LottoGopher Holdings Inc. (CSE: LOTO) (OTCQB: LTTGF) (Frankfurt: 2LG) a lottery messenger service that allows users to easily order and manage their state lottery tickets online, today announced that it has entered into a binding agreement to acquire 88% of the issued and outstanding shares of PlasmaNet, Inc. one of the largest online sweepstakes companies in the U.S. and one of the largest online marketing and free member acquisition companies in the world. 

Through its FreeLotto.com website, PlasmaNet has attracted over 65 million members to date and has awarded over US$100 million in prize money. Since its inception in 1999, FreeLotto members have played over 3.7 billion games. Currently, the FreeLotto website attracts over 7.3 million unique visitors per month on average and produces over 11,000 prize winners per month. A global online database company, FreeLotto is a proven direct marketing model that offers both free membership as well as a paid subscription service for its daily sweepstakes games.

As payment for the PlasmaNet shares, the Company will pay the following consideration to the vendor: (a) 11,600,000 common shares of the Company (b) an unsecured promissory note in the aggregate principal amount of CAD$1,496,655, convertible into up to 21,229,148 Common Shares at a price of $0.0705 per Common Share, subject to certain restrictions (c) a promissory note in the aggregate principal amount of US$1,760,000, secured against the PlasmaNet shares, and (d) share purchase warrants of the Company, each of which will entitle the holder to acquire one Common Share at an exercise price of CAD$0.1410 per Common Share at any time prior to three years from the date of issuance.  

PlasmaNet derives its revenues from fees paid by its members for services provided by PlasmaNet’s FreelottoPlus subscription service (an optional paid service where subscribers pay the company a recurring fee to automatically be automatically entered into the six daily FreeLotto drawings), from paid advertisers and from various other means of monetizing both its websites and its extensive database of members. The Company has almost 20,000 active FreelottoPlus subscribers paying between US$15 and $20 per month. To date, PlasmaNet has successfully billed over US$145 million in credit card transactions. The Company has a diverse customer base comprised of approximately 30% North American members and 70% international members. 

PlasmaNet has developed the expert know-how and market position to be a key participant in the online global gaming industry. The Company can act as an ideal entry point for a company positioning itself for the expansion of online gaming in the U.S. PlasmaNet represents a multifaceted opportunity to a potential acquirer in the lottery, legal sports betting, sweepstakes, marketing, database, ecommerce and media industries.

LottoGopher Chief Executive Officer, James Morel, commented, “We are thrilled to welcome FreeLotto and PlasmaNet into the LottoGopher family. We believe its revenue traction, profitability, strong brand name and trademark, highly scalable operating model, highly efficient customer acquisition engine and advanced tools for front-end marketing will spur growth in our existing business and allow us to expand internationally. Its current business model of recurring monthly subscriptions is highly predictable and scalable. We look forward to integrating and expanding business together.”

About LottoGopher

LottoGopher is a lottery messenger service that allows users to easily order and manage their state lottery tickets online using a debit or credit card. By allowing individuals to choose their numbers and safely order tickets for the official lottery drawings in California, LottoGopher makes it simple for users to keep track of their tickets and winnings. With LottoGopher, individuals can either play alone with a single ticket or create and join online public and private groups to pool winnings from California lotteries, including Mega Millions, Powerball and SuperLotto Plus. LottoGopher offers memberships that allow California residents to order multiple tickets from various lotteries. LottoGopher also enables users to stay up to date on the latest drawings, track their tickets and collect winnings. Members have exclusive access to expert player strategies, jackpot alerts, lottery news, lucky number pickers and winners’ financial resources.