SURGEPAYS Revenue for the nine months ending
SurgePays, Inc. is currently trading as
Corporate highlights and recent developments include:
- Announced rebranding to SurgePays to better reflect the Company’s orientation around its fintech platform
- Launched proprietary 4SIM™ wireless activation technology
- Retained CORE IR to assist the Company with investor relations, public relations, advisory and shareholder communications
“The third quarter of 2020 continued to exceed expectations with regard to revenue, product diversification, and penetration, as the Company continued its strong growth. Concurrently, we are sharpening our focus to ensure that the Company operates efficiently and ensure that both our customers and our stockholders have a clear understanding of our business and of our path forward. We are very excited for the future of SurgePays and believe that the next few quarters will continue to demonstrate dynamic growth and progress,” stated
“We believe SurgePays as a brand is better representative of our focus on our fintech software platform that processes third-party prepaid wireless activations and top-ups, gift card activation and loads, and wireless SIM activation, providing a more precise direction as a public company as we implement our growth strategies and continue to work towards a listing on a major exchange. The SurgePays system drives value and growth by enabling retailers to instantly add credit to any prepaid wireless customer’s account for any carrier, providing the merchant commissioned transactions, increased foot traffic, and customer loyalty. Moreover, our platform offers an innovative supply-chain marketplace for convenience store, bodega and tienda owners to order many top selling products for their stores at a deeper wholesale discount than traditional distribution due to utilizing the Direct Store Delivery (DSD) model,”
Financial Results for Third Quarter 2020
Revenue for the quarter ending
Cost and expenses for the quarter ending
Net loss for the quarter ending
Cash and cash equivalents as of
About SurgePays, Inc.
Company Contact:
Tony Evers CPA, CIA
Chief Financial Officer
Chief Operating Officer
Phone: (847) 648-7542 ext. 104
tevers@surgeholdings.com
Media Relations:
Director of Public Relations
CORE IR
917-885-7378
julesa@coreir.com
Investor Relations:
CORE IR
Joseph Delahoussaye III
V.P. of Investor Relations
516-222-2560
invest@surgeholdings.com
SURGEPAYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
2020 | 2019 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 421,315 | $ | 346,040 | ||||
| Accounts receivable, less allowance for doubtful accounts of | 337,017 | 3,056,213 | ||||||
| Note receivable | — | 14,959 | ||||||
| Lifeline revenue due from USAC | 222,833 | 60,790 | ||||||
| Inventory | 177,184 | — | ||||||
| Prepaid expenses | 38,772 | 96,883 | ||||||
| Total current assets | 1,197,121 | 3,574,885 | ||||||
| Property and Equipment, less accumulated depreciation of | 249,871 | 294,616 | ||||||
| Intangible assets less accumulated amortization of | 4,406,497 | 4,769,117 | ||||||
| 866,782 | 866,782 | |||||||
| Investment in Centercom | 456,685 | 203,700 | ||||||
| Operating lease right of use asset, net | 419,372 | 210,816 | ||||||
| Other long-term assets | 61,458 | 66,457 | ||||||
| Total assets | $ | 7,657,786 | $ | 9,986,373 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses - others | $ | 5,479,508 | $ | 3,637,577 | ||||
| Accounts payable and accrued expenses - related party | 1,699,914 | 998,517 | ||||||
| Credit card liability | 378,260 | 449,158 | ||||||
| Loss contingency | — | 38,040 | ||||||
| Deferred revenue | — | — | ||||||
| Derivative liability | 1,415,238 | 190,846 | ||||||
| Operating lease liability | 50,151 | 90,944 | ||||||
| Line of credit | 912,870 | 912,870 | ||||||
| Convertible notes payable and current portion of long-term debt, net | 1,324,629 | — | ||||||
| Debt – related party | 463,000 | — | ||||||
| Notes payable and current portion of long-term debt, net | 247,094 | 736,172 | ||||||
| Total current liabilities | 11,970,664 | 7,054,124 | ||||||
| Long-term debt less current portion – related party | 2,225,440 | 2,205,440 | ||||||
| Operating lease liability – net | 365,723 | 119,872 | ||||||
| Trade payables - long term | 869,868 | 869,868 | ||||||
| Notes payable and long term portion of debt - net | 1,134,582 | — | ||||||
| Convertible promissory notes payable - net | — | 4,436,684 | ||||||
| Total liabilities | 16,566,277 | 14,685,988 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit: | ||||||||
| Series A preferred stock: | 13,000 | 13,000 | ||||||
| Series C convertible preferred stock; | 722 | 722 | ||||||
| Common stock: | 116,235 | 102,193 | ||||||
| Additional paid in capital | 9,816,841 | 6,055,042 | ||||||
| Accumulated deficit | (18,855,289 | ) | (10,870,572 | ) | ||||
| Total stockholders’ deficit | (8,908,491 | ) | (4,699,615 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 7,657,786 | $ | 9,986,373 | ||||
Condensed Consolidated Statements of Operations
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue | $ | 12,802,172 | $ | 4,901,864 | $ | 43,104,767 | $ | 12,295,058 | ||||||||
| Cost of revenue | 11,216,186 | 3,023,292 | 39,422,776 | 7,814,614 | ||||||||||||
| Gross profit | 1,585,986 | 1,878,572 | 3,681,991 | 4,480,444 | ||||||||||||
| Cost and expenses | ||||||||||||||||
| Depreciation and amortization | 306,341 | 17,926 | 876,152 | 39,050 | ||||||||||||
| Selling, general and administrative | 2,904,569 | 2,998,359 | 11,138,464 | 9,222,923 | ||||||||||||
| Total costs and expenses | 3,210,910 | 3,016,285 | 12,014,616 | 9,261,973 | ||||||||||||
| Operating profit (loss) | (1,624,924 | ) | (1,137,713 | ) | (8,332,625 | ) | (4,781,529 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (1,164,409 | ) | (20,767 | ) | (2,348,175 | ) | (93,157 | ) | ||||||||
| Derivative expense | (33,239 | ) | — | (529,294 | ) | — | ||||||||||
| Change in fair value of derivative liability | 212,851 | — | 405,413 | — | ||||||||||||
| Gain on investment in Centercom | 107,649 | 6,134 | 252,985 | 70,909 | ||||||||||||
| Gain/(loss) on settlement of liabilities | — | — | 2,556,979 | (466,187 | ) | |||||||||||
| Other income | — | — | 10,000 | — | ||||||||||||
| Total other income (expense) | (877,148 | ) | (14,633 | ) | 347,908 | (488,435 | ) | |||||||||
| Net loss before provision for income taxes | (2,502,072 | ) | (1,152,346 | ) | (7,984,717 | ) | (5,269,964 | ) | ||||||||
| Provision for income taxes | — | — | — | — | ||||||||||||
| Net loss | $ | (2,502,072 | ) | $ | (1,152,346 | ) | $ | (7,984,717 | ) | $ | (5,269,964 | ) | ||||
| Net loss per common share, basic and diluted | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.06 | ) | ||||
| Weighted average common shares outstanding – basic and diluted | 114,683,442 | 98,452,560 | 108,246,505 | 94,225,836 | ||||||||||||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | ||||||||
| 2020 | 2019 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (7,984,717 | ) | $ | (5,269,964 | ) | ||
| Adjustments to reconcile net income loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 876,512 | 39,051 | ||||||
| Amortization of right of use assets | 146,647 | 35,015 | ||||||
| Amortization of debt discount | 1,417,524 | - | ||||||
| Stock-based compensation | 127,992 | 307,873 | ||||||
| Change in fair value of derivative liability | (405,413 | ) | - | |||||
| Derivative expense | 529,294 | - | ||||||
| (Gain) loss on settlement of liabilities | (2,681,586 | ) | 474,953 | |||||
| Gain on equity investment in Centercom | (252,985 | ) | (70,909 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 2,719,196 | (5,163,347 | ) | |||||
| Lifeline revenue due from USAC | (162,043 | ) | 619,162 | |||||
| Customer phone supply | - | 1,355,201 | ||||||
| Inventory | (177,184 | ) | - | |||||
| Prepaid expenses | 58,111 | (100,600 | ) | |||||
| Other assets | 4,999 | - | ||||||
| Credit card liability | (70,898 | ) | 165,914 | |||||
| Deferred revenue | - | (50,000 | ) | |||||
| Loss contingency | (38,040 | ) | (30,000 | ) | ||||
| Current portion of operating lease liability | (150,145 | ) | (35,015 | ) | ||||
| Accounts payable and accrued expenses | 2,665,117 | 2,767,632 | ||||||
| Net cash used in operating activities | (3,377,619 | ) | (4,955,034 | ) | ||||
| Investing activities | ||||||||
| Repayments of notes receivable | 14,959 | - | ||||||
| Purchase of equipment | (4,147 | ) | (222,000 | ) | ||||
| Net cash provided by (used) in investing activities | 10,812 | (222,000 | ) | |||||
| Financing activities | ||||||||
| Issuance of Common Stock and warrants | 705,000 | 3,190,500 | ||||||
| Repurchase of Common Stock | (500,000 | ) | - | |||||
| Note payable, related party - borrowings | 723,196 | - | ||||||
| Note payable, related party - repayments | (240,196 | ) | - | |||||
| Note payable - borrowings | 1,134,582 | - | ||||||
| Note payable - repayments | (27,500 | ) | (70,000 | ) | ||||
| Convertible promissory notes - borrowings | 2,182,000 | 233,000 | ||||||
| Convertible promissory notes - repayments | (373,000 | ) | - | |||||
| Cash paid for debt issuance costs | (162,000 | ) | - | |||||
| Line of credit - advances | - | 1,130,000 | ||||||
| Line of credit - repayments | - | (217,130 | ) | |||||
| Loan proceeds under related party financing arrangement | - | 1,316,000 | ||||||
| Loan repayments under related party financing arrangement | - | (674,000 | ) | |||||
| Net cash provided by financing activities | 3,442,082 | 4,908,370 | ||||||
| Net change in cash and cash equivalents | 75,275 | (300,709 | ) | |||||
| Cash and cash equivalents, beginning of period | 346,040 | 444,612 | ||||||
| Cash and cash equivalents, end of period | $ | 421,315 | $ | 143,903 | ||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest and income taxes: | ||||||||
| Interest | $ | 98,113 | $ | 65,600 | ||||
| Income taxes | $ | - | $ | - | ||||
| Non-cash investing and financing activities: | ||||||||
| Exchange of related party advances for Series C Preferred Stock | $ | - | $ | 389,502 | ||||
| Exchange of investment in CenterCom for Series C Preferred Stock | $ | - | $ | 178,508 | ||||
| Common Stock issued for an acquisition | $ | 210,794 | $ | 1,000,000 | ||||
| Debt acquired in acquisition | $ | - | $ | 4,000,000 | ||||
| Common Stock and warrants issued with debt recorded as debt discount | $ | 906,098 | $ | - | ||||
| Derivative liability on convertible notes recorded as debt discount | $ | 1,366,636 | $ | - | ||||
| Operating lease liability | $ | 355,203 | $ | 230,812 | ||||
| Make whole Common Stock issued pursuant to SPA | $ | 196,341 | $ | - | ||||
| Issuance of Common Stock for modification of debt | $ | 49,890 | $ | - | ||||
2020 GlobeNewswire, Inc., source
