10-Q/A: TPT Global Tech Restates Q3 2023 Financials, Cites Land Deal Issues and Ongoing Debt Restructuring

Sentiment:

Quarterly Report 22 April 2024 4:18 PM

TPT Global Tech restated its third-quarter 2023 financials due to a cancelled land acquisition and continues to navigate significant debt and operational challenges.

Capital raiseThe company is seeking additional debt or equity financing to continue as a going concern.The company is considering a public offering to raise capital.The company is also seeking debt financing through its existing Reg A capital raise.

Worse than expectedThe company's revenue decreased significantly compared to the prior year.The company's net loss increased compared to the prior year.The company's debt levels remain high and the company is in default on multiple debt instruments.The company's ability to continue as a going concern is in doubt.

Summary

TPT Global Tech has filed an amended 10-Q report to restate its financial statements for the quarter ended September 30, 2023.
The restatement was primarily due to a $1,226,000 decrease in total assets and mezzanine equity related to a cancelled land acquisition.
The company experienced a net loss of $3,093,608 for the nine months ended September 30, 2023, and used $442,135 in cash for operations.
Revenue decreased to $3,007,866 for the nine months ended September 30, 2023, compared to $6,145,465 in the same period of 2022.
The company has significant debt obligations, including convertible notes and factoring agreements, totaling $9,882,725.
TPT Global Tech is in default on several debt instruments and is negotiating with creditors to restructure terms.
The company has issued a large number of common shares through debt conversions, totaling 843,681,820 shares in 2023 and 333,871,496 shares in 2022.
There is substantial doubt about the company's ability to continue as a going concern without additional financing or acquisitions of cash flow positive businesses.

Sentiment

Score: 2

Explanation: The document reveals significant financial distress, ongoing defaults, declining revenue, and substantial doubt about the company's ability to continue as a going concern. The restatement and multiple lawsuits further contribute to a negative outlook.

Positives

Gross profit percentage improved to 41% for the nine months ended September 30, 2023, compared to 27% in the same period of 2022.
Operating expenses decreased to $4,318,017 for the nine months ended September 30, 2023, compared to $6,767,816 in the same period of 2022.
The company has taken steps to address its financial issues, including negotiating with creditors and seeking additional financing.

Negatives

The company experienced a significant decrease in revenue, from $6,145,465 to $3,007,866 for the nine months ended September 30, 2023.
TPT Global Tech has a substantial accumulated deficit of $109,549,957.
The company is in default on multiple debt instruments, including convertible notes and factoring agreements.
The company's ability to continue as a going concern is in doubt without additional financing or acquisitions.
The company has been named in multiple lawsuits related to debt and lease obligations.

Risks

The company's ability to continue as a going concern is dependent on securing additional debt or equity financing.
The company faces significant risks related to its debt obligations and ongoing defaults.
The company's revenue is declining, and there is no guarantee that it will be able to reverse this trend.
The company is involved in multiple lawsuits, which could result in significant financial liabilities.
The company's internal controls are not effective, which could lead to further financial issues.

Future Outlook

The company's ability to continue as a going concern is dependent on securing additional debt or equity financing and acquiring cash flow positive operations. There is no assurance that the company will be successful in these efforts.

Management Comments

Management believes that the customer agreement allows them to keep the amounts under dispute.
Management believes it has several defenses to the claims and is in the process of communicating with opposing counsel for dismissal of the claims.
Management believes it will not have to pay more than what it has recorded in accounts payable.
Management does not believe that an unfavorable outcome will result in payment of more than is recorded in accounts payable.
Management believes it has good and meritorious defenses and does not belief the outcome of the lawsuit will have any material effect on the financial position of the Company.

Industry Context

The company operates in the telecommunications, medical technology, and media content sectors, which are all highly competitive and subject to rapid technological changes. The company's financial difficulties and ongoing litigation could make it difficult to compete effectively in these markets.

Comparison to Industry Standards

TPT Global Tech's financial performance is significantly below industry standards for companies in the telecommunications, medical technology, and media sectors.
Many competitors in these sectors have higher revenue, profitability, and stronger balance sheets.
For example, companies like Verizon and AT&T in telecommunications have significantly higher revenue and profitability.
In the medical technology sector, companies like Medtronic and Abbott have much stronger financial positions.
In the media sector, companies like Netflix and Disney have significantly higher revenue and market capitalization.
TPT Global Tech's high debt levels and ongoing defaults are also not typical for companies in these sectors.

Legal Proceedings

The company is involved in a lawsuit with EMA Financial, LLC for failing to comply with a Securities Purchase Agreement.
The company is involved in a lawsuit with Pinnacle Towers LLC and Crown Atlantic Company Inc. for unpaid rent.
The company is involved in a lawsuit with American Tower and related entities for unpaid tower lease payments.
The company is involved in lawsuits with Mr. Advance, CLOUDFUND, and Fox Capital for non-payment under debt agreements.
The company is involved in a lawsuit with AHS Staffing, LLC for unpaid medical staffing services.
The company is involved in a lawsuit with Robert Serrett, a former employee, for breach of contract.

Related Party Transactions

There are amounts outstanding due to related parties of the Company of $1,186,459 as of September 30, 2023.
The company has a line of credit secured by the personal assets of certain shareholders.
The company has a lease agreement for office space used by the CEO.
The company has a Software Development agreement with Mr. and Mrs. Caudle.
There are amounts due from management/shareholders of $265,273 as of December 31, 2022.
The CEO of the Company has a license agreement with New Orbit Technologies, S.A.P.I. de C.V.

Stakeholder Impact

Shareholders face significant risk of loss due to the company's financial difficulties and potential bankruptcy.
Employees may face job losses if the company is unable to continue operations.
Customers may experience disruptions in service if the company is unable to meet its obligations.
Suppliers and creditors face the risk of non-payment due to the company's financial distress.

Next Steps

The company needs to secure additional debt or equity financing.
The company needs to restructure its existing debt obligations.
The company needs to improve its revenue and profitability.
The company needs to resolve its ongoing litigation.
The company needs to improve its internal controls.

Key Dates

Date	Description
2014-06	TPT Global, Inc. was formed in Nevada.
2015-02	The Board of Directors authorized the issuance of 1,000,000 shares of Series A Preferred Stock to Stephen Thomas.
2017-01-01	Start date for related party transactions.
2018-05	The Company designated 3,000,000 shares of Preferred Stock as Series C Convertible Preferred Stock.
2019-06-11	The Company consummated a Securities Purchase Agreement with EMA Financial, LLC.
2020-05-06	The Company entered into a promissory note for the acquisition of Media Live One Platform.
2021-10-06	TPT Global Tech, Inc. and FirstFire Global Opportunities Fund, LLC. entered into a convertible promissory note.
2021-10-13	TPT Global Tech, Inc. and Cavalry Investment Fund LP entered into a convertible promissory note.
2021-10-13	TPT Global Tech, Inc. and Cavalry Fund I, LP entered into a convertible promissory note.
2022-01-31	TPT Global Tech, Inc. and Blue Lake Partners, LLC entered into a convertible promissory note.
2022-03-20	The Company amended its Series E Designation from November 10, 2021.
2022-03-25	The Company entered into a Software Acquisition Agreement with Mr. and Mrs. Caudle.
2022-04-01	The Company entered into a Future Receivable Sale and Purchase Agreement with Mr. Advance LLC and CLOUDFUND LLC.
2022-04-27	The Company entered into a Future Receivables Sale and Purchase Agreement with Fox Capital Group, Inc.
2022-06-13	TPT Global Tech, Inc. and 1800 Diagonal Lending LLC entered into a promissory note agreement.
2022-06-29	TPT Strategic entered into a definitive agreement for the acquisition of the assets and Information Security and Training LLC.
2023-02-08	TPT Global Tech, Inc. and 1800 Diagonal Lending LLC entered into a promissory note agreement.
2023-02-09	TPT Global Tech, Inc. and FirstFire Global Opportunities Fund, LLC entered into a promissory note agreement.
2023-03-24	An Agreement and Plan of Merger was made and entered into by TPT SpeedConnect LLC and Asberry 22 Holdings, Inc.
2023-03-27	The Company entered into a convertible note payable with Michael Littman, Atty Defined Benefit Plan.
2023-07-14	The Company entered into an agreement to acquire land per the Real estate Land Purchase and JV Real estate Development Partnership Agreement.
2023-07-28	The Company entered into a Securities Purchase Agreement with Broadband Infrastructure, Inc.
2023-08-06	The Board granted 1,000,000 shares of common stock to a consultant.
2023-09-08	The Board of Directors granted 52,830,333 shares of common stock to Edward Cabrera, Eduardo Cabrera and Mawe Capital Management, LLC.
2023-09-11	Everett Lanier and the Company agreed to a Settlement Agreement and Mutual Release.
2023-09-18	The Company entered into a Securities Purchase Agreement to acquire control of Tekmovil Holdings LLC.
2023-10-01	Effective date of the Advisory Services Agreement.
2023-10-26	The Company entered into an Advisory Services Agreement.
2023-10-31	The Company entered into an Acquisition and Purchase Agreement with Geokall UK Ltd.
2023-12-13	There were 2,154,412,687 shares of the registrants common stock issued and outstanding.
2024-04-12	Both parties agreed to cancel the land acquisition transaction.
2024-04-22	Date of the filing of the amended 10-Q report.

Keywords

restatement, financial results, debt, convertible notes, going concern, default, revenue, losses, acquisitions, litigation

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.