares which negatively affects
Woodford; and (h) repurchasing any shares.

The
Company also agreed to grant warrants to purchase shares of common stock to Woodford (the “Woodford Warrants”) in an amount
equal to 15% of the Company’s then issued and outstanding shares of common stock. Each Woodford Warrant has an exercise price equal
to the average of the closing price of the Company’s common stock for each of the ten days prior to the first amount being debited
from the bank account of Woodford, which equates to an exercise price of $5.60 per share. In the event the Company fails to repay the