SurgePays Announces First Quarter 2024 Financial Results

BARTLETT, Tenn., May 13, 2024 (GLOBE NEWSWIRE) -- SurgePays, Inc. (Nasdaq: SURG) (“SurgePays” or the “Company”), a technology and telecom company focused on the underbanked and underserved, today announced its financial results for the first quarter ended March 31, 2024.

Management Commentary

Chairman and CEO Brian Cox commented on the quarter’s results, “The first quarter of 2024 was highlighted by continued execution on our growth strategy and solid profitability. With a substantial cash balance of over $42 million and a full product suite, we believe we are well-positioned to become one of the country's largest distributors of prepaid wireless and underbanked financial technology services. The uncertainty surrounding ACP funding sparked a refreshing sense of urgency to grow our business. We believe our strategic hires, new technology, cash in the bank, and other corporate initiatives have put us in a great position.

“First quarter revenues of $31.4 million were impacted by operational changes by management last year to shift our focus away from our non-core business Lead Generation subsidiary LogicsIQ. This effectively eliminated the $3.2 million of revenue that LogicsIQ contributed in 2023; however, it allowed our team to be completely focused on verticals aligned with our profitable and scalable business model. Despite the quarterly loss in Lead Generation revenue, we believe our new focus will benefit the Company in the long term. Most shareholders know there was a mandated pause in new ACP enrollments on February 7. Even with the pause in new enrollments, our Mobile Virtual Network Operator (MVNO wireless) revenue increased from $28.7 million in the first quarter of 2023 to $28.9 million in the first quarter of 2024. Net income was $1.2 million, which included $2 million in non-cash stock charges.

“Regarding the Affordable Connectivity Program, or ACP, there are currently several proposals in Congress to fund the program. Several members of Congress on both sides of the line have expressed support for the program, including but not limited to Senator Kaine, who said ‘Access to high-speed internet is a necessity. I was proud that we took steps to make internet more affordable for millions of families as part of the Bipartisan Infrastructure Law,’ and Senator Padilla who said, ‘We must fully fund this program to ensure millions of families can afford to get connected at home.’ Senator JD Vance stated ‘That’s why I’m doing all that I can to ensure the ACP has the funding it needs. I’m proud to introduce this amendment with Senator Luján because it reflects a bipartisan consensus of the Senate. I look forward to getting this done.’  We hope that based on the strong support from Congress on both sides, this essential program, which assists more than 20 million households, will continue to be funded. While we hope ACP funding passes, we aren't waiting for approval and have created a plan to expand revenue in our non-ACP businesses.

“Our team has put together a comprehensive strategic plan that we are confident will enable us to grow our SurgePays nationwide network, which is a product-agnostic delivery system to the underbanked and underserved utilizing convenience stores as the points of distribution. If the ACP is funded, we will be in a fantastic situation immediately. If the ACP is not funded, in the next 12 months, we will look to grow revenue to levels not just to replace the ACP revenue but exceed it with the rollout and scaling of our prepaid wireless company, LinkUp Mobile. Keep in mind that if ACP is not funded, millions will be looking for a new prepaid wireless company to replace their subsidized service. We believe our relationship with our existing ACP base and access to those utilizing other ACP companies will give us the upper hand in converting these folks into LinkUp Mobile customers. In any scenario, we believe we have the team, the products, and the distribution to be extremely successful regardless of how the ACP funding situation plays out.”

First Quarter 2024 Results Conference Call

SurgePays management will host a webcast at 5 p.m. ET / 2 p.m. PT to discuss these results.

The live webcast of the call can be accessed at 1Q24 Webcast Link, as well as on the company’s investor relations website at

Telephone access to the call will be available at 877-407-0784 (in the U.S.) or by dialing 201-689-8560 (outside U.S.).

A telephone replay will be available approximately one hour following completion of the call through May 27, 2024. To access the replay, please dial 844-512-2921 (in the U.S.) or 412-317-6671 (outside U.S.). Enter Access ID#: 13746599.

About SurgePays, Inc.

SurgePays, Inc. is a technology and telecom company focused on the underbanked and underserved communities. SurgePays' technology-layered platform empowers clerks at over 8,000 convenience stores to provide a suite of prepaid wireless and financial products to underbanked customers. SurgePays prepaid wireless companies provide services to over 250,000 low-income subscribers nationwide. The company ranks as the 345th fastest-growing tech company in North America according to the 2023 Deloitte Technology Fast 500. Please visit for more information.

Cautionary Note Regarding Forward-Looking Statements

This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “attempting,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

Although we believe that the expectations reflected in these forward-looking statements such as regarding our market potential along with the statements under the heading Business Outlook are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements including but not limited to, our plans to expand our prepaid wireless company, the funding of the ACP program by the US government for the periods after April 2024, which at this time has not been funded. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, the assumption that the ACP will be funded after April 2024, statements about our future financial performance, including our revenue, cash flows, costs of revenue and operating expenses; our anticipated growth; and our predictions about our industry. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The forward-looking statements in this press release speak only as of the date on which the statements are made. We undertake no obligation to update, and expressly disclaim the obligation to update, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Investor Relations
Brian M. Prenoveau, CFA
MZ Group – MZ North America 
561 489 5315

SurgePays, Inc. and Subsidiaries
Consolidated Balance Sheets
 March 31, 2024  December 31,
Current Assets       
Cash$42,945,078  $14,622,060 
Accounts receivable - net 8,271,878   9,536,074 
Inventory 7,343,739   9,046,594 
Prepaids and other 499,908   161,933 
Total Current Assets 59,060,603   33,366,661 
Property and equipment - net 291,458   361,841 
Other Assets       
Note receivable 176,851   176,851 
Intangibles - net 1,963,093   2,126,470 
Internal use software development costs - net 483,717   539,424 
Goodwill 4,166,782   1,666,782 
Investment in CenterCom 480,562   464,409 
Operating lease - right of use asset - net 420,107   387,869 
Deferred income taxes - net 2,542,000   2,835,000 
Total Other Assets 10,233,112   8,196,805 
Total Assets$69,585,173  $41,925,307 
Liabilities and Stockholders’ Equity       
Current Liabilities       
Accounts payable and accrued expenses$6,506,061  $6,439,120 
Accounts payable and accrued expenses - related party 564,389   1,048,224 
Accrued income taxes payable 700,000   570,000 
Deferred revenue -   20,000 
Operating lease liability 94,244   43,137 
Note payable - related party 1,567,254   4,584,563 
Total Current Liabilities 9,431,948   12,705,044 
Long Term Liabilities       
Note payable - related party 3,147,879   - 
Notes payable - SBA government 477,403   460,523 
Operating lease liability 342,444   356,276 
Total Long-Term Liabilities 3,967,726   816,799 
Total Liabilities 13,399,674   13,521,843 
Stockholders’ Equity       
Common stock, $0.001 par value, 500,000,000 shares authorized 19,431,549 and 14,403,261 shares issued and outstanding, respectively 19,435   14,404 
Additional paid-in capital 69,985,592   43,421,019 
Accumulated deficit (13,961,608)  (15,186,203)
Stockholders’ equity 56,043,419   28,249,220 
Non-controlling interest 142,080   154,244 
Total Stockholders’ Equity 56,185,499   28,403,464 
Total Liabilities and Stockholders’ Equity$69,585,173  $41,925,307 

SurgePays, Inc. and Subsidiaries
Consolidated Statements of Operations
 For the Three Months
Ended March 31,
 2024  2023 
Revenues$31,429,135  $34,776,443 
Costs and expenses       
Cost of revenues 23,246,468   27,081,960 
General and administrative expenses 6,430,806   2,989,421 
Total costs and expenses 29,677,274   30,071,381 
Income from operations 1,751,861   4,705,062 
Other income (expense)       
Interest expense (132,583)  (192,326)
Gain on investment in CenterCom 16,153   33,029 
Total other income (expense) - net (116,430)  (159,297)
Net income before provision for income taxes 1,635,431   4,545,765 
Provision for income tax benefit (expense)$(423,000)  - 
Net income including non-controlling interest 1,635,431   4,545,765 
Non-controlling interest (12,164)  (576)
Net income available to common stockholders$1,224,595  $4,546,341 
Earnings per share - attributable to common stockholders       
Basic$0.07  $0.32 
Diluted$0.07  $0.31 
Weighted average number of shares outstanding - attributable to common stockholders       
Basic 17,693,283   14,131,276 
Diluted 18,678,136   14,535,222 

SurgePays, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
 For the Three Months
Ended March 31,
 2024  2023 
Operating activities       
Net income (loss) - including non-controlling interest$1,212,431  $4,545,765 
Adjustments to reconcile net income (loss) to net cash provided by operations:       
Depreciation and amortization 233,760   233,758 
Amortization of right-of-use assets 23,363   10,687 
Amortization of internal use software development costs 55,707   32,265 
Stock issued for services 411,740   307,458 
Recognition of stock based compensation - unvested shares - related parties 1,497,417   - 
Recognition of share based compensation - options - related party 6,196   9,294 
Interest expense adjustment - SBA loans 19,750   - 
Right-of-use asset lease payment adjustment true up (46,338)  - 
Gain on equity method investment - CenterCom (16,153)  (33,029)
Changes in operating assets and liabilities       
(Increase) decrease in       
Accounts receivable 1,264,196   (429,187)
Inventory 1,702,855   (4,335,727)
Prepaids and other (337,975)  (58,428)
Deferred income taxes - net -   - 
Increase (decrease) in       
Accounts payable and accrued expenses (2,433,059)  1,418,337 
Accounts payable and accrued expenses - related party 15,156   (1,322,773)
Accrued income taxes payable 130,000)  - 
Installment sale liability - net -   2,026,713 
Deferred revenue (20,000)  470,211 
Operating lease liability 28,012   (9,548)
Net cash provided by operating activities 4,040,058   2,865,796 
Investing activities       
Capitalized internal use software development costs -   (157,044)
Net cash used in investing activities -   (157,044)
Financing activities       
Proceeds from stock issued for cash 17,249,994   - 
Proceeds from exercise of common stock warrants 8,799,257   - 
Cash paid as direct offering costs (1,395,000)    
Repayments of loans - related party (368,421)  (467,385)
Repayments on notes payable -   (410,468)
Repayments on notes payable - SBA government (2,870)  (4,468)
Net cash provided (used in) by financing activities 24,282,960   (882,321)
Net increase in cash 28,323,018   1,826,431 
Cash - beginning of period 14,622,060   7,035,654 
Cash - end of period$42,945,078  $8,862,085 
Supplemental disclosure of cash flow information       
Cash paid for interest$129,003  $100,074 
Cash paid for income tax$-  $- 
Supplemental disclosure of non-cash investing and financing activities       
Reclassification of accrued interest - related party to note payable - related party$498,991  $- 
Exercise of warrants - cashless$41  $- 
Right-of-use asset obtained in exchange for new operating lease liability$98,638  $- 
Goodwill (ClearLine Mobile, Inc.)$2,500,000  $-