Digerati Technologies Eliminates Derivative Liability Associated with its Convertible Debt

Rhea-AI Summary

Digerati Technologies (OTCQB: DTGI) announced the elimination of its entire derivative liability related to convertible notes, improving its financial outlook. The notes were extinguished by converting them into equity and restructuring them into a new one-year note with a fixed-priced floor. This move is anticipated to boost future financial results by reducing P&L expenses. Digerati currently generates over $14 million in annual revenue and is positive cash flow generating, supported by a new $20 million credit facility, aiming for uplisting to a major U.S. exchange in 2021.

Positive

• Eliminated entire derivative liability associated with convertible notes.
• Improved financial terms reduce P&L expenses.
• Current annual revenue exceeds $14 million.
• Positive cash flow generation.
• Secured $20 million credit facility for future growth.

Negative

• None.

SAN ANTONIO, Feb. 19, 2021 (GLOBE NEWSWIRE) -- Digerati Technologies, Inc. (OTCQB: DTGI) ("Digerati" or the "Company"), a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the small to medium-sized business (“SMB”) market, is pleased to announce that it has eliminated its entire derivative liability associated with the Company’s convertible notes.

The convertible notes held by an institutional shareholder were extinguished through a combination of accelerated conversion to equity at a fixed price and in the form of a new one year note with a fixed-priced “floor” on conversion that can be prepaid at any time by the Company. The improved terms and fixed-priced structure that eliminates the derivative accounting treatment and related P&L expense associated with the legacy convertible notes are expected to have a positive impact on the Company’s future financial results.   

Arthur L. Smith, CEO of Digerati, stated, “While securing capital over these past two years has been necessary for execution of our business plan and reaching our current stage of corporate development, we recognize the potential negative effect certain financing structures and terms can have on our stock price. We are extremely pleased to have reached a point where we can remove this type of debt and demonstrate the continued commitment and enthusiasm of our institutional shareholder while lowering our cost of capital. With current annual revenue at over $14 million and an operation generating positive cash flow, we have much more advantageous capital available to us for funding future growth, as evidenced by our recently secured $20 million credit facility. Our team is very excited for 2021 as we continue forging ahead towards meeting our stated corporate goal of uplisting to a major U.S. national exchange.”

About Digerati Technologies, Inc.

Digerati Technologies, Inc. (OTCQB: DTGI) is a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the business market. Through its operating subsidiaries T3 Communications (T3com.com) and Nexogy (Nexogy.com), the Company is meeting the global needs of businesses seeking simple, flexible, reliable, and cost-effective communication and network solutions, including cloud PBX, cloud mobile, Internet broadband, SD-WAN, SIP trunking, and customized VoIP services, all delivered on its carrier-grade network and Only in the Cloud™. For more information about Digerati Technologies, please visit digerati-inc.com.

Forward-Looking Statements

The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements related to the future financial performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful execution of growth strategies, product development and acceptance, the impact of competitive services and pricing, general economic conditions, and other risks and uncertainties described in the Company's periodic filings with the Securities and Exchange Commission. 

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Investors:

The Eversull Group
Jack Eversull
jack@theeversullgroup.com
(972) 571-1624

ClearThink
Brian Loper
bloper@clearthink.capital
(347) 413-4234

FAQ

What recent financial changes has Digerati Technologies (DTGI) announced?

Digerati Technologies announced the elimination of its entire derivative liability associated with convertible notes, which is expected to improve its financial results.

How much annual revenue does Digerati (DTGI) currently generate?

Digerati Technologies currently generates over $14 million in annual revenue.

What future plans does Digerati Technologies (DTGI) have regarding its stock listing?

Digerati aims to uplist to a major U.S. national exchange in 2021.

What new financial support has Digerati Technologies (DTGI) secured?

Digerati has secured a $20 million credit facility to support future growth.