CEO Update

Q2 FY 2023

Shareholders, stakeholders and partners,

On behalf of the board, and executive, please find the latest CEO Update below.

The following update provides corporate and operational highlights from Q2 of fiscal 2023. Each section contains hyperlinks to supporting materials for your reference, and review. Key topics include: financial highlights (positive results from restructuring), TotalAccess™ (a new software innovation project), new Fortune 500 customer accounts and contracts, a private placement financing, and recent articles on the state of the economy, market and sector from leading sources. 

To secure a reservation in the open financing please email your requests to [email protected].

Visit more information visit the investor centre or click Corporate Presentation.

Thank you kindly for your interest and continued support.

Best regards,

John Belfontaine

CEO and Chairman

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Opening Remarks

The following CEO update is the fourth under the tenure of the new DGTL Holdings Inc leadership team. Management is pleased to report on the initial positive results (e.g. Total Liabilities down 50%, Net Losses down 91%, Gross Profit Margins up 60%) from ongoing corporate, business, organization and product development. The Company has also developed software innovation projects, creative go-to market strategies, and has reported on new Fortune 500 clients and contracts. 

Thus, despite the economic, market, and sector uncertainty in 2022, and a need for strategic restructuring to optimize the administration, governance and financial position inherited, the new senior management team has rebuilt a solid foundation for revenue growth, profitability, innovation and prospective M&A, in the face of adversity. With a renewed purpose, stabilized platform, and improving macroeconomic conditions, the Company is now focused on stewarding growth and development in 2023.

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Corporate Development 

In Q4 2022, the new DGTL management team set priority mandates on; (1) fiscal responsibility, (2) corporate governance and (3) accountability / leadership. The goal was to optimize financial position, capital structure and advance our operating business lines for a sustained improvement in enterprise value. In Q2 2023, restructuring projects began to yield results including a significant divestiture of liabilities and reductions in operating expenses. As strategic restructuring projects began to take hold, management concurrently designed and implemented a new two-year Development Plan and Profoma P&L includes assertive initiatives to grow sales, reduce liabilities and expenses and improve gross profit margins. 

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Business Development

Recent press releases reporting new Fortune 500 clients and contracts;

February 21st, 2023

New Contract with Fortune 500 Multimedia Conglomerate (Dotdash-Meredith) NASDAQ Publisher Selects Award Winning Data-Analytics PaaS for Fifth Consecutive Audience Segmentation Study 

February 8th, 2023

New Content Marketing Contract for NASDAQ Listed E-Sports Client (DraftKings at US Open) Social Content Campaign Aims to Build Awareness and Subscriptions Surrounding Tentpole Event in US Sports 

January 25th, 2023 

New Advertising Study with Entertainment Company (Bron Productions) New Contract with Fast Growing Entertainment Company Led by NBA icon

January 17th, 2023 

F500 Social Technology Brand Contract (Twitter) Major Signing of 2023 with Significant Account Growth Potential 

January 9th, 2023 

Multiple Service Agreements with Leading E-Broadcast and Entertainment Brand (CBS-Viacom-Paramount) $270,000 in Agreements to Leverage TotalSocial PaaS for Deep-Dive Data-Analytics Modelling

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Financials (Q2 2023)

Initial results from strategic restructuring initiatives indicating positive trends within the Company’s financial position.

Beyond above, additional financial improvements from new and ongoing corporate development initiatives are expected to be realized in Q3/4 of fiscal 2023. As reported in the Q2 2023 FS, Hashoff LLC is now a discontinued operation, with multiple operating business lines now managed under a sole subsidiary Engagement Labs Inc. (i.e. TotalSocial®). The Company is now re-focusing efforts and resources from restructuring and corporate development planning, to new business development, revenue growth and accretive M&A projects. 

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Product Mix 

TotalSocial® is now DGTL’s flagship digital media PaaS (platform-as-a-service) brand. TotalSocial® is a patented and award-winning full-service social management platform, with a strategic mix of data-analytics (TotalSocial® Scorecard™, DeepDiagnostics™ and Predictive Analytics™) and strategic content strategic marketing services (i.e. TotalInfluence™). TotalSocial® currently serves an established list of Fortune 500 clients that includes international leaders in technology, media, entertainment, financial services and consumer packaged goods (CPG). Moving forward, the Company is dedicating resources to the software innovation, sales and marketing of the TotalSocial® brand, and its underlying software products and managed services.  

Software Innovation

TotalAccess™ is a software innovation concept designed to create a low-cost entry-level version of TotalSocial®’s patented methodologies and proprietary Scorecard™ dashboard.

Concept: Trial software version of TotalSocial®’s Scorecard™ to provide limited access to consumer/audience segment data (demographic psychographic, media habits, key issues, referrals and recommendations, etc.), online-offline brand sentiment scoring and competitive intelligence, etc. across all sectors within the USA. This project will be funded as a portion of the Use of Proceeds from the open equity financing (see below).

Key Benefits:  Expand addressable market from current Fortune 500 client base to Fortune 1000-2000 brands (+300%) while creating new distribution channels within large to medium advertising agencies and channel partners, create new software IP (intellectual-property) at minimal capital/operating expense (re-purposing existing technology, data and service providers), increase client base (for up and cross-sell potential), re-monetize database, fully-automated SaaS platform which will in turn improve gross profit margins 

Competitors: YouGov.com (LON: YOU) 

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PR & Trade Media (TotalSocial®)

Recent blogs and featured articles from Engagement Labs Inc.

• Marketing Charts: 10 Most Watched Superbowl Ads
• Blog: Top Super Bowl 2023 Advertisers That Dominated the Buzz
• Bulldog Reporter:  FIFA World Cup viewers talk more about advertisers and sponsors
• WARC: World Cup shows why we need to talk about brands 
• Blog: FIFA World Cup Viewers Talk More About Advertisers and Sponsors
• Marketing Charts: World Cup 2022: A Few Stats to Know

Past recognition and coverage from leading third party trade media; 

• MIT Review: Deriving Value From Conversations About Your Brand
• NY Times: Brands Heed Social Media. Do Not to Forget Word of Mouth
• AdAge: Half of Turner’s UEFA Soccer Deals Include OOH Guarantees
• AdAge: Marketer’s Brief: When Peltz Fights P&G, Google Wins
• Adweek: Social Presence Goes Beyond the Screen
• Harvard Business Review: Brands Shouldn’t Believe Everything Online
• USA Today: For Generation Z, iPhone, Apple have Buzz – Coke, Pepsi fizzle
• Wall Street Journal: Meredith to Acquire Time Inc.; LittleThings Explores Options; The Perils of Over-Tracking Social Sentiment

Other trade media coverage, sector research, articles and blogs published at; https://www.engagementlabs.com/news.

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Economy & Sector 

Leading economy, market and sector research data on the financial forecast for 2023 

January 23rd, 2023

Morgan Stanley – Q1 Report– U.S. economy heading for softer landing

January 17th, 2023

Luma Partners – 2022 Year Report – Ad/Martech trends in 2022, valuations slowly improving, sector stabilizing, macro shift to consolidation and M&A 

January 4th, 2023

NASDAQ – Investor Place– 10 predictions for a market boom in 2023

October 7th, 2022

Luma Partners – Q3 2022 Report  -Top Ad/Martech investment bank calling for sector stabilization, macro shift to consolidation and M&A 

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Equity Financing

On January 3rd, 2023 the Company announced a non-brokered financing to raise a maximum of up to $1,000,000 (the “Unit Offering“). Each unit will consist of one common-share (a “Common Share“) at a price of $.05 per share and one-half (1/2) of one common-share warrant (a “Warrant“) at an exercise price of $.07 for a period of two years from issuance. 

Net proceeds will be deployed to fund (i) working capital (i.e. pre-funding data service providers), (ii) software innovation (i.e. TotalAccess™) and (iii) the addition of new digital media sales executives (i.e. part-time x 2 and full-time x 1) operating in the New York City area under the supervision of the new Chief Commercial Officer. The Company is still accepting requests participate in this round of financing (if received before March 7th 2023).

To secure a reservation please email [email protected] with a request to participate.

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Closing Remarks 

In closing, the implementation of new development mandates over the past 10 months have successfully stablized and strengthened both corporate and operational functionality and potential. With a challenging year behind us, initial positive results from strategic restructuring and encouraging forecast data for 2023, the Company is now poised for growth and development. In addition, with new working capital marketing, sales executives, and software innovation projects (and expansion of addressable markets) via financing, management has a clear and targeted path forward. On behalf of the board and executive, we thank our valued stakeholders, shareholders and partners for their continued support throughout this process. We look forward to providing additional positive development updates in the upcoming Q3 2023 update.