| Nevada(State or Other Jurisdiction ofIncorporation or Organization)                 |   | 74-2849995(I.R.S. EmployerIdentification No.) |
|-------------------------------------------------------------------------------------|--------|-----------------------------------------------|
|                                                                                |   |                                          |
| 3463 Magic Dr., Suite 202San Antonio, Texas(Address of Principal Executive Offices) |   |   78229(Zip Code)                   |
|                                                                                |
| (210) 614-7240(Registrant’s Telephone Number, Including Area Code)            |

|   | Large accelerated filer  ̈           | Accelerated filer  ̈    |   |
|--------|------------------------------------------|-----------------------------|--------|
|   | Non-accelerated filer    ̈ | Smaller reporting Company x |   |

|   | Number of Shares | Class Common Stock | As of             |   |
|--------|------------------|--------------------|-------------------|--------|
|   | 72,988,705       | $.001 par value    | December 12, 2011 |   |

----

|                                                                                                                     | Page   |
|--------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                     |   |
| PART I. FINANCIAL INFORMATION                                                                                            |   |
|                                                                                                                     |   |
| Item 1. Financial Statements                                                                                             |   |
|                                                                                                                     |   |
| Consolidated Balance Sheets as of October 31, 2011 and July 31, 2011 (unaudited)                                         | 3      |
| Consolidated Statements of Operations for the Three Months Ended October 31, 2011 and 2010 (unaudited)                   | 4      |
| Consolidated Statement of Changes in Stockholders’ Deficit for the Three Months Ended October 31, 2011 (unaudited) | 5      |
| Consolidated Statements of Cash Flows for the Three Months Ended October 31, 2011 and 2010 (unaudited)                   | 6      |
| Notes to Consolidated Financial Statements (unaudited)                                                                   | 7      |
|                                                                                                                     |   |
| Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations                     | 10     |
|                                                                                                                     |   |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk                                                       | 13     |
|                                                                                                                     |   |
| Item 4. Controls and Procedures                                                                                          | 13     |
|                                                                                                                     |   |
| PART II. OTHER INFORMATION                                                                                               |   |
|                                                                                                                     |   |
| Item 6. Exhibits                                                                                                         | 15     |

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|                                                                            |   | October 31, |    |   | July 31, |   |
|---------------------------------------------------------------------------------|--------|------------------|---------|--------|---------------|--------|
|                                                                            |   | 2011             |    |   | 2011          |   |
|                                                                            |   |             |    |   |          |   |
| ASSETS                                                                          |   |             |    |   |          |   |
| CURRENT ASSETS:                                                                 |   |             |    |   |          |   |
| Cash and cash equivalents                                                       |   | $                | 65      |   |          | $      | 60 |   |
| Accounts receivable, net of allowance for bad debt of $0 and $0, respectively   |   |             | 373     |   |          |   | 562 |   |
| Prepaid and other current assets                                                |   |             | 38      |   |          |   | 68 |   |
| Total current assets                                                            |   |             | 476     |   |          |   | 690 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| LONG-TERM ASSETS:                                                               |   |             |    |   |          |   |   |   |
| Deferred financing fees                                                         |   |             | 20      |   |          |   | 34 |   |
| Intangible assets, net of accumulated amortization of $50 and $46, respectively |   |             | 100     |   |          |   | 104 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| Property and equipment                                                          |   |             | 1,017   |   |          |   | 877 |   |
| Less - accumulated depreciation                                                 |   |             | (835    | )      |          |   | (812 | ) |
| Net property and equipment                                                      |   |             | 182     |   |          |   | 65 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| Total assets                                                                    |   | $                | 778     |   |          | $      | 893 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                           |   |             |    |   |          |   |   |   |
| CURRENT LIABILITIES:                                                            |   |             |    |   |          |   |   |   |
| Accounts payable                                                                |   | $                | 959     |   |          | $      | 841 |   |
| Accrued liabilities                                                             |   |             | 123     |   |          |   | 143 |   |
| Current portion of long term debt                                               |   |             | 1,355   |   |          |   | 794 |   |
| Derivative liability                                                            |   |             | 10      |   |          |   | 10 |   |
| Total current liabilities                                                       |   |             | 2,447   |   |          |   | 1,788 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| LONG-TERM LIABILITIES:                                                          |   |             |    |   |          |   |   |   |
| Long term debt, net of current portion                                          |   |             | 90      |   |          |   | 647 |   |
| Customer deposits                                                               |   |             | 125     |   |          |   | 125 |   |
| Total long-term liabilities                                                     |   |             | 215     |   |          |   | 772 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| Total liabilities                                                               |   |             | 2,662   |   |          |   | 2,560 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| STOCKHOLDERS' DEFICIT:                                                          |   |             |    |   |          |   |   |   |
| Preferred stock, 16,063,000 shares authorized, none issued and outstanding      |   |             | -       |   |          |   | - |   |
| Common stock, $0.001 par value, 150,000,000 shares authorized, 65,882,410       |   |             |    |   |          |   |   |   |
| issued and outstanding, respectively                                            |   |             | 66      |   |          |   | 66 |   |
| Additional paid in capital                                                      |   |             | 74,233  |   |          |   | 74,223 |   |
| Accumulated deficit                                                             |   |             | (76,184 | )      |          |   | (75,957 | ) |
| Other comprehensive income                                                      |   |             | 1       |   |          |   | 1 |   |
| Total stockholders' deficit                                                     |   |             | (1,884  | )      |          |   | (1,667 | ) |
| Total liabilities and stockholders' deficit                                     |   | $                | 778     |   |          | $      | 893 |   |
|                                                                            |   |             |    |   |          |   |   |   |
| See accompanying notes to unaudited consolidated financial statements           |

----

|                                                                                   |   | Three months ended October 31, |       |
|----------------------------------------------------------------------------------------|--------|--------------------------------|------------|
|                                                                                   |   | 2011                           |       |   | 2010 |   |
| OPERATING REVENUES:                                                                    |   |                           |       |   |   |   |
| Global VoIP services                                                                   |   | $                              | 2,023      |   |   | $ | 4,208 |   |
| Cloud-based hosted services                                                            |   |                           | 55         |   |   |   | 44 |   |
|                                                                                   |   |                           |       |   |   |   |   |   |
| Total operating revenues                                                               |   |                           | 2,078      |   |   |   | 4,252 |   |
|                                                                                   |   |                           |       |   |   |   |   |   |
| OPERATING EXPENSES:                                                                    |   |                           |       |   |   |   |   |   |
| Cost of services (exclusive of depreciation and amortization)                          |   |                           | 1,936      |   |   |   | 3,865 |   |
| Selling, general and administrative expense (exclusive of legal and professional fees) |   |                           | 251        |   |   |   | 577 |   |
| Legal and professional fees                                                            |   |                           | 49         |   |   |   | 56 |   |
| Bad debt                                                                               |   |                           | -          |   |   |   | - |   |
| Depreciation and amortization expense                                                  |   |                           | 27         |   |   |   | 25 |   |
| Total operating expenses                                                               |   |                           | 2,263      |   |   |   | 4,523 |   |
|                                                                                   |   |                           |       |   |   |   |   |   |
| OPERATING LOSS                                                                         |   |                           | (185       | ) |   |   | (271 | ) |
|                                                                                   |   |                           |       |   |   |   |   |   |
| OTHER INCOME (EXPENSE):                                                                |   |                           |       |   |   |   |   |   |
| Interest expense                                                                       |   |                           | (42        | ) |   |   | (47 | ) |
| Total other expense                                                                    |   |                           | (42        | ) |   |   | (47 | ) |
|                                                                                   |   |                           |       |   |   |   |   |   |
| NET LOSS                                                                               |   |                           | (227       | ) |   |   | (318 | ) |
|                                                                                   |   |                           |       |   |   |   |   |   |
| LOSS PER SHARE - BASIC AND DILUTED                                                     |   | $                              | (0.00      | ) |   | $ | (0.01 | ) |
|                                                                                   |   |                           |       |   |   |   |   |   |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED                         |   |                           | 65,882,410 |   |   |   | 45,990,559 |   |
|                                                                                   |   |                           |       |   |   |   |   |   |
| See accompanying notes to unaudited consolidated financial statements                  |

----

|                                                                  |   |   |       |   |       |   |   |        |   |   |          |   |   |   |    |
|-----------------------------------------------------------------------|--------|--------|------------|--------|------------|--------|--------|-------------|--------|--------|---------------|--------|--------|--------|---------|
|                                                                  |   |   |       |   | Additional |   |   |        |   |   | Other         |   |   |   |    |
|                                                                  |   | Common |       |   | Paid-in    |   |   | Accumulated |   |   | Comprehensive |   |   |   |    |
|                                                                  |   | Shares |       |   | Par        |   |   | Capital     |   |   | Deficit       |   |   | Income |    |   | Totals |   |
| BALANCE, July 31, 2011                                                |   |   | 65,882,410 |   |       | $      | 66     |        |   | $      | 74,223        |   |   | $      | (75,957 | ) |   | $ | 1 |   |   | $ | (1,667 | ) |
| Stock option expense                                                  |   |   | -          |   |       |   | -      |        |   |   | 10            |   |   |   | -       |   |   |   | - |   |   |   | 10 |   |
| Net loss                                                              |   |   | -          |   |       |   | -      |        |   |   | -             |   |   |   | (227    | ) |   |   | - |   |   |   | (227 | ) |
| BALANCE, October 31, 2011                                             |   |   | 65,882,410 |   |       | $      | 66     |        |   | $      | 74,233        |   |   | $      | (76,184 | ) |   | $ | 1 |   |   | $ | (1,884 | ) |
|                                                                  |   |
| See accompanying notes to unaudited consolidated financial statements |   |

----

|                                                                    |   | Three months ended October 31, |   |
|-------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                    |   | 2011                           |   |   | 2010 |   |
|                                                                    |   |                           |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                   |   |                           |   |   |   |   |
| Net loss                                                                |   | $                              | (227   | ) |   | $ | (318 | ) |
| Adjustments to reconcile net loss to cash used in operating activities: |   |                           |   |   |   |   |   |   |
| Depreciation and amortization                                           |   |                           | 27     |   |   |   | 25 |   |
| Amortization of deferred financing fees                                 |   |                           | 14     |   |   |   | 9 |   |
| Issuance of stock grants and options for services                       |   |                           | 10     |   |   |   | 258 |   |
| Amortization of debt discount                                           |   |                           | -      |   |   |   | 1 |   |
| Changes in operating assets and liabilities:                            |   |                           |   |   |   |   |   |   |
| Accounts receivable                                                     |   |                           | 187    |   |   |   | (119 | ) |
| Prepaid expenses and other current assets                               |   |                           | (22    | ) |   |   | 12 |   |
| Accounts payable                                                        |   |                           | 67     |   |   |   | (88 | ) |
| Accrued liabilities                                                     |   |                           | (20    | ) |   |   | (18 | ) |
| Customer deposits                                                       |   |                           | -      |   |   |   | 100 |   |
| Net cash provided (used in) operating activities                        |   |                           | 36     |   |   |   | (138 | ) |
|                                                                    |   |                           |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                   |   |                           |   |   |   |   |   |   |
| Purchases of property & equipment                                   |   |                           | (30    | ) |   |   | (3 | ) |
| Net cash used in investing activities                                   |   |                           | (30    | ) |   |   | (3 | ) |
|                                                                    |   |                           |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                   |   |                           |   |   |   |   |   |   |
| Payment of deferred financing fees                                      |   |                           | -      |   |   |   | (73 | ) |
| Payments on debt                                                        |   |                           | (51    | ) |   |   | (200 | ) |
| Proceeds from debt                                                      |   |                           | 50     |   |   |   | 677 |   |
| Acquisition of put option on warrants                                   |   |                           | -      |   |   |   | (75 | ) |
| Net cash provided by (used in) financing activities                     |   |                           | (1     | ) |   |   | 329 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
| INCREASE IN CASH AND CASH EQUIVALENTS                                   |   |                           | 5      |   |   |   | 188 |   |
| CASH AND CASH EQUIVALENTS, beginning of period                          |   |                           | 60     |   |   |   | 73 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, end of period                                |   | $                              | 65     |   |   | $ | 261 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES:                                               |   |                           |   |   |   |   |   |   |
| Cash paid for interest                                                  |   | $                              | 28     |   |   | $ | 30 |   |
|                                                                    |   |                           |   |   |   |   |   |   |
| NON-CASH INVESTING AND FINANCING TRANSACTIONS                           |   |                           |   |   |   |   |   |   |
| Reclass prepaid assets to property and equipment                        |   | $                              | 52     |   |   | $ | - |   |
| Property and equipment purchased on account                             |   | $                              | 58     |   |   | $ | - |   |

----

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | October 31, |   |   | July 31, |           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|----------|----------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2011        |   |   | 2011     |           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |
| Note payable to Alfonso Torres, payable upon maturity, bearing interest of 6.00% per annum, maturing July 31, 2012, unsecured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $           | 376    |   |     | $              | 370 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to ATVF, Scott Crist, Roderick Ciaccio & Vencore Solutions, payable in monthly installments, bearing interest at 10.00% per annum, matured on September 10, 2010, collateralized by Digerati's accounts receivables (other than accounts factored with Wells Fargo), $100,000 certificate of deposit with Wells Fargo and Digerati's ownership in ATSICOM. Additionally, Digerati issued 425,000 warrants to the note holders, at an exercise price per warrant of $0.19. The warrants have the following “Put” and “Call” rights: Put right. From and after the second anniversary of the notes payable, the holder shall have the right to request from Digerati, upon five (5) business days prior notice, to acquire from the holders the warrants at a price $0.39 per warrant. Call right.  At any time any warrants are outstanding, if the last sale price of Digerati's common stock is greater than $.80 per share for ten (10) consecutive trading days, Digerati shall be entitled to require the purchaser to exercise the warrants and pay the exercise price upon five (5) business days written notice. Net of unamortized discount of $0 and $1, respectively. |   |        | -      |   |     |           | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to San Antonio National Bank payable in monthly installments, bearing interest at 8.00% per annum, maturing December 29, 2011, collateralized by Digerati's assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        | 13     |   |     |           | 39 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to ATV Texas Ventures payable in monthly installments, bearing interest at 12.00% per annum, maturing November 10, 2011, collateralized by Digerati's assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        | 14     |   |     |           | 18 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to ATV Texas Ventures payable in monthly installments, bearing interest at 12.00% per annum, maturing January 10, 2012, collateralized by Digerati's assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        | 23     |   |     |           | 27 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to ATV Texas Ventures payable in monthly installments, bearing interest at 12.00% per annum, maturing March 10, 2012, collateralized by Digerati's assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        | 16     |   |     |           | 18 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to ATV Texas Ventures IV payable in monthly installments, bearing interest at 12.00% per annum, maturing October 10, 2012, collateralized by Digerati's assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |        | 122    |   |     |           | 131 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to Recap Marketing & Consulting LLP, bearing interest at 3% per annum, maturing October 1, 2010. If the note is not extinguished by the maturity date, the note may be converted to Digerati's common stock at a rate per share mutually agreeable by the parties, however, if converted, the company will issue  no more than 1,666,666 common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        | 20     |   |     |           | 20 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to ATVF II payable in monthly installments, bearing interest at 12% for the first year and 18% during the second year, maturing January 10, 2013, collateralized by Digerati's assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |        | 154    |   |     |           | 154 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to ATVF II payable in monthly installments, bearing interest at 16% for the first year and 18% during the second year, maturing May 10, 2013, collateralized by Digerati's assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |        | 186    |   |     |           | 187 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to Thermo Credit, LLC.,  interest payment for the first twenty-three months with a balloon payment on the twenty-fourth month, maturing August 2, 2012, collateralized by Digerati's accounts receivable. Bearing an annual interest rate equivalent to the lesser of the maximum rate and the greater of the prime rate plus 8.25% and 11.5%, a commitment fee of 2% and weekly monitoring fee of .05%. Digerati is required to maintain the following financial covenants: 1) A consolidated debt service coverage ratio, for the 12-month period, of not less than 1.0 as of the last day of each quarter and 2) A consolidated operating income, for the 12-month period, of not less than zero as of the last day of each fiscal year                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |        | 471    |   |     |           | 477 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Note payable to Asher Enterprises, Inc., bearing interest at 8% per annum, maturing July 15, 2012. The holder has the option to convert the principal and accrued interest into Digerati's common shares at a price equal to the greater of 58% of the average of the lowest three trading prices during the ten day trading period prior to conversion or $.00009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |        | 50     |   |     |           | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Total outstanding long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        | 1,445  |   |     |           | 1,441 |   |
| Current portion of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |        | (1,355 | )      |     |           | (794 | ) |
| Long-term debt, net of current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $           | 90     |   |     | $              | 647 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Payments on long-term debt of Digerati are due as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |   |   |     |           |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     | (in thousands) |   |
| Fiscal 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        |   |   |     |           | 798 |   |
| Fiscal 2013                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |        |   |   |     |           | 647 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        |   |   |     |           |   |   |
| Total payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |        |   |   |     | $              | 1,445 |   |

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|   | - | 5,772,962 common shares to various employees as part of the Company’s profit sharing plan contribution.  The Company recognized stock-based compensation expense of $173,189 equivalent to the value of the shares calculated based on the share’s closing price at the grant dates. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | 1,333,333 common shares to our Board of Directors for services. The Company recognized stock-based compensation expense of $40,000 equivalent to the value of the shares calculated based on the share’s closing price at the grant dates. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                   |   | Three months ended October 31, |   |
|----------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                   |   | 2011                           |   |   | 2010 |   |   | Variances |   |   | % |   |
| OPERATING REVENUES:                                                                    |   |                           |   |   |   |   |   |   |   |   |   |   |
| Global VoIP services                                                                   |   | $                              | 2,023  |   |   | $ | 4,208 |   |   | $ | (2,185 | ) |   |   | -52 | % |
| Cloud-based hosted services                                                            |   |                           | 55     |   |   |   | 44 |   |   |   | 11 |   |   |   | 25 | % |
|                                                                                   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total operating revenues                                                               |   |                           | 2,078  |   |   |   | 4,252 |   |   |   | (2,174 | ) |   |   | -51 | % |
|                                                                                   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services (exclusive of depreciation and amortization, shown below)             |   |                           | 1,936  |   |   |   | 3,865 |   |   |   | (1,929 | ) |   |   | -50 | % |
| GROSS MARGIN                                                                           |   |                           | 142    |   |   |   | 387 |   |   |   | (245 | ) |   |   | -63 | % |
|                                                                                   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative expense (exclusive of legal and professional fees) |   |                           | 251    |   |   |   | 577 |   |   |   | (326 | ) |   |   | -56 | % |
| Legal and professional fees                                                            |   |                           | 49     |   |   |   | 56 |   |   |   | (7 | ) |   |   | -13 | % |
| Bad debt                                                                               |   |                           | -      |   |   |   | - |   |   |   | - |   |   |   | 100 | % |
| Depreciation and amortization expense                                                  |   |                           | 27     |   |   |   | 25 |   |   |   | 2 |   |   |   | 8 | % |
| OPERATING LOSS                                                                         |   |                           | (185   | ) |   |   | (271 | ) |   |   | 86 |   |   |   | -32 | % |
|                                                                                   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE):                                                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                                                       |   |                           | (42    | ) |   |   | (47 | ) |   |   | 5 |   |   |   | -11 | % |
| Total other expense, net                                                               |   |                           | (42    | ) |   |   | (47 | ) |   |   | 5 |   |   |   | -11 | % |
|                                                                                   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS                                                                               |   | $                              | (227   | ) |   | $ | (318 | ) |   | $ | 91 |   |   |   | -29 | % |

----

----

| Number |   | Description                                                                                                                     |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                            |
| 10.1   |   | Promissory note payable with Asher Enterprises, Inc., dated November 9, 2011 in the principal amount of $37,500.                |
|   |   |                                                                                                                            |
| 10.2   |   | Forbearance agreement with Thermo Credit, LLC, dated October 19, 2011.                                                          |
|   |   |                                                                                                                            |
| 31.1   |   | Certification of our President and Chief Executive Officer, under Section 302 of the Sarbanes-Oxley Act of 2002.                |
|   |   |                                                                                                                            |
| 31.2   |   | Certification of our Corporate Controller and Principal Financial Officer, under Section 302 of the Sarbanes-Oxley Act of 2002. |
|   |   |                                                                                                                            |
| 32.1   |   | Certification of our President and Chief Executive Officer, under Section 906 of the Sarbanes-Oxley Act of 2002.                |
|   |   |                                                                                                                            |
| 32.2   |   | Certification of our Corporate Controller and Principal Financial Officer, under Section 906 of the Sarbanes-Oxley Act of 2002. |

----

|                    | DIGERATI TECHNOLOGIES, INC.                                                                                                           |
|-------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
|                    |                      (Registrant) |
|                    |                                                                                                                                  |   |
| Date: December 14, 2011 | By:                                                                                                                                   | /s/ Arthur L. Smith |
|                    | Name:                                                                                                                                 | Arthur L. Smith |
|                    | Title:                                                                                                                                | President and Chief Executive Officer |
|                    |                                                                                                                                  |   |
| Date: December 14, 2011 | By:                                                                                                                                   | /s/ Antonio Estrada Jr. |
|                    | Name:                                                                                                                                 | Antonio Estrada Jr. |
|                    | Title:                                                                                                                                | Sr. VP of Finance & Corporate Controller |
|                    |                                                                                                                                  | (Principal Accounting and Principal Financial Officer) |

----

| Number |   | Description                                                                                                                     |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                            |
| 10.1   |   | Promissory note payable with Asher Enterprises, Inc., dated November 9, 2011 in the principal amount of $37,500.                |
|   |   |                                                                                                                            |
| 10.2   |   | Forbearance agreement with Thermo Credit, LLC, dated October 19, 2011.                                                          |
|   |   |                                                                                                                            |
| 31.1   |   | Certification of our President and Chief Executive Officer, under Section 302 of the Sarbanes-Oxley Act of 2002.                |
|   |   |                                                                                                                            |
| 31.2   |   | Certification of our Corporate Controller and Principal Financial Officer, under Section 302 of the Sarbanes-Oxley Act of 2002. |
|   |   |                                                                                                                            |
| 32.1   |   | Certification of our President and Chief Executive Officer, under Section 906 of the Sarbanes-Oxley Act of 2002.                |
|   |   |                                                                                                                            |
| 32.2   |   | Certification of our Corporate Controller and Principal Financial Officer, under Section 906 of the Sarbanes-Oxley Act of 2002. |

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