UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 30, 2022
Digerati Technologies, Inc.
(Exact Name of Registrant as Specified in its Charter)
Nevada
(State or other jurisdiction of incorporation)
| Nevada |
|
001-15687 |
|
74-2849995 |
(State or other jurisdiction
of incorporation) |
|
Commission File Number |
|
(IRS Employer
Identification No.) |
| 8023 Vantage Dr., Suite 660, San Antonio, TX |
|
78230 |
| (Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: (210) 614-7240
825 W. Bitters, Suite 104, San Antonio, TX
78216
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
| ☒ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
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| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
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| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
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| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
| None |
|
N/A |
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N/A |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry Into A Material Definitive Agreement.
Business Combination Agreement
On August 30, 2022, Digerati Technologies, Inc.,
a Nevada corporation (“Digerati”) entered into a Business Combination Agreement (as it may be amended, supplemented
or otherwise modified from time to time, the “Business Combination Agreement”), by and among Digerati, Minority Equality
Opportunities Acquisition Inc., a Delaware corporation (“MEOA”), and Merger Sub, Inc., a Delaware corporation and a
wholly owned subsidiary of MEOA (“Merger Sub”).
The Business Combination Agreement and the transactions
contemplated thereby were approved by the board of directors of each of MEOA and Digerati.
The Business Combination
The Business Combination Agreement provides, among
other things, that Merger Sub will merge with and into Digerati, with Digerati as the surviving company in the merger and, after giving
effect to such merger, Digerati shall be a wholly-owned subsidiary of MEOA (the “Merger”). In addition, MEOA
will be renamed Digerati Holdings, Inc. The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter
referred to as the “Business Combination”. Other capitalized terms used, but not defined, herein, shall have the respective
meanings given to such terms in the Business Combination Agreement.
In accordance with the terms and subject to the conditions
of the Business Combination Agreement, at the Effective Time, among other things: (i) each share of Digerati common stock outstanding
as of immediately prior to the Effective Time will be exchanged for shares of MEOA common stock, par value $0.0001 per share (each, an
“MEOA Share” and collectively, the “MEOA
Shares”), based upon the exchange ratio set forth in the Business Combination Agreement (the “Exchange
Ratio”); (ii) all vested and unvested stock options of Digerati will be assumed by MEOA and thereafter be settled or exercisable
for MEOA Shares, as applicable, determined based on the Exchange Ratio; (iii) each warrant to purchase shares of Digerati common stock
will be canceled in exchange for a warrant to purchase MEOA Shares determined based on the Exchange Ratio; (iv) any shares of the Series
A Preferred Stock of Digerati outstanding as of the Effective Time will thereafter be convertible into a number of MEOA Shares determined
by multiplying the number of shares of Digerati common stock into which such preferred shares would have been convertible immediately
prior to the Effective Time by the Exchange Ratio; (v) certain convertible notes of Digerati issued following the signing of the Business
Combination Agreement and outstanding as of the Effective Time will thereafter be convertible into a number of MEOA Shares determined
by multiplying the number of shares of Digerati common stock into which such convertible notes would have been convertible immediately
prior to the Effective Time by the Exchange Ratio; and (vi) each share of MEOA Class A common stock, par value $0.0001 per share (the
“MEOA Class A Common Stock”), and each share of MEOA Class B common stock,
par value $0.0001 per share (the “MEOA Class B Common Stock”), that is issued
and outstanding immediately prior to the Effective Time shall become one MEOA Share following the consummation of the Business Combination.
The Business Combination is expected to close
in the fourth calendar quarter of 2022, following the receipt of the required approval by the stockholders of MEOA and Digerati, approval
by the Nasdaq Stock Market (“Nasdaq”) of MEOA’s initial listing application filed in connection with the Business
Combination, and the fulfillment of other customary closing conditions.
Representations and Warranties; Covenants
The parties to the Business Combination Agreement
have agreed to customary representations and warranties for transactions of this type. In addition, the parties to the Business Combination
Agreement agreed to be bound by certain customary covenants for transactions of this type, including, among others, covenants with respect
to the conduct of Digerati and its subsidiaries during the period between execution of the Business Combination Agreement and the Closing.
Each of the parties to the Business Combination Agreement has agreed to use its reasonable best efforts to cause to be taken all actions
and to do all things necessary to consummate and expeditiously implement the Business Combination.
Conditions to Each Party’s Obligations
Under the Business Combination Agreement, the obligations
of the parties to consummate the Merger are subject to the satisfaction or waiver of certain closing conditions of the respective parties,
including, without limitation: (i) the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
and the rules and regulations promulgated thereunder relating to the Business Combination having expired or been terminated and any other
required regulatory approvals applicable to the transactions contemplated by the Business Combination Agreement having been obtained and
remaining in full force and effect; (ii) no order or law issued by any court of competent jurisdiction or other governmental entity or
other legal restraint or prohibition preventing the consummation of the transactions contemplated by the Business Combination being in
effect; (iii) the registration statement on Form S-4 containing the joint proxy statement/prospectus to be filed by MEOA relating to the
Business Combination Agreement and the Merger (the “Registration Statement”)
becoming effective in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities
Act”), no stop order being issued by Securities and Exchange Commission (the “SEC”)
and remaining in effect with respect to the Registration Statement, and no proceeding seeking such a stop order being threatened or initiated
by the SEC and remaining pending; (iv) MEOA’s initial listing application filed with Nasdaq in connection with the Business Combination
having been approved; (v) the MEOA Board consisting of the number of directors, and comprising the individuals, determined pursuant to
the Business Combination Agreement; (vi) the approval and adoption of the Business Combination Agreement and the transactions contemplated
thereby by the requisite vote of MEOA’s stockholders (the “Required MEOA Stockholder
Consent”); (vii) the approval and adoption of the Business Combination Agreement and the transactions contemplated thereby
by the requisite vote of Digerati’s stockholders; (viii) the absence of a Company Material Adverse Effect since the date of the
Business Combination Agreement that is continuing; (ix) MEOA shall have repaid, or shall have irrevocably arranged to have repaid upon
the Closing, any and all loans that have been made to MEOA by Minority Equality Opportunities Acquisition Sponsor, LLC (the “Sponsor”),
or, in lieu thereof, and with the consent of the Sponsor, such loans have been converted into warrants to purchase MEOA Shares; (x) Digerati
shall have provided to MEOA evidence reasonably satisfactory to MEOA of (A) the exchange, effective prior to the closing of the transactions
contemplated by the Business Combination Agreement (the “Closing”), of all
of the issued and outstanding shares of Digerati’s Series C Convertible Preferred Stock for restricted shares of Digerati Common
Stock, (B) the redemption, effective prior to the Closing, by Digerati of all of the issued and outstanding shares of Digerati’s
Series F Preferred Stock, and (C) the exercise, effective prior to the Closing, of the warrants currently held by Post Road Special Opportunity
Fund II LP and Post Road Special Opportunity Fund II Offshore LP for shares of Digerati Common Stock; (xi) the delivery of waivers by
certain executives of Digerati on the date of the Business Combination Agreement whereby such executives waive any entitlement to claim
that the consummation of the transactions contemplated by the Business Combination Agreement, including the Merger, constitutes “Good
Reason” as defined in the existing employment agreements that such individuals have entered into with Digerati or any of its Subsidiaries,
(xii) the receipt by MEOA at or prior to the Closing of a lock-up agreement between certain Digerati stockholders and MEOA (which lock-up
period shall last for not less than 180 days from the date of the Closing (the “Closing
Date”)); and (xiii) the receipt, at or prior to closing, by MEOA of a duly executed copy of an agreement between Post Road
Administrative LLC and certain of its affiliates (“Post Road”, and such agreement,
the “PRG Resolution Agreement”), pursuant to which, among other things, the
breaches, if any, of the covenants contained in that certain credit agreement, as amended to the date hereof, between and among Post Road
and T3 Communications, Inc., a Nevada corporation (a majority owned subsidiary of Digerati) and its subsidiaries are resolved to the reasonable
satisfaction of MEOA.
Termination
The Business Combination Agreement may be terminated
under certain customary and limited circumstances at any time prior to the Closing, including, without limitation, (i) by the mutual written
consent of MEOA and Digerati; (ii) by MEOA, subject to certain exceptions, if any of the representations or warranties made by Digerati
are not true and correct or if Digerati fails to perform any of its covenants or agreements under the Business Combination Agreement (including
an obligation to consummate the Closing) such that certain conditions to the obligations of MEOA could not be satisfied and the breach
(or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured
or cannot be cured within the earlier of (A) thirty (30) days after written notice thereof, and (B) February 25, 2023 (the “Termination
Date”); (iii) by Digerati, subject to certain exceptions, if any of the representations or warranties made by the MEOA Parties
are not true and correct or if any MEOA Party fails to perform any of its covenants or agreements under the Business Combination Agreement
(including an obligation to consummate the Closing) such that the condition to the obligations of Digerati could not be satisfied and
the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or
are) not cured or cannot be cured within the earlier of (A) thirty (30) days after written notice thereof, and (B) the Termination Date;
(iv) by either MEOA or Digerati, if the Closing does not occur on or prior to the Termination Date, unless the breach of any covenants
or obligations under the Business Combination Agreement by the party seeking to terminate proximately caused the failure to consummate
the transactions contemplated by the Business Combination Agreement; (v) by either MEOA or Digerati, if (A) any governmental entity shall
have issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated
by the Business Combination Agreement and such order or other action shall have become final and nonappealable; or (B) if the Required
MEOA Stockholder Consent is not obtained; (vi) by MEOA, if (A) Digerati does not deliver, or cause to be delivered to MEOA a Transaction
Support Agreement duly executed by certain Digerati stockholders or (B) the Digerati stockholders meeting has been held, has concluded,
the Digerati stockholders have duly voted, and Digerati stockholder approval was not obtained; (vii) by MEOA, if Digerati does not deliver,
or cause to be delivered, to MEOA a duly executed copy of the PRG Resolution Agreement on or prior to October 15, 2022; (viii) by Digerati,
should MEOA not have timely taken such actions as are reasonably necessary to extend the period of time for it to complete an initial
business combination for an additional period of three months from November 30, 2022; provided, that it shall be the obligation of Digerati
to timely make the deposit into the Trust Account in connection with such extension, and Digerati shall not have a right to terminate
the Business Combination Agreement as a result of Digerati’s failure to make such deposit; (ix) by MEOA should Digerati not deposit
into the Trust Account in a timely manner the funds necessary to extend the period for MEOA to complete an initial business combination
for an additional period of three months from November 30, 2022, in accordance with, and as required pursuant to, the Business Combination
Agreement; and (x) by MEOA should: (A) Nasdaq not approve the initial listing application for the combined company with Nasdaq in connection
with the Business Combination; (B) the combined company not have satisfied all applicable initial listing requirements of Nasdaq; or (C)
the common stock of the combined company not have been approved for listing on Nasdaq prior to the Closing Date.
If the Business Combination Agreement is validly terminated,
none of the parties to the Business Combination Agreement will have any liability or any further obligation under the Business Combination
Agreement other than customary confidentiality obligations, except in the case of a Willful Breach of any covenant or agreement under
the Business Combination Agreement or Fraud, provided, that (A) if MEOA terminates the
Business Combination Agreement pursuant to clauses (ii), (iv) (other than due to the failure by the SEC to declare the Registration Statement
effective on or prior to the Termination Date), (vi) or (vii) of the preceding paragraph, Digerati shall pay to MEOA, promptly following
such termination, and in any event within not less than five business days following delivery of notice of termination, a termination
fee in the amount of $2,000,000, (B) if Digerati terminates the Business Combination Agreement pursuant to clauses (iii) or (viii) of
the preceding paragraph, MEOA shall pay to Digerati promptly following such termination, and in any event within not less than five business
days following delivery of notice of termination, a termination fee in the amount of $2,000,000 and (C) in the event of a termination
by MEOA pursuant to clauses (ix) or (x) of the preceding paragraph, Digerati shall pay to MEOA, promptly following such termination, and
in any event within not less than five business days following delivery of notice of termination, a termination fee in the amount of $1,265,000.
A copy of the Business Combination Agreement has
been filed as Exhibit 2.1 hereto (the terms of which are incorporated herein by reference) and the foregoing description of the Business
Combination Agreement is qualified in its entirety by reference thereto.
The Business Combination Agreement contains representations,
warranties and covenants that the respective parties made to each other as of the date of the Business Combination Agreement or other
specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among
the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating
such agreement. The representations, warranties and covenants in the Business Combination Agreement are also modified in important part
by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different
from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing
matters as facts. MEOA does not believe that these schedules contain information that is material to an investment decision.
Sponsor Letter Agreement
Concurrently with the execution of the
Business Combination Agreement, the Sponsor and Digerati entered into the Sponsor Letter Agreement (the “Sponsor
Letter Agreement”), pursuant to which the Sponsor agreed to, among other things, (i) vote in favor of the Business
Combination Agreement and the transactions contemplated thereby (including the Business Combination), (ii) waive any adjustment to
the conversion ratio set forth in the governing documents of MEOA or any other anti-dilution or similar protection with respect to
the shares of MEOA Class B Common Stock, such that the shares of MEOA Class B Common Stock will convert into MEOA Shares at the
Closing on a one-to-one basis, (iii) subject certain of the MEOA Class B Common Stock currently held by the Sponsor to potential
forfeiture, (iv) forfeit certain redeemable warrants owned by the Sponsor and that are exercisable for MEOA Class A Stock (the
“Sponsor Warrants”), and (v) execute a customary lock-up agreement with
respect to any MEOA Class A Stock received by the Sponsor in connection with the consummation of the Merger and those shares of MEOA
Class A Stock issuable upon exercise of the Sponsor Warrants.
The foregoing description of the Sponsor Letter
Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Sponsor Letter Agreement,
a form of which is attached as Exhibit A (the terms of which are incorporated herein by reference) to the Business Combination Agreement.
Digerati Stockholder Transaction Support Agreements
Concurrently with, or with respect to certain
stockholders, within a specified time after, the signing of the Business Combination Agreement, each “Company Stockholder”
listed on Schedule I attached to the Business Combination Agreement (collectively, the “Supporting Digerati Stockholders”)
shall duly execute and deliver to MEOA a transaction support agreement (collectively, the “Digerati Stockholder Transaction Support
Agreements”), pursuant to which, among other things, each such Supporting Digerati Stockholder will agree to support and vote
in favor of the Business Combination Agreement, the Ancillary Documents to which Digerati is or will be a party and the transactions contemplated
thereby (including the Merger).
The foregoing description of the Digerati Stockholder
Transaction Support Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the Digerati
Stockholder Transaction Support Agreements, a form of which is attached as Exhibit B (the terms of which are incorporated herein by reference)
to the Business Combination Agreement.
Item 7.01 Regulation FD Disclosure.
On September 6, 2022, Digerati issued a press
release announcing its entry into the Business Combination Agreement. The press release is attached hereto as Exhibit 99.1 and incorporated
by reference herein.
Exhibits 99.1 is being furnished pursuant to Item
7.01 and will not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of
that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
Additional Information
In connection with the Business Combination, MEOA
intends to file with the SEC the Registration Statement. Digerati will mail a definitive proxy statement/final prospectus and other relevant
documents to its stockholders. This communication is not a substitute for the Registration Statement, the definitive proxy statement/final
prospectus or any other document that Digerati will send to its stockholders in connection with the Business Combination. Investors
and security holders of Digerati are advised to read, when available, the proxy statement/prospectus in connection with Digerati’s
solicitation of proxies for its special meeting of stockholders to be held to approve the Business Combination (and related matters) because
the proxy statement/prospectus will contain important information about the Business Combination and the parties to the Business Combination.
The definitive proxy statement/final prospectus will be mailed to stockholders of Digerati as of a record date to be established for voting
on the Business Combination. Stockholders will also be able to obtain copies of the proxy statement/prospectus, without charge, once available,
at the SEC’s website at www.sec.gov or by directing a request to: Digerati Technologies, Inc., Attention: Antonio Estrada Jr., Chief
Financial Officer, 8023 Vantage Dr., Suite 660, San Antonio, TX 78230.
Participants in the Solicitation
MEOA, Digerati and their respective directors,
executive officers, other members of management, and employees, under SEC rules, may be deemed to be participants in the solicitation
of proxies of Digerati’s stockholders in connection with the Business Combination. Investors and security holders may obtain
more detailed information regarding the names and interests in the Business Combination of Digerati’s directors and officers in
MEOA’s filings with the SEC, including the Registration Statement to be filed with the SEC by MEOA, which will include the proxy
statement of Digerati for the Business Combination, and such information and names of MEOA’s directors and executive officers will
also be in the Registration Statement to be filed with the SEC by MEOA, which will include the proxy statement of Digerati for the Business
Combination.
Forward Looking Statements
Certain statements made herein that are not historical
facts are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include, without limitation, MEOA’s and Digerati’s expectations with
respect to the proposed business combination between MEOA and Digerati, including statements regarding the benefits of the transaction,
the anticipated timing of the transaction, the implied valuation of Digerati, the products and services offered by Digerati and the markets
in which it operates, and the projected future results of Digerati. Words such as “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,”
“plan,” “may,” “should,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions are intended to identify such forward-looking statements. Forward-looking
statements are predictions, projections and other statements about future events that are based on current expectations and assumptions
and, as a result, are subject to significant risks and uncertainties that could cause the actual results to differ materially from the
expected results. Most of these factors are outside MEOA’s and Digerati’s control and are difficult to predict. Factors that
may cause actual future events to differ materially from the expected results, include, but are not limited to: (i) the risk that the
business combination transaction between Digerati and MEOA may not be completed in a timely manner or at all, which may adversely affect
the price of the securities of MEOA and Digerati, (ii) the risk that the transaction may not be completed by MEOA’s business combination
deadline, even if extended by its sponsor, (iii) the failure to satisfy the conditions to the consummation of the transaction, including
the adoption of the Business Combination Agreement by the stockholders of MEOA and Digerati, (iv) the occurrence of any event, change
or other circumstance that could give rise to the termination of the Business Combination Agreement, (v) the receipt of an unsolicited
offer from another party for an alternative transaction that could interfere with the business combination, (vi) the effect of the announcement
or pendency of the transaction on Digerati’s business relationships, performance, and business generally, (vii) the inability to
recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability
of the post-combination company to grow and manage growth profitability and retain its key employees, (viii) costs related to the business
combination, (ix) the outcome of any legal proceedings that may be instituted against Digerati or MEOA following the announcement of the
proposed business combination, (x) the ability to maintain the listing of MEOA’s securities on Nasdaq, (xi) the ability to implement
business plans, forecasts, and other expectations after the completion of the proposed business combination, and identify and realize
additional opportunities, (xii) the risk of downturns and the possibility of rapid change in the highly competitive industry in which
Digerati operates, (xiii) the risk that Digerati and its current and future collaborators are unable to successfully develop and commercialize
the products or services of Digerati, or experience significant delays in doing so, including failure to achieve approval of its products
or services by applicable federal and state regulators, (xiv) the risk that Digerati may never achieve or sustain profitability, (xv)
the risk that Digerati may need to raise additional capital to execute its business plan, which many not be available on acceptable terms
or at all, (xvi) the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations, (xvii)
the risk of product liability or regulatory lawsuits or proceedings relating to the products and services of Digerati, (xviii) the risk
that Digerati is unable to secure or protect its intellectual property, (xix) the risk that the securities of the post-combination company
will not be approved for listing on Nasdaq or if approved, maintain the listing, and (xx) other risks and uncertainties indicated in the
filings that are made from time to time with the Securities and Exchange Commission by MEOA and Digerati (including those under the “Risk
Factors” sections therein). The foregoing list of factors is not exhaustive. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Digerati and MEOA assume no obligation,
and do not intend, to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Disclaimer
This communication is for informational purposes
only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation
of any vote in any jurisdiction pursuant to the Business Combination or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act.
Item 9.01 Financial Statements and Exhibits.
| # | Certain schedules and exhibits have been omitted pursuant to
Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally copies of omitted schedules and exhibits to the Securities
and Exchange Commission or its staff upon its request. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| Dated: September 6, 2022 |
Digerati Technologies, Inc. |
| |
|
| |
By: |
/s/ Antonio Estrada Jr. |
| |
|
Antonio Estrada Jr., |
| |
|
Chief Financial Officer |
7
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