$DTGI

Digerati Technologies, Inc.

CIK:0001014052|SEC Filings

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2024	Apr. 30, 2023	Apr. 30, 2024	Apr. 30, 2023
OPERATING REVENUES:
Cloud software and service revenue	$ 7,430	$ 7,837	$ 22,649	$ 23,908
Total operating revenues	7,430	7,837	22,649	23,908
OPERATING EXPENSES:
Cost of services (exclusive of depreciation and amortization)	2,912	2,879	8,123	8,698
Selling, general and administrative expense	4,067	4,322	12,431	12,921
Legal and professional fees	621	681	2,784	2,311
Bad debt expense	93	37	208	106
Depreciation and amortization expense	908	993	2,720	2,912
Total operating expenses	8,601	8,912	26,266	26,948
OPERATING LOSS	(1,171)	(1,075)	(3,617)	(3,040)
OTHER INCOME (EXPENSE):
Gain (loss) on derivative instruments	(467)	2,120	(1,048)	2,893
Gain (loss) on extinguishment of debt	(816)	55	(915)	55
Other income (expense)	88	(1)	37	455
Interest expense	(2,920)	(3,701)	(8,184)	(8,137)
Income tax expense	(46)	(51)	(109)	(128)
Total other income (expense)	(4,161)	(1,578)	(10,219)	(4,862)
NET LOSS	(5,332)	(2,653)	(13,836)	(7,902)
Less: Net loss attributable to the noncontrolling interests	803	409	1,666	898
NET LOSS ATTRIBUTABLE TO DIGERATI’S SHAREHOLDERS	(4,529)	(2,244)	(12,170)	(7,004)
Deemed dividend on Series A Convertible preferred stock				(8)
NET LOSS ATTRIBUTABLE TO DIGERATI’S COMMON SHAREHOLDERS	$ (4,529)	$ (2,244)	$ (12,170)	$ (7,012)
LOSS PER COMMON SHARE – BASIC (in Dollars per share)	$ (0.03)	$ (0.01)	$ (0.07)	$ (0.05)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING – BASIC (in Shares)	176,182,237	153,785,787	167,357,959	148,462,169

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (13,836)	$ (7,902)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization expense	2,720	2,912
Stock compensation expenses	16	81
Bad debt expense	208	106
Amortization of Right-of-use assets	406	624
Amortization of debt discount	1,756	2,104
(Gain) loss on derivative liabilities	1,048	(2,893)
(Gain) loss on extinguishment of debt	771	(55)
(Gain) on settlement of conversion premium on Notes		(466)
Loss on conversion of warrants	144
Debt extension fee charged to interest expense		689
Common stock issued for debt extension charged to interest expense	42	505
Changes in operating assets and liabilities:
Accounts receivable	(727)	(390)
Prepaid expenses and other current assets	(246)	(213)
Inventory		18
Other assets	(97)	(281)
Right of use operating lease liability	(437)	(574)
Accounts payable	807	883
Accrued expenses	6,171	1,406
Deferred income	(54)	346
Net cash used in operating activities	(1,308)	(3,100)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of equipment	(225)	(467)
Net cash used in investing activities	(225)	(467)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from convertible debt, net of original issuance cost and discounts		4,491
Borrowings from debt, net of original issuance cost and discounts	2,000
Proceeds from the exercise of warrants		22
Borrowings from related party notes, net of original issuance cost and discounts		250
Principal payments on debt, net		(548)
Principal payments on convertible debt, net		(520)
Principal payments on related party notes, net		(568)
Principal payment on equipment financing	(422)	(72)
Net cash provided by financing activities	1,578	3,055
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	45	(512)
CASH AND CASH EQUIVALENTS, beginning of period	924	1,509
CASH AND CASH EQUIVALENTS, end of period	969	997
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	145	2,995
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for accounts payable settlement	120
Conversion of convertible notes	317
Beneficial conversion feature on debt extinguishment	141
Beneficial conversion feature on convertible note		1,401
Accounts payable reclassed to debt principal	9,384
Accrued interest rolled into principal		1,503
Reduction of Right-of-use liability due to termination of operating leases	562
Debt discount from debt extinguishment	2,231
Day 1 (one) recognition of Right-of-use assets for financing leases	1,205	524
Debt discount from derivative liabilities		64
Debt discount from warrant issuances		837
Common stock issued for debt conversion and settlement		151
Common Stock issued for the conversion of Preferred Stock Series A		57
Dividends accrued		8
Debt discount from common stock issued with debt		$ 430

Consolidated Balance Sheets (Unaudited) - USD ($)	Apr. 30, 2024	Jul. 31, 2023
CURRENT ASSETS:
Cash and cash equivalents	$ 969,000	$ 924,000
Accounts receivable, net	1,268,000	749,000
Prepaid and other current assets	896,000	650,000
Total current assets	3,133,000	2,323,000
LONG-TERM ASSETS:
Intangible assets, net	10,608,000	12,211,000
Goodwill	19,380,000	19,380,000
Property and equipment, net	1,093,000	1,346,000
Other assets	534,000	437,000
Investment in Itellum	185,000	185,000
Right-of-Use assets - financing	1,366,000	578,000
Right-of-Use assets - operating	944,000	1,912,000
Total assets	37,243,000	38,372,000
CURRENT LIABILITIES:
Accounts payable	4,240,000	5,373,000
Accrued liabilities	10,746,000	9,877,000
Equipment financing	595,000	228,000
Convertible note payable, current, net of discount of $317 and $960, respectively	7,784,000	8,216,000
Note payable, current, net of discount of $1,317 and $60, respectively	46,135,000	36,497,000
Revolving credit facility	2,000,000
Acquisition payable, net of discount of $2 and $0, respectively	1,028,000	1,000,000
Deferred income	1,070,000	1,124,000
Derivative liability	5,173,000	4,125,000
Operating lease liability, current	518,000	662,000
Total current liabilities	79,803,000	67,602,000
LONG-TERM LIABILITIES:
Equipment financing	769,000	354,000
Operating lease liability, net of current portion	465,000	1,320,000
Total long-term liabilities	1,234,000	1,674,000
Total liabilities	81,037,000	69,276,000
Commitments and contingencies
STOCKHOLDERS’ DEFICIT:
Preferred stock, value
Common stock, $0.001, 500,000,000 shares authorized, 179,734,434 and 160,931,685 issued and outstanding (122,000,000 and 109,000,000, respectively, reserved in Treasury)	180,000	161,000
Additional paid in capital	94,845,000	93,911,000
Accumulated deficit	(133,854,000)	(121,684,000)
Other comprehensive income	1,000	1,000
Total Digerati’s stockholders’ deficit	(38,828,000)	(27,611,000)
Noncontrolling interest	(4,966,000)	(3,293,000)
Total stockholders’ deficit	(43,794,000)	(30,904,000)
Total liabilities and stockholders’ deficit	37,243,000	38,372,000
Related Party
CURRENT LIABILITIES:
Note payable, current, related party, current, net of discount of $1 and $0, respectively	514,000	500,000
Convertible Series A Preferred Stock
STOCKHOLDERS’ DEFICIT:
Preferred stock, value
Convertible Series B Preferred Stock
STOCKHOLDERS’ DEFICIT:
Preferred stock, value
Convertible Series C Preferred Stock
STOCKHOLDERS’ DEFICIT:
Preferred stock, value
Series F Super Voting Preferred Stock
STOCKHOLDERS’ DEFICIT:
Preferred stock, value