- Non-GAAP Adjusted Operating EBITDA of
- Merger with MEOA SPAC Targeted to Close in First Quarter Calendar 2023 -
Key Financial Highlights for the First Quarter Fiscal Year 2023 (Ended
- Revenue increased by 115% to
$8.1 million compared to$3.8 million for Q1 FY2022. - Gross profit increased 131% to
$5.3 million compared to$2.3 million for Q1 FY2022. - Gross margin increased to 64.9% compared to 60.6% for Q1 FY2022.
- Non-GAAP Adjusted EBITDA income increased by 161% to
$0.8 million , excluding all non-cash items and one-time transactional expenses, compared to$0.3 million for Q1 FY2022. - Non-GAAP Adjusted Operating EBITDA (OPCO EBITDA) income increased by 86% to
$1.3 million , excluding corporate expenses, non-cash items and one-time transactional expenses, compared to$0.7 million for Q1 FY2022.
Key Business Highlights for the First Quarter Fiscal Year 2023 (Ended
- Announced business combination with Minority Equality Opportunities Acquisition Inc. (MEOA).
- Appointed
Derek Gietzen to President. - NextLevel Internet named one of the Fortune top 100 best small & medium workplaces for 2022.
Update on Plan to List on NASDAQ via Business Combination with Minority Equality Opportunities Acquisition Inc.
The Company and MEOA have made significant progress since the business combination agreement was executed on
- MEOA’s filing of the S-4 registration statement for the business combination on
November 30, 2022 . - Filing by MEOA of its Charter Amendment approved by the shareholders of MEOA on
November 29, 2022 .
The transaction results in a
Three Months ended
Revenue for the three months ended
Gross profit for the three months ended
Selling, General and Administrative expenses (excluding legal and professional fees) for the three months ended
Operating loss for the three months ended
Adjusted EBITDA income for the three months ended
Of note were the following non-cash expenses associated with the three months ended
Non-GAAP adjusted operating EBITDA (OPCO EBITDA) for the three months ended
Net loss for the three months ended
At
Use of Non-GAAP Financial Measurements
The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the cloud communications industry to evaluate companies on the basis of operating performance and leverage. Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant non-recurring transactions, if any, such as impairment losses and expenses associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as changes in fair value of the Company’s derivative liabilities and stock-based compensation. The Company also believes that Adjusted EBITDA provides investors with a measure of the Company’s operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Although the Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. Non-GAAP operating EBITDA (OPCO EBITDA) is useful to investors because it reflects EBITDA for the core operation of the business excluding corporate expenses, non-cash expenses and transactional expenses. EBITDA, Adjusted EBITDA, and Non-GAAP operating EBITDA are not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in
About
About Minority Equality Opportunities Acquisition Inc.
Minority Equality Opportunities Acquisition Inc. is a blank check company, also commonly referred to as a special purpose acquisition company, or SPAC, organized under the laws of the
INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY OTHER REGULATORY AUTHORITY NOR HAS ANY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Important Information and Where to Find It
As mentioned above, the parties have filed a registration statement on Form S-4 with the
In addition, the documents filed with the
Participants in the Solicitation
MEOA, Digerati and their respective directors, executive officers, other members of management, and employees, under
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the applicable securities laws. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to, statements regarding the terms and conditions of the proposed business combination and related transactions disclosed herein, the timing of the consummation of such transactions, assumptions regarding shareholder redemptions and the anticipated benefits and financial position of the parties resulting therefrom. These statements are based on various assumptions and/or on the current expectations of MEOA or Digerati’s management. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by any investor or other person as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of MEOA and/or Digerati. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to general economic, financial, legal, political and business conditions and changes in domestic and foreign markets; the amount of redemption requests made by MEOA’s public shareholders; NASDAQ’s approval of MEOA’s initial listing application; changes in the assumptions underlying Digerati’s expectations regarding its future business; the effects of competition on Digerati’s future business; and the outcome of judicial proceedings to which Digerati is, or may become a party.
If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Digerati and MEOA presently do not know or currently believe are immaterial that could also cause actual results to differ materially from those contained in the forward-looking statements. In addition, forward-looking statements reflect expectations, assumptions, plans or forecasts of future events and views as of the date of this press release. Digerati and MEOA anticipate that subsequent events and developments will cause these assessments to change. However, while Digerati and/or MEOA may elect to update these forward-looking statements at some point in the future, each of Digerati and MEOA specifically disclaims any obligation to do so, except as required by applicable law. These forward-looking statements should not be relied upon as representing Digerati’s or MEOA (or their respective affiliates’) assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Facebook:
Twitter: @DIGERATI_IR
LinkedIn:
Investors
ClearThink
bloper@clearthink.capital
(602) 785-4120
Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||
Three months ended | |||||||||||||||
2022 | 2021 | Variances | % | ||||||||||||
OPERATING REVENUES: | |||||||||||||||
Cloud-based hosted services | $ | 8,130 | $ | 3,777 | $ | 4,353 | 115 | % | |||||||
Total operating revenues | 8,130 | 3,777 | 4,353 | 115 | % | ||||||||||
Cost of services (exclusive of depreciation and amortization) | 2,851 | 1,490 | 1,361 | 91 | % | ||||||||||
GROSS MARGIN | 5,279 | 2,287 | 2,992 | 131 | % | ||||||||||
Selling, general and administrative expense | 4,118 | 1,764 | 2,354 | 133 | % | ||||||||||
Stock compensation expense | 23 | 24 | (1 | ) | -6 | % | |||||||||
Legal and professional fees | 556 | 574 | (18 | ) | -3 | % | |||||||||
Bad debt | 29 | 13 | 16 | 123 | % | ||||||||||
Depreciation and amortization expense | 953 | 492 | 461 | 94 | % | ||||||||||
OPERATING LOSS | (400 | ) | (580 | ) | 180 | -31 | % | ||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Gain (loss) on derivative instruments | (3,076 | ) | 4,433 | (7,509 | ) | -169 | % | ||||||||
Income tax expense | (50 | ) | (77 | ) | 27 | -35 | % | ||||||||
Other income (expense) | 446 | (4 | ) | 450 | -11250 | % | |||||||||
Interest expense | (2,065 | ) | (1,506 | ) | (559 | ) | 37 | % | |||||||
Total other income (expense) | (4,745 | ) | 2,846 | (7,591 | ) | -267 | % | ||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTEREST | (5,145 | ) | 2,266 | (7,411 | ) | -327 | % | ||||||||
Less: Net loss attributable to the noncontrolling interests | 161 | 158 | 3 | 2 | % | ||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS | $ | (4,984 | ) | $ | 2,424 | $ | (7,408 | ) | -306 | % | |||||
Deemed dividend on Series A Convertible preferred stock | (4 | ) | (5 | ) | 1 | -20 | % | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S COMMON SHAREHOLDERS | $ | (4,988 | ) | $ | 2,419 | $ | (7,407 | ) | -306 | % | |||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA - OPCO, Net of Non-cash expenses & Transactional Costs. | |||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO DIGERATI'S SHAREHOLDERS, as reported | $ | (4,984 | ) | $ | 2,424 | $ | (7,408 | ) | -306 | % | |||||
EXCLUDING NON-CASH ITEMS TRANSACTIONAL COSTS & CORP EXP ADJUSTMENTS: | |||||||||||||||
Stock compensation & warrant expense | 23 | 24 | (1 | ) | -6 | % | |||||||||
Corp Expenses (Net of stock compensation, - Transactional cost) | 480 | 374 | 106 | 28 | % | ||||||||||
Transactional costs | 219 | 368 | (149 | ) | -40 | % | |||||||||
Depreciation and amortization expense | 953 | 492 | 461 | 94 | % | ||||||||||
OTHER ADJUSTMENTS | |||||||||||||||
Gain (loss) on derivative instruments | 3,076 | (4,433 | ) | 7,509 | -169 | % | |||||||||
Income tax expense | 50 | 77 | (27 | ) | -35 | % | |||||||||
Other income (expense) | (446 | ) | 4 | (450 | ) | -11250 | % | ||||||||
Interest expense | 2,065 | 1,506 | 559 | 37 | % | ||||||||||
Less: Net loss attributable to the noncontrolling interest | (161 | ) | (158 | ) | (3 | ) | 2 | % | |||||||
ADJUSTED EBITDA - OPCO | $ | 1,275 | $ | 678 | $ | 597 | 88 | % | |||||||
ADD-BACKS Expenses | |||||||||||||||
Corp Expenses (Net of stock compensation & Transactional cost) | 480 | 374 | 106 | 28 | % | ||||||||||
ADJUSTED EBITDA - INCOME | $ | 795 | $ | 304 | $ | 491 | 161 | % | |||||||
Source: Digerati Technologies
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