Good afternoon, everyone, and welcome to today's SurgePays Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants will be in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Also, today's call is being recorded, and I will be standing by should anyone need any assistance. And now at this time, I'll turn things over to Mr. Quinn Callanan, Investor Relations. Quinn, please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to the SurgePays' fourth quarter and full year 2023 earnings webcast and conference call. Today's date is March 12, 2024. And on the call today from SurgePays are Brian Cox, President and Chief Executive Officer; 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 a discussion of such risks and uncertainties, please see SurgePays' 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. Also during the course of today's call, the company will be discussing one or more non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in the press release we issued this afternoon. Copies of today's press release are accessible on SurgePays' Investor Relations website. In addition to this, SurgePays' Form 10-K for the year ended December 31, 2023, will also be available on SurgePays' Investor Relations website. And now, I'd like to turn the call over to President and Chief Executive Officer, Brian Cox.

Thanks, Quinn. I want to start off by thanking all of our shareholders, especially our long-term shareholders and recent investors for your patience while watching our business model evolve. I believe our management team has done an outstanding job executing our growth strategy and delivering record financial results. Simultaneously, our stock has been pushing record highs recently, and we want that trend to continue. We're in the best financial position ever with over $40 million in cash, and I'll explain more about that later. Now for our results. Our core mission 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 underbanked do most of their financial transactions at the trusted local convenience store closest to their home. We believe we are making tremendous strides on this front, and I think the numbers primarily speak for themselves. 2023 was the most profitable year in the company's history, delivering our highest ever net income of $20.6 million and EBITDA of $22.3 million. Revenue for the year was $137.1 million, the highest we've seen as a company. Gross profit increased to $35.6 million, also the highest we've seen as a company. Our cash flow from operations is in the black for the first time. Profitability was a focus for the company with the most significant catalyst being the increase in our ACP subscribers and the reduced enrollment costs paid on ACP subscribers as we move transactions away from the tent and into brick-and-mortar stores. Early in 2023, we pulled down about $19 million from an inventory line of credit. As we forecasted, we utilized internally generated cash flows to pay off the line by year's end. Looking a bit more deeply at what we did in 2023, we transitioned our sales force from parking lot sales to online and in-store during the year. We've touched on this in prior calls, but the economics of running sales online or through the store counter are so compelling that the short-term growth slowdown during the transition period made it well worth it. We signed an agreement with Clearline Mobile toward the end of 2023 and ultimately acquired their technology in early 2024. We integrated our SurgePays platform with the customer-facing touchscreen tablets next to the register in convenience stores and are actively working to get these point-of-sale devices in all of our transacting stores on the network. This will enable real-time marketing of our products and services to customers as they check out, and our servers control this marketing remotely. Touchscreen equipment at the register opens several verticals our development team is already pursuing. We feel this technology, combined with the launch of Linkup Mobile, our own prepaid wireless company, will give us such a competitive advantage that we're separating from the pack of competitors in terms of our suite of products and services, aggressive growth strategy, and support team. Our focus is now on building in-house and indirect sales channels and distribution. We made some key hires during the year. Just outside of 2023, we introduced Jeremy Gies, who at the time was tasked with focusing on our prepaid fintech platform. Jeremy is now fully integrated with the team and was promoted to President of SurgePays. Jeremy's contributions in 2023 have laid the groundwork for future growth. We hired Gary Chekan as Head of Revenue Assurance and Financial Technology. Since joining SurgePays, Gary has been leveraging his extensive telecom background to prepare the runway for our Linkup Mobile business, SurgePays' next big step. Additions like these, implemented during 2023 and after, planted the seeds for profitable growth in 2024. As we continue building our team, we are focusing on direct and indirect sales leaders. We are constantly evaluating new opportunities to ensure they fit our strategic approach. We entered the year with a strong balance sheet and improved cash balance of over $14.6 million and minimal debt. We have since bolstered the balance sheet further through a successful equity raise of $15 million in January, which included some fantastic new institutional investors. We have also been happy to see warrants from our previous raise in 2021 being exercised, which adds to our cash balance of over $40 million in the bank. 2023 indeed compares well to 2022, when we lost $0.7 million on the bottom line and had minimal cash on hand. SurgePays has achieved tremendous profitability, which afforded the company opportunities and a war chest to maximize those opportunities. I'll now turn the call over to Tony to review our financial results before summarizing today's call. Tony?

Thank you, Brian, and good afternoon, everyone. I'll begin my overview of the fourth quarter and full year 2023 financial results. For the year, we reported revenues of $137.1 million compared to $121.5 million in 2022, representing an increase of 11%. The increase was primarily due to revenues related to providing mobile broadband and wireless service to low-income subscribers through the ACP, which increased 34% to $118.6 million in 2023. Revenue for the quarter totaled $32.3 million compared to $36.2 million in the fourth quarter of 2022. Gross profit increased 165% in the year to $35.6 million compared to $21.6 million in the year-ago period. During the fourth quarter of 2023, gross profit increased 14% to $7.4 million compared to $6.5 million in the year-ago period. Fourth quarter gross margin also showed improvement up to 23.0% versus 18.1% in the fourth quarter of last year. SG&A expenses increased by 30.7% year-over-year. The increase was primarily driven by compensation expenses, as Brian has talked about the additional hires we had in 2023, and contractor and consultant fees over the course of the year. Income from operations was positive for the year at $18.9 million compared to a gain of $0.6 million in the year-ago period. Net income for the year was $20.6 million or $1.39 per share compared to a net loss of $0.7 million or a loss of $0.05 per share in 2022. Of the $20.6 million in net income, the year included much lower interest expense than the year-ago period and included a $110,000 gain on investment in CenterCom. Turning to the balance sheet, liquidity, and cash flow. Our cash balance as of December 31 was $14.6 million compared to $7 million at year-end 2022. Accounts receivable have increased by $306,000 from year-end 2022 to $9.5 million. Receivables from the U.S. government for the mobile broadband subsidy; payment usually occurs approximately 30 to 60 days after a new customer is verified and signed up. Subsequent to the year-end, our secondary offering raised approximately $15 million in cash, and $8.6 million came in from the exercising of warrants since January 1. Given our strengthened financial position, cash balance, and capital structure, our cash allocation priorities focus on investing in the business and maintaining ample liquidity for future growth. I'll now pass the call back to Brian for closing remarks.

Thanks, Tony. We believe SurgePays is now on solid financial footing with a significant cash balance, consistent earnings, and growth. This disposition, contrasted by some economic uncertainty in our market and country, has made SurgePays an attractive destination for some of the best sales talent in the industry. We are adding in-house and indirect salespeople monthly. These folks bring networks of sales opportunities and relationships with them. We believe we are poised to create one of the country's largest direct distribution networks of underbanked products and services, and a vast market with tremendous opportunity and growth awaits. I look to increase revenue growth through organic sales key hires, and as opportunities arise, complementary acquisitions that are synergistic and accretive to our business model. Our track record shows we maximize management effectiveness and can make difficult decisions that produce results and deliver positive cash flow. Our interests are aligned with our shareholders. Thank you so much for your time today. We will now open up the call to questions.

Thank you, Mr. Cox. We'll go first this afternoon to Curtis Shauger of Water Tower Research.

Yeah. Hi, guys. Thanks for taking my call. First of all, great finish to the year. Some interesting points there. It looks like the wireless business finished at $30 million for the quarter, which is trending down I guess in light of the ACP. It seems like a pretty good controlled trajectory there. In light of the stop taking new customers, what can you say about the Clearline Mobile launch that could give investors some encouragement that we can see a smooth transition from ACP to the more traditional wireless business in the event that ACP delays or we continue to see funding issues with the government?

Hi, Curtis. Thanks for the question. Yeah, those are things that my team meets daily and goes over. We definitely have an all-hands-on-deck approach right now. When you don't know what your lineup is going to be for game time in respect to ACP, you have to have contingencies and audibles on hand. So, we definitely have all of these factored in. One of the things that we've been focused heavily on, as we've spoken of before, is Linkup Mobile and utilizing our buying power because of what ACP has allowed us to achieve to offer a competitive brand through the convenience store where folks are shopping, and closest to where they live, that would be significantly lower than any of the other competition out there. The reason is because of our ability to take payments for ourselves, essentially. Every other wireless company utilizes a third party to process payments. We're one of the only companies out there that we know of, actually, we're the only company that is a wireless company and is a fintech transaction company. So, where Clearline comes in, Clearline, the customer-facing tablets at the register, point-of-sale register, just imagine those eight-inch full-color moving ads constantly promoting our products. When you have the volume of foot traffic in convenience stores, and nine times out of ten, every customer that comes into these targeted community convenience stores are likely to be prepaid wireless customers. Again, there's over 100 million of them out there. That opportunity to offer people a chance to save money on their wireless bills and then offering that store owner, it's usually an owner-operator behind the register, an opportunity to make transactional profit off of that customer coming back in every month is pretty astounding. So, where Clearline comes in handy again is the ability to promote those products, to be able to change our ads constantly, putting different rotators in. And then, as we bring in other products to the stores, as we're always looking for other high-margin products that would cater to the same demographic, that's where we feel like the Clearline piece will be the strongest. And look, we're — I think we touched on it. Deploying these, we've got a whole subset of our support reps right now that are actively calling our existing stores, our legacy stores, and I got a — I call it, the rekindle and retrofit. Reengage the store, remind them who we are, remind them of the products that we have to offer them, and then let's get the Clearline point-of-sale out to the store. We don't charge the store for that. We want that to be out in the store. That's free marketing constantly for us. And well, for example, I made a quick call before I hopped on today's call, and we've already shipped out 14, which is a great day today, of stores that wanted — they're hungry for more revenue, especially where they don't have to come out of pocket for consumable goods that sit on the shelf. So, we're finding our stores very receptive, it's being adopted well, and we look forward to that continuing. And in case there is a little downturn in ACP — we're very hopeful, but if there is a downturn, we can position all of those resources currently being used to sell and support ACP to go full throttle with Linkup Mobile and getting the Clearline POS out to our stores.

Excellent. Thank you.

Thank you. We go next now to Ed Woo of Ascendiant Capital.

Yeah, congratulations on your performance in 2023. My question is more on the macro issues. Like you said, it seems like the economy is really rough at the lower end of the economic ladder. How is that helping or hurting your business and your customers, those stores that have to touch bases with these customers?

Yeah, Ed, thank you for the question. I'm going to answer your question and use a little bit different phrasing than what you used. It's motivating to us because we know that our market doesn't necessarily benefit from upturns but takes a little bit of a beating in downturns. Some of the most receptive times that people are to making a change for their wireless provider or changing any habits they may have is when they are struggling a little bit. So, if we offer products and services to this community, this group, that's almost a third of our country now, where they can save money, and not only save money, but it's convenient for them to pay, whether it's the closest store to their home, where they don't have to go out of their way or go to a bill payment center. We look to check all the boxes for the reasons, number one, where we can obtain the customer, and then number two, how we can secure them as a long-term customer. And it's usually a couple of things. Number one is price. Number two is proximity for payment. And then, number three, support. And as we've talked about before, I take a tremendous amount of pride in our support center with over 120 people working there to ensure that we offer first-class support to our customers. When you look at it from that perspective, let me throw in a little bit of a curveball — it's not just our customer base, the target customer base. Remember, we have a unique business model where we serve clients, the store, to ultimately obtain customers who visit the store. So, the store owners who are getting squeezed by interest rates for the lines of credit for the goods on our shelf and have already maxed out their stores floor to ceiling, being able to offer these stores a fantastic way to help make more bottom-line money in this type of environment, now they're listening. We have our product suite put together now in a really compelling offering. Our sales teams, I believe we've got booths at four conventions that cater to convenience stores just in April alone, so we're on the outbound. The reception that our folks are getting is fantastic. There's definitely an openness. People are hungry. These business owners are eager to bring these products in. Number one, they know that they will sell. And number two, everybody wins off of it. So, it's been a really good deal. I always want to stress. I never pray or hope for tough financial conditions — nobody does. But when they do hit, companies like us that cater to, and thrive from serving this group of people usually do really well.

Very well. Thank you for answering my questions, and I wish you guys good luck. Thank you.

Thanks for the question, Ed.

We'll go next now to Andrew Scott with SLS Group.

Hey, Brian, congratulations to you and your team on a great year. You guys have come a long way. I'm watching the stock trading in the aftermarket. It's a little bit of a head scratcher, but I guess everybody's got something to do. Can you just go over again, I think I heard the number right, how much cash do you guys carry right now? And what do you have any ideas on what you plan on doing with it? It sounds like you have a lot of options with that much cash.

Hey, Andrew. Thanks for the question. Yeah, we do have options because of the cash, and that cash is cumulative of us compounding profit month over month in addition to the — again the raise that we talked about that we did with Titan in January. And then, we've had just shy of $2 million warrants from our 2021 raise to get to NASDAQ. We've had just $2 million shy warrants exercised over the past couple of months. So that's ultimately led us to having over $40 million in cash. And really from a strategic standpoint, I'm never going to say that we're sitting on the sidelines, but we're in a little bit of — we're watching what's going on in Washington, as Congress — the funding for ACP has gotten stuck behind a lot of, I guess, you could call it more important global items that the folks in Washington are debating. Our consultants and our legal folks up in that neck of the woods are all giving us a good vibes' thumbs up. But I don't want to fully take a step in a direction assuming anything. So, we obviously have our contingency plans put together, maybe let's just touch on a couple of those. If ACP gets funded, like we hope and expect, we're going to push pretty hard in the ACP arena and utilize the profits from that to really focus on growing our core business model, the fintech platform and convenience stores, and pushing out our MVNO prepaid wireless company, Linkup. So that's really — it's pretty simple at a high level. If it doesn't, we know that there are profitable accretive businesses out there that we could take and plug them into our distribution mechanism and definitely get a lot more output from some of the companies that are product companies that depend on third parties to sell their products, being able to push that through our distribution network and control our output, we think would be extremely profitable for us. But right now, we're going to wait and see over the next couple of weeks, see how things shake out. I kind of wish this call was 30 days later — it would have given me a little bit more, at least see the army man on the table that we're dealing with. But that is the strategy that we're taking. But either way, look, we're still — we're constantly adding salespeople. We're constantly adding sales development folks, independent — they're called ISOs in our industry, independent sales organizations, very similar to the credit card merchant account companies that go door to door selling merchant accounts in the same ISO model. And we're also adding in-house salespeople that are bringing networks with them. So, the feedback we're getting from conventions is great. The feedback we're getting from a lot of salespeople who work for competitors that are looking for something different has been great. So, we're going to stay on this. We're going to stay on this.

Great job. Yeah, you got a lot of options. Great job to you and your team. Thank you, Brian.

Thanks for the question, Andrew.

And ladies and gentlemen, that is all the time we have for questions this afternoon. So that will bring us to the conclusion of today's conference call. Again, we'd like to thank you all so much for joining us this afternoon and wish you all a great evening. Goodbye.