ITEM 1. BUSINESS
Company Overview and History
About SurgePays, Inc.
SurgePays, Inc. (“SurgePays”, “we”, the “Company”) is a financial technology and telecommunications company with one clear mission: to enhance connectivity and financial access in the places people live, shop, and work. We were previously known as North American Energy Resources, Inc. and KSIX Media Holdings, Inc. Prior to April 27, 2015, we operated solely as an independent oil and natural gas company engaged in the acquisition, exploration and development of oil and natural gas properties and the production of oil and natural gas through its wholly owned subsidiary, NAER. On April 27, 2015, NAER entered into a Share Exchange Agreement with KSIX Media whereby KSIX Media became a wholly owned subsidiary of NAER and which resulted in the shareholders of KSIX Media owning approximately 90% of the voting stock of the surviving entity. While we continued the oil and gas operations of NAER following this transaction, on August 4, 2015, we changed its name to KSIX Media Holdings, Inc. On December 21, 2017, we changed its name to Surge Holdings, Inc. to better reflect the diversity of its business operations. We changed our name to SurgePays, Inc. on October 29, 2020.
As described in more detail below, we currently operate in three different business segments through the following subsidiaries: (i) Surge Blockchain, LLC, formerly Blvd. Media Group, LLC, a Nevada limited liability company; (ii) LogicsIQ, Inc., a Nevada corporation; (iii) SurgePhone Wireless, LLC, a Nevada limited liability company; (iv) SurgePays Fintech, Inc., a Nevada limited liability company; (v) ECS Prepaid, LLC, a Missouri limited liability company, and (vi) Torch Wireless, LLC a Wyoming limited liability company.
Corporate Vision and Objective
At SurgePays, we believe we are just scratching the surface of what we believe is a valuable market opportunity. Our foundation is built on a robust infrastructure, a diversified product suite, and strategic partnerships that position us for a potential to expand rapidly. We are focused on capturing additional market potential and business opportunities across telecommunications, financial technology, and retail solutions.
Our integrated approach is not just about incremental growth; it is designed for scalability. We are not in this to compete on small, tactical wins. We are here to redefine how underserved and value-conscious markets access essential services, from prepaid wireless and financial products to digital engagement solutions. With a nationwide network of convenience stores, bodegas, and neighborhood locations as our distribution backbone, we believe we are positioned to bring these services directly to the communities that need them most.
We believe this is an important opportunity in an underserved market, and we are on the frontline. By seamlessly integrating telecommunications and fintech on a single platform, we strive to deliver the value and convenience customers demand while aiming to create a recurring revenue model. Our data-driven marketing strategies and the flexibility of our software enable us to tailor offerings in real time, driving high customer retention and capturing new opportunities at every turn.
With every new customer and every new partner, we are advancing towards our goals. SurgePays has laid the groundwork; now, it is about execution, speed, and capturing market share. This is a pivotal moment for the Company, and we believe we are positioned not just to compete but to dominate. We are building the foundation to achieve future success and we believe the opportunity is massive.
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Our Business Segments
SurgePays operates through two primary business segments, each strategically designed to meet the diverse needs of our customers. These segments are driven by independent technology platforms that also function synergistically to foster mutual growth:
● MVNO
Telecommunications: Providing reliable, affordable prepaid wireless services.
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● Comprehensive
Platform Services: Offering Point-of-sale (“POS”) transaction and marketing technology.
In addition, in November 2024, the Company entered into a multi-year strategic agreement with AT&T, providing direct access to its nationwide 4G LTE and 5G wireless network. This integration represents a significant advancement in the Company’s infrastructure and capabilities, enabling SurgePays to operate not only as a Mobile Virtual Network Operator (MVNO), but also as a Mobile Virtual Network Enabler (MVNE). As an MVNE, the Company now offers wireless services, including SIM provisioning, billing, and airtime, to other wireless providers that do not have a direct carrier relationship. This expansion creates a new high-margin, scalable revenue channel with minimal incremental cost to the Company, and anticipate this to become another major segment for the Company starting in 2025.
The Company previously also operated a Lead Generation segment; however, this business segment was discontinued in 2024.
MVNO Telecommunications
SurgePays’ Mobile Virtual Network Operator (MVNO) business delivers high-speed, reliable, and affordable wireless services by leveraging agreements with national telecom leaders. Generating $43,450,244 of year ended December 31, 2024 operating revenue, we believe this segment will be central to our growth, offering subsidized and prepaid options to meet diverse financial needs.
Subsidized Services
Our subsidized offerings—through programs like Lifeline —enable us to bridge the digital divide in underserved communities. These federal initiatives empower us to provide essential connectivity, driving social impact while targeting sustainable growth. Even as funding changes, we strategically maintain resilience by utilizing our Lifeline program to keep these critical services accessible, establishing a strong foundation. Brands like SurgePhone Wireless and Torch Wireless embody this mission, reaching customers where they need it most.
The Company previously offered subsidized offerings through the Affordable Connectivity Program (ACP), however funding for this program ended in June 2024. As a transition strategy, we decided to keep the existing base of subscribers from the former ACP enrolled in our network. a built-in subscriber base of 250,000. We chose to keep our subscribers active, absorbing the wholesale costs (averaging around $7-10 per subscriber per month), and put our strong balance sheet to work to replace the cash inflow we lost once ACP funding ran out. We transitioned over 80,000 subscribers to the Lifeline program during 2024.
Prepaid Services
Our prepaid plans deliver flexibility, with contract-free, affordable solutions that provide unlimited talk and text across the USA, Mexico, and Canada—no credit checks or hidden fees. Through LinkUp Mobile, we leverage our purchasing power and established retailer relationships to offer low-cost SIM kits at convenience stores, creating accessible, local service hubs.
Our distribution strategy centers on empowering local community stores as trusted service points, where activations and payments are seamlessly integrated into customers’ routines. We believe this approach will not only drive subscriber growth but builds loyalty, allowing customers to switch from competitors effortlessly. By meeting customers in familiar locations, we strengthen long-term relationships and fuel desired sustainable growth.
Comprehensive Platform Services
Our Comprehensive Platform Services segment is tailored to the needs of retailers, using advanced POS technology to elevate operational efficiency and customer engagement. Through SurgePays Prepaid Wireless Top-ups and ClearLine, we deliver innovative transaction and marketing solutions that aim to transform how thousands of convenience stores operate.
Prepaid Wireless Top-Ups
Our Prepaid Wireless Top-Ups platform empowers convenience store clerks to handle top-ups for all major wireless brands efficiently. Additionally, it supports debit and gift card activations, creating a seamless, all-in-one payment processing solution. This functionality not only drives recurring revenue but also gives us critical feedback on what consumers are looking for in today’s Prepaid Wireless Market, allowing us to offer targeted promotions that increase retention and incremental sales. By presenting customers with a comparable Linkup wireless plan at the point of transaction, we maximize opportunities to upsell higher-margin brands, further enhancing growth.
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ClearLine
Our ClearLine technology transforms POS terminals and customer-facing screens into powerful engagement tools. This patent-pending touchscreen application enables in-store marketing campaigns, loyalty program enrollment, and even QR code scanning for streamlined customer interactions. ClearLine replaces traditional posters with smart TVs, displaying interactive QR-code ads and real-time coupon redemptions, creating a measurable impact on store revenue and customer satisfaction.
By capturing detailed analytics, ClearLine offers merchants actionable insights to drive growth and foster customer loyalty. This Software as a Service (SaaS) solution is compatible across various devices, positioning ClearLine as a high-value asset for retailers and an anticipated growing significant revenue driver for SurgePays.
Lead Generation
Effective December 31, 2024, the Company’s management elected to abandon its lead generation segment operations as part of a strategic reassessment of its business lines. This decision followed a review by the Chief Operating Decision Maker (“CODM”, which is our Chief Executive Officer), who had been regularly evaluating the segment’s financial performance and determined that its continued operation was no longer aligned with the Company’s long-term strategic objectives.
Growth Strategies
At SurgePays, our growth strategy is simple yet powerful: leverage our strengths across business segments to drive for sustainable, scalable growth. Each business unit and service is aligned with our mission to create lasting value, enabling us to be strategically positioned for our goal of long-term profitability.
MVNO Communications
Subsidized Services:
● Expand
Distribution: Strengthen our footprint in convenience stores, bodegas, and neighborhood
retail locations to meet customers where they are, while accelerating growth through online
sales channels.
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● Simplify
Engagement: Make Lifeline enrollments easy by integrating them directly at the
point of sale, eliminating friction for eligible customers.
● Drive
Growth: Fuel subscriber growth through strategic partnerships and incentives, focusing
on expanding our reach and value to customers.
Prepaid Services:
● Optimize
Sales Channels: Amplify the POS platform to maximize every sales opportunity,
while seamlessly converting subsidized subscribers to non-subsidized services as their needs
evolve.
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● Leverage
Buying Power: Harness our purchasing power to offer competitively priced plans and affordable
SIM kits through our convenience store network, delivering a strong value proposition.
● Expand
Rural Reach: Target rural markets where competition is low and demand is high, offering
compelling pricing and retaining customers by promoting non-subsidized services in times
of funding variability.
Comprehensive Platform Services
SurgePays Prepaid Wireless Top-Ups:
● Enhance
Service Delivery: Continuously evolve our prepaid wireless offerings to align with customer
needs, creating a seamless experience that keeps customers coming back.
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● Strengthen
Partnerships: Expand our distributor relationships with innovative POS technology,
deepening market penetration and maximizing channel efficiency.
● Leverage
Data: Deploy transaction data insights for targeted marketing, tailoring offers that
boost customer retention and increase lifetime value.
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ClearLine:
● Engage
Customers: Transform each payment terminal into a dynamic engagement and SaaS marketing
tool, maximizing brand interaction at every transaction.
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● Boost
Revenues: Drive sales through digital loyalty programs, targeted marketing campaigns,
and customer feedback initiatives that enhance satisfaction and retention.
● Leverage
Data Insights: Use customer data to create targeted promotions and operational improvements,
giving merchants actionable insights that deepen their customer relationships.
Synergy Across Business Units
Our integrated approach means all units work in unison, creating efficiency and value that is hard to replicate. By aligning technology, data, and market expansion strategies, we are building a cohesive platform with a unique value proposition:
● Technology
Integration: Our POS platforms unify transactions across prepaid wireless, financial
products, and merchant services, delivering a streamlined retail experience.
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● Data-Driven
Engagement: Data analytics from our ACH banking and fintech transactions platform unlock
valuable insights, enhancing customer engagement across all segments.
● Strategic
Market Expansion: With a focus on underserved and rural markets, we are capturing
untapped potential and fostering lasting customer loyalty.
Market Opportunity
MVNO Communications
Subsidized Services
According to Forbes Advisor from May 26, 2023, 42 million americans still do not have access to broadband internet. It is the Company’s initiative to address the gap created by the lack of access to high-speed internet, particularly rural areas. By focusing on these underserved regions, SurgePays not only meets an essential need but also positions itself within a market poised for growth. Government initiatives like Lifeline provide a steady stream of eligible customers allowing a consistent demand base.
Our strategy aligns with these government-backed programs, allowing us to capture steady demand among value-conscious households. Lower-income Americans are still less likely to have home broadband or smartphone. According to the Pew Research Center (from June 22, 2021), research shows that 27% of low-income adults rely on smartphones for internet access, underscoring the need for affordable mobile connectivity in these communities. By serving this critical market, we are positioned for both growth and resilience.
Prepaid Services
According to Research and Markets published January 3, 2025, the prepaid wireless market in the U.S. is thriving, with 74 million of the 307 million smartphone users choosing prepaid plans—a number expected to grow at a 5.2% CAGR from 2022 to 2030. SurgePays’ prepaid offerings directly address this demand, appealing to consumers seeking flexible, no-contract options.
Targeting rural areas, where competition is minimal and pricing is often higher, gives us a strategic edge. With rural Americans comprising nearly 17.9% of the U.S. population (according to NCESC.com from June 22, 2024), these regions represent a significant growth opportunity. Additionally, the multicultural segment—particularly Hispanic Americans—is one of the fastest-growing demographics, with a projected growth rate of 2.3% annually, published by the United States Census Bureau dated June 27, 2024. By aligning our offerings with the needs of these expanding demographics, we are aiming to capture a significant market share, supporting our vision for sustained growth.
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Comprehensive Platform Services
SurgePays Prepaid Wireless Top-ups
We believe there is a strong market for prepaid wireless top-ups through convenience stores, bodegas, and neighborhood retail locations. Our approach aims to leverage the more than over 150,000 convenience stores (according to the National Association of Convenience Stores dated February 5, 2025) in the U.S. to deliver accessible prepaid wireless top-ups and essential services, creating a potential for a broad distribution network and we believe this high-transaction environment will become a significant revenue driver for the Company. The U.S. prepaid card market alone was valued at $542 billion in 2023 (according to Research and Markets dated May 30, 2024), and our platform is designed to captures value from every transaction in which it is utilized. Using transaction data to drive targeted marketing further enhances engagement, retention, and customer lifetime value.
ClearLine
Through our ClearLine channel, we are transforming traditional payment terminals into high-impact engagement and marketing tools that increase merchant revenue and customer satisfaction. Digital engagement can increase customer spending by up to 20% (according to McKinsey’s annual Digital Payments Consumer Survey from November 25, 2020), while personalized offers and loyalty programs improve retention by up to 10% and lifetime value by 25% (according to the article titled, A Guide on Impact of Personalization on Customer Lifetime Value dated February 27, 2025). We believe ClearLine solutions can be utilized across more retail locations to maximize market penetration and revenue potential, growing alongside the digital signage market expected to grow at a CAGR of 6.9% through 2028 (according to PR Newswire dated June 28, 2023).
Marketing and Sales
Our marketing strategies are meticulously designed for each business segment, anchored in three strategic pillars: strengthening retail partnerships, amplifying digital engagement, and extending market reach through direct and channel sales teams dedicated to customer retention.
Our retail distribution portfolio is the backbone of our MVNO business units. Being able to reach consumers where they are is our strength. Through software enhancements, we are able to reach potential MVNO subscribers in wireless retail stores, convenience stores, markets, and online sites. By collaborating with third-party partners, we facilitate Lifeline enrollments and offer a range of non-subsidized prepaid wireless plans. Through targeted education and proactive engagement, we maximize subscriber acquisition in underserved regions. By delivering tailored, incentivized plans to existing Lifeline, we enhance retention and create enduring value within this critical market segment.
For Comprehensive Platform Services, we prioritize building strong retail partnerships that ensure extensive distribution and easy access to our solutions. Our approach integrates the convenience of our expansive store network with powerful digital engagement tools, enabling us to reach a broad audience and deliver consistent customer value. To support this growth, we have and will continue as necessary to scale our national sales and distribution teams to deepen market penetration and deliver personalized, high touch support, driving for customer satisfaction and long-term growth.
Competition
SurgePays operates in a competitive and rapidly evolving market, where both traditional and non-traditional players in telecommunications and technology compete to capture market share.
In telecommunications, major MVNOs dominate the prepaid wireless landscape, while national carriers leverage their infrastructure and brand strength to attract prepaid customers. Regional providers further intensify competition by focusing on specific geographic areas. In financial technology, established prepaid card providers hold significant ground, while fintech startups push the envelope with digital innovation and streamlined user experiences. Traditional convenience store distributors, with decades of legacy behind them, rely on a manufacturing-to-warehouse-to-store logistics model that has remained largely unchanged. Currently, our MVNO market share at convenience store sales is under 1%, highlighting a substantial growth opportunity.
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Yet, we believe our diverse product suite and operational efficiencies position us to capture a larger share of this market. Our ability to seamlessly integrate with others in this space, creates a unique dynamic allowing us to compensate for growth opportunities while unlocking the potential for additional revenue for stores. This collaborative approach is fueled by our unique product offerings, which drive more value for retail partners. Additionally, we may explore strategic acquisitions as a way to accelerate our path forward.
Across our product markets, competition is shaped by key factors: technical features, quality, availability, price, customer support, and distribution coverage. Each region may weigh these factors differently, but by deploying our direct store distribution model nationwide, we are positioned to meet these demands head-on and open substantial growth opportunities.
Differentiation
At SurgePays, our competitive edge is rooted in relentless adaptability, a tightly integrated service ecosystem, and robust retail partnerships. These strengths allow us to bring our communication and technology platform products to market with speed and precision, creating a clear path to success.
We stand apart by offering a seamless blend of telecommunications and transactions services on a single platform—a one-stop solution that delivers both convenience and exceptional value to our customers. By targeting underserved and rural communities, often overlooked by larger players, we provide vital services where people live, shop, and work. Through our network of convenience stores, bodegas, and local retail spots, we bring affordable, accessible solutions to the neighborhoods that need them most.
Owning the transaction software for processing, activations, and top-ups allows us to offer prepaid wireless and financial products at lower prices right at the community level. This structure not only captures a significant, value-conscious segment but also leverages efficiencies that drive down costs and improve margins.
In a fragmented distribution landscape where no single player offers top consumables alongside essential services like prepaid wireless, gift cards, bill payments, and reloadable debit cards, we see a major opportunity. Our partnerships with distributors enable broad market reach and higher customer engagement. Our vision extends to building a wholesale e-commerce platform that unites these services under one roof—a scalable model that enhances customer loyalty and operational efficiency.
Agility is our backbone. We continuously adapt our offering to stay ahead of customer needs. Using a combination of information gathered by extracting data from our customer service system and comparing it with industry marketing trends and offerings, we are able to offer targeted social media engagement and personalized offers. Incorporating these solutions helps us drive customer acquisition and retention by allowing our product offering to meet the market where we uncover the need.
With these strengths—an integrated platform, a focus on underserved markets, robust retail partnerships, and a commitment to data-driven insights—we believe SurgePays is well-positioned to thrive in a competitive market. Our approach is built to drive for long-term growth and profitability, supported by a foundation of innovation and customer focus that we believe is unmatched in the industry.
Internal Development Activities
At SurgePays, innovation is not a department—it is our DNA. We are relentlessly focused on enhancing our products to deliver efficient, secure, and lightning-fast transactions at convenience stores. Our software platform, hosted on Amazon Web Services (AWS) Cloud, leverages the power of world-class infrastructure to enable our goal of unmatched reliability and scalability.
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Success demands a mindset of continuous improvement. We have developed integrated software solutions for popular point-of-sale systems from such companies as Clover, PAX, and Landi. These integrations provide additional opportunities to operate our platform in various types of retail businesses without the need for additional hardware, with a single goal in mind: to create powerful tools that help our retail partners operate more efficiently and serve their customers better. By embracing technology’s rapid evolution, we are not just keeping pace with change, we are shaping it.
Seasonality
Our diverse product portfolio helps mitigate any significant fluctuations, and as we continue to expand our offerings, we expect the impact of seasonality to diminish further.
SurgePays Team
At SurgePays, our people are the driving force behind everything we accomplish. As of March 2025, our team of over 130 dedicated professionals—across various areas such as accounting and finance (4), human resources (3), programming (13), customer service (79), sales (6), and operations (25)—is committed to solving real problems and delivering value to our customers and shareholders every day.
Our leadership team brings over a century of combined experience across telecommunications, technology, and national distribution. This depth of expertise fuels our ability to innovate, think long-term, and make bold bets that set us apart in the market.
We know that a business only grows by hiring exceptional talent and empowering them with a culture that prizes continuous improvement and ownership. We focus on attracting the best, building an environment that nurtures growth, and aligning incentives to performance through equity and cash plans. These plans not only reward high performance but are designed to create alignment with our long-term vision, fostering a team that acts like owners, not employees.
At SurgePays, we think in decades, not quarters. By investing in our people and cultivating a culture of excellence, we are building a foundation that will support our growth for years to come.
Corporate Information
Our executive offices are located at:
3124 Brother Blvd, Suite 410, Bartlett, TN 38133
Telephone: (800) 760-9689 Website: www.surgepays.com
Please note that our website and the information contained in, or accessible through, it will not be deemed incorporated by reference into this Annual Report and does not constitute a part of this Annual Report.
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