Attention shareholders, partners, and stakeholders,
As you may know, DGTL Holdings Inc, has been active over the last few months. The Company has completed an acquisition, added leadership and reported new Fortune 100 level clients, etc. Thus, as a firm believer in effective communications, I am pleased to provide you with a CEO update below. This update provides context on recent developments, and news releases over the past quarter, with supporting links (in bold), for your reference, and review. To maintain this effective communication, the new DGTL leadership team will continue to provide updates on a quarterly basis, moving forward. Each update will summarize past news releases and highlight key achievements while providing a roadmap for ongoing developments. In the interim, please review the update below and send questions to [email protected]. Also, be sure to visit our Investor Centre and download our updated Presentation.
Thank you for your continued support.
Best regards,
John Belfontaine
CEO and Chairman
DGTL Holdings Inc.
Management Team
Firstly, as seen in a Mar. 19th release, the board has appointed a new senior executive leadership team. The new DGTL executive consists of experienced industry professionals, with a track record of success and are focused on building a full-service digital media conglomerate to serve Fortune 100 clientele.
I am pleased to assume the position of CEO and Chairman. As CEO, it is my role to oversee all corporate functions of DGTL Holdings Inc. while supporting the operational teams of our wholly owned subsidiaries. As the original founder of DGTL Holdings Inc., I have supported the Company from inception, and I am thrilled to lead the next chapter. My primary objective in this role is to build long term shareholder value within the portfolio. In doing so, the new DGTL management team and I are dedicated to streamlining operations for scalable revenue growth while fostering a culture of communication and collaboration.
DGTL also welcomes a new Chief Commercial Officer (CCO) to the Company. As CCO, Mr. Steven M. Brown will oversee the business development and trade marketing for Hashoff, Engagement Labs, and all future subsidiaries. Steve has a track record of success in guiding several high-performance business development teams for global industry powerhouses, such as United Online, IGN/News Corp, and Viacom/CBS Radio. Steve served as CRO of ViewLift (a global streaming company) and SVP of Platform Sales and Advertising for NeuLion (a top OTT technology company) which was sold to Endeavor for US $300 million.
DGTL also welcomes Mr. Chris Foster (CPA, CGA) to the Company as the new incumbent Chief Financial Officer (effective Apr. 30th, 2022). Mr. Foster has led several financial management teams for several public, and private companies, across a range of industries. As CFO, Mr. Foster will manage all financial controllers at the subsidiary level and will work with appointed auditors to prepare and file quarterly and annual financial statements. DGTL also reports that Director, Mr. David Beck has been appointed as the new Chairman of the Audit Committee and that Mr. Bruce Lev (former director of Engagement Labs) has been appointed as a Board Observer.
DGTL also reports that former Engagement Labs executives Mr. Ed Keller (CEO), Mr. Cedric de Saint Ledger (CTO) and Mr. Gilbert Boyer (CFO ) are no longer with the Company. Former DGTL executives Michael Racic and Steven Goldberg have also been replaced with a new senior executive leadership team.
The evolution of our senior executive brings a renewed sense of purpose and positive momentum to the next stages of our development as well as a reduction in annual operating expenses by over US $1 million a year. The new DGTL management is dedicated to financial accountability and sound corporate governance while supporting the acceleration of our subsidiaries and M&A activities. For new executive bios, please visit our updated Management webpage.
Mergers & Acquisitions
As noted, DGTL Holdings Inc. remains dedicated to expanding our portfolio while diligently scaling our existing media businesses. DGTL recently announced the successful acquisition of Engagement Labs Inc. (and its patented PaaS, TotalSocial®). Engagement Labs is now DGTL’s second wholly owned subsidiary and brings to DGTL Holdings Inc. an enterprise level social media analytics platform with a Fortune 100 level customer base.
The Engagement Labs acquisition diversifies DGTL’s (i) software/IP, (ii) revenue streams and (iii) a Fortune 100 client-mix. With Hashoff providing CMS, TotalSocial® providing analytics, and key partnerships providing content distribution, DGTL Holdings Inc. now offers a full-service social media marketing platform. DGTL management is now stewarding the integration of processes and personnel, while pursuing cross-selling opportunities, within its portfolio. For more insights on Engagement Labs and TotalSocial® please visit our Technology webpage, or our updated Presentation.
Moving forward, DGTL continues to evaluate new and accretive M&A opportunities focusing on fully commercialized enterprise software in the high growth areas of the digital media industry. Key areas include software solutions in the mobile, gaming, streaming (A/V) and OTT (Over-The-Top) categories. We continue to evaluate new M&A prospects for accretive acquisition.
Subsidiary Operations
As the new CEO of DGTL Holdings Inc. I recently visited the operational teams of our subsidiaries in New York City, USA. The meeting took a central theme of building intercompany efficiency and a culture of communication and collaboration. I was impressed with the talent and professionalism of our subsidiary personnel and the leadership on their executive teams.
During this trip, DGTL held strategic planning meetings with the executives of both subsidiaries. Engagement Labs is having a banner growth quarter, with strong operations, technology and major new signings of Fortune 100 level clients. After a rigorous review of the Hashoff business inherited, a four-pronged development strategy was reached.
Our plan for Hashoff is to immediately (i) maximize cost efficiencies (ii) boost gross profit margins (for sustainable revenue growth) while (iii) eliminating current and contingent liabilities. Under the leadership of our new CCO, Hashoff is now (iv) re-building sales pipelines, activating orphaned accounts and cross-selling within the portfolio for organic revenue growth.
Starting April 1st, and implemented over the next 4-6 months, management will significantly reduce Hashoff’s monthly operating expenses ratio while increasing the gross profit margins of all future business. The goal is a near-term breakeven to ensure long term scalable growth. As noted, Engagement Labs is experiencing impressive revenue growth this quarter and is tracking towards cash flow positive from significant recent reductions in senior executive wages and their +70% gross profit margins.
Back Office Update
On Apr. 11th DGTL reported that both of its subsidiaries have been approved for PPP (Paycheck Protection Program) loan forgiveness. Hashoff had $177,000 in loans forgiven while Engagement Labs was approved for $420,250 in loan forgiveness. This exercise was the first of many proactive measures to reduce operating expenses and liabilities. DGTL is actively preserving working capital, reducing liabilities via settlements, and loan forgiveness, while pursuing low interest term debt financing from a big six bank.
On Apr, 4th DGTL reported the filing of a “Statement of Claim” vs. Mr. Joel Wright and Mr. Tom Jessiman, (founders of Hashoff LLC). In the interests of protecting, and defending our shareholders, DGTL is seeking damages to compensate the company and its shareholders for “gross misrepresentations and breaches of contract” which caused a goodwill impairment reflected in the FYE 2021 statements. DGTL considers this a positive initiative in our effort to reduce or eliminate liabilities.
Post the acquisition of Engagement Labs, the new DGTL financial management team has begun the process of standardizing accounting principles, policies and reporting procedures. Under our new CFO, DGTL will synchronize the fiscal year ends of all entities and begin preparing consolidated financials for the Q4 FYE 2022 filing (due Sept. 30, 2022).
By virtue of acquisition, reductions in operating expenses and loan forgiveness, DGTL anticipates significant YoY (year-over-year) improvements in the pending Q4 FYE 2022 reports. Please note that the Q3 2022 report (due Apr. 30th, 2022) will only reflect previous Hashoff business (period ending Feb. 28th, 2022) under the management of former CEO Michael Racic and COO/Chairman of the Audit Committee, Steven Goldberg. Finally, Engagement Labs has been delisted from the TSXV while DGTL Holdings Inc. continues to trade on the TSXV as “DGTL” and OTCQB as “DGTHF”.
Front Office Update
As noted, Hashoff and Engagement Labs serve an impressive list of Fortune 100 level clients, around the globe. Hashoff recently announced that key client account DraftKings extended their contract services to include social content campaigns in the state of New York and Illinois. Hashoff also recently announced new multibrand campaigns with Anheuser Busch, running across the Southeastern USA. Engagement Labs recently announced a new contract renewal from one of the largest OTT and streaming video service providers in the world. Engagement Labs also recently announced the signing of a new client contract with a global mass media conglomerate, with subsidiaries that are the leader in motion pictures, television and digital media streaming.
Now with two operating subsidiaries signing Fortune 100 level client accounts and the prospect for cross sales within the portfolio, DGTL anticipates an enhanced cadence to business related news, moving forward. Under the new Chief Commercial Officer, DGTL is implemented an assertive pipeline development program for new lead generation and to target orphaned accounts to growth the active accounts roster with a short sales cycle. In addition, our collateral materials have been updated., including the Company webpage and our Corporate Presentation.
Closing Remarks
In closing, with our first two software acquisitions now complete, DGTL now has a solid platform to serve its expanded client base of Fortune 100 level customers. With the proactive cost savings measures and near-term sustainable revenue growth plans now activated, the new DGTL leadership is fully engaged and dedicated to scalable and tactical growth. Lastly, our goal for 2023 is to streamline operations and boost momentum towards continued to expansion of the DGTL Holdings Inc. portfolio via M&A and partnerships. In the interim, we look forward to providing future updates on ongoing development and news in the weeks ahead
Best regards,
John Belfontaine
Chief Executive Officer
