DGTL Holdings Inc. Announces Change in Auditor Appointment
Restructure to divest of estimated $5 million in annual operating expenses and liabilities and to reposition DGTL Holdings Inc. for scalable revenue growth, cash flow positivity and accretive M&A
The Board of Directors of DGTL Holdings Inc. (TSXV: DGTL) (“DGTL” or the “Company”) reports that the Company has begun a strategic restructuring of its wholly-owned subsidiaries, Hashoff LLC (“Hashoff”) and Engagement Labs Inc. . (“Commitment Labs”). The objective of restructuring its subsidiaries is to apply objective third-party financial analysis to current business operations to assess long-term viability and optimize organizational structures. The result of this initiative is a disposal estimated at $5,000,402[i] operating liabilities and expenses and repositioning the Company for future-proof revenue growth, near-term cash flow positivity and long-term equity.
On June 1, 2022, Hashoff LLC retained Lindenwood Associates, a New York-based strategic development and restructuring firm (“Lindenwood”) to assess legal and financial viability as well as Klestadt Winters Jureller Southard & Stevens, LLP ( “KWJSS”) to provide legal services to Hashoff LLC in this regard. Hashoff LLC’s restructuring team performed a thorough and objective viability assessment. After presenting its report and reviewing the facts, the Board of Directors voted unanimously to accept Lindenwood’s recommendations to commence a formal orderly liquidation and subsequent dissolution of Hashoff LLC pursuant to Section 18-801 of the Delaware Limited Liability Corporations Act.
The result of the liquidation of Hashoff LLC is the disposal of approximately $1,939,053 of accounts payable and accrued liabilities and $572,849 of contingent liabilities from the consolidated balance sheet of DGTL Holdings Inc.[ii] As a first step towards this financial restructuring project, the two wholly owned subsidiaries of DGTL have been approved for PPP (Paycheck Protection Program) loan forgiveness. PPP loan forgiveness applications have been processed by the SBA (Small Business Association), an agency of the U.S. federal government that administers small business relief loans (as authorized by Section 1106 of the federal CARES Act) . Hashoff LLC had $177,000 in canceled PPP loans and Engagement Labs had $420,000 in canceled loans totaling $597,000 in interest-bearing loans removed from DGTL Holdings’ balance sheet.
Additionally, by identifying and implementing numerous cost savings and efficiencies, DGTL’s new management team produced a 50% reduction in Engagement Labs Inc.’s annual operating expenses. of Engagement Labs provides a viable entity that will now serve as a flagship social media subsidiary, with multiple operational businesses. In doing so, Engagement Labs Inc. will expand its product and service offerings to include strategy, execution, measurement and distribution solutions to serve DGTL’s Fortune 100 customers as a PaaS (Platform-as-a -Service) full-service social media.
As a result, in the first 120 days under the leadership of DGTL’s new management team, the Company proactively divested over $3,234,743 in current and non-current liabilities and an additional $1,891,500 in capital expenditures. annual operations.[iii] totaling an estimated reduction of $5,000,402 for the first year of long-term debt and current operating expenses. When factoring in the longer-term impact of significantly reducing annual operating expenses, maintaining the previous cost structure would continue to increase this total estimate with each ongoing future year of operation. The financial improvements will begin to be reflected in the first quarter 2023 (October 30, 2022) financial statements and subsequent filings thereafter.
In summary, DGTL’s new management team is dedicated to restoring fiscal responsibility, accountability and sound corporate governance to maximize long-term equity value. The reduction in post-restructuring operating expenses and liabilities of approximately $5,000,402 is a significant improvement in the Company’s consolidated financial position. Going forward, DGTL is now positioned for scalable revenue growth and accretive M&A with a stronger corporate structure and a viable financial position.
In conclusion, DGTL will host a video webinar on Wednesday, July 6, 2022, which will include an update from the CEO on the company, its current operations and future business interests. Details of the attendees for this meeting are listed below. Availability is limited. Register in advance to guarantee attendance.
DGTL CEO Update
July 6e2022, 1:00 p.m. EST (US and Canada)
Register in advance for this meeting via the link below.
After registering, you will receive a confirmation email with information about joining the meeting.
For more information please contact:
DGTL Management Inc.
John David A. Belfontaine
Managing Director, President
Email: [email protected]
Phone: +1 (877) 879-3485
DGTL Management Inc.
DGTL Holdings Inc. acquires and accelerates the transformation of digital media, marketing and advertising software and services companies. DGTL (aka Digital Growth Technologies and Licensing) specializes in accelerating fully commercialized SaaS (Software as a Service) and PaaS (Platform-as-a-Service) businesses that are entering a phase of rapid growth in social media, gaming, streaming, OTT and other industries. In doing so, DGTL seeks to build full-service operational business lines in each industry, with content, analytics and distribution solutions. DGTL seeks new accretive M&A opportunities through a mix of unique capitalization structures. DGTL Holdings Inc. is listed on the Toronto Venture Exchange as “DGTL”, on the OTCQB as “DGTHF” and on the FSE as “A2QB0L”. DGTL Holdings Inc. has 44,549,265 common shares issued and outstanding as of the date of this release. For more information, visit: www.dgtlinc.com.
As a wholly owned subsidiary of DGTL Holdings Inc., Engagement Labs is a leading data and analytics company providing social intelligence to Fortune 500 brands and companies. Engagement Labs’ TotalSocial® platform focuses across the entire social ecosystem by combining powerful online (social media) and offline (word of mouth) data with predictive analytics. Engagement Labs has a decade-long proprietary database of unique brand, industry, and competitive intelligence, coupled with its industry-leading predictive analytics that use machine learning and artificial intelligence to reveal social metrics that increase marketing ROI and core revenue for its diverse group. customers at the enterprise level. Engagement Labs Inc. will expand its product and service offerings to include strategy, execution, measurement and distribution solutions to serve DGTL’s Fortune 100 customers as a PaaS (Platform-as-a-Service) full-service social media company.
To find out more visit www.engagementlabs.com.
Lindenwood Associates LLC
Lindenwood Associates is an experienced strategic development and restructuring firm. Lindenwood is led by corporate turnaround and restructuring specialists with progressive expertise in leading and managing distressed businesses, delivering results in crisis situations, divestitures and a wide range of business development initiatives. Lindenwood guides companies through complex challenges spanning a wide range of industries to improve their strength, value and growth.
For more information, visit https://www.lindenwoodassociates.com.
Klestadt Winters Jureller Southard & Stevens (KWJS&S), LLP is a commercial law firm dedicated to providing high quality legal services. The firm specializes in the core practice areas of corporate reorganization and restructuring, commercial litigation, transactions and finance.
For more information, please visit https://klestadt.com.
This press release contains certain statements that constitute forward-looking statements with respect to DGTL and its subsidiaries. Forward-looking statements are not historical facts but represent management’s current expectations regarding future events and can be identified by words such as “believe”, “expect”, “will”, “intend”. of”, “plans”, “projects”, “anticipates”, “estimates”, “continues” and similar expressions. Although management believes that the expectations expressed in these forward-looking statements are accurate, there can be no assurance that they will will prove to be accurate. By their nature, forward-looking statements involve assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those contained in the forward-looking statements. and where forward-looking statements are set forth in this new release, DGTL will also disclose the material risk factors or assumptions used in making the statements. prospective statements. Except as expressly required by applicable securities laws, DGTL undertakes no obligation to update or revise any forward-looking statements. Future results related to forward-looking statements may be influenced by many factors, including, but not limited to, the impact of all intangible and variable economic and legal risks that, at this time, are immeasurable and impossible to define.