Item 1.01 Entry into a Material Definitive
Agreement.
As
disclosed in its Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on November
23, 2020, on November 17, 2020, Digerati Technologies, Inc. (the “Company”), T3 Communications, Inc., a Nevada entity that
is a controlled subsidiary of the Company (“T3 Nevada”), and its subsidiaries (collectively, “the T3 Nevada Parties”)
entered into a credit agreement (the “Credit Agreement”) with Post Road Administrative LLC and its affiliate Post Road Special
Opportunity Fund II LLP (collectively, “Post Road”). The Company is a party to certain sections of the Credit Agreement. Pursuant
to the Credit Agreement, Post Road provided T3 Nevada with a secured loan of up to $20,000,000.
As
disclosed in the Company’s Current Report on Form 8-K filed with the SEC on December 23, 2021, on December 20, 2021, the parties
to the Credit Agreement entered into an amendment to the Credit Agreement.
As
disclosed in the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2022, on February 4, 2022, the parties
to the Credit Agreement agreed that Post Road would lend a further $10 million to T3 Nevada pursuant to a Term Loan C Note (the “Loan
C Note”). T3 Nevada received net proceeds of $9.75 million pursuant to the Loan C Note, which it used to acquire all of the equity
interests in Next Level Internet, Inc. (“Next Level”). In connection with the issuance of the Term Loan C Note, the T3 Nevada
Parties and Next Level (collectively, the “Loan Parties”) and Post Road entered into a Joinder and Second Amendment to Credit
Agreement (the “Joinder”) whereby, among other terms, Next Level became a guarantor of the T3 Nevada Parties’ obligations
pursuant to the Credit Agreement and the notes issued pursuant thereto.
As disclosed in the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2022, as filed with the SEC on June 21, 2022 (the “Form 10-Q”),
on June 13, 2022, the parties to the Joinder entered into a Forbearance Agreement and Third Amendment to the Credit Agreement (“Forbearance
Agreement”). Pursuant to the Forbearance Agreement, Post Road agreed to forbear through the Forbearance Period (as defined therein)
from (i) exercising its rights and remedies with regard to certain existing events of default and (ii) requiring compliance with the financial
covenants set forth in Section 11.12 of the Credit Agreement (related to leverage, EBITDA, liquidity, capital expenditures, fixed charge
coverage ratio, and churn).
On October 17, 2022, the parties
to the Joinder entered into an Amendment to Forbearance Agreement (the “Amendment”). The Amendment was entered into because
certain events of default related to both the Credit Agreement and the Joinder that had occurred prior to the parties’ entering
into the Forbearance Agreement (as described in Part II, Item 5 (“Other Information”) in the Form 10-Q) were continuing (the
“Prior Existing Defaults”), certain additional events of default related to the Credit Agreement had occurred since the date
of the Forbearance Agreement (the “Additional Existing Defaults”), and the parties anticipated that additional events of default
with respect to the Credit Agreement will occur (the “Anticipated Defaults”).
The Additional Existing Defaults
related to financial covenants were failure to maintain a Senior Leverage Ratio (as defined in the Credit Agreement) of less than 4.06
to 1.00 for the fiscal quarter ended July 31, 2022, and failure to maintain Minimum Liquidity (as defined in the Credit Agreement) of
$2.0 million for the fiscal quarter ended July 31, 2022. The Anticipated Defaults related to financial covenants are failure to maintain
a Senior Leverage Ratio of less than 4.05 to 1.00 for the fiscal quarter ending October 31, 2022, and failure to maintain Minimum Liquidity
of $2.0 million for the fiscal quarter ending October 31, 2022.
The Additional Existing Defaults
and Anticipated Defaults unrelated to financial covenants relate to the Loan Parties’ failure to deliver a compliance certificate
for the fiscal quarter ended July 31, 2022 and ending October 31, 2022, respectively and, with respect to the Additional Existing Defaults,
to timely deliver an executed copy of an amendment to a lease agreement.
Pursuant to the Amendment, Post Road agreed to
forbear through the Amended Forbearance Period (as defined below) from (i) exercising its rights and remedies with regard to the Prior
Existing Defaults, the Additional Existing Defaults, and the Anticipated Defaults and (ii) requiring compliance with the financial covenants
set forth in Section 11.12 of the Credit Agreement. The “Amended Forbearance Period” is from June 13, 2022 through the earlier
of (a) November 15, 2022, (b) the date on which any other event of default not enumerated in the Amendment occurs or is deemed to have
occurred, or (c) the date of any failure of any Loan Party to comply with any term, condition, or provision of the Forbearance Agreement
as amended by the Amendment. The Amendment does not constitute a waiver of the defaults enumerated therein nor does it impair the ability
of Post Road to exercise its rights and remedies after the expiration of the Amended Forbearance Period.
The foregoing summary of the
Amendment contains only a brief description of the material terms of the Amendment and such description is qualified in its entirety by
reference to the full text of the Amendment, filed herewith as Exhibit 10.1.