- Lottery.com (LTRY, Financial) expands committed financing facility with Generating Alpha from $100 million to $300 million.
- Improvements include a reduced discount rate from 10% to 6%, saving approximately $12 million over the facility's lifetime.
- The facility will support cash-generating acquisitions, including potential deals like Concerts.com.
Lottery.com (NASDAQ: LTRY) has significantly expanded its financing facility with Generating Alpha Ltd., increasing the commitment from $100 million to $300 million. This strategic move reflects a deepening partnership aimed at enhancing Lottery.com’s acquisition capabilities. The facility's improved terms include a reduction in the discount rate from 10% to 6%, which is expected to save the company nearly $12 million over the facility’s duration.
The company has already utilized $1.87 million from the facility for operational expenses and acquisitions. CEO Matthew McGahan highlighted the flexibility this financing provides, allowing Lottery.com to issue shares based on market strength, which is less dilutive compared to traditional equity structures.
The expansion of the facility aligns with Lottery.com's strategy to pursue acquisitions of cash-flow positive businesses with tangible assets, with Concerts.com being a potential target. The elimination of the trading cushion and a simplified put mechanism further enhance the company’s capital deployment options, offering greater flexibility.
This financing initiative underscores the long-term commitment of Generating Alpha, which remains a key shareholder since the initial issuance. Investors should note the potential for share dilution, though the company aims to manage this through careful timing of share issuance to optimize market conditions.
