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BARTLETT, Tenn. - SurgePays, Inc. (NASDAQ:SURG), a technology company offering wireless and point-of-sale solutions, announced today a $7 million financing agreement through a senior secured convertible note with an existing institutional shareholder. The note, maturing in two years, is convertible into common stock at $4.00 per share, representing a premium to the current stock price of $3.36. According to InvestingPro data, the company’s stock has shown strong momentum with a 58% return over the past six months, though current analysis suggests the stock is trading above its Fair Value.
The transaction involves $6 million in cash and the repurchase of 333,333 shares from the shareholder. The company retains the option to prepay the note in full or in part, with a 5-day notice and a 2% premium on the principal plus accrued interest. InvestingPro analysis reveals that SurgePays maintains a healthy current ratio of 2.95, indicating strong short-term liquidity, though the company has been quickly burning through cash recently.
Brian Cox, Chairman and CEO of SurgePays, expressed gratitude for the shareholder’s continued support, stating that the investment strengthens the company’s balance sheet and supports the execution of their national growth strategy. The funds will be directed towards the national rollout of LinkUp Mobile and the expansion of the MVNE wholesale business, particularly after the recent integration with AT&T on April 1, 2025.
SurgePays anticipates surpassing $200 million in revenue over the next 12 months, commencing April 1, 2025, and aims to achieve positive operational cash flow by the year’s end. This financial outlook is based on the current deployment of its core MVNO and POS platforms. Analysts tracking the stock on InvestingPro anticipate significant sales growth, with revenue projected to nearly double in the current fiscal year, though they don’t expect profitability this year.
Titan Partners Group, a division of American Capital Partners, served as the financial advisor for this transaction. SurgePays operates as both an MVNO and MVNE, providing infrastructure to other wireless providers and offering mobile connectivity and financial services, especially to underserved communities.
The information reported is based on a press release statement and reflects SurgePays’ current financial maneuvers and strategic objectives. The company’s forward-looking statements, such as projected revenue and cash flow, are subject to risks and uncertainties that could cause actual results to differ materially.
In other recent news, SurgePays, Inc. reported its financial results for the fourth quarter of 2024, revealing a mixed performance. The company achieved a revenue of $60.9 million, significantly exceeding the forecast of $9.02 million, although it experienced a net loss of $45.7 million, or $2.39 per share, missing the earnings per share (EPS) forecast of -$0.225. Despite the earnings miss, SurgePays’ revenue growth in certain segments, such as platform services, from $11.3 million to $17.4 million, highlights areas of expansion. The company also projects over $200 million in revenue for the next 12 months, driven by various strategic initiatives including the Link Up Mobile prepaid brand and Lifeline services. Additionally, SurgePays announced the promotion of Derron Winfrey to President of Sales and Operations, emphasizing his role in expanding the sales organization and operational development. The company has also launched new products and network integrations, such as eSIM capabilities and partnerships with AT&T, to support its growth ambitions. Analyst firms like Water Tower Research and Sidoti have shown interest in the company’s strategies, particularly its focus on high-margin states and channels. SurgePays aims to be cash flow positive by the end of 2025, as it continues to navigate the competitive landscape of the prepaid and government-subsidized wireless markets.
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