SurgePays, Inc.

Greetings and welcome to the Search Pays Q1 2024 earnings. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Quinn Cullinan. Thank you. You may again.

Thank you, operator. And good afternoon, everyone. Welcome to the SurgePays first quarter 2024 earnings webcast and conference call. Today's date is May 13th, 2024. And on the call today from SurgePays 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 discussion of such risks and uncertainties, please see surge-based 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. Copies of today's press release are accessible on SurgePay's investor relations website. In addition, SurgePay's Form 10-Q for the quarter ended March 31, 2024, will also be available on SurgePay's investor relations website. And now I'd like to turn the call over to President and Chief Executive Officer Brian Topps.

Thanks, Quinn. First, I would like to thank our shareholders and those interested in SurgePay's for joining the call. As we have expanded and continue expanding our audience, I'd like to give a brief overview of who we are, what we do, and our target market. Our core mission at SurgePays is to provide financial technology and prepaid wireless services to the underbanked and underserved populations at the grassroots level where they live and shop. Studies have shown that the underbank do most of their financial transactions at the trusted local convenience store closest to their homes. SurgePay's technology-layered platform empowers clerks at these convenience stores to provide a suite of prepaid wireless and financial products to underbank customers at the register. Before we dive into Q1 results, let's address the 800-pound gorilla. We are currently in a complicated environment pending government approval of continuing the funding of ACP, the Affordable Connectivity Program. The ACP funding provision made it to the floor by being attached to the FAA Reauthorization Act. So it's likely it could come to a vote with Rip and Replace, another program, or be attached to another bill. We could know in a few weeks. We are hopeful ACP passes, but we aren't waiting around for approval. Three months ago, I challenged my team to make a plan to replace or duplicate all ACP revenue within 12 months. I'm thrilled to announce that I believe that they have not only met this challenge but exceeded it with the successful rollout of our prepaid wireless company, LinkUp Mobile, combined with ramping up our legacy prepaid wireless top-up business. Strategic hires, new technology, and other corporate initiatives have put us in a great position. Our team has put together a comprehensive strategic plan that we are confident will enable us to grow our surge pays 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, I expect us not only to just replace our current ACP revenue, but exceed it in 12 months with the rollout and scaling of our prepaid wireless company, LinkUp Mobile, utilizing our own distribution platform, SurgePays. As an example of the traction we've accomplished, we now have signed over nine master nationwide dealers for LinkUp distribution and prepaid top-up business. We believe the combination of our own MBNO prepaid wireless company and the top-up platform is compelling longstanding distribution business to switch to us. We will help those companies roll out our program into wireless dealers, convenience stores, and bodegas. It bears emphasizing that the timing of this rollout and expected revenue growth should happen independently of ACP and is a direct result of our team's execution. Touching on our financial results for the quarter, overall revenues were affected by our decision last year to shift focus away from LogicSiteQ. This effectively eliminated the 3.2 million of revenue that LogicSiteQ contributed in the first quarter of 2023. However, it allowed our team to be completely focused on verticals aligned with our profitable and scalable business model. Despite the recent quarterly loss in lead generation revenue, we believe our new focus will benefit the company in the long term. Our mobile virtual network operator, or MVNO, wireless revenue increased from $28.7 million in the first quarter of 2023 to $28.9 million in the first quarter of 2024. Gross profit increased 6% to $8.2 million compared to $7.7 million in the year-ago period, and gross margin increased about 4% to 26%. I'm looking for big things and big revenue coming from our team's future effort and execution. Whether or not the ACP is funded, we are confident we can continue to build the largest distribution network of underbanked products and services utilizing convenience stores as the points of distribution with or without ACP. If the ACP is funded, we plan to expand our ACP customer base with the use of our base of stores and other mechanisms in place.