Surgepays (SURG) Status Update summary

Market overview and business model

• Targets the U.S. prepaid wireless market, serving about a third of the country, focusing on blue-collar and government-subsidized demographics.

• Operates through 9,000 community-based retail points, aiming to expand to over 100,000 locations.

• Utilizes a point-of-sale platform in local stores to distribute prepaid wireless, subsidized wireless, and payment services.

• Recently became an MVNO through a direct contract with AT&T, enabling multiple revenue channels.

• U.S. MVNO market projected to grow from $30 billion in 2024 to nearly $53 billion in eight years.

Growth initiatives and revenue channels

• Three main revenue channels: prepaid (LinkUp), government-subsidized (Torch Wireless/Lifeline), and wholesale to other wireless companies.

• Lifeline program, refocused after ACP funding ceased, is scaling faster than previous programs.

• Wholesale channel allows integration with other MVNOs, including competitors, leveraging the AT&T contract.

• Five growth channels now operate in parallel, reducing reliance on any single revenue stream.

• All channels use the same distribution mechanism, enabling synergistic and siloed growth.

Financial outlook and guidance

• Confident in revenue guidance due to a highly experienced team with a track record of multi-billion dollar prepaid revenue.

• Expects to be cash flow positive by the end of 2025, with projections to surpass previous best months by end of Q1 next year.

• Lifeline subscriber growth currently outpaces previous ACP scaling, with 1,200–1,800 new subscribers daily.

• Achieving 100,000 subscribers in key states will result in cash flow positivity for that subsidiary.

• Exponential growth observed in Q2, with further acceleration anticipated in Q3.