SurgePays Announces First Quarter 2024 Financial Results

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 ir.surgepays.com .

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 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. 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
SURG@mzgroup.us
561 489 5315

SurgePays, Inc. and Subsidiaries
Consolidated Balance Sheets

	March 31, 2024			December 31, 2023
	(Unaudited)
Assets
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
(Unaudited)

	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
(Unaudited)

	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		$	-

News Provided by GlobeNewswire via QuoteMedia

SurgePays Inc.SURG NASDAQ:SURG

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Grid Battery Metals Update - Drilling Completed on its Clayton Valley Lithium Project

Grid Battery Metals Inc. (the "Company" or "Grid") (TSXV: CELL)(OTCQB:EVKRF)(FRA:W47) is pleased to announce that its reverse circulation drilling program has now been completed on the Company's claim block at Silver Peak, Clayton Valley, Esmeralda County, Nevada. This strategic land package, covering approximately 2,300 acres (930 ha), directly adjoins the western portion of lithium producer Albemarle's (NYSE:ALB) evaporation ponds and is nearby Century Lithium Corp.'s (TSXV:LCE)(OTCQB:CYDVF) proposed 5,430-acre Angel Island Lithium Mine, which recently released a Positive Feasibility Study detailing a 40-year mine life and an after-tax NPV8 of $3.01 billion

Mr. Tim Fernback, Company President and CEO comments "Now that our fall drilling program at our Clayton Valley Lithium Project has been successfully completed, we are eagerly awaiting the lithium assay results from the lab. One of the stated goals of the planned drilling program was to test the depth of the accumulated lithium brine and claystones on our property. With this knowledge, we can propose a significant follow-on exploration program that will work towards an eventual maiden resource calculation and NI# 43-101 Preliminary Economic Assessment. We remain very excited about this opportunity in Nevada for our company and shareholders."

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Altech Batteries Ltd Breakthrough 55% Higher Energy Density Anodes

Perth, Australia (ABN Newswire) - Altech Batteries Limited (ASX:ATC) (FRA:A3Y) (OTCMKTS:ALTHF) has achieved a remarkable milestone in its Silumina AnodesTM battery material technology. The Company is delighted to announce an average 55% surge in lithium battery anode energy capacity, marking a significant breakthrough.

Highlights

- Altech achieves 55% surge in energy capacity in Li-ion batteries

- Average energy retention capacity of approximately 500 mAh/g

- Stable battery with sound cycling performance

- Follows Altech previously cracking the "silicon barrier" by achieving 30% energy increase

- Dispersion challenges limited further improvements

- Persistent R&D has now resolved these challenges

- Altech aims to revolutionise the Lithium-ion battery industry

By utilising its innovative proprietary technology, Altech has now improved on the previous 30% energy increase, by blending alumina-coated silicon particles (10%) with battery-grade graphite, to create a composite graphite/silicon anode for the lithium-ion battery electrode. Upon activation, this composite material has now exhibited a remarkable 55% increase in capacity compared to the traditional graphite-only anode material, See Figure 1.

In a series of tests, the Altech lithium-ion battery anode material exhibited an average energy retention capacity of approximately 500 mAh/g, which is significantly higher than the average of approximately 320 mAh/g for a normal lithium-ion battery anode. This represents an average of 55% increase in energy retention capacity. Importantly, the Altech Batteries demonstrated good stability and cycling performance, indicating that the technology is highly promising. Altech's technology has the potential to be gamechanging and has demonstrated that silicon particles can be modified to resolve the capacity fading caused by both the swelling and first-cycle-capacity-loss problems. Altech's Research and Development team, led by Dr. Jingyuan Liu, achieved this significant breakthrough.

Altech had previously declared a major achievement in the field of battery technology. The Company reported that it had overcome the "silicon barrier" and had manufactured and evaluated a range of lithiumion battery anode materials that exhibit a retention capacity of approximately 30% higher than the standard lithium-ion battery anode materials. Following this breakthrough, Altech's research and development laboratory in Perth, Western Australia has been striving to further enhance the technology beyond this initial success.

As the Company endeavoured to surpass the 30% retention capacity achieved in the previous generation of batteries by increasing the silicon content, it encountered challenges in dispersing the alumina-coated silicon particles. However, Altech managed to overcome these challenges by implementing improvements in organic binders, coating parameters, and several other innovative solutions. After persistent efforts, the final challenges were eventually resolved, allowing the Company to move forward with the development of the next generation of batteries.

Through laboratory testing of the composite graphite/silicon batteries, Altech was able to substantially overcome previously unresolved impediments associated with using silicon in lithium-ion battery anodes.

These impediments include silicon particle swelling, first-cycle capacity loss of up to 50%, and rapid battery degradation. Altech's testing showed that the innovative composite graphite/silicon batteries were able to overcome these challenges, by spherification of the silicon particles. The spherical structure allows the distribution of alumina-coated silicon in graphite voids, hence minimises the electrode layer damaging due to expansion, see Figure 3, and 4. By doing so, via the alumina coating, the negative impact caused by the expansion of silicon is well managed in a lithium-ion battery.

The lithium-ion battery industry has recognised the introduction of silicon in battery anodes as a crucial step in achieving a significant increase in energy density, as well as reducing costs. This is because silicon has approximately ten times the energy retention capacity of graphite, making it an ideal anode material for the next generation of lithium-ion batteries. However, until now, the use of silicon in commercial lithium-ion batteries has been limited due to two critical drawbacks. Firstly, during battery charge, silicon particles expand by up to 300% in volume, leading to particle swelling, fracturing, and eventual battery failure.

Secondly, silicon deactivates a high percentage of the lithium ions in a battery, immediately reducing battery performance and lifespan. The industry has been in a race to overcome these obstacles and crack the silicon barrier to unlock the full potential of silicon in lithium-ion batteries.

The Company completed a Definitive Feasibility Study for the construction of an 8,000tpa Silumina AnodesTM plant in Saxony, Germany, that included the following economics.

- Pre-tax NPV10 EUR684 million

- Low capital cost of EUR112 million

- Attractive Internal Rate of Return of 34%

- EBITDA EUR105 million p.a.

- Payback (full rate) 2.4 years

- Revenue per annum of EUR328 million

Altech is in a race to get its patented technology to market. To support the development, Altech has constructed a pilot plant adjacent to the proposed project site to enable the qualification process for its Silumina AnodesTM product. The Company has successfully completed the construction of the pilot plant and is now in the process of hot commissioning.

CEO and MD Mr Iggy Tan stated "We are thrilled with the significant progress we have made in overcoming the critical challenges associated with using silicon in lithium-ion battery anodes. Our breakthrough technology represents a major step forward in unlocking the full potential of silicon in lithium-ion batteries, and we believe it has the potential to revolutionise the battery industry. We are currently commissioning a pilot plant to further scale up our technology and bring it to market".

Watch Interview with Dr Jingyuan Liu
https://www.abnnewswire.net/lnk/297I4J8A

About Altech Batteries Ltd:

Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.

The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.

News Provided by ABN Newswire via QuoteMedia

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Drill Hole	Width	Silver	Gold	Copper	Lead+Zinc	AgEq
ID	(meter)	(g/t)	(g/t)	%	%	(g/t)
DC98-38	9.00	268.60	1.15	0.15	7.80	725
DC98-40	36.10	183.00	1.02	0.22	8.54	672
Including	3.00	738.20	3.29	1.47	43.99	3123
DC18-77	6.80	938.70	1.45	0.36	5.20	1333
DC18-79	4.60	233.30	1.75	0.16	9.73	820
and	6.10	384.60	5.50	1.23	22.20	1988
Including	4.70	466.00	6.91	1.45	27.20	2442
WTF82-08	7.30	334.80	0.54	0.07	5.42	619
Including	1.80	1313.10	1.85	0.27	17.74	2248
WTF82-14	1.80	240.20	2.14	0.10	12.50	984
WTF83-17	1.90	620.70	3.58	0.00	23.21	1945
Including	1.30	871.60	5.06	0.51	31.93	2760
WTF18-28	3.50	517.50	2.05	0.20	21.60	1654

Hole ID	From (m)	To (m)	Interval (m)	Ag (ppm)	Pb (%)	Zn (%)	Cu (ppm)	Ga (ppm)	Sb (ppm)
MCH-22-001	16.91	27.10	10.19	246.31	5.71	3.54	526.82	98.62	976.62
incl	21.65	26.05	4.40	497.00	11.13	3.87	1035.50	190.27	2129.50
and	64.62	67.89	3.27	64.97	0.52	0.44	45.77	4.82	5.17

MCH-22-002	33.79	49.00	15.21	907.11	26.03	2.72	117.24	17.10	1011.99
incl	33.79	41.47	7.68	1577.50	45.28	4.03	201.50	28.96	1748.75

MCH-22-003	22.60	32.00	9.40	270.92	7.95	4.35	125.37	26.79	491.23
incl	27.00	31.05	4.05	640.30	16.55	7.06	190.00	41.26	880.25
Not Previoulsy Released
Hole ID	From (m)	To (m)	Interval (m)	Ag (ppm)	Pb (%)	Zn (%)	Cu (ppm)	Ga (ppm)	Sb (ppm)
MCH-22-004	26.80	48.34	21.54	172.42	3.11	7.08	65.93	19.44	340.59
incl	31.32	39.19	7.87	199.87	5.97	18.60	121.93	48.76	896.92
incl	44.12	48.34	4.22	232.62	4.45	2.30	84.20	11.50	213.62

MCH-22-005	27.20	39.50	12.30	623.87	12.95	3.75	354.61	66.07	657.95
incl	33.32	38.53	5.21	1282.80	26.34	6.55	734.60	136.34	1343.40
and	49.88	79.00	29.12	2.77	0.10	6.80	54.27	2.38	11.69

SurgePays Announces First Quarter 2024 Financial Results

‘We aim to create solutions to accelerate sustainability in the industries we operate in’

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