AT&T Integration Complete; Nationwide Launch Positions Company for Most Aggressive Growth Phase to Date

Company Ships Over 250,000 SIM Cards and Secures $6 Million in Cash to Accelerate Expansion

BARTLETT, Tenn., May 13, 2025 /PRNewswire/ -- SurgePays, Inc. (NASDAQ:SURG) ("SurgePays" or the "Company"), a wireless and point-of-sale technology company, today announced its financial results for the first quarter ended March 31, 2025. Following the successful nationwide launch and full integration with AT&T, the Company is reaffirming its outlook of generating over $200 million in revenue for the twelve months beginning April 1, 2025, with positive operating cash flow expected before year-end.

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Brian Cox, Chairman and CEO, commented:

"The investments we've made in our team, technology, distribution, and strategic partnerships have set the stage for the most significant growth phase in SurgePays' history. With our AT&T integration now complete, we've launched nationwide across our wireless ecosystem as both a Mobile Virtual Network Operator (MVNO) and Enabler (MVNE). To accelerate this expansion, we recently closed a $7 million financing, including $6 million in cash, with one of our largest shareholders. This transition from a reseller model to a direct carrier partner is a transformative milestone, positioning us to scale rapidly and profitably in both retail and wholesale."

Operational Highlights

Nationwide launch complete on the AT&T network, with over 250,000 SIM cards shipped to customers and retail partners. An additional 290,000 SIMs are in inventory, with another 250,000 expected by June to meet increasing demand.
Finalized MVNO integration and full network cutover on April 1, including subscriber migrations and full validation of provisioning, billing, and API systems by AT&T.
MVNE pipeline expanded, with 3 MVNOs fully integrated and 2 more in the onboarding process.
"Phone in a Box" launch exceeded expectations, selling out of 2,600 ready-to-retail smartphones in under 30 days.
Secured $7 million in financing from a large institutional shareholder to accelerate growth initiatives.
Derron Winfrey promoted to President, Sales, and Operations, overseeing growth of LinkUp Mobile, prepaid top-ups, Lifeline programs, and ClearLine.

First Quarter 2025 Financial Results

The first quarter results tracked closely with Q4 2024 and were in line with expectations. The Company continues to transition from the federally funded ACP era, which concluded in 2024. Investments made in the first quarter — including the AT&T integration, MVNE platform development, and expansion of the POS software network — have laid the foundation for our goal of a return to growth and profitability in 2025.

Cash, cash equivalents and investments balances as of March 31, 2025, were $5.4 million. Subsequent to the end of the quarter, the Company closed on a $7 million senior secured convertible note (the "Note") with interest rate of 15% per annum that matures 24-months from the date of closing. Amortization of the Note begins at month eight with a prepayment option in excess of amortization in whole or in part at any time with five days' advance notice at a 2% premium to the principal amount plus accrued interest. The Note has a fixed conversion price of $4 per share beginning at month eight from the date of issuance, subject to monthly conversion limits. Included in the Note is a dilution offset clause in which the investor will exchange 333,333 shares of the Company's common stock previously held by the investor for $999,999 of principal at $3 per share. Additionally, the Company will issue 700,000 5-year warrants at an exercise price of $6.00 per share.

2025 Financial Guidance:

With the nationwide launch of LinkUp Mobile and a growing pipeline of MVNE partnerships, SurgePays expects to surpass $200 million in revenue over the next 12 months beginning April 1, 2025. The Company also anticipates generating positive operating cash flow before the end of the year, marking a pivotal shift toward sustained profitability and scalable growth.

This guidance is based solely on the monetization of core MVNO and POS platforms already deployed. As these platforms scale, both through direct customer acquisition and wholesale MVNE relationships, the Company anticipates significant revenue growth as well as margin expansion.

First Quarter 2025 Financial Results Conference Call:

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

The live webcast of the call can be accessed on the Company's investor relations website at ir.surgepays.com, or by registering at the following link: SurgePays First Quarter Earnings Conference Call.

Telephone access:

- U.S.: 877-545-0523

- International: 973-528-0016

- Participant Access Code: 877643

A telephone replay will be available approximately one hour following completion of the call until May 27, 2025.

Replay: 877-481-4010 (U.S.) or 919-882-2331 (Intl.)

Replay Passcode: 52439

About SurgePays, Inc.

SurgePays, Inc. is a wireless and fintech company focused on delivering mobile connectivity and financial services to underserved communities. As both a mobile virtual network operator (MVNO) and mobile virtual network enabler (MVNE), SurgePays operates its own wireless brand while also providing back-end infrastructure, including provisioning and billing, to other wireless providers. The Company's proprietary point-of-sale platform is used nationwide in thousands of retail locations, enabling SIM activations, top-ups, and digital financial services. SurgePays is built to scale and uniquely positioned to grow across both retail and wholesale wireless channels. Visit www.SurgePays.com 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 and generally relate to future events or our future financial or operating performance. These statements may include projections, guidance, or other estimates regarding revenue, cash flow, business growth, market expansion, or customer acquisition. 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 the expectations reflected in these forward-looking statements, such as regarding our revenue, margins, expectations for customer demand, and profitability potential 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 actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. 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 Company will be able to obtain high-margin recurring revenues, 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 and customer demand. These include, but are not limited to, our ability to scale our prepaid wireless business, transition ACP subscribers to Lifeline, maintain our MVNE partnerships, and achieve financial targets. 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, 2024. 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.

SurgePays, Inc. and Subsidiaries Consolidated Balance Sheets

	March 31, 2025		December 31, 2024
	(Unaudited)
Assets

Current Assets
Cash and cash equivalents	$	5,397,770	$	11,790,389
Restricted cash - held in escrow		-		1,000,000
Accounts receivable - net		2,486,889		3,000,209
Inventory		1,781,365		1,781,365
Prepaids and other		184,596		298,360
Total Current Assets		9,850,620		17,870,323

Property and equipment - net		523,556		591,088

Other Assets
Note receivable		176,851		176,851
Intangibles - net		1,309,510		1,472,962
Goodwill		3,300,000		3,300,000
Operating lease - right of use asset - net		503,502		564,781
Total Other Assets		5,289,863		5,514,594

Total Assets	$	15,664,039	$	23,976,005

Liabilities and Stockholders' Equity

Current Liabilities
Accounts payable and accrued expenses	$	3,760,820	$	3,929,195
Accounts payable and accrued expenses - related party		-		192,845
Operating lease liability		248,069		248,069
Note payable - related party		1,731,366		1,689,367
Total Current Liabilities		5,740,255		6,059,476

Long Term Liabilities
Note payable - related party		1,416,513		1,866,288
Notes payable - SBA government		466,627		469,396
Operating lease liability		259,205		319,232
Total Long Term Liabilities		2,142,345		2,654,916

Total Liabilities		7,882,600		8,714,392

Stockholders' Equity
Common stock, $0.001 par value, 500,000,000 shares authorized 20,431,549 shares issued and 20,068,929 shares outstanding, respectively, at March 31, 2025 and December 31, 2024		20,435		20,435
Additional paid-in capital		76,997,997		76,842,878
Treasury stock - at cost (362,620 and 0 shares, respectively)		(631,967)		(631,967)
Accumulated deficit		(68,550,511)		(60,915,427)
Stockholders' equity		7,835,954		15,315,919
Non-controlling interest		(54,515)		(54,306)
Total Stockholders' Equity		7,781,439		15,261,613

Total Liabilities and Stockholders' Equity	$	15,664,039	$	23,976,005

Consolidated Statements of Operations (Unaudited)

	2025		2024
	For the Three Months Ended March 31,
	2025		2024

Revenues	$	10,577,429	$	31,429,135

Costs and expenses
Cost of revenues		13,519,775		23,246,468
General and administrative expenses		4,637,556		6,430,806
Total costs and expenses		18,157,331		29,677,274

Income (loss) from operations		(7,579,902)		1,751,861

Other income (expense)
Interest expense		(119,434)		(132,583)
Interest income		56,903		-
Other income		7,140		-
Gain on investment in CenterCom		-		16,153
Total other income (expense) - net		(55,391)		(116,430)

Net income (loss) before provision for income taxes		(7,635,293)		1,635,431

Provision for income tax (expense)		-		(423,000)

Net income (loss) including non-controlling interest		(7,635,293)		1,212,431

Non-controlling interest		(209)		(12,164)

Net income (loss) available to common stockholders	$	(7,635,084)	$	1,224,595

Earnings per share - attributable to common stockholders
Basic	$	(0.38)	$	0.07
Diluted	$	(0.38)	$	0.07

Weighted average number of shares outstanding - attributable to common stockholders
Basic		20,068,929		17,693,283
Diluted		20,068,929		18,678,136

Consolidated Statements of Cash Flows (Unaudited)

	2025		2024
	For the Three Months Ended March 31,
	2025		2024

Operating activities
Net income (loss) - including non-controlling interest	$	(7,635,293)	$	1,212,431
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations
Depreciation and amortization		249,574		233,760
Amortization of right-of-use assets		61,279		23,363
Amortization of internal use software development costs		-		55,707
Stock issued for services		-		411,740
Recognition of stock based compensation - unvested shares - related parties		155,119		1,497,417
Recognition of share based compensation - options - related party		-		6,196
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)
Changes in operating assets and liabilities
(Increase) decrease in
Accounts receivable		513,320		1,264,196
Inventory		-		1,702,855
Prepaids and other		113,764		(337,975)
Deferred income taxes - net		-		293,000
Increase (decrease) in
Accounts payable and accrued expenses		(168,375)		(2,433,059)
Accounts payable and accrued expenses - related party		(192,845)		15,156
Accrued income taxes payable		-		130,000
Deferred revenue		-		(20,000)
Operating lease liability		(60,027)		28,012
Net cash provided by (used in) operating activities		(6,963,484)		4,040,058

Investing activities
Purchase of leasehold improvements		(18,590)		-
Net cash used in investing activities		(18,590)		-

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		(407,776)		(368,421)
Repayments on notes payable - SBA government		(2,769)		(2,870)
Net cash provided (used in) by financing activities		(410,545)		24,282,960

Net increase (decrease) in cash, cash equivalents and restricted cash		(7,392,619)		28,323,018

Cash, cash equivalents and restricted cash - beginning of period		12,790,389		14,622,060

Cash, cash equivalents and restricted cash - end of period	$	5,397,770	$	42,945,078

Supplemental disclosure of cash flow information
Cash paid for interest	$	90,860	$	129,003
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
Goodwill (ClearLine Mobile, Inc.)	$	-	$	2,500,000
Right-of-use asset obtained in exchange for new operating lease liability	$	-	$	98,638

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SOURCE SurgePays

SurgePays Reports First Quarter 2025 Financial Results