SurgePays, Inc.

Greetings. Welcome to the SurgePays, Inc. 2021 Year-End Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Brian Prenneveau, Investor Relations. Thank you. You may begin.

Thank you, Operator, and good afternoon, everyone. Welcome to the Surge Pays 2021 Earnings Webcast and Conference Call. Today's date is March 24, 2022, and on the call today from Surge Pays are Brian Cox, President and Chief Executive Officer, and Tony Evers, Chief Financial Officer. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a discussion of such risks and uncertainties, please see SurgePay's most recent filings with the SEC. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statement to reflect the events that occur after this call. Also, during the course of today's call, the company will be discussing one or more non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in a press release we issued this afternoon. Copies of today's press release are accessible on SurgePay's investor relations website, ir.surgepays.com. In addition, SurgePay's Form 10-K for the year ended December 31, 2021,

also be available on the surge pays investor relations website and now i'd like to turn the call over to president and chief executive officer brian cox thanks brian and good afternoon everyone during today's call i'll provide an overview of surge pays performance in 2021 i'll discuss our future and 2022 expectations tony evers our cfo will review the annual financial results in more detail and then we'll open it up the call for questions later 2021 was a transformative year of results and accomplishments for the SurgePace team. Our key objectives, including access to capital, liquidity, and long-term shareholder value, hinged on achieving a listing on the NASDAQ exchange. This was without question the most important accomplishment since starting this public company journey almost four years ago. It was a bumpy road. We got thrown a few curveballs with COVID and some other things along the way. But our team persevered, and in November 2021, we completed a capital raise that netted the company approximately $20 million, and we completed our listing on the NASDAQ exchange. There were several other notable achievements and moves made during 2021 that I'd like to highlight. We made the strategic decision to focus on driving profitability with existing customers and eliminating unprofitable customers. Our executive team set out to focus inward to explore margin expansion and pursue strategies to be more financially efficient while building the foundation for rapid sales increases. While our top line sales for 2021 did not increase, we reduced our monthly burn and cut our yearly operating loss by almost 50% compared to our 2020 numbers while still achieving similar top line sales numbers. These numbers improved month over month and trended towards operational positive cash flow. perhaps the most transformative part of 2021 was our push to provide mobile broadband to underserved communities through the affordable connectivity program or atp originally called the emergency broadband benefit or edb this program allowed eligible allows eligible households to receive a discount on their monthly broadband bill of up to thirty dollars the infrastructure bill late in 2021 transitioned this program from the emergency benefit to a permanent connectivity program benefit. We launched our surge phone mobile broadband subsidiary in August of 2021 to take advantage of this opportunity. We couldn't be more proud of the growth in this program and the customers we are helping. Making home internet more affordable makes getting homework done, applying for jobs and receiving higher quality healthcare easier and more accessible to low income households. We started with zero customers in August and ended 2021 with over 30,000 mobile broadband subscribers. We surpassed 65,000 mobile broadband subscribers in early March, and the growth continues at this trajectory. We are currently licensed to offer this program in 14 states, encompassing approximately 25 million qualified households. We announced an initial target of 200,000 subscribers by the end of this year, but given the daily subscriber growth of our sales team, We believe this will easily surpass that number. Throughout March, we were consistently signing up over 1,000 subscribers per day. Not only is this providing access to essential technology for underserved communities, it will drive significant revenue growth and margin expansion for the company. Each subscriber provides $30 on monthly recurring revenue, month after month. This includes the cost of equipment and commissions paid to salespeople, Factoring that in, our growth margin is approximately 40% per scriber, remembering that we do get a reimbursement on the tablet device that we provide to the customer on the onset of enrolling them in the program and signing them up as a consumer and a customer. This new business has become integral to our overall strategy, and it's even more exciting because it's a perfect complement to our existing business of providing financial services to underbanked and underserved communities. Our suite of financial and prepaid products essentially includes converts corner stores and bodegas into tech hubs for underbanked neighborhoods. In February of this year, we launched our Bitcoin sales platform. This program enables local convenient and neighborhood stores to sell Bitcoin to customers for amounts between $50 and $1,499. Keeping in mind, this is without a bank account or credit card. We also do not use ATMs. We rely on the store clerk and the trust that they've built over the years serving their local communities. Customers simply download one of the many digital wallets available on their phone or tablet, and the clerk becomes their virtual financial teller, facilitating this Bitcoin purchase at the register using our web interface app while checking out at the register. To be clear, this isn't for investing in Bitcoin. I wanted our company to be at the tip of the spear grassroots level for adopting Bitcoin or digital currencies for actually use enhancing the lives of of underbanked and underserved folks in our country. Corner stores, bodegas, and local convenience stores are profit partners that provide prepaid debit card, wireless card minutes, and cash to digital currency conversions, as well as capture data and build a loyal consumer base using our ever-growing network of fintech-providing software. These communities historically have been overlooked by larger corporations. And we saw an opportunity in this largely untapped market. Most people don't realize there are approximately 100 million Americans that are either unbanked or underbanked. It's almost a third of the country. That means they don't have access to checking and saving accounts or credit cards. Everyday transactions that most of us take for granted, especially assuming most of you listening to my voice are in the investment class, These are not available, the luxuries that we are used to and take for granted are not available in the underserved communities. Their local bodega or convenience store or community store market becomes their trusted partner for obtaining and reloading their debit cards, adding minutes or paying their prepaid wireless bills, and sending money overseas to family. With the addition of surge phone wireless in some of these same communities, we believe our infrastructure positions us at the grassroots level It allows us to serve the underbank market better than any company in the sector. We're looking to corner the underbank market both in the customer's home through the direct-to-customer model where we are allowing these customers to connect to the internet, we're enabling this, and also through the community's markets where they shop. We have a B2C and a B2B product that brings us in both sides encompassing this market. Our ability to grow our mobile broadband subscriber customer base and increased store count has significantly increased across the board. With the company's strategic position solidified, the balance sheet improved, and the product offering growing, we anticipate revenue growth significantly growing in 2022. By the end of 2022, we expect to be at a sales run rate of 130 million per year with a higher margin sales. We anticipate revenue growth will be evident in the first quarter of 2022 and will accelerate through the year. Moving forward, we will be talking about adjusted EBITDA as a way to measure the operational progress of the business. And Tony will provide some more details on that in just a minute. We anticipate that revenue growth starting in the first quarter of 2022 will translate to positive adjusted EBITDA in the second quarter of 2022. For the full year, we anticipate generating greater than $15 million in adjusted EBITDA. Keep in mind that a new subscriber base produces a loss of $20 for the first two months. This is on our mobile broadband once we're paying commissions and we're covering tablets and the initial cost, the cost per acquisition. After that initial period, a new subscriber drives high margin reoccurring revenue every month. We intend to continue growing and focusing on the long-term opportunities, even if it means a lower adjusted EBITDA in the short term. Our goal is long-term shareholder value. Our target of 200,000 mobile broadband subscriber activations by the end of the year is based on our license to operate in 14 states. We are working to be licensed in 20 to 30 additional states by May of this year and would anticipate higher subscriptions along with that. We have a goal to reach 1 billion in annual sales with profitable growth, and I want to stress that last phrase, profitable growth. We have made significant progress since this time last year. 2021 included a lot of bumps and bruises, but the entire team stayed focused on the long-term vision of the company, and we ended the year in a much, much better position. Revenue is growing, profitability is increasing. We are now operating a business that has the ability to grow organically and through accretive acquisitions while simultaneously making money across our core revenue channels. Now I'd like to turn the call over to Tony to provide a brief review of our financial results before summarizing today's call. Tony?