Digerati (DTGI) 10-Q/A 13 Feb 19 2018 Q2 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jan. 31, 2018	Mar. 22, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Digerati Technologies, Inc.
Entity Central Index Key	1,014,052
Trading Symbol	DTGI
Amendment Flag	false
Current Fiscal Year End Date	--07-31
Document Type	10-Q
Document Period End Date	Jan. 31, 2018
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		11,128,781

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jan. 31, 2018	Jul. 31, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 112	$ 673
Accounts receivable, net	46	15
Prepaid and other current assets	35	9
Escrow Deposits related to acquisition	275
Total current assets	468	697
LONG-TERM ASSETS:
Intangible assets, net	305	14
Property and equipment, net	97	2
Total assets	870	713
CURRENT LIABILITIES:
Accounts payable	983	859
Accrued liabilities	422	365
Note Payable, current	125
Total current liabilities	1,530	1,224
LONG-TERM LIABILITIES:
Customer deposits	131	131
Convertible debenture, net $200 and $0, respectively
Derivative liability	335
Total long-term liabilities	466	131
Total liabilities	1,996	1,355
Commitments and contingencies
STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001, 50,000,000 shares authorized, none issued and outstanding
Common stock, $0.001, 150,000,000 shares authorized, 10,968,781 and 8,386,056 issued and outstanding, respectively	11	8
Additional paid in capital	78,337	76,986
Accumulated deficit	(79,475)	(77,637)
Other comprehensive income	1	1
Total stockholders' deficit	(1,126)	(642)
Total liabilities and stockholders' deficit	$ 870	$ 713

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jan. 31, 2018	Jul. 31, 2017
Statement of Financial Position [Abstract]
Convertible debenture, net	$ 200	$ 0
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	10,968,781	10,968,781
Common stock, shares outstanding	8,386,056	8,386,056

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
OPERATING REVENUES:
Cloud-based hosted services	$ 151	$ 42	$ 207	$ 87
Total operating revenues	151	42	207	87
OPERATING EXPENSES:
Cost of services (exclusive of depreciation and amortization)	98	34	143	69
Selling, general and administrative expense	291	243	496	504
Stock compensation & warrant expense	919	374	975	374
Legal and professional fees	176	99	292	126
Depreciation and amortization expense	35	4	39	9
Total operating expenses	1,519	754	1,945	1,082
OPERATING LOSS	(1,368)	(712)	(1,738)	(995)
OTHER INCOME (EXPENSE):
Gain on derivative instruments	108		108
Interest income (expense)	(208)		(208)
Total other income (expense)	(100)		(100)
NET LOSS	$ (1,468)	$ (712)	$ (1,838)	$ (995)
LOSS PER SHARE - BASIC AND DILUTED	$ (0.15)	$ (0.11)	$ (0.20)	$ (0.17)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED	9,884,962	6,216,232	9,339,435	5,722,513

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,838)	$ (995)
Adjustments to reconcile net loss to cash used in by operating activities:
Depreciation and amortization	39	9
Stock compensation and warrant expense	975	374
Gain on derivative instruments	(108)
Debt discount in excess of Face value	208
Changes in operating assets and liabilities:
Accounts receivable	(31)	(6)
Escrow deposit related to acquisition	(275)
Prepaid expenses and other current assets	(26)	(12)
Accounts payable	124	33
Accrued liabilities and customer deposits	57	44
Net cash used in operating activities	(875)	(553)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of oil and gas property		(38)
Acquisition of VoIP assets	(125)
Net cash used in investing activities	(125)	(38)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	280
Borrowings from convertible debt, net of original issue cost and discounts	159
Net cash provided by financing activities	439
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(561)	(591)
CASH AND CASH EQUIVALENTS, beginning of period	673	1,169
CASH AND CASH EQUIVALENTS, end of period	112	578
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jan. 31, 2018
Accounting Policies [Abstract]
BASIS OF PRESENTATION	NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements of Digerati Technologies, Inc. ("we;" "us," "our," or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the United States Securities and Exchange Commission. In the opinion of management, these interim financial statements contain all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim periods presented. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements, which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the year ended July 31, 2017 contained in the Company's Form 10-K filed on December 14, 2017 have been omitted. Income Taxes The effective tax rate was 0% for the six months ended January 31, 2018 and 2017, respectively. The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. Since January 1, 2007, the Company accounts for uncertain tax positions in accordance with the authoritative guidance issued by the Financial Accounting Standards Board on income taxes which addresses how an entity should recognize, measure and present in the financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return. Pursuant to this guidance, the Company recognizes a tax benefit only if it is "more likely than not" that a particular tax position will be sustained upon examination or audit. To the extent the "more likely than not" standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than 50% likely of being realized upon settlement. As of January 31, 2018, we have no liability for unrecognized tax benefits. Cash and cash equivalents The Company considers all bank deposits and highly liquid investments with original maturities of three months or less to be cash and cash equivalents. Reclassifications For comparability, certain prior period amounts have been reclassified, where applicable, to conform to the financial statement presentation used in fiscal 2018. The reclassifications have no impact on net loss.

Going Concern

Going Concern	6 Months Ended
	Jan. 31, 2018
Going Concern [Abstract]
GOING CONCERN	NOTE 2 – GOING CONCERN Financial Condition Digerati's consolidated financial statements for the period ending January 31, 2018 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. Digerati has incurred net losses and accumulated a deficit of approximately $79,475,000 since 1993 and a working capital deficit of approximately $1,062,000 which raises substantial doubt about Digerati's ability to continue as a going concern. Management Plans to Continue as a Going Concern Management believes that current available resources will not be sufficient to fund the Company's operations over the next 12 months. The Company's ability to continue to meet its obligations and to achieve its business objectives is dependent upon, among other things, raising additional capital, issuing stock-based compensation to certain members of the executive management team in lieu of cash, or generating sufficient revenue in excess of costs. At such time as the Company requires additional funding, the Company will seek to secure such additional funding from various possible sources, including equity or debt financing, sales of assets, or collaborative arrangements. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject to limitations on its operations, through debt covenants or other restrictions. If the Company obtains additional funds through arrangements with collaborators or strategic partners, the Company may be required to relinquish its rights to certain technologies. There can be no assurance that the Company will be able to raise additional funds, or raise them on acceptable terms. If the Company is unable to obtain financing on acceptable terms, it may be unable to execute its business plan, the Company could be required to curtail its operations, and the Company may not be able to pay off its obligations, if and when they come due. The Company will continue to work with various best-efforts funding sources to secure additional debt and equity financings. However, Digerati cannot offer any assurance that it will be successful in executing the aforementioned plans to continue as a going concern. Digerati's consolidated financial statements as of January 31, 2018 do not include any adjustments that might result from the inability to implement or execute Digerati's plans to improve our ability to continue as a going concern.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jan. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	NOTE 3 – STOCK-BASED COMPENSATION In November 2015, Digerati adopted the Digerati Technologies, Inc. 2015 Equity Compensation Plan (the "Plan"). The Plan, authorizes the grant of up to 7.5 million stock options, restricted common shares, non-restricted common shares and other awards to employees, directors, and certain other persons. The Plan is intended to permit Digerati to retain and attract qualified individuals who will contribute to the overall success of Digerati. Digerati's Board of Directors determines the terms of any grants under the Plan. Exercise prices of all stock options and other awards vary based on the market price of the shares of common stock as of the date of grant. The stock options, restricted common stock, non-restricted common stock and other awards vest based on the terms of the individual grant. During the six months ended January 31, 2018, we issued: ● 644,731 common shares to various employees as part of the Company's profit sharing plan contribution. The Company recognized stock-based compensation expense of approximately $226,000 equivalent to the value of the shares calculated based on the share's closing price at the grant dates. (See Note 4) ● 515,493 common shares to management for services in lieu of cash compensation. The Company recognized stock-based compensation expense of approximately $155,000 equivalent to the value of the shares calculated based on the share's closing price at the grant dates. (See Note 5) ● 1,025,000 options to purchase common shares to various employees with an exercise price of $0.35 per share and a term of 5 years. The options vest equally over a period of one year. The options have a fair market value of $218,800. ● 275,000 options to purchase common shares to various employees with an exercise price of $0.35 per share and a term of 5 years. The options vest equally over a period of two years. The options have a fair market value of $74,800. ● 545,000 options to purchase common shares to various employees with an exercise price of $0.35 per share and a term of 5 years. The options vest equally over a period of three years. The options have a fair market value of $164,900. The fair market value of all options issued was determined using the Black-Scholes option pricing model which used the following assumptions: Expected dividend yield 0.00 % Expected stock price volatility 170.44 % Risk-free interest rate 2.10 % Expected term 1.0 - 3.0 years Digerati recognized approximately $503,500 and $374,000 in stock-based compensation expense to employees during the six months ended January 31, 2018 and 2017, respectively. Unamortized compensation cost totaled $420,000 and $191,000 at January 31, 2018 and January 31, 2017, respectively.

Non-Standardized Profit Sharing

Non-Standardized Profit Sharing Plan	6 Months Ended
	Jan. 31, 2018
Non-Standardized Profit-Sharing Plan [Abstract]
NON-STANDARDIZED PROFIT SHARING PLAN	NOTE 4 – NON-STANDARDIZED PROFIT SHARING PLAN We currently provide a Non-Standardized Profit Sharing Plan ("Plan"), adopted September 15, 2006. Under the plan our employees qualify to participate in the plan after one year of employment. Contributions under the plan are based on 25% of the annual base salary of each eligible employee up to $54,000 per year. Contributions under the plan are fully vested upon funding. During the period ended January 31, 2018 and January 31, 2017, the Company issued 644,731 and 1,003,966

Equity

Equity	6 Months Ended
	Jan. 31, 2018
Stockholders' Equity Note [Abstract]
EQUITY	NOTE 5 – EQUITY During the six months ended January 31, 2018, the Company issued the following shares of common stock and warrants: In August, 2017, the Company issued an aggregate of 480,000 shares of common stock for $240,000 and 3-year warrants to purchase 90,000 shares of common stock at an exercise price of $0.50 per share. In September, 2017, the Company issued an aggregate of 12,500 shares of common stock with a market value at time of issuance of $4,375. The shares were issued for consulting services. In October, 2017, the Company issued an aggregate of 80,000 shares of common stock for $40,000 and 3-year warrants to purchase 15,000 shares of common stock at an exercise price of $0.50 per share. In December, 2017 the Company issued an aggregate of 644,731 shares of common stock to various employees as part of the Company's profit sharing plan contribution. The Company recognized stock-based compensation expense of approximately $226,000 equivalent to the value of the shares calculated based on the share's closing price at the grant dates. In December, 2017, the Company issued an aggregate of 500,000 shares of common stock with a market value of $175,000. The shares were issued under an Asset Purchase Agreement. In December, 2017, the Company issued an aggregate of 100,000 shares of common stock with a market value at time of issuance of $40,000. The shares were issued for consulting services. In January, 2018, the Company issued an aggregate of 250,000 shares of common stock with a market value at time of issuance of $135,000. The shares were issued under an Equity Purchase Agreement. In January, 2018, the Company issued 515,493 shares of common stock to management for services in lieu of cash compensation. The Company recognized stock-based compensation expense of approximately $155,000 equivalent to the value of the shares calculated based on the share's closing price at the grant dates.

Warrants

Warrants	6 Months Ended
	Jan. 31, 2018
Warrants [Abstract]
WARRANTS	NOTE 6 - WARRANTS During the six months ended January 31, 2018, the Company issued the following warrants: In August 2017, the Company secured $240,000 from various accredited investors under a private placement and issued 480,000 shares of its common stock at a price of $0.50 per share and warrants to purchase an additional 90,000 shares of its common stock at an exercise price of $0.50 per share. We determined that the warrants issued in connection with the private placement were equity instruments and did not represent derivative instruments. In October 2017, the Company secured $40,000 from an accredited investor under a private placement and issued 80,000 shares of its common stock at a price of $0.50 per share and warrants to purchase an additional 15,000 shares of its common stock at an exercise price of $0.50 per share. We determined that the warrants issued in connection with the private placement were equity instruments and did not represent derivative instruments. In December 2017, Digerati issued 100,000 warrants to a consultant for services, the warrants vested at time of issuance. The warrants have a term of 5 years, with an exercise price of $0.50. At time of issuance the company recognized approximately $49,000 in warrant expense using Black-Scholes valuation. Additionally, Digerati committed to issue 100,000 warrants if the Company's stock price traded at $0.75 per share for 10 consecutive days, to issue 100,000 warrants if the Company's stock price traded at $1.00 per share for 10 consecutive days, and to issue 100,000 warrants if the Company's stock price traded at $1.25 per share for 10 consecutive days. The term of the Agreement is one year. As a result of the commitment to issue additional warrants in the future, the Company recorded a derivative liability at the origination of the Agreement of $77,000. This liability was re-measured at the January 31, 2018 which resulted in a gain on change in derivative value of $25,000. In January 2018, Digerati issued 100,000 warrants to various consultants for services, the warrants vested at time of issuance. The warrants have a term of 5 years, with an exercise price of $0.50. At time of issuance the company recognized approximately $49,000 in warrant expense using Black-Scholes valuation. In January 2018, Digerati issued 220,000 warrants to a consultant for services, the warrants vested at time of issuance. The warrants have a term of 5 years, with an exercise price of $0.001. At time of issuance the company recognized approximately $119,000 in warrant expense using Black-Scholes valuation. The fair market value of all warrants issued was determined using the Black-Scholes option pricing model which used the following assumptions: Expected dividend yield 0.00 % Expected stock price volatility 175.31% - 176.73 % Risk-free interest rate 2.24% - 2.30 % Expected term 5.0 years A summary of the warrants as of January 31 , 2018 and July 31, 2017 and are Weighted-average Weighted-average remaining contractual Warrants exercise price term (years) Outstanding at July 31, 2017 510,000 $ 0.29 2.87 Granted 525,000 $ 0.29 5.00 Exercised - - - Cancelled - - - Outstanding at January 31, 2018 1,035,000 $ 0.29 3.11 Exercisable at January 31, 2018 1,035,000 $ 0.29 3.11

Significant Customers

Significant Customers	6 Months Ended
	Jan. 31, 2018
Significant Customers [Abstract]
SIGNIFICANT CUSTOMERS	NOTE 7 – SIGNIFICANT CUSTOMERS During the six months ended January 31, 2018, the Company derived a significant amount of revenue from four customers, comprising 12%, 9%, 7% and 5% of the total revenue for the period, respectively, compared to four customers, comprising 31%, 24%, 11% and 5% of the total revenue for the six months ended January 31, 2017. During the six months ended January 31, 2018, the Company derived a significant amount of accounts receivable from four customers, comprising 26%, 15%, 13% and 11% of the total accounts receivable for the period, compared to three customers, comprising 52%, 13% and 12% of the total accounts receivable for the six months ended January 31, 2017.

Agreement and Plan of Merger

Agreement and Plan of Merger	6 Months Ended
	Jan. 31, 2018
Agreement and Plan of Merger [Abstract]
AGREEMENT AND PLAN OF MERGER	NOTE 8 – AGREEMENT AND PLAN OF MERGER On May 8, 2017, Shift8 Technologies, In., a Nevada corporation ("Shift8 Tech" or "Shift8"), a wholly owned subsidiary of Digerati Technologies, Inc., a Nevada corporation (the "Company"), and T3 Acquisition, Inc., a Florida corporation (Acquisition Sub"), and newly formed wholly-owned subsidiary of Shift8 Tech, entered into an Agreement and Plan Merger (the "Merger Agreement") with T3 Communications, a Florida corporation ("T3"). The Merger Agreement provides that, upon the terms and subject to the conditions thereof, the Acquisition Sub will be merged with and into T3, with T3 continuing as the surviving corporation and as a wholly-owned subsidiary of Shift8 Tech. The Company anticipates closing the transaction during third quarter of fiscal year 2018, the Merger has been approved by the Shareholders of T3 and is subject to certain customary closing conditions. In November 2017, under an Amendment to the Agreement and Plan of Merger, Shift8 funded to T3 a nonrefundable extension fee of $200,000 to extend the closing date until December 22, 2017. In December 2017, Shift8 funded to T3 a nonrefundable extension fee payment of $25,000 to extend the closing date until January 5, 2018. In January 2018, Shift8 funded to T3 a nonrefundable extension fee payment of $50,000 to extend the closing date until January 19, 2018. In February 2018, Shift8 funded to T3 a nonrefundable extension fee payment of $70,000 to extend the closing date until February 28, 2018. The Company and T3 continue to work towards closing the Merger Agreement, and the Company believes that this will occur on or before April 6, 2018. Upon closing, the extension fee total of $345,000 will be credited towards the purchase price for the acquisition of T3.

Purchase Agreement

Purchase Agreement	6 Months Ended
	Jan. 31, 2018
Purchase Agreement [Abstract]
Purchase Agreement	NOTE 9 – PURCHASE AGREEMENT On December 1, 2017, Shift8 and Synergy Telecom, Inc., a Delaware corporation ("Synergy"), closed a transaction to acquire all the assets, assumed all customers, and critical vendor arrangements from Synergy. Shift8 acquired Synergy to increase its customer base and obtain higher efficiency of its existing infrastructure. Shift8 paid $125,000 upon execution of the agreement, issued 500,000 shares of common stock with a market value of $175,000, and entered into a promissory note for $125,000 with an effective annual interest rate of 6% with 5 quarterly payments and a maturity date of February 28, 2019. The total purchase price was $425,000, the acquisition was accounted for under the purchase method of accounting, with Digerati identified as the acquirer. Under the purchase method of accounting, the aggregate amount of consideration assumed by Digerati was allocated to customer contract acquired, software licenses, and intangible assets based on their estimated fair values as of December 1, 2017. Allocation of the purchase price is based on the best estimates of management. The following information summarizes the allocation of the fair values assigned to the assets at the purchase date. The allocation of fair values is preliminary and is subject to change in the future during the measurement period. Synergy Non-compete Agreement $ 100,000 Customer contracts 220,000 License - software 105,000 Total identifiable assets $ 425,000 Total Purchase price $ 425,000 The following table summarizes the cost of amortizable intangible assets related to the acquisition: Estimated Useful life Cost (years) License - software $ 105,000 2 Non-compete Agreement 100,000 5 Customer contracts 220,000 2 Total $ 425,000 The Company incurred approximately $10,000 in costs associated with the acquisition. These included legal, and accounting. The Company expensed these cost during the period ended January 31, 2018. Combined Proforma The results of Synergy Telecom, are included in the consolidated financial statements effective December 1, 2017. The following schedule contains pro-forma consolidated results of operations for the six months ended January 31, 2018 and 2017 as if the acquisitions occurred on August 1, 2017. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisition had taken place on November 1, 2017, or of results that may occur in the future. Six months ended January 31, 2018 2017 As Reported Pro Forma As Reported Pro Forma Revenue $ 207 $ 345 $ 87 $ 349 Income (loss) from operations (1,738 ) (1,766 ) (995 ) (1,052 ) Net income (loss) $ (1,838 ) $ (1,866 ) $ (995 ) $ (1,052 ) Earnings (loss) per common share-Basic and Diluted $ (0.20 ) $ (0.20 ) $ (0.17 ) $ (0.18 )

Convertible Debenture

Convertible Debenture	6 Months Ended
	Jan. 31, 2018
Debt Disclosure [Abstract]
CONVERTIBLE DEBENTURE	NOTE 10 - CONVERTIBLE DEBENTURE On January 12, 2018, the Company entered into a securities purchase agreement with Peak One Opportunity Fund, L.P., a Delaware limited partnership ("Peak One"). Under the agreement, Peak One agreed to purchase from us up to $600,000 aggregate principal amount of our convertible debentures (together the "Debentures" and each individual issuance a "Debenture"), bearing interest at a rate of 0% per annum, with maturity on the third anniversary of the respective date of issuance. The Company issued the first debenture (the "Debenture") to Peak One on January 17, 2018 in the principal amount of $200,000 for a purchase price of $180,000 and 0% percent stated interest rate. The Company paid Peak One $6,000 for legal and compliance fees. In addition, the Company paid $14,400 in other closing costs, these fees were deducted from the proceeds at time of issuance. The Company recorded these discounts and cost of $40,400 as a discount to the Debenture and they will be amortized over the term to interest expense. The Debenture provides Peak One with the option to convert any outstanding balance under the Debenture into shares of Common Stock of the Company at a conversion price for each share of Common Stock equal to either: (i) if the date of conversion is prior to the date that is 180 days after the issuance date, $0.50, or (ii) if the date of conversion is on or after the date that is 180 days after the issuance date, the lesser of (a) $0.50 or (b) at 70 % of the lowest closing bid price of the Company's Common Stock during the twenty trading days prior to conversion, The Company may at its option call for redemption all or part of the Debentures, with the exception of any portion thereof which is the subject of a previously-delivered notice of conversion, prior to the maturity date for an amount equal to: (i) if the redemption date is 90 days or less from the date of issuance, 110% of the sum of the principal amount so redeemed plus accrued interest, if any; (ii) if the redemption date is greater than or equal to 91 days from the date of issuance and less than or equal to 120 days from the date of issuance, 115% of the sum of the principal amount so redeemed plus accrued interest, if any; (iii) if the redemption date is greater than or equal to 121 days from the date of issuance and less than or equal to 50 days from the date of issuance, 120% of the sum of the principal amount so redeemed plus accrued interest, if any; (iv) if the redemption date is greater than or equal to 151 days from the date of issuance and less than or equal to 180 days from the date of issuance, 130% of the sum of the principal amount so redeemed plus accrued interest, if any; and (v) if the redemption date is greater than or equal to 181 days from the date of issuance, 140% of the sum of the principal amount so redeemed plus accrued interest, if any. The Company analyzed the Debenture for derivative accounting consideration and determined that the embedded conversion option qualified as a derivative instrument, due to the variable conversion price. Therefore, as of the period ending January 31, 2018, the company recognized a net debt discount of $159,600 and $207,524 as a charge to noncash interest .

Equity Purchase Agreement and R

Equity Purchase Agreement and Registration Rights Agreement	6 Months Ended
	Jan. 31, 2018
Equity Purchase Agreement and Registration Rights Agreement [Abstract]
EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT	NOTE 11 - EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT On J anuary 1 2, 201 , the entered into a with Peak One, whereby, upon the terms and subject to the conditions thereof, the Peak One has agreed to purchase shares of our common stock at an aggregate price of up to $5,000,000 over the course of 24 months. In connection with the execution of the purchase agreement, we issued 250,000 shares of our common stock to Peak One as a commitment fee. At issuance, the Company recognized a non-cash expense for $135,000 for the market value of the shares issued to Peak One. From time to time over the 24-month term, commencing on the date on which a registration statement registering the Purchase Shares becomes effective, we may, in our sole discretion, provide to Peak One with a put notice to purchase a specified number of the Purchase Shares subject to certain customary limitations. The actual amount of proceeds we receive pursuant to each put notice is to be determined by: (i) 88% of the lowest market price of the Common Stock during the ten trading days immediately prior to the date of the respective put date; and (ii) the valuation period, the period of seven trading days immediately following the clearing date associated with the respective drawdown notice; the purchase price per share shall mean the lesser of 88% of the lowest market price of the Common Stock during the valuation period or 88% of the lowest market price of the Common Stock during the initial pricing period. The put amount requested pursuant to any single put notice must have an aggregate value of not less than $20,000 and a maximum amount up to the lesser of (a) $250,000 or (b) 250% of the average daily trading value of the common stock in the ten (10) trading days immediately preceding the Put Notice. We also entered into a registration rights agreement with Peak One whereby we are obligated to file the registration statement to register the resale of the purchase shares. Pursuant to the registration rights agreement, we must ( i ) file the registration statement within thirty (30) calendar days from the closing date, (ii) use reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the 90th calendar day following the closing date, and (iii) use its reasonable efforts to keep such registration statement continuously effective under the Securities Act until all of the commitment shares and purchase shares have been sold there under or pursuant to Rule 144. To date, the Company has not filed a registration statement with the SEC.

Promissory Note

Promissory Note	6 Months Ended
	Jan. 31, 2018
Promissory Note [Abstract]
PROMISSORY NOTE	NOTE 12 - PROMISSORY NOTE On January 17, 2018, the Company entered into a Promissory Note (the "Note") for $30,000, bearing interest at a rate of 5% per annum, with maturity date of January 19, 2018. The Company paid the full principal amount outstanding and accrued interest on January 19, 2018.

Subsequent Events

Subsequent Events	6 Months Ended
	Jan. 31, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 13 – SUBSEQUENT EVENTS Promissory Notes On February 21, 2018, the Company entered into a Promissory Note (the "Note") for $35,000, bearing interest at a rate of 5% per annum, with maturity date of March 2, 2018. The Company paid the full principal amount outstanding and accrued interest on March 2, 2018. On March 13, 2018, the Company entered into various Promissory Notes (the "Notes") for $200,000, bearing interest at a rate of 12% per annum, with maturity date of April 13, 2018. In conjunction with the Notes, the Company issued 3-year warrants to purchase 80,000 shares of common stock at an exercise price of $0.15 per share. In March 2018, the Company entered into two Promissory Note (the "Notes") for $250,000 each, bearing interest at a rate of 12% per annum. The Notes have a maturity date of September 15, 2018, provided, however, the Company shall have the right to request that the maturity date to be extended by one (1) additional period of ninety (90) days, until December 14, 2018. The Notes are payable every month, commencing April 15, 2018, in monthly payments of interest only and a single payment of the principal amount outstanding plus accrued interes t on September 15, 2018. T " Variable Conversion Price Shares " Fixed Conversion Price Other Matters On March 2, 2018, the Company issued an aggregate of 80,000 shares of common stock for $40,000 and 3-year warrants to purchase 15,000 shares of common stock at an exercise price of $0.50 per share. On March 16, 2018, the Company issued an aggregate of 80,000 shares of common stock for $40,000 and 3-year warrants to purchase 15,000 shares of common stock at an exercise price of $0.50 per share. The sales and issuances of the securities described above were made pursuant to the exemptions from registration contained in to Section 4(a)(2) of the Securities Act and Regulation D under the Securities Act. Each purchaser represented that such purchaser's intention to acquire the shares for investment only and not with a view toward distribution. We requested our stock transfer agent to affix appropriate legends to the stock certificate issued to each purchaser and the transfer agent affixed the appropriate legends. Each purchaser was given adequate access to sufficient information about us to make an informed investment decision. Except as described in this prospectus, none of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jan. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of fair market value using Black-Scholes option-pricing model	Expected dividend yield 0.00 % Expected stock price volatility 170.44 % Risk-free interest rate 2.10 % Expected term 1.0 - 3.0 years

Warrants (Tables)

Warrants (Tables)	6 Months Ended
	Jan. 31, 2018
Warrants [Abstract]
Schedule of fair market value of all warrants issued determined using the Black-Scholes option pricing model	Expected dividend yield 0.00 % Expected stock price volatility 175.31% - 176.73 % Risk-free interest rate 2.24% - 2.30 % Expected term 5.0 years
Schedule of warrants	Weighted-average Weighted-average remaining contractual Warrants exercise price term (years) Outstanding at July 31, 2017 510,000 $ 0.29 2.87 Granted 525,000 $ 0.29 5.00 Exercised - - - Cancelled - - - Outstanding at January 31, 2018 1,035,000 $ 0.29 3.11 Exercisable at January 31, 2018 1,035,000 $ 0.29 3.11

Purchase Agreement (Tables)

Purchase Agreement (Tables)	6 Months Ended
	Jan. 31, 2018
Purchase Agreement [Abstract]
Schedule of fair values assets to purchase date	Synergy Non-compete Agreement $ 100,000 Customer contracts 220,000 License - software 105,000 Total identifiable assets $ 425,000 Total Purchase price $ 425,000
Schedule of amortizable intangible assets related to the acquisition	Estimated Useful life Cost (years) License - software $ 105,000 2 Non-compete Agreement 100,000 5 Customer contracts 220,000 2 Total $ 425,000
Schedule of pro-forma consolidated results of operations	Six months ended January 31, 2018 2017 As Reported Pro Forma As Reported Pro Forma Revenue $ 207 $ 345 $ 87 $ 349 Income (loss) from operations (1,738 ) (1,766 ) (995 ) (1,052 ) Net income (loss) $ (1,838 ) $ (1,866 ) $ (995 ) $ (1,052 ) Earnings (loss) per common share-Basic and Diluted $ (0.20 ) $ (0.20 ) $ (0.17 ) $ (0.18 )

Basis of Presentation (Details)

Basis of Presentation (Details)	Jan. 01, 2007	Jan. 31, 2018	Jan. 31, 2017
Basis of Presentation (Textual)
Effective tax rate, percentage		0.00%	0.00%
Settlement percentage	50.00%

Going Concern (Details)

Going Concern (Details) - USD ($) $ in Thousands	6 Months Ended
	Jan. 31, 2018	Jul. 31, 2017
Going Concern (Textual)
Accumulated deficit	$ (79,475)	$ (77,637)
Working capital deficit	$ 1,062

Stock-Based Compensation (Detai

Stock-Based Compensation (Details)	6 Months Ended
	Jan. 31, 2018
Expected dividend yield	0.00%
Expected stock price volatility	170.44%
Risk-free interest rate	2.10%
Minimum [Member]
Expected term	1 year
Maximum [Member]
Expected term	3 years

Stock-Based Compensation (Det_2

Stock-Based Compensation (Details Textual) - USD ($)	1 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 02, 2017	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2017	Nov. 30, 2015
Stock-Based Compensation (Textual)
Common stock, shares issued		500,000
2015 Equity Compensation Plan [Member]
Stock-Based Compensation (Textual)
Shares of stock options						7,500,000
Employees [Member]
Stock-Based Compensation (Textual)
Stock-based compensation expense to employees			$ 503,500		$ 374,000
Unamortized compensation cost			420,000		$ 191,000
Various employees [Member]
Stock-Based Compensation (Textual)
Stock-based compensation expense to employees	$ 226,000		$ 226,000	$ 241,000
Common shares issued for services			644,731
Purchase of common shares			644,731	1,003,966
Management [Member]
Stock-Based Compensation (Textual)
Stock-based compensation expense to employees			$ 155,000
Common shares issued for services			515,493
Various employees one [Member]
Stock-Based Compensation (Textual)
Purchase of common shares			1,025,000
Stock option exercise price			$ 0.35
Life of option plan			5 years
Vesting period, description			The options vest equally over a period of one year.
Fair market value option			$ 218,800
Various employees two [Member]
Stock-Based Compensation (Textual)
Purchase of common shares			275,000
Stock option exercise price			$ 0.35
Life of option plan			5 years
Vesting period, description			The options vest equally over a period of two years
Fair market value option			$ 74,800
Various employees three [Member]
Stock-Based Compensation (Textual)
Purchase of common shares			545,000
Stock option exercise price			$ 0.35
Life of option plan			5 years
Vesting period, description			The options vest equally over a period of three years
Fair market value option			$ 164,900

Non-Standardized Profit Shari_2

Non-Standardized Profit Sharing Plan (Details) - USD ($)	1 Months Ended	6 Months Ended
	Dec. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Non-Standardized Profit-Sharing Plan (Textual)
Non-standardized profit sharing plan, description		Under the plan our employees qualify to participate in the plan after one year of employment. Contributions under the plan are based on 25% of the annual base salary of each eligible employee up to $54,000 per year. Contributions under the plan are fully vested upon funding.
Various employees [Member]
Non-Standardized Profit-Sharing Plan (Textual)
Issue of common shares		644,731	1,003,966
Stock based compensation expenses	$ 226,000	$ 226,000	$ 241,000

Equity (Details)

Equity (Details) - USD ($)	1 Months Ended								6 Months Ended
	Jan. 31, 2018	Jan. 31, 2018	Dec. 31, 2017	Dec. 31, 2017	Dec. 02, 2017	Oct. 31, 2017	Sep. 30, 2017	Aug. 31, 2017	Jan. 31, 2018	Jan. 31, 2017	Jan. 17, 2018	Jan. 12, 2018
Equity (Textual)
Promissory note											$ 200,000	$ 600,000
Maturity date					Feb. 28, 2019
Various employees [Member]
Equity (Textual)
Aggregate shares of common stock			644,731
Common stock issued for services									644,731
Recognized stock based compensation expenses			$ 226,000						$ 226,000	$ 241,000
Common Stock [Member]
Equity (Textual)
Warrants to purchase of common stock						15,000		90,000
Exercise price, per share						$ 0.50		$ 0.50
Aggregate shares of common stock		250,000	500,000	100,000		80,000	12,500	480,000
Issuance of common stock, value		$ 135,000	$ 175,000	$ 40,000		$ 40,000	$ 4,375,000	$ 240,000
Common stock issued for services	515,493
Recognized stock based compensation expenses	$ 155,000
Term of warrants						3 years		3 years

Warrants (Details)

Warrants (Details) - Warrant [Member]	6 Months Ended
	Jan. 31, 2018
Expected dividend yield	0.00%
Expected term	5 years
Minimum [Member]
Expected stock price volatility	175.31%
Risk-free interest rate	2.24%
Maximum [Member]
Expected stock price volatility	176.73%
Risk-free interest rate	2.30%

Warrants (Details 1)

Warrants (Details 1) - Warrant [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jan. 31, 2018	Jul. 31, 2017
Warrants, Outstanding at July 31, 2017	510,000
Warrants, Granted	525,000
Warrants, Exercised
Warrants, Cancelled
Warrants, Outstanding at January 31, 2018	1,035,000	510,000
Warrants, Exercisable at January 31, 2018	1,035,000
Weighted-average exercise price, Outstanding at July 31, 2017	$ 0.29
Weighted-average exercise price, Granted	0.29
Weighted-average exercise price, Exercised
weighted-average exercise price, Cancelled
Weighted-average exercised price, Outstanding at January 31, 2018	0.29	$ 0.29
Weighted-average exercised price, Exercisable at January 31, 2018	$ 0.29
Weighted-average remaining contractual term (years), Outstanding	3 years 1 month 9 days	2 years 10 months 14 days
Weighted-average remaining contractual term (years), Granted	5 years
Weighted-average remaining contractual term (years), Exercisable at January 31, 2018	3 years 1 month 9 days

Warrants (Details Textual)

Warrants (Details Textual) - USD ($)	1 Months Ended
	Jan. 31, 2018	Dec. 31, 2017	Dec. 02, 2017	Oct. 31, 2017	Aug. 31, 2017
Warrants (Textual)
Common stock, Shares issued			500,000
Warrants, description	Digerati issued 220,000 warrants to a consultant for services, the warrants vested at time of issuance. The warrants have a term of 5 years, with an exercise price of $0.001. At time of issuance the company recognized approximately $119,000 in warrant expense using Black-Scholes valuation.	Digerati issued 100,000 warrants to a consultant for services, the warrants vested at time of issuance. The warrants have a term of 5 years, with an exercise price of $0.50. At time of issuance the company recognized approximately $49,000 in warrant expense using Black-Scholes valuation. Additionally, Digerati committed to issue 100,000 warrants if the Company's stock price traded at $0.75 per share for 10 consecutive days, to issue 100,000 warrants if the Company's stock price traded at $1.00 per share for 10 consecutive days, and to issue 100,000 warrants if the Company's stock price traded at $1.25 per share for 10 consecutive days. The term of the Agreement is one year. As a result of the commitment to issue additional warrants in the future, the Company recorded a derivative liability at the origination of the Agreement of $77,000. This liability was re-measured at the January 31, 2018 which resulted in a gain on change in derivative value of $25,000.
Private Placement [Member] | Accredited Investors [Member]
Warrants (Textual)
Secured amount				$ 40,000	$ 240,000
Common stock, Shares issued				80,000	480,000
Common stock price per share				$ 0.50	$ 0.50
Warrants to purchase of common stock				15,000	90,000
Exercise price of warrants				$ 0.50	$ 0.50

Significant Customers (Details)

Significant Customers (Details) - Customers	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Significant Customers (Textual)
Number of customers	4	3
Customer One [Member]
Significant Customers (Textual)
Percentage of revenue from customers	12.00%	31.00%
Percentage of accounts receivable from customers	26.00%	52.00%
Customer Two [Member]
Significant Customers (Textual)
Percentage of revenue from customers	9.00%	24.00%
Percentage of accounts receivable from customers	15.00%	13.00%
Customer Three [Member]
Significant Customers (Textual)
Percentage of revenue from customers	7.00%	11.00%
Percentage of accounts receivable from customers	13.00%	12.00%
Customer Four [Member]
Significant Customers (Textual)
Percentage of revenue from customers	5.00%	5.00%
Percentage of accounts receivable from customers	11.00%

Agreement and Plan of Merger (D

Agreement and Plan of Merger (Details)	6 Months Ended
	Jan. 31, 2018
Agreement and Plan of Merger [Abstract]
Description of amendment agreement	In November 2017, under an Amendment to the Agreement and Plan of Merger, Shift8 funded to T3 a nonrefundable extension fee of $200,000 to extend the closing date until December 22, 2017. In December 2017, Shift8 funded to T3 a nonrefundable extension fee payment of $25,000 to extend the closing date until January 5, 2018. In January 2018, Shift8 funded to T3 a nonrefundable extension fee payment of $50,000 to extend the closing date until January 19, 2018. In February 2018, Shift8 funded to T3 a nonrefundable extension fee payment of $70,000 to extend the closing date until February 28, 2018. The Company and T3 continue to work towards closing the Merger Agreement, and the Company believes that this will occur on or before April 6, 2018. Upon closing, the extension fee total of $345,000 will be credited towards the purchase price for the acquisition of T3.

Purchase Agreement (Details)

Purchase Agreement (Details) - USD ($) $ in Thousands	Jan. 31, 2018	Dec. 02, 2017
Finite-Lived Intangible Assets [Line Items]
Total identifiable assets	$ 425
Total Purchase price	425	$ 425
Non Compete Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Total identifiable assets	100
Customer Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Total identifiable assets	220
License Software [Member]
Finite-Lived Intangible Assets [Line Items]
Total identifiable assets	$ 105

Purchase Agreement (Details 1)

Purchase Agreement (Details 1)	6 Months Ended
	Jan. 31, 2018USD ($)
Finite-Lived Intangible Assets [Line Items]
Total	$ 425,000
Non-compete Agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Total	$ 100,000
Useful life(years)	5 years
License - software [Member]
Finite-Lived Intangible Assets [Line Items]
Total	$ 105,000
Useful life(years)	2 years
Customer Contracts [Member]
Finite-Lived Intangible Assets [Line Items]
Total	$ 220,000
Useful life(years)	2 years

Purchase Agreement (Details 2)

Purchase Agreement (Details 2) - USD ($)	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Revenue	$ 207	$ 87
Income (loss) from operations	(1,738)	(995)
Net income (loss)	$ (1,838)	$ (995)
Earnings (loss) per common share-Basic and Diluted	$ (0.2)	$ (0.17)
Pro Forma [Member]
Revenue	$ 345	$ 349
Income (loss) from operations	(1,766)	(1,052)
Net income (loss)	$ (1,866)	$ (1,052)
Earnings (loss) per common share-Basic and Diluted	$ (0.20)	$ (0.18)

Purchase Agreement (Details Tex

Purchase Agreement (Details Textual) - USD ($)	1 Months Ended
	Dec. 02, 2017	Jan. 31, 2018
Purchase Agreement (Textual)
Execution of agreement	$ 125,000
Common stock, shares issued	500,000
Fair market value	$ 175,000
Promissory note	$ 125,000
Annual interest rate	6%
Maturity date	Feb. 28, 2019
Total purchase price	$ 425,000	$ 425,000
Acquisition cost	$ 10,000

Convertible Debenture (Details)

Convertible Debenture (Details) - USD ($)	1 Months Ended	6 Months Ended
	Jan. 17, 2018	Jan. 31, 2018	Jan. 12, 2018
Convertible Debenture (Textual)
Aggregate principal amount	$ 200,000		$ 600,000
Bearing interest rate			0.00%
Purchase price of debenture	180,000
Legal and compliance fees	6,000
Paid in other closing costs	14,400
Debenture discount	$ 40,400
Debt conversion, description		(i) if the date of conversion is prior to the date that is 180 days after the issuance date, $0.50, or (ii) if the date of conversion is on or after the date that is 180 days after the issuance date, the lesser of (a) $0.50 or (b) at 70% of the lowest closing bid price of the Company's Common Stock during the twenty trading days prior to conversion, provided, further, that if either the Company is not DWAC operational at the time of conversion or the Common Stock is traded on the OTC Pink at the time of conversion, then 70% shall automatically adjust to 65% of the lowest closing bid price.
Convertible debt redemption, description		(i) if the redemption date is 90 days or less from the date of issuance, 110% of the sum of the principal amount so redeemed plus accrued interest, if any; (ii) if the redemption date is greater than or equal to 91 days from the date of issuance and less than or equal to 120 days from the date of issuance, 115% of the sum of the principal amount so redeemed plus accrued interest, if any; (iii) if the redemption date is greater than or equal to 121 days from the date of issuance and less than or equal to 50 days from the date of issuance, 120% of the sum of the principal amount so redeemed plus accrued interest, if any; (iv) if the redemption date is greater than or equal to 151 days from the date of issuance and less than or equal to 180 days from the date of issuance, 130% of the sum of the principal amount so redeemed plus accrued interest, if any; and (v) if the redemption date is greater than or equal to 181 days from the date of issuance, 140% of the sum of the principal amount so redeemed plus accrued interest, if any.
Debt, net discount		$ 159,600
Noncash interest expense		207,524
Derivative liability		$ 283,845

Equity Purchase Agreement and_2

Equity Purchase Agreement and Registration Rights Agreement (Details) - Peak One [Member]	Jan. 12, 2018USD ($)shares
Equity Purchase Agreement and Registration Rights Agreement (Textual)
Common stock at an aggregate price	5,000,000
Issued shares of common stock	250,000
Non-cash expense | $	$ 135,000
Equity purchase agreement course, terms	24 months
Registration statement, description	(i) 88% of the lowest market price of the Common Stock during the ten trading days immediately prior to the date of the respective put date; and (ii) the valuation period, the period of seven trading days immediately following the clearing date associated with the respective drawdown notice; the purchase price per share shall mean the lesser of 88% of the lowest market price of the Common Stock during the valuation period or 88% of the lowest market price of the Common Stock during the initial pricing period.
Description of trading activities	The put amount requested pursuant to any single put notice must have an aggregate value of not less than $20,000 and a maximum amount up to the lesser of (a) $250,000 or (b) 250% of the average daily trading value of the common stock in the ten (10) trading days immediately preceding the Put Notice.

Promissory Note (Details)

Promissory Note (Details) - USD ($)	1 Months Ended
	Jan. 17, 2018	Dec. 02, 2017	Jan. 12, 2018
Promissory Note (Textual)
Promissory note		$ 175,000
Bearing interest at rate			0.00%
Maturity date		Feb. 28, 2019
Promissory Notes [Member]
Promissory Note (Textual)
Promissory note	$ 30,000
Bearing interest at rate	5.00%
Maturity date	Jan. 19, 2018

Subsequent Events (Details)

Subsequent Events (Details) - USD ($)	Mar. 13, 2018	Mar. 02, 2018	Mar. 31, 2018	Mar. 16, 2018	Feb. 21, 2018	Jan. 17, 2018	Dec. 02, 2017	Jan. 31, 2018	Jan. 12, 2018
Subsequent Events (Textual)
Promissory note value							$ 175,000
Shares of common stock							500,000
Bearing interest rate									0.00%
Maturity date							Feb. 28, 2019
Subsequent Event [Member]
Subsequent Events (Textual)
Promissory note value		$ 40,000		$ 40,000
Shares of common stock		80,000		80,000
Warrants to purchase		15,000		15,000
Exercise price per share		$ 0.50		$ 0.50
Term of warrants		3 years		3 years
Promissory Notes [Member]
Subsequent Events (Textual)
Promissory note value						$ 30,000
Bearing interest rate						5.00%
Maturity date						Jan. 19, 2018
Warrants to purchase								80,000
Exercise price per share								$ 0.15
Promissory Notes [Member] | Subsequent Event [Member]
Subsequent Events (Textual)
Promissory note value	$ 200,000		$ 250,000		$ 35,000
Bearing interest rate	12.00%		12.00%		5.00%
Maturity date	Apr. 13, 2018		Sep. 15, 2018		Mar. 2, 2018
Description of warrants to purchase			In conjunction with the Notes, the Company issued two 3-year warrants to purchase 150,000 shares of common stock each at an exercise price of $0.10 per share. In addition, on March 15, 2018, the Company entered into a Note Conversion Agreement (the "Agreement") with the Note holders, whereby, the holders may elect to convert up to 50% of the principal amount outstanding on the Notes into Common Stock of Digerati at any time after 90 days of funding the Notes. The Conversion Price shall be the greater of: (i) the Variable Conversion Price (as defined herein) or (ii) the Fixed Conversion Price (as defined herein). The "Variable Conversion Price" shall be equal to the average closing price for Digerati's Common Stock (the "Shares") for the ten (10) Trading Day period immediately preceding the Conversion Date. "Trading Day" shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. The "Fixed Conversion Price" shall mean $0.50.