Form 8-K

8-K — SurgePays, Inc.

Accession: 0001493152-26-024589

Filed: 2026-05-20

Period: 2026-05-15

CIK: 0001392694

SIC: 4813 (TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE))

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

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EX-99.1 (ex99-1.htm)

EX-99.2 (ex99-2.htm)

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0001392694

2026-05-15

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

8-K

CURRENT

REPORT

PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES

EXCHANGE ACT OF 1934

Date

of Report (Date of earliest event reported): May 15, 2026

SURGEPAYS,

INC.

(Exact

name of registrant as specified in its charter)

Nevada

001-40992

98-0550352

(State

or other jurisdiction

incorporation)

(Commission

File

Number)

(IRS

Employer

Identification

No.)

3124

Brother Blvd., Suite

104

Bartlett,

38133

(Address

of principal executive offices, including zip code)

Registrant’s

telephone number, including area code: (901) 302-9587

(Former

name or former address, if changed since last report)

Check

the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under

any of the following provisions:

☐

Written

communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting

material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement

communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement

communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities

registered pursuant to Section 12(b) of the Act:

Title

of each class

Trading

Symbol(s)

Name

of each exchange on which registered

Common

Stock

SURG

The

Nasdaq Stock Market, LLC

Indicate

by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405

of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging

growth company ☐

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item

2.02. Results of Operations and Financial Condition.

May 15, 2026, SurgePays, Inc. (the “Company”) issued a press release announcing its financial results for the

quarter ended March 31, 2026, and the Company held a conference call to discuss the financial results. A copy of the press release is

furnished as Exhibit 99.1 to this report, and a transcript of the conference call is furnished as Exhibit 99.2 to the report.

accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and

99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the

“Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference

into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as

shall be expressly set forth by specific reference in such filing.

Item

9.01 Financial Statements and Exhibits

99.1

Press Release, dated May 15, 2026, issued by SurgePays, Inc.

99.2

Transcript of Conference Call held on May 15, 2026.

104

Cover

Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant

to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by

the undersigned hereunto duly authorized.

SURGEPAYS,

INC.

Date:

May 20, 2026

By:

/s/

Kevin Brian Cox

Name:

Kevin

Brian Cox

Title:

Chief

Executive Officer

EX-99.1

Filename: ex99-1.htm · Sequence: 2

Exhibit

99.1

SurgePays

Reports First Quarter 2026 Revenue of Approximately $16 Million, Up 51% Year-Over-Year Driven by Point of Sale and Prepaid Services Growth

of 71%

May

15, 2026 09:00 ET | Source: SurgePays, Inc.

Cost

discipline initiated in 2025 drove G&A expenses down approximately 25%

Revenue

growth was led by point of sale and prepaid services

Total

wireless subscriber lines surpassed 200,000 across LinkUp Mobile and Torch Wireless

BARTLETT,

Tenn., May 15, 2026 (GLOBE NEWSWIRE) — SurgePays, Inc. (NASDAQ: SURG), a fintech and mobile virtual network operator serving the

approximately 138 million subprime consumers in the United States, today reported its financial results for the quarter ended March 31,

2026.

“The

first quarter of 2026 is the quarter where the diversification work of the last twelve months becomes visible in the numbers,”

said Brian Cox, Chief Executive Officer of SurgePays. “Revenue grew approximately 51% year-over-year, driven by an approximately

71% increase in point of sale and prepaid services. Additionally, the cost discipline we set in motion in 2025 reached our G&A line,

which declined approximately 25% year-over-year.”

First

Quarter and Subsequent Operational Highlights

Wireless

Subscriber Growth

●

Total

wireless subscriber lines surpassed 200,000 across the Company’s LinkUp Mobile and Torch Wireless brands, reflecting continued

momentum in the prepaid wireless business.

●

Initiated

a buy one get one promotional campaign to drive subscriber growth and increase market penetration.

Customer

Acquisition Engine

●

Reduced

cost per lead in the Company’s subscriber acquisition channel by approximately 28%, with cost-per-enrollment down approximately

48% and lead-to-enrollment conversion up approximately 39%, following the transition of subscriber acquisition to an in-house growth

marketing team.

●

Continued

to scale ProgramBenefits.com as a unified intake and decisioning platform and as a monetization layer for the subscriber base, with

internal upsell, top-up cross-sell, affiliate offers, and data partnership initiatives now contributing revenue that partially offsets

acquisition cost.

Wholesale

Distribution Expansion

●

Closed

six new wholesale distribution partners during the period, consisting of three Master Agent agreements covering an aggregate of more

than 3,000 retail locations under contract and three independent sales organization agreements, with onboarding underway and initial

volume contribution expected during the second quarter of 2026.

●

The

independent sales organization additions are expected to lift monthly prepaid top-up volume on the Company’s distribution platform

by approximately 30% once fully integrated, with the Master Agent locations contributing incremental LinkUp Mobile activation volume

as stores come online.

Retail

Infrastructure Monetization

●

Launched

a fully integrated stored value and loyalty platform, enabling merchants to offer branded gift cards, store credit, and loyalty programs

through the SurgePays point of sale system.

●

Deployed

the Company’s Managed Marketing Services platform, enabling third party brand messaging through the SurgePays point of sale

network and introducing an additional monetization layer.

Strategic

Partnerships and Platform

●

Continued

to advance the previously announced strategic relationship with Alpha Modus Holdings, Inc. (NASDAQ: AMOD), originally entered into

under a Letter of Intent, via ongoing negotiations throughout the quarter toward a definitive multiyear commercial integration framework.

●

Executed

signed wholesale contracts with multiple MVNO and MVNE customers on the HERO Wireless platform, with counterparties at various stages

of technical integration through API connectivity and one customer having taken delivery of custom SIM cards in advance of launch.

The Company expects initial customer rollouts on the HERO platform during the second quarter of 2026, with wholesale wireless revenue

contribution anticipated to be reflected in third quarter 2026 results.

●

Advanced

a real time AI decisioning platform built on ProgramBenefits.com and the Company’s nationwide retail network, designed to expand

each customer interaction into a multi-product revenue opportunity across wireless, financial services, and other essential offerings.

First

Quarter 2026 Financial Highlights

●

Revenue

of approximately $16.0 million, up 51% year-over-year from approximately $10.6 million in the prior year period, driven primarily

by an approximately 71% increase in point of sale and prepaid services.

●

General

and administrative expenses declined approximately 25% to approximately $3.5 million, compared to approximately $4.6 million in the

prior year period, reflecting the cost discipline initiated in 2025.

●

Net

cash used in operating activities improved to approximately $4.6 million, compared to approximately $7.0 million in the prior year

period.

●

Loss

from operations totaled approximately $11.2 million, compared to approximately $7.6 million in the prior year period, primarily reflecting

increased interest expense and non-cash items.

●

Net

loss available to common stockholders totaled approximately $12.1 million, compared to approximately $7.6 million in the prior year

period.

●

Cash

and cash equivalents were approximately $2.0 million at March 31, 2026. Total cash, cash equivalents and restricted cash were approximately

$2.4 million at quarter end.

Subsequent

Events

May 1, 2026, subsequent to quarter end, the Company entered into a multiyear Commercial Integration and Distribution Agreement with Alpha

Modus Holdings, Inc. (NASDAQ: AMOD). On May 12, 2026, the Company and Alpha Modus announced the launch of a 25,000 Activation Pilot to

integrate the Alpha Cash mobile wallet across the SurgePays distribution surface, as previously announced.

“Today,

SurgePays operates with multiple revenue channels. Total wireless subscriber lines across LinkUp Mobile and Torch Wireless surpassed

200,000, alongside our wholesale wireless platform relationships and our point-of-sale fintech and data platforms,” Mr. Cox

continued. “With an established retail footprint of more than 9,000 locations, a customer acquisition engine through ProgramBenefits.com,

additional monetization initiatives such as our Managed Marketing Services platform and our newly launched stored value and loyalty platform,

and the multiyear Commercial Integration and Distribution Agreement we entered into with Alpha Modus subsequent to quarter end, we are

positioned to monetize each consumer relationship across multiple revenue streams rather than just one. That is the compounding model,

and Q1 is the first quarter where you can see it forming.”

First Quarter 2026 Financial Results Conference Call

Date: Friday, May 15, 2026

Time: 11:00 a.m. Eastern Time

Dial in: 1 888 506 0062

Access code: 276693

Webcast:

ir.surgepays.com/company events

replay will be available on the SurgePays investor relations website following the call.

About

SurgePays, Inc.

SurgePays,

Inc. (NASDAQ: SURG) is a fintech and mobile virtual network operator (MVNO) that delivers prepaid wireless and financial products to

the approximately 138 million subprime consumers in the United States. Through its proprietary point-of-sale platform deployed across

approximately 9,000 convenience stores and a growing Retail Media Network, SurgePays enables retailers to offer wireless activations,

top-ups, and consumer financial services. The Company’s subsidiaries include LinkUp Mobile, Torch Wireless, the HERO mobile virtual

network enabler (MVNE) platform, and the ProgramBenefits.com platform, which is being built to incorporate AI-driven decisioning across

the financial and benefit products it offers. SurgePays is headquartered in Bartlett, TN. Learn more at www.surgepays.com and ir.surgepays.com.

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 of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within

the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve substantial risks

and uncertainties and generally relate to future events or the Company’s future financial or operating performance. These statements

may include projections, guidance, or other estimates regarding revenue, cash flow, business growth, market expansion, or customer acquisition,

and statements regarding subscriber growth, distribution expansion, and operating scale. In some cases, you can identify forward looking

statements by words such as may, will, could, would, should, expect, intend, plan, anticipate, believe, estimate, predict, project, potential,

continue, or similar terminology. Although the Company believes the expectations reflected in these forward-looking statements are reasonable,

they involve known and unknown risks and uncertainties that may cause actual results to differ materially from those described in the

forward-looking statements. These risks include, but are not limited to, the Company’s ability to scale its prepaid wireless business,

maintain retail distribution relationships, expand its merchant platform, and achieve anticipated subscriber growth. Additional information

regarding these and other risks can be found in the Company’s filings with the Securities and Exchange Commission, including its

Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The forward-looking statements in this press release speak only as of

the date they are made, and the Company undertakes no obligation to update them except as required by law.

Investor Relations Contact

Valter Pinto, Managing Director

KCSA Strategic Communications

SurgePays@KCSA.com | 212.896.1254

SurgePays,

Inc. and Subsidiaries, Consolidated Balance Sheets

(In US$)

March 31, 2026

December 31, 2025

Assets

Current Assets

Cash and cash equivalents

$ 1,991,166

$ 1,731,400

Restricted cash, accounts receivable factoring facility

424,995

281,811

Accounts receivable, net

5,041,837

4,045,162

Inventory

339,570

Prepaids and other

410,742

581,823

Total Current Assets

8,208,310

6,979,766

Property and equipment, net

376,678

403,517

Other Assets

Intangibles, net

655,776

819,153

Operating lease right of use asset, net

260,694

313,410

Total Other Assets

916,470

1,132,563

Total Assets

$ 9,501,458

$ 8,515,846

Liabilities and Stockholders’ Deficit

Current Liabilities

Accounts payable and accrued expenses

$ 17,514,013

$ 10,219,011

Accounts payable and accrued expenses, related party

159,135

117,546

Operating lease liability

226,225

219,997

Notes payable

2,483,335

1,834,008

Note payable, related party

1,730,796

2,730,796

Convertible notes payable, net

3,667,956

3,068,878

Derivative liabilities

184,983

—

Total Current Liabilities

25,966,443

18,190,236

Long Term Liabilities

Notes payable, SBA government

455,919

458,334

Operating lease liability

40,093

99,235

Convertible notes payable, net

6,906,971

5,170,860

Total Long Term Liabilities

7,402,983

5,728,429

Total Liabilities

33,369,426

23,918,665

Stockholders’ Deficit

Common stock, $0.001 par value

24,890

21,852

Additional paid in capital

86,829,583

83,246,736

Treasury stock at cost

(1,631,966 )

Accumulated deficit

(109,035,180 )

(96,984,297 )

Stockholders’ equity (deficit)

(23,812,673 )

(15,347,675 )

Non controlling interest

(55,295 )

(55,144 )

Total Stockholders’ Deficit

(23,867,968 )

(15,402,819 )

Total Liabilities and Stockholders’ Deficit

$ 9,501,458

$ 8,515,846

SurgePays, Inc. and Subsidiaries, Consolidated Statements of Operations (Unaudited)

(In US$)

Three Months Ended

March 31, 2026

Three Months Ended

March 31, 2025

Revenues

$ 15,983,983

$ 10,577,429

Costs and expenses

Cost of revenues

23,681,432

13,519,775

General and administrative expenses

3,501,918

4,637,556

Total costs and expenses

27,183,350

18,157,331

Loss from operations

(11,199,367 )

(7,579,902 )

Other income (expense)

Interest expense (including amortization of debt discount)

(881,908 )

(119,434 )

Other income

—

7,140

Interest income

—

56,903

Change in fair value of derivative liabilities

30,241

—

Total other income (expense), net

(851,667 )

(55,391 )

Net loss before provision for income taxes

(12,051,034 )

(7,635,293 )

Provision for income tax benefit (expense)

—

Net loss including non controlling interest

(12,051,034 )

(7,635,293 )

Non controlling interest

(151 )

(209 )

Net loss available to common stockholders

$ (12,050,883 )

$ (7,635,084 )

Loss per share, basic and diluted

$ (0.51 )

$ (0.38 )

Weighted average shares outstanding, basic and diluted

23,703,775

20,068,929

SurgePays,

Inc. and Subsidiaries, Consolidated Statements of Cash Flows (Unaudited)

(In US$)

Three Months Ended

March 31, 2026

Three Months Ended

March 31, 2025

Net cash used in operating activities

$ (4,550,799 )

$ (6,963,484 )

Net cash used in investing activities

—

(18,590 )

Net cash provided by (used in) financing activities

4,953,749

(410,545 )

Net increase (decrease) in cash, cash equivalents and restricted cash

402,950

(7,392,619 )

Cash, cash equivalents and restricted cash, beginning of period

2,013,211

12,790,389

Cash, cash equivalents and restricted cash, end of period

$ 2,416,161

$ 5,397,770

Cash and cash equivalents

$ 1,991,166

$ 1,731,400

Restricted cash, accounts receivable factoring facility

424,995

281,811

Cash paid for interest

$ 38,472

$ 908,760

EX-99.2

Filename: ex99-2.htm · Sequence: 3

Exhibit

99.2

SurgePays,

Inc. (SURG) Q1 2026 Earnings Call May 15, 2026 11:00 AM EDT

Company

Participants

Kevin

Cox - CEO & Director

Chelsea

Pullano - Interim Chief Financial Officer

Conference

Call Participants

Valter

Pinto - Kanan, Corbin, Schupak & Aronow, Inc.

Edward

Woo - Ascendiant Capital Markets LLC, Research Division

Presentation

Operator

Good

morning, welcome to the SurgePays Incorporated’s first quarter 2026 financial results conference call. At this time, all participants

are on a listen-only mode, and a question and answer session will follow management’s prepared remarks. Please note, this event

is being recorded. I would now like to turn the conference over to Valter Pinto with KCSA Strategic Communications. Valter, please go

ahead.

Valter

Pinto

Managing

Director, KCSA Strategic Communications

Thank

you, operator. Good morning, everyone. Welcome to the SurgePays first quarter 2026 financial results conference call. Joining me on the

call today are Brian Cox, Chief Executive Officer, and Chelsea Pullano, Interim Chief Financial Officer. Before we begin, I’d like

to remind everyone that statements made on this call that are not historical facts may be forward-looking statements within the meaning

of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results

to differ materially from those expressed or implied. Additional information about these risks is included in the company’s filings

with the Securities and Exchange Commission, including its annual report on Form 10-K and subsequent quarterly reports on Form 10-Q.

The company undertakes no obligation to update these statements except as required by law.

With

that, I’d like to now turn the call over to Brian Cox. Brian, please go ahead.

Brian

Cox

CEO,

SurgePays

Thank

you, Valter, good morning, everyone. Thank you for joining us today. The first quarter of 2026 is the quarter where diversification work

of the last 12 months becomes visible in the numbers. Revenue grew approximately 51% year-over-year to $16 million, driven by an approximately

71% increase in point-of-sale and prepaid services. At the same time, the cost discipline we set in motion in 2025 reached our general

and administrative expense line, which declined approximately 25% year-over-year. Today, SurgePays operates with multiple revenue channels

working in parallel. Total wireless subscriber lines across our LinkUp Mobile and Torch Wireless brands surpassed 200,000 subscribers

during the quarter. Our point-of-sale platform continues to scale across a retail footprint of more than 9,000 convenience store locations

nationwide.

have added new monetization channels on top of that footprint, including a stored value and loyalty program and a managed marketing services

platform for the in-store media network we launched during the quarter. We have rebuilt the top of our acquisition funnel through ProgramBenefits.com,

which is now serving as both a unified intake and decisioning platform and a monetization layer for the subscribers it brings in. The

way to think about this business is straightforward. Every consumer SurgePays acquires can now be paired with additional financial and

benefit products distributed through the same platform. That is the compounding model we designed. Q1 is the first quarter where you

can see it forming in the financials, and we’re going to walk you through each one of the operating pieces that drove that.

There

are five operating themes that define the first quarter and that frame how we expect the rest of the year to unfold. First, wireless

subscriber growth. Total wireless subscriber lines across our LinkUp Mobile and Torch Wireless brands surpassed 200,000 during this quarter.

That’s a milestone the team has worked toward for several quarters, and it reflects the operational work we have done to scale

the prepaid wireless business in-house. To press that momentum further, we initiated a buy one, get one promotional campaign in our prepaid

wireless business designed to drive subscriber growth and increase market penetration across our retail and digital channels. Second,

the customer acquisition engine. This is one of the most important shifts inside the company, and I want to spend a minute on it. During

the first quarter, we transitioned subscriber acquisition to our in-house growth marketing team.

For

the past five years, this has been outsourced to third-party ad agencies. Since that transition, we have reduced cost per lead by approximately

28%, cost per enrollment is down approximately 48%, and our lead -to-enrollment conversion rate is up approximately 39%. We are paying

less to acquire each new customer. Fewer of those leads fall out of the funnel, and the customers we bring on cost materially less than

they did one quarter ago. Our marketing team is winning. That is a structural improvement in unit economics that’s impactful now,

but even more so as we ramp up our sales push. On top of that engine, we have continued to scale ProgramBenefits.com as both a unified

intake and decisioning platform and as a monetization layer for the subscriber base.

Internal

upsells, top-up cross-sell, affiliate offers, and data partnership initiatives are now generating revenue against those subscribers.

This partially offsets the acquisition costs. In other words, the funnel is starting to pay for itself, and our end-of-year goal is to

continue improving this funnel, so we effectively eliminate our cost to acquire customers entirely. Third, wholesale distribution expansion.

During the period, we closed six new wholesale distribution partners, including three master agent agreements covering an aggregate of

more than 3,000 retail locations under contract and three other independent sales organization agreements. Onboarding is underway, with

initial volume contribution expected during the second quarter of 2026. The independent sales organization additions alone are expected

to lift monthly prepaid top of volume on our distribution platform by approximately 30% once fully integrated. We have spent years building

this retail infrastructure. Once the infrastructure has been built, it’s simple math.

With

retail channel side execution and more locations offering LinkUp, incremental sales volume increases continually and in proportion. Fourth,

retail infrastructure monetization. We launched a fully integrated stored value and loyalty program enabling merchants to offer branded

gift cards, store credit, and loyalty programs through the SurgePays point-of-sale system. We also deployed our managed marketing services

platform, which converts standard smart TVs mounted in the store into a media network we control for both our products and third-party

ads. Both of these are revenue streams that did not exist a year ago and are now being layered onto our same retail footprint. Fifth,

strategic partnerships and platform. We continued to advance our previously announced strategic relationship with Alpha Modus Holdings.

we disclosed in the press release, that framework was executed subsequent to the quarter end on May 1st, and the joint pilot launch was

announced on May 12th. Also during the period, we executed signed wholesale contracts with multiple MVNO and MVNE customers on our HERO

Wireless platform. Counterparties are at various stages of technical integration through API connectivity, and one customer has already

taken delivery of custom SIM cards in advance of their launch. We expect initial customer rollouts on the HERO platform during the second

quarter of 2026, with wholesale wireless revenue contribution anticipated to be reflected in the third quarter 2026 results. Finally,

we advanced a real-time AI decisioning platform built on ProgramBenefits.com and our nationwide retail network designed to expand each

customer interaction into a multi-product revenue opportunity across wireless, financial services, and other essential offerings.

This

is the connective tissue between the acquisition engine, the retail platform, and the wholesale relationships I just described. With

that as the operating backdrop, let me turn the call over to Chelsea Pullano, our Interim Chief Financial Officer, to walk through the

first quarter financial results in more detail. Chelsea.

Chelsea

Pullano

Interim

CFO, SurgePays

Thank

you, Brian, and good morning, everyone. Turning to our first quarter 2026 financial results. Revenue for the three months ended March

31st, 2026 was $16 million compared to $10.6 million in the prior year period, an increase of approximately 51% year-over-year. The growth

was driven primarily by an approximately 71% increase in our point-of-sale and prepaid services. General and administrative expenses

were approximately $3.5 million in the first quarter compared to approximately $4.6 million in the prior year period, a decrease of approximately

25%. This decline reflects the cost discipline we initiated in 2025 and which is now visible in the reported results. Loss from operations

was approximately $11.2 million in the first quarter compared to approximately $7.6 million in the prior year period.

This

change primarily reflects the mix of revenue growth against the current cost of revenue, along with increased interest expense and non-cash

items. Interest expense, including amortization of debt discount, was approximately $0.9 million in the first quarter compared to approximately

$0.1 million in the prior year period, reflecting the financing activity executed across the second half of 2025 and into 2026. Net loss

available to common stockholders for the first quarter was approximately $12.1 million or $0.51 per basic and diluted share, compared

to approximately $7.6 million or $0.38 per share in the prior year period. Turning to cash flow. Net cash used in operating activities

improved to approximately $4.6 million in the first quarter compared to approximately $7.0 million in the prior year period.

Net

cash provided by financing activities was approximately $5 million. Net change in cash equivalents and restricted cash was a + $0.4 million

for the quarter. On the balance sheet, cash and cash equivalents were approximately $2 million at March 31st, 2026, and total cash equivalents

and restricted cash were approximately $2.4 million at quarter end. With that, I will turn the call back over to Brian for closing remarks.

Brian

Cox

CEO,

SurgePays

Thank

you, Chelsea. Let me close with how I am thinking about the rest of the year. We expect continued revenue growth driven by our point

of sale and prepaid services, supported by the buy one get one wireless campaign and the wholesale distribution channel I described earlier.

The six new distribution partners we signed during the quarter, the three major, excuse me, master agents and three independent sales

organizations are onboarding now, with initial volume contribution expected in the second quarter and ramping through the back half of

the year as the master agent locations come online. We expect ongoing benefit on the general and administrative line from cost discipline

framework that we put in place in 2025, with G&A continuing to scale at a slower rate than revenue. We expect the customer acquisition

engine to keep compounding.

The

approximately 28% cost per lead reduction, approximately 48% cost per enrollment induction, and approximately 39% conversion lift we

delivered in the first quarter were not a one-time campaign. Those metrics reflect a permanent operational change in how we acquire and

convert customers. As ProgramBenefits.com matures as both an intake platform and a monetization layer, we expect that engine to keep

paying down its own acquisition costs. We expect our new monetization layers, including the stored value and loyalty platform and the

managed marketing services platform, to contribute incremental revenue streams as they mature through the balance of the year. On the

wholesale side, the HERO Wireless customer rollouts we have under contract are expected to begin during the second quarter, with wholesale

wireless revenue contribution anticipated to be reflected in third quarter 2026 results.

The

Alpha Modus joint pilot is underway with integration for full market launch. SurgePays today is no longer a single product story. We

are a fintech and mobile virtual network operator with multiple revenue channels, more than 200,000 wireless subscriber lines, a retail

footprint of more than 9,000 convenience store locations, a customer acquisition engine that we own and operate in-house, signed wholesale

wireless contracts on the HERO program, and a multi-year commercial integration framework with Alpha Modus. Every consumer we acquire

is now a multi-product opportunity rather than a single product transaction. That is the model we have built. Q1 2026 is the first quarter

where you can see it taking shape, and the operating work we did during the quarter is what makes the rest of the year actionable. Operator,

we are now ready to open the call for questions.

Operator

Thank

you. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please press star then one on your telephone

keypad. If you would like to withdraw your question, please press star then two. We will pause momentarily to assemble our roster. Thank

you. Our first question is coming from Ed Woo with Ascendiant Capital. Ed, your line is live.

Woo

Analyst,

Ascendiant Capital

Yeah.

Congratulations on the progress and for taking my question. Congratulations on getting to the 200,000 subscribers. What do you think

the long-term subscriber target is? You know, what is the market potential, and how happy would you be to reach a certain level?

Brian

Cox

CEO,

SurgePays

Hey,

thanks for the question, Ed. That’s a loaded question because unfortunately, with the psychotic entrepreneurial mindset that most

of the folks on our team have since we did come from this industry before the public company world, you know, the number is always more.

That is one thing. As far as, you know, being happy and content are two different things. I think we’ll be happy once we’ve

surpassed the 1 million subscriber mark. I think that’s just a subscriber mark that sets us apart and puts us in a special class

that we’ve been shooting for. We’ve worked with companies in that in that arena. As you know, we have the third-party top-up

platform.

We’re

familiar with those companies, familiar with the management of those companies, and believe that we are as good as those companies and

can pull that off, especially considering that, you know, we’re not just looking for subscribers under one prepaid brand or under

one subsidized brand. The fact that we can bring the wholesale piece as well, I think that you’re gonna be pretty intrigued to

see the numbers we can put up. One of the decisions we’ve made, you know, we learned last year that revenue for the sake of revenue

isn’t necessarily what the market’s looking for. Sometimes we’ve, you know, tried to do things to please the market

instead of sticking to our business plan.

You

know, that’s just part of, I guess, the wisdom of running a company and balancing the business of doing business versus the public

side of the business. I think what you’re gonna see is the fact that we pulled back and we said, “Hey, you know what? Instead

of just scaling for the sake of scaling, let’s reduce our costs, if not eliminate the cost to acquire customer. Let’s do

all this work now. Let’s effectively increase our margins. Let’s get this going to a point where we could scale. When we

do scale, we’ll get exponentially that much more customers where we can rinse and repeat with the profit from those customers and

get that 1 million number faster.” From an internal standpoint, Ed, 1 million is our number, and that would fall under the LinkUp

and Torch Wireless brands.

definitely wanna push far beyond that. We see what’s out there, we see the opportunities. Interestingly enough, with the subprime

market continuing to grow, you know, it’s $138 million, you know, as of a brief that we’ve got on file last year. You know,

we feel like we can definitely go after a number that far exceeds that $1 million.

Woo

Analyst,

Ascendiant Capital

Great.

Going back to, you know, you mentioned about the subprime market seems to be, you know, growing, you know, in this K-shaped economy.

What are you hearing from, you know, the convenience store owners or the, you know, people that do business with them? Are they able

to benefit from, you know, I hate to say it, but the poor expanding or are people, you know, just being hurt all over?

Brian

Cox

CEO,

SurgePays

Let

me take a step back and let me use some of my. You know, we’ve been working inside the prepaid and subsidized market for over 20

years. Our best runs as a collection of former operators that are now working under one banner, our best runs as companies, as entrepreneurs,

have always been at times when it’s been most difficult financially. I think that’s for two reasons. Number one, if you provide

a service that offers a value, then in a situation where there’s too much month, not enough check, I think that’s where you

can, you know, you can box out and gain ground.

Number

two, in that same situation where it’s too much month, not enough check, I think people stop going through the motions of the ruts

in the road of their daily life, and they open their eyes a little bit wider for opportunities to save money. You know, for example,

you may have someone wait in line for 20 minutes to save $0.10 on gas. Well, I mean, instead of just paying my prepaid wireless bill

that I’ve done for the past year and a half without even thinking, and I’m gonna put $50 on the counter. Well, I just saw

this poster.

just saw you got a smart TV over there by the coffee machine that says you guys have a $30 plan that. I know that that encompasses what

I use, and I can save $20 a month, and that means something to me when I’m working an hourly job. That’s where I think that

the benefit comes in. Obviously, these convenience store owners, you know, the convenience stores nowadays in our the community markets

that we work with, one of the reasons I love working with these people is they are the financial, the transaction nucleus of these communities.

You know, they’re definitely gonna have a beat on what’s going on in the neighborhood.

For

them to be able to offer value, look, that’s that much more money that consumer is still gonna spend inside that store, but they

can buy other products as well.

Woo

Analyst,

Ascendiant Capital

Great.

Well, thanks for giving me that color, and I do wish you guys good luck. Thank you.

Brian

Cox

CEO,

SurgePays

Thanks,

Ed.

Operator

Thank

you. Once again, ladies and gentlemen, if you do have a question, please press star one on your telephone keypad. Okay. It looks like

we currently have no further questions on the lines at this time, so this will conclude our question and answer session and also our

call. You may disconnect your lines at this time. Have a wonderful day, and we thank you for your participation.

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