Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 08, 2024 | Jun. 30, 2023 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-40992 | ||
Entity Registrant Name | SURGEPAYS, INC. | ||
Entity Central Index Key | 0001392694 | ||
Entity Tax Identification Number | 98-0550352 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 3124 Brother Blvd | ||
Entity Address, Address Line Two | Suite 104 | ||
Entity Address, City or Town | Bartlett | ||
Entity Address, State or Province | TN | ||
Entity Address, Postal Zip Code | 38133 | ||
City Area Code | 901 | ||
Local Phone Number | 302-9587 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 62,587,072 | ||
Entity Common Stock, Shares Outstanding | 19,290,799 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 910 | ||
Auditor Name | Rodefer Moss & Co, PLLC | ||
Auditor Location | Johnson City, Tennessee | ||
Common Stock [Member] | |||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | SURG | ||
Security Exchange Name | NASDAQ | ||
Common Stock Purchase Warrants [Member] | |||
Title of 12(b) Security | Common Stock Purchase Warrants | ||
Trading Symbol | SURGW | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash | $ 14,622,060 | $ 7,035,654 |
Accounts receivable - net | 9,536,074 | 9,230,365 |
Inventory | 9,046,594 | 11,186,242 |
Prepaids and other | 161,933 | 111,524 |
Total Current Assets | 33,366,661 | 27,563,785 |
Property and equipment - net | 361,841 | 643,373 |
Other Assets | ||
Note receivable | 176,851 | 176,851 |
Intangibles - net | 2,126,470 | 2,779,977 |
Internal use software development costs - net | 539,424 | 387,180 |
Goodwill | 1,666,782 | 1,666,782 |
Investment in CenterCom | 464,409 | 354,206 |
Operating lease - right of use asset - net | 387,869 | 431,352 |
Deferred income taxes - net | 2,835,000 | |
Total Other Assets | 8,196,805 | 5,796,348 |
Total Assets | 41,925,307 | 34,003,506 |
Current Liabilities | ||
Accrued income taxes payable | 570,000 | |
Installment sale liability | 13,018,184 | |
Deferred revenue | 20,000 | 243,110 |
Operating lease liability | 43,137 | 39,490 |
Total Current Liabilities | 12,705,044 | 23,464,062 |
Long Term Liabilities | ||
Operating lease liability | 356,276 | 399,413 |
Total Long-Term Liabilities | 816,799 | 5,421,191 |
Total Liabilities | 13,521,843 | 28,885,253 |
Stockholders’ Equity | ||
Common stock, $0.001 par value, 500,000,000 shares authorized 14,403,261 and 14,116,832 shares issued and outstanding, respectively | 14,404 | 14,117 |
Additional paid-in capital | 43,421,019 | 40,780,707 |
Accumulated deficit | (15,186,203) | (35,804,106) |
Stockholders’ equity | 28,249,220 | 4,990,718 |
Non-controlling interest | 154,244 | 127,535 |
Total Stockholders’ Equity | 28,403,464 | 5,118,253 |
Total Liabilities and Stockholders’ Equity | 41,925,307 | 34,003,506 |
Nonrelated Party [Member] | ||
Current Liabilities | ||
Accounts payable and accrued expenses - related party | 6,439,120 | 5,784,374 |
Notes payable | 1,542,033 | |
Long Term Liabilities | ||
Notes payable - SBA government | 53,134 | |
Related Party [Member] | ||
Current Liabilities | ||
Accounts payable and accrued expenses - related party | 1,048,224 | 1,728,721 |
Notes payable | 4,584,563 | 1,108,150 |
Long Term Liabilities | ||
Notes payable - SBA government | 4,493,798 | |
SBA Government [Member] | ||
Long Term Liabilities | ||
Notes payable - SBA government | $ 460,523 | $ 474,846 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 14,403,261 | 14,116,832 |
Common stock, shares outstanding | 14,403,261 | 14,116,832 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 137,141,832 | $ 121,544,190 |
Costs and expenses | ||
Cost of revenues | 101,499,341 | 108,074,782 |
General and administrative expenses | 16,777,107 | 12,835,623 |
Total costs and expenses | 118,276,448 | 120,910,405 |
Income from operations | 18,865,384 | 633,785 |
Other income (expense) | ||
Interest expense | (595,975) | (1,843,396) |
Gain (loss) on investment in CenterCom | 110,203 | (89,082) |
Amortization of debt discount | (115,404) | |
Gain on forgiveness of PPP loan - government | 524,143 | |
Other income | 336,726 | |
Total other income (expense) - net | (485,772) | (1,187,013) |
Net income (loss) before provision for income taxes | 18,379,612 | (553,228) |
Provision for income tax benefit (expense) | 2,265,000 | |
Net income (loss) including non-controlling interest | 20,644,612 | (553,228) |
Non-controlling interest | 26,709 | 127,535 |
Net income (loss) available to common stockholders | $ 20,617,903 | $ (680,763) |
Earnings (loss) per share - attributable to common stockholders | ||
Basic | $ 1.45 | $ (0.05) |
Diluted | $ 1.38 | $ (0.05) |
Weighted average number of shares outstanding - attributable to common stockholders | ||
Basic | 14,258,172 | 12,395,364 |
Diluted | 14,922,881 | 12,395,364 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Preferred Stock [Member] Series A Preferred Stock [Member] | Preferred Stock [Member] Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2021 | $ 260 | $ 12,064 | $ 38,662,340 | $ (35,123,343) | $ 3,551,321 | ||
Balance, shares at Dec. 31, 2021 | 260,000 | 12,063,834 | |||||
Stock issued for services | $ 50 | 103,450 | $ 103,500 | ||||
Stock issued for services, shares | 50,000 | 200,000 | |||||
Recognition of stock-based compensation - stock options | 37,176 | $ 37,176 | |||||
Exercise of warrants | 473 | 473 | |||||
Exercise of warrants, shares | 100 | ||||||
Net income (loss) | (680,763) | (680,763) | |||||
Conversion of preferred stock to common stock - related parties | $ (260) | $ 1,300 | (1,040) | ||||
Conversion of preferred stock to common stock - related parties, shares | (260,000) | 1,300,000 | |||||
Conversion of debt into common stock - related party | $ 271 | 1,086,142 | 1,086,413 | ||||
Conversion of debt into common stock - related party, shares | 270,745 | ||||||
Stock issued as direct offering costs | $ 200 | (200) | |||||
Stock issued as direct offering costs, shares | 200,000 | ||||||
Stock issued to purchase software | $ 85 | 411,315 | $ 411,400 | ||||
Stock issued to purchase software, shares | 85,000 | 85,000 | |||||
Warrants issued as debt issue costs | 115,404 | $ 115,404 | |||||
Warrants issued as interest expense | 365,794 | 365,794 | |||||
Exercise of warrants (cashless) | $ 147 | (147) | |||||
Exercise of warrants (cashless), shares | 147,153 | ||||||
Non-controlling interest | 127,535 | 127,535 | |||||
Balance at Dec. 31, 2022 | $ 14,117 | 40,780,707 | (35,804,106) | 127,535 | 5,118,253 | ||
Ending balance, shares at Dec. 31, 2022 | 14,116,832 | ||||||
Stock issued for services | $ 243 | 1,289,781 | $ 1,290,024 | ||||
Stock issued for services, shares | 242,615 | 242,615 | |||||
Recognition of stock-based compensation - unvested shares - related parties | 529,534 | $ 529,534 | |||||
Recognition of stock-based compensation - stock options | 576,625 | 576,625 | |||||
Recognition of stock-based compensation - stock options - related party | 37,176 | 37,176 | |||||
Exercise of warrants | $ 44 | 207,196 | 207,240 | ||||
Exercise of warrants, shares | 43,814 | ||||||
Non-controlling interest | 26,709 | 26,709 | |||||
Net income (loss) | 20,617,903 | 20,617,903 | |||||
Non-controlling interest | 26,709 | ||||||
Balance at Dec. 31, 2023 | $ 14,404 | $ 43,421,019 | $ (15,186,203) | $ 154,244 | $ 28,403,464 | ||
Ending balance, shares at Dec. 31, 2023 | 14,403,261 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating activities | ||
Net income (loss) - including non-controlling interest | $ 20,644,612 | $ (553,228) |
Adjustments to reconcile net income (loss) to net cash provided by operations | ||
Bad debt expense (recovery) | 90,009 | (59,485) |
Provision for inventory obsolescence | 51,718 | |
Depreciation and amortization | 935,039 | 933,384 |
Amortization of right-of-use assets | 43,483 | 55,316 |
Amortization of debt discount/debt issue costs | 115,404 | |
Amortization of internal use software development costs | 129,060 | |
Stock issued for services | 1,290,024 | 103,500 |
Recognition of stock-based compensation - unvested shares - related parties | 529,534 | |
Warrants issued for interest expense | 365,794 | |
(Gain) loss on equity method investment - CenterCom | (110,203) | 89,082 |
Gain on forgiveness of PPP loan | (524,143) | |
(Increase) decrease in | ||
Accounts receivable | (395,718) | (5,920,991) |
Inventory | 2,139,648 | (6,878,664) |
Prepaids | (50,409) | (111,524) |
Deferred income taxes - net | (2,835,000) | |
Increase (decrease) in | ||
Accrued income taxes payable | 570,000 | |
Installment sale liability - net | (13,018,184) | 13,018,184 |
Deferred revenue | (223,110) | (33,140) |
Operating lease liability | (39,490) | (49,352) |
Net cash provided by operating activities | 10,287,345 | 793,272 |
Investing activities | ||
Purchase of property and equipment | (11,402) | |
Capitalized internal use software development costs | (281,304) | (387,180) |
Purchase of software | (300,000) | |
Acquisition of Torch, Inc. | (800,000) | |
Net cash used in investing activities | (281,304) | (1,498,582) |
Financing activities | ||
Proceeds from exercise of common stock warrants | 207,240 | 473 |
Repayments of loans - related party | (1,017,385) | |
Proceeds from notes payable | 6,700,000 | |
Repayments on notes payable | (1,595,167) | (5,231,251) |
Repayments on notes payable - SBA government | (14,323) | (11,754) |
Net cash provided (used in) by financing activities | (2,419,635) | 1,457,468 |
Net increase in cash | 7,586,406 | 752,158 |
Cash - beginning of year | 7,035,654 | 6,283,496 |
Cash - end of year | 14,622,060 | 7,035,654 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 222,326 | 523,005 |
Cash paid for income tax | ||
Supplemental disclosure of non-cash investing and financing activities | ||
Debt issue costs recorded in connection with notes payable | 115,404 | |
Stock issued to acquire software | 411,400 | |
Nonrelated Party [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by operations | ||
Recognition of share-based compensation - options | 576,625 | |
Increase (decrease) in | ||
Accounts payable and accrued expenses | 654,746 | (812,227) |
Related Party [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by operations | ||
Recognition of share based compensation - options | 37,176 | 37,176 |
Increase (decrease) in | ||
Accounts payable and accrued expenses | $ (680,497) | $ 966,468 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Note 1 - Organization and Nature of Operations Organization and Nature of Operations SurgePays, Inc. (“SurgePays,” “SP,” “we,” “our” or “the Company”), and its operating subsidiaries, is a technology-driven company building a next generation supply chain software platform that can offer wholesale goods and services more cost efficiently than traditional and existing wholesale distribution models. The parent (SurgePays, Inc.) and subsidiaries are organized as follows: Schedule of Subsidiaries Company Name Incorporation Date State of Incorporation SurgePays, Inc August 18, 2006 Nevada KSIX Media, Inc November 5, 2014 Nevada KSIX, LLC September 14, 2011 Nevada Surge Blockchain, LLC January 29, 2009 Nevada Injury Survey, LLC July 28, 2020 Nevada DigitizeIQ, LLC July 23, 2014 Illinois LogicsIQ, Inc October 2, 2018 Nevada Surge Payments, LLC December 17, 2018 Nevada SurgePhone Wireless, LLC August 29, 2019 Nevada SurgePays Fintech, Inc August 22, 2019 Nevada ECS Prepaid, LLC June 9, 2009 Missouri Central States Legal Services, Inc August 1, 2003 Missouri Electronic Check Services, Inc May 19, 1999 Missouri Torch Wireless January 29, 2019 Wyoming * Effective January 1, 2022, the Company acquired Torch Wireless Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements (“U.S. GAAP”). Liquidity and Management’s Plans As reflected in the accompanying consolidated financial statements, for the year ended December 31, 2023, the Company had: ● Net income available to common stockholders of $ 20,617,903 ● Net cash provided by operations was $ 10,287,345 Additionally, at December 31, 2023, the Company had: ● Accumulated deficit of $ 15,186,203 ● Stockholders’ equity of $ 28,403,464 ● Working capital of $ 20,661,617 We manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company has cash on hand of $ 14,622,060 The Company has historically incurred significant losses and has not, prior to 2023, demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations. There can be no assurance that profitable operations will continue to be sustained on a continuing basis. In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the twelve months ended December 31, 2024, and our current capital structure including equity-based instruments and our obligations and debts. The Company believes it has sufficient cash resources on hand along with access to additional debt and/or equity-based capital from third parties and related parties as needed to meet its current obligations for a period that is one year from the issuance date of these financial statements. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Management’s strategic plans include the following: ● Sustain our growth of the Affordable Connectivity Program revenue stream, ● Expand product and services offerings to a larger surrounding geographic area, ● Continuing to explore and execute prospective partnering or distribution opportunities; and ● Identifying unique market opportunities that represent potential positive short-term cash flow. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of Consolidation and Non-Controlling Interest These consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. For entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other than the Company. The aggregate of the income or loss and corresponding equity that is not owned by us is included in Non-controlling Interests in the consolidated financial statements. Business Combinations The Company accounts for business acquisitions using the acquisition method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed. Significant judgments are used in determining fair values of assets acquired and liabilities assumed, as well as intangibles. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows, and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company’s current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to fair values of assets and liabilities made after the end of the measurement period are recorded within the Company’s operating results. Effective January 1, 2022, the Company executed a management agreement with Torch Wireless (“Torch” or “TW”). Generally, the Company was engaged to handle the following services: ● Oversee management of the business being conducted by Torch, ● Involved in the performance of Torch’s obligations under contracts regarding its business operations and maintenance of Torch’s customer relationships, ● Assist Torch with regulatory compliance, ● Manage all billing and collection functions, including the right to collect revenues related to Torch’s business operations, as part of the agreement, Torch may not participate in this function; and ● Manage all payment functions related to the business, including the right to disburse funds, as part of the agreement, Torch may not participate in this function SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Torch is a provider of subsidized mobile broadband services to consumers qualifying under the federal guidelines of the U.S. Federal Communication Commission’s Affordable Connectivity Program (“ACP”). The ACP provides the Company with up to a $ 100 30 It was determined that the Company had acquired 100 At the time of acquisition, Torch had no significant assets or liabilities. The Company paid $ 800,000 800,000 At the time of acquisition, Torch had nominal revenues and losses. As a result, and given the immaterial nature of this acquisition, the Company elected not to present any pro-forma financial information during the year ended December 31, 2022. In addition, the Company was required to pay the Sellers monthly residual payments for customers enrolled by the Company through December 31, 2022 of either $ 2 3 For the years ended December 31, 2023 and 2022, the Company incurred expenses of $ 0 1,679,723 This transaction did not involve the purchase of a “significant amount of assets” as defined in the Instructions to Item 2.01 of Form 8-K. Additionally, the acquisition of Torch was not deemed to be significant at any level under SEC Regulation S-X 3.05 and did not require the presentation of any additional historical audited financial statements. For financial reporting purposes, Torch has been consolidated into the Company’s consolidated statements of financial position, results of operations, and cash flows. At December 31, 2023 and December 31, 2022 goodwill was $ 1,666,782 There were no Note Receivable (Sale of Former Subsidiary) On May 7, 2021, the Company disposed of its subsidiary True Wireless, Inc. In connection with the sale, the Company received an unsecured note receivable for $ 176,851 0.6 10 7,461 Payments are scheduled as follows: Schedule of Receivables For the Year Ended December 31, 2024 $ 141,759 ** 2025 44,766 186,525 Less: amount representing interest (9,674 ) Total $ 176,851 On July 12, 2023, Notice of Default was provided by SurgePays, Inc. to Blue Skies Connections, LLC for failure to pay amounts due under that certain Promissory Note dated June 14, 2021 by Blue Skies Connections, LLC in favor of SurgePays, Inc. in the original principal amount of $ 176,851 See Note 8 for Contingencies – Legal Matters for additional discussion. ** 52,227 As of December 31, 2023, the Company believes the note is collectible. Business Segments and Concentrations The Company uses the “management approach” to identify its reportable segments. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. The Company manages its business as multiple reportable segments. See Note 10 regarding segment disclosure. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 The Mobile Virtual Network Operators consisting of SurgePhone Wireless and Torch Wireless business segment made up approximately 86 73 Revenues related to this business segment are 100 Accounts receivable related to these programs made up 97 96 Customers in the United States accounted for 100 Use of Estimates Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material. Significant estimates during the years ended December 31, 2023 and 2022, respectively, include, allowance for doubtful accounts and other receivables, inventory reserves and classifications, valuation of loss contingencies, valuation of stock-based compensation, estimated useful lives related to intangible assets, capitalized internal-use software development costs, and property and equipment, implicit interest rate in right-of-use operating leases, uncertain tax positions, income tax payable and the valuation allowance on deferred tax assets. Risks and Uncertainties The Company operates in an industry that is subject to intense competition and changes in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. The Company has experienced, and in the future may experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. Effective February 7, 2024, the Affordable Connectivity Program (“ACP”) stopped accepting new applications and enrollments. The program will cease to be funded after April 2024. The Company believes that the program will be funded by Congress, however, at this time, we cannot predict any outcome. See discussion below regarding revenue recognition. Fair Value of Financial Instruments The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: ● Level 1 – Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 – Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and ● Level 3 – Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate. Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. The Company’s financial instruments, including cash, accounts receivable, note receivable, accounts payable and accrued expenses, and accounts payable and accrued expenses – related party, are carried at historical cost. At December 31, 2023 and 2022, respectively, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. ASC 825-10 “Financial Instruments” Cash and Cash Equivalents and Concentration of Credit Risk For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At December 31, 2023 and 2022, respectively, the Company did not have any cash equivalents. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $ 250,000 At December 31, 2023 and 2022, respectively, the Company did not experience any losses on cash balances in excess of FDIC insured limits. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made. Allowance for doubtful accounts was $ 17,525 There was bad debt expense of $ 90,009 0 Bad debt expense (recoveries) is recorded as a component of general and administrative expenses in the accompanying consolidated statements of operations. Inventory Inventory primarily consists of tablets, cell phones and sim cards. Inventories are stated at the lower of cost or net realizable value using the average cost valuation method. There was a provision for inventory obsolescence of $ 0 51,718 During 2023, management determined that $ 2,411,445 At December 31, 2023 and 2022, the Company had inventory of $ 9,046,594 11,186,242 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Impairment of Long-lived Assets including Internal Use Capitalized Software Costs Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets.” If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. There were no Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management reviews the carrying value of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. There were no Internal Use Software Development Costs We capitalize certain internal use software development costs associated with creating and enhancing internally developed software related to our technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not meet the qualification for capitalization, as further discussed below, are expensed as incurred and recorded in general and administrative expenses in the consolidated results of operations. Software development activities generally consist of three stages: (i) planning stage, (ii) application and infrastructure development stage, and (iii) post implementation stage. Costs incurred in the planning and post implementation stages of software development, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. We capitalize costs associated with software developed for internal use when the planning stage is completed, management has authorized further funding for the completion of the project, and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development stages, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete, and the software and technologies are ready for their intended purpose. There is judgment involved in estimating the stage of development as well as estimating time allocated to a particular project. A significant change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent periods. We amortize internal use software development costs using a straight-line method over a three-year estimated useful life, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. We determined the life of internal use software based on historical software upgrades and replacement. On an ongoing basis, we assess if the estimated remaining useful lives of capitalized projects continue to be reasonable based on the remaining expected benefit and usage. If the remaining useful life of a capitalized project is revised, it is accounted for as a change in estimate and the remaining unamortized cost of the underlying asset is amortized prospectively over the updated remaining useful life. We also evaluate internal use software for abandonment and use that as a significant indicator for impairment on a quarterly basis. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Right of Use Assets and Lease Obligations The Right of Use Asset and Lease Liability reflect the present value of the Company’s estimated future minimum lease payments over the lease term, which may include options that are reasonably assured of being exercised, discounted using a collateralized incremental borrowing rate. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed that of the initial lease term, and the performance of the business remains strong. Therefore, the Right of Use Asset and Lease Liability may include an assumption on renewal options that have not yet been exercised by the Company. The Company’s operating leases contained renewal options that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. As the rate implicit in leases are not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease within a particular currency environment. See Note 8 regarding operating leases. Revenue Recognition The Company recognizes revenue in accordance with ASC 606 to align revenue recognition more closely with the delivery of the Company’s services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps: Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts contain a significant financing component and there are no contracts with variable consideration. Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer. The following reflects additional discussion regarding our revenue recognition policies for each of our material revenue streams. For each revenue stream we do not offer any returns, refunds or warranties, and no arrangements are cancellable. Additionally, all contract consideration is fixed and determinable at the initiation of the contract. Performance obligations for Torch and LogicsIQ are satisfied when services are performed. Performance obligations for ECS and SB are satisfied at point of sale. For each of our revenue streams we only have a single performance obligation. Mobile Virtual Network Operators SurgePhone Wireless (“SPW”) and Torch Wireless are licensed to provide subsidized mobile broadband services through the ACP to qualifying low-income customers to all fifty (50) states. Revenues are recognized when an ACP application is completed and accepted. Each month we reconcile subscriber usage to ensure the service was utilized. A monthly file is submitted to the Universal Service Administrative Company for review and approval, at which time we have completed our performance obligation and recognize accounts receivable and revenue. Revenues are recorded in the month when services were rendered, with payment typically received on the 28th of the following month. Lead Generation Services LogicsIQ, Inc. is a lead generation and case management solutions company primarily serving law firms in the mass tort industry. Revenues are earned from our lead generation retained services offerings and call center activities through CenterCom. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Lead generation consist of sourcing leads, which requires us to drive traffic to our landing pages for a specific marketing campaign. We also achieve this in certain marketing campaigns by using third-party preferred vendors to meet the needs of our clients. Revenues are recognized at the time the lead is delivered to the client. If payment is received in advance of the delivery of services, it is included in deferred revenue, and subsequently recognized once the performance obligation has been completed. Retained service offerings consist of turning leads into a retained legal case. To provide this service to our customers, we qualify leads through verification of information collected during the lead generation process. Additionally, we further qualify these leads using a client questionnaire which assists in determining the services to be provided. The qualification process is completed using our call center operations. Effective February 1, 2023, LogicsIQ started offering call center services to existing clients. These services are similar in nature to the services CenterCom offers LogicsIQ. The total revenue from these services for the years ended December 31, 2023 and 2022, was $ 1,545,397 0 If payment is received in advance of the delivery of services, it is included in deferred revenue, and subsequently recognized once the performance obligation has been completed. At the time of delivery of leads and the creation of retained cases (customers are qualified at this point), our performance obligation has been completed and revenues are recognized. Arrangements with customers do not provide the customer with the right to take possession of our software or platform at any time. Once the advertising is delivered, it is non-refundable. Comprehensive Platform Services Revenues are generated through the sale of telecommunication products such as mobile phones, wireless top-up refills, and other mobile related products. At the time in which our products are sold through our online web portal (point of sale), our performance obligation is considered complete. At point of sale (completion of performance obligation), our web portal platform initiates an automated clearing house transaction (ACH) resulting in the recording revenue. Contract Liabilities (Deferred Revenue) Contract liabilities represent deposits made by customers before the satisfaction of performance obligation and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer deposit is relieved and revenue is recognized. At December 31, 2023 and 2022, the Company had deferred revenue of $ 20,000 243,110 The following represents the Company’s disaggregation of revenues for the years ended December 31, 2023 and 2022: Schedule of Disaggregation of Revenue from Contracts With Customers For the Year Ended December 31, 2023 2022 Revenue Revenue % of Revenues Revenue % of Revenues Mobile Virtual Network Operators $ 118,577,920 86.46 % $ 88,351,547 72.69 % Comprehensive Platform Services 11,341,183 8.27 % 16,319,076 13.43 % Lead Generation 7,184,283 5.24 % 16,760,656 13.79 % Other 38,446 0.03 % 112,911 0.09 % Total Revenues $ 137,141,832 100 % $ 121,544,190 100 % The above disaggregation of revenues includes the following entities: Mobile Virtual Network Operators (SPW and TW), Comprehensive Platform Services (Surge Fintech and ECS), Lead Generation (LogicsIQ); and Other (Surge Blockchain) SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Cost of Revenues Cost of revenues consists of purchased telecom services including data usage and access to wireless networks. Additionally, cost of revenues consists of prepaid phone cards, commissions, and advertising costs. Income Taxes The Company accounts for income tax using the asset and liability method prescribed by ASC 740, “Income Taxes”. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2023 and 2022, respectively, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related to uncertain income tax positions were recorded for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023, the Company generated net income. The Company currently has an unapplied net operating loss carryforward (deferred tax asset), which was evaluated for applicability in offsetting the current taxable net income. The Company has determined that the net operating loss carryforward is limited to 80% of the current year’s net taxable income. The Company has accrued an income tax liability of $ 570,000 Investment – Former Related Party On January 17, 2019, we announced the completion of an agreement to acquire a 40 Anthony N. Nuzzo, a former director and officer and the holder of approximately 10% of our voting equity, had a controlling interest in CenterCom Global. During 2022, Mr. Nuzzo passed away. See Form 8-K filed on March 24, 2022. The strategic partnership with CenterCom as a bilingual operations hub has powered our growth and revenue. CenterCom has been built to support the infrastructure required to rapidly scale in synergy and efficiency to support our sales growth, customer service and development. We account for this investment under the equity method. Investments accounted for under the equity method are recorded based upon the amount of our investment and adjusted each period for our share of the investee’s income or loss. All investments are reviewed for changes in circumstance or the occurrence of events that suggest an other than temporary event where our investment may not be recoverable. The financial information used to account for the investment is unaudited. At December 31, 2023 and December 31, 2022, our investment in CenterCom was $ 464,409 354,206 During the years ended December 31, 2023 and 2022, we recognized a gain of $ 110,203 89,082 Advertising Costs Advertising costs are expensed as incurred. Advertising costs are included as a component of general and administrative expense in the consolida |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 – Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment Estimated Useful Type December 31, 2023 December 31, 2022 Lives (Years) Computer equipment and software $ 1,006,286 $ 1,006,286 3 5 Furniture and fixtures 82,752 82,752 5 7 1,089,038 1,089,038 Less: accumulated depreciation/amortization 727,197 445,665 Property and equipment - net $ 361,841 $ 643,373 In June 2022, the Company acquired software having a fair value of $ 711,400 300,000 85,000 411,400 4.84 Depreciation and amortization expense for the years ended December 31, 2023 and 2022 was $ 281,532 279,877 These amounts are included as a component of general and administrative expenses in the accompanying consolidated statements of operations. |
Intangibles
Intangibles | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles | Note 4 – Intangibles Intangibles consisted of the following: Schedule of Intangible Assets Estimated Useful Type December 31, 2023 December 31, 2022 Lives (Years) Proprietary Software $ 4,286,402 $ 4,286,402 7 Tradenames/trademarks 617,474 617,474 15 ECS membership agreement 465,000 465,000 1 Noncompetition agreement 201,389 201,389 2 Customer Relationships 183,255 183,255 5 Intangible assets gross 5,753,520 5,753,520 Less: accumulated amortization (3,627,050 ) (2,973,543 ) Intangibles - net $ 2,126,470 $ 2,779,977 Amortization expense for the years ended December 31, 2023 and 2022 was $ 653,507 Estimated amortization expense for each of the five (5) succeeding years is as follows: Schedule of Estimated Amortization Expenses For the Years Ended December 31: 2024 653,507 2025 653,507 2026 653,507 2027 165,949 Total $ 2,126,470 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 |
Internal Use Software Developme
Internal Use Software Development Costs | 12 Months Ended |
Dec. 31, 2023 | |
Internal Use Software Development Costs | |
Internal Use Software Development Costs | Note 5 – Internal Use Software Development Costs Internal Use Software Development Costs consisted of the following: Schedule of Intangible Assets Estimated Useful Type December 31, 2023 December 31, 2022 Life (Years) Internal Use Software Development Costs $ 668,484 $ 387,180 3 Less: accumulated amortization 129,060 - Internal Use Software Development Costs - net $ 539,424 $ 387,180 Costs incurred for Internal Use Software Development Costs Management has determined that all costs incurred in 2023 ($ 281,304 Management determined that all costs incurred in 2022 ($ 387,180 For the years ended December 31, 2023 and 2022, amortization of internal use software development costs was $ 129,060 0 Estimated amortization expense is as follows for the years ended December 31: Schedule of Estimated Amortization Expenses 2024 222,828 2025 222,828 2026 93,768 Total $ 539,424 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 6 – Debt The following represents a summary of the Company’s notes payable – SBA government, notes payable – related parties, and notes payable, key terms, and outstanding balances at December 31, 2023 and December 31, 2022, respectively: Notes Payable – SBA government (1) Paycheck Protection Program - PPP Loan Pertaining to the Company’s eighteen (18) month loan and in accordance with the Paycheck Protection Program (“PPP”) and Conditional Loan Forgiveness, the promissory note evidencing the loan contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company. Under the terms of the PPP loan program, all or a portion of this Loan may be forgiven upon request from Borrower to Lender, provided the Loan proceeds are used in accordance with the terms of the Coronavirus Aid, Relief and Economic Security Act (the “Act” or “CARES”), Borrower is not in default under the Loan or any of the Loan Documents, and Borrower has provided documentation to Lender supporting such request for forgiveness that includes verifiable information on Borrower’s use of the Loan proceeds, to Lender’s satisfaction, in its sole and absolute discretion. (2) Economic Injury Disaster Loan (“EIDL”) This program was made available to eligible borrowers in light of the impact of the COVID-19 pandemic and the negative economic impact on the Company’s business. Proceeds from the EIDL are to be used for working capital purposes. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Installment payments, including principal and interest, are due monthly (beginning twelve (12) months from the date of the promissory note) in amounts ranging from $ 109 751 Schedule of Notes Payable PPP EIDL EIDL PPP Terms SBA SBA SBA SBA Total Issuance dates of SBA loans April 2020 May 2020 July 2020 March 2021 Term 18 months 30 30 5 Maturity date October 2021 May 2050 July 2050 March 2026 Default interest rate Interest rate 1 3.75 3.75 1 Collateral Unsecured Unsecured Unsecured Unsecured Warrants issued as debt discount/issue costs Conversion price N/A N/A N/A N/A Balance - December 31, 2021 $ 126,418 $ 150,000 $ 336,600 $ 518,167 $ 1,131,185 Forgiveness of loan - - - (518,167 ) (518,167 ) 1 Conversion of debt into common stock Reclass of accrued interest to note payable Gross proceeds Reclassification from SBA - PPP note payable Debt issue costs Amortization of debt issue costs Repayments - (4,078 ) (7,676 ) - (11,754 ) Reclassification to note payable (126,418 ) - - - (126,418 ) 2 Balance - December 31, 2022 - 145,922 328,924 - 474,846 Repayments - (3,928 ) (10,395 ) - (14,323 ) Balance - December 31, 2023 $ - $ 141,994 $ 318,529 $ - $ 460,523 1 During 2022, the Company received forgiveness on a PPP loan totaling $ 524,143 518,167 5,976 2 During 2021, the Company received a partial forgiveness on a PPP loan totaling $ 377,743 371,664 6,079 Monthly payments are $3,566/month SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Notes Payable – Related Parties Schedule of Notes Payable 1 2 Note Payable Note Payable Terms Related Party Related Party Total Issuance dates of notes Various August 2021 Maturity dates December 31, 2023 December 31, 2024 August 2031 Interest rate 10% 10% Collateral Unsecured Unsecured Conversion price N/A N/A Balance - December 31, 2021 $ 5,593,431 $ 467,385 6,060,816 Conversion of debt into common stock (1,086,413 ) - (1,086,413 ) Reclass of accrued interest to note payable 627,545 - 627,545 Balance - December 31, 2022 5,134,563 467,385 5,601,948 Less: short term 1,108,150 - 1,108,150 Long term $ 4,026,413 $ 467,385 $ 4,493,798 Balance - December 31, 2022 $ 5,134,563 $ 467,385 $ 5,601,948 Repayments (550,000 ) (467,385 ) (1,017,385 ) Balance - December 31, 2023 4,584,563 - 4,584,563 Less: short term 4,584,563 - 4,584,563 Long term $ - $ - $ - 1- Activity is with the Company’s Chief Executive Officer and Board Member (Kevin Brian Cox). In 2022, the Company included $ 627,545 270,745 4.01 1,086,413 1,086,413 At December 31, 2023, of the total $ 4,584,563 558,150 4,026,413 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 In March 2024, as approved by the Audit Committee, the Company consolidated all remaining outstanding principal ($ 4,584,563 498,991 5,083,554 36 5,905,427 164,039 Subsequent to year end the Company is current in all payments due. 2- Activity is with David May, who is a Board Member. The note of $ 467,385 63,641 531,026 Notes Payable Schedule of Notes Payable 1 2 3 4 Terms Notes Notes Notes Note Total Issuance dates of notes April/May 2022 April/June 2022 March 2022 2022 Maturity date October/November 2022 January/February 2023 March 2023 2025 Interest rate 19% 24% 19% 1% Default interest rate 26% N/A 26% 0% Collateral Unsecured All assets Unsecured Unsecured Warrants issued as debt discount/issue costs 36,000 N/A 15,000 N/A Balance - December 31, 2021 $ - $ - $ - $ - $ - Gross proceeds 1,200,000 5,000,000 500,000 - 6,700,000 Reclassification from SBA - PPP note payable - - - 126,418 126,418 Repayments (100,000 ) (5,000,000 ) (100,000 ) (31,251 ) (5,231,251 ) Debt issue costs (76,451 ) - (38,953 ) - (115,404 ) Amortization of debt issue costs 76,451 - 38,953 - 115,404 Balance - December 31, 2022 1,100,000 - 400,000 95,167 1,595,167 Repayments (1,100,000 ) - (400,000 ) (95,167 ) (1,595,167 ) Balance - December 31, 2023 $ - $ - $ - $ - $ - 1- These notes were issued with 36,000 3 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 2- The Company executed a $ 5,000,000 80 3- These notes were issued with 15,000 3 12,000 3 400,000 100,000 4- This loan, originally a PPP loan, was refinanced in 2022 and was extended from October 2021 to March 2025. Monthly payments were $ 3,566 Secured Revolving Debt In April 2022, a maximum of $ 3,000,000 5,000,000 The notes accrued interest at a monthly rate of 2 24 80 The maximum amount outstanding under the loan was the lesser of $ 5,000,000 80 In 2022, the Company repaid the $ 5,000,000 46,027 Debt Maturities The following represents the maturities of the Company’s various debt arrangements for each of the five (5) succeeding years and thereafter as follows: Schedule of Debt Maturities For the Year Ended December 31, Notes Payable - Related Parties Notes Payable - SBA Government Total 2024 $ 4,584,563 $ - $ 4,584,563 Thereafter - 460,523 460,523 Total $ 4,584,563 $ 460,523 $ 5,045,086 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Investments, All Other Investments [Abstract] | |
Fair Value of Financial Instruments | Note 7 – Fair Value of Financial Instruments The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The Company did not have any assets or liabilities measured at fair value on a recurring basis at December 31, 2023 and 2022, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies Operating Leases We have entered into various operating lease agreements, including our corporate headquarters. We account for leases in accordance with ASC Topic 842: Leases, SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments over the lease term. Lease right-of-use assets and liabilities at commencement are initially measured at the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at commencement to determine the present value of lease payments except when an implicit interest rate is readily determinable. We determine our incremental borrowing rate based on market sources including relevant industry data. We have lease agreements with lease and non-lease components and have elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component, from both a lessee and lessor perspective with the exception of direct sales-type leases and production equipment classes embedded in supply agreements. From a lessor perspective, the timing and pattern of transfer are the same for the non-lease components and associated lease component and, the lease component, if accounted for separately, would be classified as an operating lease. We have elected not to present short-term leases on the balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of our leases do not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Our leases, where we are the lessee, do not include an option to extend the lease term. For purposes of calculating lease liabilities, lease term would include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense, included as a component of general and administrative expenses, in the accompanying consolidated statements of operations. Certain operating leases provide for annual increases to lease payments based on an index or rate, our lease has no stated increase, payments were fixed at lease inception. We calculate the present value of future lease payments based on the index or rate at the lease commencement date. Differences between the calculated lease payment and actual payment are expensed as incurred. At December 31, 2023 and 2022, respectively, the Company had no financing leases as defined in ASC 842, “Leases.” The tables below present information regarding the Company’s operating lease assets and liabilities at December 31, 2023 and 2022, respectively: Schedule of Lease Expense For the Year Ended For the Year Ended December 31, 2023 December 31, 2022 Operating Leases $ 43,483 $ 34,294 Interest on lease liabilities 20,804 11,598 Total net lease cost $ 64,287 $ 45,892 Supplemental balance sheet information related to leases was as follows: Supplemental cash flow and other information related to leases was as follows: Schedule of Supplemental Cash Flow and Other Information Related to Leases For the Year Ended For the Year Ended December 31, 2023 December 31, 2022 Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 39,490 $ 30,948 ROU assets obtained in exchange for lease liabilities Operating leases $ - $ - Weighted average remaining lease term (in years) Operating leases 6.50 7.99 Weighted average discount rate Operating leases 5 % 5 % SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Future minimum lease payments for the years ended December 31: Schedule of Future Minimum Payments 2024 $ 61,876 2025 73,460 2026 65,044 2027 66,627 2028 100,246 Thereafter 107,261 Total lease payments 474,514 Less: amount representing interest (75,101 ) Total lease obligations 399,413 Less: short term lease liability (43,137 ) Long term lease liability $ 356,276 Employment Agreements (Chief Executive Officer and Chief Financial Officer) Chief Financial Officer In November 2023, the Company finalized the terms of its employment agreement with its Chief Financial Officer as follows: 1. Base salary a. For the year ended December 31, 2023 - $ 475,000 b. For the year ended December 31, 2024 - $ 489,250 c. For the year ended December 31, 2025 - $ 503,928 2. Annual cash bonus a. For the year ended December 31, 2023 - $ 510,000 b. Future years – to be determined by the Board of Directors 3. Restricted Stock Awards a. Effective November 10, 2023, an award of 600,000 3,114,000 5.19 b. The shares will vest as follows (see below for table on non-vested shares): i. 400,000 66,667 ii. 200,000 iii. Shares shall immediately vest if any of the following occur and the Chief Financial Officer is employed by the Company at the time of: 1. Death, 2. Total disability, 3. Termination without cause; and 4. Change in control SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 4. Other a. Vacation, b. Car allowance of $ 500 c. Home office expense reimbursement of $ 667 d. 401(K) plan participation, e. Life insurance; and f. Liability insurance See Note 9 regarding the vesting provisions of these shares. Chief Executive Officer In December 2023, the Company finalized the terms of its employment agreement with its Chief Financial Officer as follows: 1. Term – through December 31, 2028 2. Base salary a. For the year ended December 31, 2023 - $ 750,000 b. For each year thereafter an increase of 3 3. Annual cash bonus a. For the year ended December 31, 2023 - $ 870,000 b. Future years – to be determined by the Board of Directors 4. Restricted Stock Awards a. Effective March 1, 2024, future stock awards totaling 2,500,000 b. The shares will be issued and vest as follows: i. 500,000 83,333 3,800,000 7.60 . ii. 500,000 iii. Shares shall immediately vest if any of the following occur and the Chief Executive Officer is employed by the Company at the time of: 1. Death, 2. Total disability, 3. Termination without cause; and 4. Change in control 5. Annual Revenue Goals (only one (1) award per goal may be earned until next threshold is achieved a. $250,000,000 – value of restricted stock award will be $6,250,000, b. $500,000,000 – value of restricted stock award will be $25,000,000 c. $1,000,000,000 – value of restricted stock award will be $50,000,000, d. $2,000,000,000 – value of restricted tock award will be $100,000,000; and e. Each additional $1,000,000,000 – value of restricted tock award will be $50,000,000, SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 6. Annual EBITDA Goals (only one (1) award per goal may be earned until next threshold is achieved a. $50,000,000 - value of restricted stock award will be $2,500,000, b. $100,000,000 - value of restricted stock award will be $5,000,000; and c. Each additional $50,000,000 - value of restricted stock award will be $2,500,000 7. Market Capitalization Goals (only one (1) award per goal may be earned until next threshold is achieved a. $250,000,000 - value of restricted stock award will be $25,000,000, b. $500,000,000 - value of restricted stock award will be $50,000,000, c. $1,000,000,000 - value of restricted stock award will be $100,000,000, d. $2,000,000,000 - value of restricted stock award will be $200,000,000; e. Each additional $1,000,000,000 - value of restricted stock award will be $100,000,000 8. Other a. Vacation, b. Car allowance of $ 500 c. Home office expense reimbursement of $ 667 d. 401(K) plan participation, e. Life insurance; and f. Liability insurance Contingencies – Legal Matters During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with Financial Accounting Standards Board (“FASB”) ASC 450-20-50, “Contingencies”. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of December 31, 2023, for all matters listed below, the Company is not aware of any contingent liabilities that should be reflected in the consolidated financial statements. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 (1) Juno Financial v. AATAC and Surge Holdings Inc. AND Surge Holdings Inc. v. AATAC; Circuit Court of Hillsborough County, Florida, Case # 20-CA-2712 DIV A: Breach of Contract, Account Stated and Open Account claims against Surge by a factoring company. Surge has filed a cross-complaint against defendant AATAC for Breach of Contract, Account Stated, Open Account and Common Law Indemnity. The case remains in discovery but has been inactive for some time. Following analysis by our litigation counsel stating that there is a good defense, management has decided that a reserve is not necessary. The case remains on the docket and has no court dates set at this time. (2) Blue Skies Connections, LLC, and True Wireless, Inc. v. SurgePays, Inc., et. al.: In the District Court of Oklahoma County, OK, CJ-2021-5327, filed on December 13, 2021. Plaintiffs petition alleges breach of a Stock Purchase Agreement by SurgePays, SurgePhone Wireless, LLC, and Kevin Brian Cox, and makes other allegations related to SurgePays’ consulting work with Jonathan Coffman, a True Wireless employee. Blue Skies believes the Defendants are in violation of their non-competition and non-solicitation agreements related to the sale of True Wireless from SurgePays to Blue Skies. Oklahoma state law does not recognize non-compete agreements and non-solicitation agreements in the manner alleged by Plaintiffs, as such we believe SurgePays, SurgePhone, and Cox have a strong defense against the claims asserted by Blue Skies and True Wireless. The matter continues in the discovery process. Mr. Coffman is no longer working for True Wireless. An attempt at mediation in July, 2022 did not achieve a settlement. The petition requests injunctive relief, general damages, punitive damages, attorney fees and costs for alleged breach of contract, tortious interference with a business relationship, and fraud. Plaintiffs have made a written demand for damages and the parties continue to discuss a potential resolution. This matter is an anti-competitive attempt by Blue Skies and True Wireless to damage SurgePays, SurgePhone, and Cox. Written discovery is winding down and depositions began in the third quarter of 2023 and are expected to continue in 2024. The case is anticipated set for trial in January 2025. In the Circuit Court of Tennessee for the 30th Judicial District at Memphis, Docket # CT-3219-23. On August 8, 2023, a complaint was filed by SurgePays for breach of a promissory note by Blue Skies Connections, LLC. The note at issue is dated June 14, 2021 176,850.56 7,461.37 (3) SurgePays, Inc. et al. v. Fina et al., Case No. CJ-2022-2782, District Court of Oklahoma County, Oklahoma. Plaintiffs SurgePays, Inc. and Kevin Brian Cox initiated this case against its former officer Mike Fina, his companies Blue Skies Connections, LLC, True Wireless, Inc., Government Consulting Solutions, Inc., Mussell Communications LLC, and others. This case also arises from the June 2021 transaction by which SurgePays sold True Wireless to Blue Skies. During the litigation of CJ-2021-5327 described above, SurgePays learned information that showed Mike Fina breached his duties owed to True Wireless during his employment and consulting work for True Wireless prior to SurgePays’ sale of True Wireless to Blue Skies. SurgePays alleges that Mike Fina conspired with the other defendants to damage True Wireless thereby harming the value of the company and causing its eventual sale at a greatly reduced price. SurgePays asserts claims for (i) breach of contract; (ii) breach of fiduciary duty; (iii) fraud; (iv) tortious interference; and (v) unjust enrichment. At this stage, no defendant has asserted a counterclaim against SurgePays. SurgePays filed a Second Amended Petition on January 27, 2023. Defendants Fina, Blue Skies, True Wireless, and Government Consulting Solutions filed a Motion to Dismiss on March 10, 2023. On June 29, 2023, the Court granted the Motion to Dismiss, ruling the claims asserted are “derivative” and could only be asserted by the True Wireless entity now owed by Blue Skies. The Court rejected SurgePays’ request to certify this ruling for immediate appeal. Defendant Misty Garrett has filed a Motion for Summary Judgment seeking the same relief as the Motion to Dismiss granted by the Court. Defendants Rob Rowlen and Terracom, LLC remain as defendants in the case after answering the Second Amended Petition. It is SurgePays’ present intent to vigorously appeal the Court’s dismissal of Fina, Blue Skies, True Wireless, and Government Consulting Solutions, and to continue prosecuting the case against the other Defendants. At this stage, no attempts at settlement have been made. (4) Robert Aliotta and Steve Vasquesz, on behalf of themselves and others similarly situated v. SurgePays, Inc. d/b/a Surge Logics, filed January 4, 2023, in the U.S. District Court for the Northern District of Illinois, Case No. 1:23-cv-00042. Plaintiffs allege violations of the Telephone Consumer Protection Act (TCPA) and the Florida Telephone Solicitations Act (FTSA) based on telephone solicitations allegedly made by or on behalf of SurgePays, Inc. Plaintiffs seek damages for themselves and seek certification of a class action on behalf of others similarly situated. Defendants intend to vigorously defend the action however most similar cases are eventually resolved by an out-of-court settlement. At this time, it is difficult to estimate the amount or range of potential loss. SurgePays Inc has been removed from the case following a Motion to Dismiss and LogicsIQ, Inc. has been named as the defendant. The case has begun written discovery and depositions are expected later this year. (5) Consumer Attorney Marketing Group, LLC v Robert Aliotta, et al. v. SurgePays, Inc. d/b/a SurgeLogics (6) On December 17, 2021, Ambess Enterprises, Inc. v SurgePays, Inc., Blair County Pa. case number 2021 GN 3222. Plaintiff alleges breach of contract and prays for damages of approximately $ 73,000 60,000 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Consumer Attorney Marketing Group, LLC v. LogicsIQ, Inc. and SurgePays, Inc. Consumer Attorney Marketing Group, LLC v. LogicsIQ, Inc. and SurgePays, Inc. On February 13, 2024, in the Superior Court of California, Los Angeles County, Case No. 24 ST CV 03653, Consumer Attorney Marketing Group, LLC (“CAMG”) filed a complaint naming SurgePays, Inc. (the “Company”) a defendant and alleging claims for breach of contract, declaratory judgment and express and implied indemnity. The complaint demands that defendants indemnify CAMG for any damages or losses that CAMG may incur in the case Robert Aliotta, et al. v. SurgePays, Inc. d/b/a SurgeLogics, Case No. 23 C 00042, pending in the U.S. District Court for the Northern District of Illinois. CAMG’s claims against the Company are solely based upon theories of participatory and vicarious liability. The Company was served on or about February 27, 2024. The Company’s answer or other pleading is currently due on March 28, 2024. This case is in the initial stages. The Company has not yet filed an appearance in the matter, and the Court has not scheduled any dates or deadlines. The Company is reviewing the claims and determining its defenses. At this time, it is not possible to estimate the amount or range of potential loss. Demiray v. SurgePays, Inc. Meral Demiray v Surge Holdings, Inc. a/k/a SurgePays, Inc.: In the United States District Court for the Northern District of Illinois, Case # 22-cv-6591, filed November 23, 2022. Plaintiff filed a claim against SurgePays following her dismissal from her position as an employee of the company. Following negotiations among and between SurgePays, SurgePays’ insurance carrier and the Plaintiff, a settlement has been reached and documentation is currently being drafted for full settlement, release, and dismissal of the claim. The case was settled and dismissed in 2023 for $ 7,500 SurgePays – Ambess Litigation On December 17, 2021, Ambess Enterprises, Inc. v SurgePays, Inc., Blair County Pa. case number 2021 GN 3222. Plaintiff alleges breach of contract and prays for damages of approximately $ 73,000 60,000 True Wireless and Surge Holdings - Terracom Litigation Global Reconnect, LLC and Terracom, Inc. v. Jonathan Coffman, Jerry Carroll, True Wireless, & Surge Holdings: In the Chancery Court of Hamilton County, TN, Docket # 20-00058, Filed Jan 21, 2020. On January 21, 2020, a complaint was filed related to a noncompetition dispute. Terracom believes Mr. Coffman and Mr. Carroll are in violation of their non-compete agreements by working for us and True Wireless, Inc. Oklahoma and Tennessee state law does not recognize non-compete agreements and are not usually enforced in the state courts of these states, as such we believe True Wireless has a strong case against Terracom. The matter is entering the discovery process. Both Mr. Carroll and Mr. Coffman are no longer working for True Wireless in sales. Mr. Carroll is off the payroll and Mr. Coffman works for SurgePays, Inc., but not in wireless sales. The complaint requests general damages plus fees and costs for tortious interference with a business relationship in their prayer for relief. They have made no written demand for damages at this point in time. The Company believes this matter is simply an anti-competitive attempt by Terracom to cause distress to True Wireless. The case was dismissed without prejudice by the Court on December 15, 2022. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 9 – Stockholders’ Equity At December 31, 2023, the Company had three (3) classes of stock: Common Stock - 500,000,000 - Par value - $ 0.001 - Voting at 1 vote per share Series A, Convertible Preferred Stock - 13,000,000 - none - Par value - $ 0.001 - Voting at 10 votes per share - Ranks senior to any other class of preferred stock - Dividends - none - Liquidation preference – none - Rights of redemption - none - Conversion into 1/10 of a share of common stock for each share held In 2022, all Series A, Preferred stockholders, representing 260,000 1,300,000 0 Series C, Convertible Preferred Stock - 1,000,000 - None - Par value - $ 0.001 - Voting at 250 votes per share - Ranks junior to any other class of preferred stock - Dividends – equal to the per share amount (as converted basis) as the common stockholders should the Board of Directors declare a dividend - Liquidation preference – original issue price plus any declared yet unpaid accrued dividends - Rights of redemption - none - Conversion into 250 shares of common stock for each share held SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Securities and Incentive Plan In March 2023, the Company’s shareholders approved the 2022 Plan (the “Plan”) initially approved, authorized and adopted by the Board of Directors in August 2022. The Plan initially provided for the following: 1. 3,500,000 2. An annual increase on the first day of each calendar year beginning January 1, 2023 and ending on January 31, 2031 equal to the lesser of: a. 10 b. Such smaller amount of common stock as determined by the Board of Directors. 3. The shares may be issued as follows to directors, officers, employees, and consultants: a. Distribution equivalent rights b. Incentive share options c. Non-qualified share options d. Performance unit awards e. Restricted share awards f. Restricted share unit awards g. Share appreciation rights h. Tandem share appreciation rights i. Unrestricted share awards See the proxy statement filed with the SEC on January 19, 2023 for a complete detail of the Plan. Effective January 1, 2024, in accordance with the Plan, we increased the available amount of shares by 10 1,400,000 4,900,000 Of the total shares authorized and available, the Company has reserved shares for its officers, directors and employees for non-vested shares that are expected to vest in accordance with the terms of the related employment agreements and stock options that may be converted into common stock. At December 31, 2023, the Company had sufficient authorized shares to settle any possible awards that vested or stock options eligible for conversion. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Equity Transactions for the Year Ended December 31, 2023 Stock Issued for Services The Company issued 242,615 1,290,024 4.19 9.40 Exercise of Warrants The Company issued 43,814 4.73 207,240 Non-Vested Shares – Related Parties Chief Financial Officer In 2023, the Company granted common stock to its Chief Financial Officer ( 600,000 3,114,000 5.19 The shares will vest as noted above (see Note 8). The Company records stock compensation expense over these vesting periods. All shares are expected to vest in accordance with the terms of the agreement. For the year ended December 31, 2023, the Company recognized stock compensation expense of $ 486,242 Board Directors In 2023, the Company granted an aggregate 95,000 519,500 5.14 5.53 The shares will vest at the earlier to occur: - Board Member no longer serves in that capacity for any reason, except for reasons related to cause, - Occurrence of a change in control; and - 5 th The Company records stock compensation expense over the five ( 5 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 For the year ended December 31, 2023, the Company recognized stock compensation expense of $ 43,292 For the year ended December 31, 2023, total related stock compensation expense due to vesting was $ 529,534 The following is a summary of the Company’s non-vested shares at December 31, 2023. Schedule of Non-vested Shares Related Parties Weighted Average Non-Vested Shares Number of Shares Grant Date Fair Value Balance - December 31, 2022 - $ - Granted 695,000 5.24 Vested - - Cancelled/Forfeited - - Balance - December 31, 2023 695,000 $ 5.24 Unrecognized Compensation $ 3,103,967 Weighted average period (years) 1.23 See Note 8 for discussion of common stock award to the Company’s Chief Financial Officer pursuant to an employment agreement. Equity Transactions for the Year Ended December 31, 2022 Stock Issued as Direct Offering Costs The Company issued 200,000 0 Stock Issued for Acquisition of Software The Company acquired software having a fair value of $ 711,400 300,000 85,000 411,400 4.84 Exercise of Warrants (Cashless) The Company issued 147,153 498,750 0 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Exercise of Warrants The Company issued 100 473 473 Stock Options Stock option transactions for the years ended December 31, 2023 and 2022 are summarized as follows: Schedule of Stock Option Transactions Stock Options Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Outstanding - December 31, 2021 17,004 $ 16.00 5.16 $ - Vested and Exercisable - December 31, 2021 3,401 $ 16.00 5.16 $ - Unvested and non-exercisable - December 31, 2021 13,603 $ 16.00 5.16 $ - Granted - - $ - Exercised - - Cancelled/Forfeited - - Outstanding - December 31, 2022 17,004 $ 16.00 4.16 $ - Vested and Exercisable - December 31, 2022 6,801 $ 16.00 4.16 $ - Unvested and non-exercisable - December 31, 2022 10,203 $ 16.00 4.16 $ - Granted 104,272 6.45 $ 5.53 Exercised - - Cancelled/Forfeited - - Outstanding - December 31, 2023 121,276 $ 7.79 6.47 $ - Vested and Exercisable - December 31, 2023 116,174 $ 7.43 6.61 $ - Unvested and non-exercisable - December 31, 2023 5,101 $ 16.00 3.16 $ - SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Stock Options - Related Party During 2023 and 2022, 5,101 3,401 5,101 Stock-based compensation expense for the years ended December 31, 2023 and 2022 was $ 37,176 37,176 Stock Options - Employees In 2023, the Company granted 104,272 7 576,625 6.45 The fair value of these stock options was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Stock Options Expected term 7 Expected volatility 106 Expected dividends 0 Risk free interest rate 3.88 Total stock-based compensation expense for the years ended December 31, 2023 and 2022 was $ 613,801 37,176 Weighted average period in which unrecognized compensation ($ 6,196 0.16 Warrants Warrant activity for the years ended December 31, 2023 and 2022 are summarized as follows: Schedule of Warrants Activity Warrants Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding - December 31, 2021 6,082,984 $ 8.68 2.93 $ - Vested and Exercisable - December 31, 2021 5,852,984 $ 8.70 2.85 $ - Unvested - December 31, 2021 230,000 $ 8.00 4.85 $ - Granted 189,000 $ 4.73 - Exercised (498,850 ) $ 6.49 - Cancelled/Forfeited (91,743 ) $ 40.02 - Outstanding - December 31, 2022 5,681,392 $ 5.05 1.85 $ 10,026,387 Vested and Exercisable - December 31, 2022 5,681,392 $ 5.05 1.85 $ 10,026,387 Unvested - December 31, 2022 - $ - - $ - Granted - $ - - Exercised (43,814 ) $ 4.73 - Cancelled/Forfeited (63,325 ) $ 26.39 - Outstanding - December 31, 2023 5,574,253 $ 4.81 0.86 $ 9,348,348 Vested and Exercisable - December 31, 2023 5,574,253 $ 4.81 0.86 $ 9,348,348 Unvested and non-exercisable - December 31, 2023 - $ - - $ - Warrant Transactions for the Year Ended December 31, 2022 Warrants Issued as Debt Issue Costs In connection with $ 1,700,000 51,000 115,404 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 The fair value of these warrants was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Warrants Expected term (years) 3 Expected volatility 119 120 Expected dividends 0 Risk free interest rate 2.45 2.80 Warrants Issued as Interest Expense A vendor increased the amount of credit the Company had for making purchases. In consideration for the increase, the Company issued 90,000 212,608 The fair value of these warrants was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Warrants Expected term (years) 3 Expected volatility 120 Expected dividends 0 Risk free interest rate 2.71 In 2022, the Company extended the due dates of certain notes payable totaling $ 1,600,000 48,000 153,186 The fair value of these warrants was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Warrants Expected term (years) 3 Expected volatility 116 119 Expected dividends 0 Risk free interest rate 4.13 4.25 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Note 10 – Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision–making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company evaluated the performance of its operating segments based on revenue and operating loss. All data below is prior to intercompany eliminations. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Segment information for the Company’s operations for the years ended December 31, 2023 and 2022, are as follows: Schedule of Operating Segments 2023 2022 For the Year Ended December 31, 2023 2022 Revenues Mobile Virtual Network Operator $ 118,577,920 $ 88,351,547 Comprehensive Platform Services 11,341,183 16,319,076 Lead Generation 7,184,283 16,760,656 Other 38,446 112,911 Total $ 137,141,832 $ 121,544,190 Cost of revenues Mobile Virtual Network Operator $ 83,918,968 $ 76,130,286 Comprehensive Platform Services 11,281,722 16,966,332 Lead Generation 6,228,650 14,975,647 Other 70,001 2,517 Total $ 101,499,341 $ 108,074,782 Operating expenses Mobile Virtual Network Operator $ 427,493 $ 299,406 Comprehensive Platform Services 1,799,469 1,327,517 Lead Generation 775,704 1,460,750 Other 3,256 53,571 Corporate overhead 13,771,185 9,694,379 Total $ 16,777,107 $ 12,835,623 Income (loss) from operations Mobile Virtual Network Operator $ 34,231,459 $ 11,921,855 Comprehensive Platform Services (1,740,008 ) (1,974,773 ) Lead Generation 179,929 324,259 Other (34,811 ) 56,823 Corporate overhead (13,771,185 ) (9,694,379 ) Total $ 18,865,384 $ 633,785 Segment information for the Company’s assets and liabilities at December 31, 2023 and 2022, are as follows: December 31, 2023 December 31, 2022 Total Assets Mobile Virtual Network Operator $ 32,502,760 $ 25,550,587 Comprehensive Platform Services 2,584,245 3,205,030 Lead Generation 1,596,236 1,880,087 Other 135,548 165,172 Corporate overhead 5,106,518 3,202,630 Total $ 41,925,307 $ 34,003,506 Total Liabilities Mobile Virtual Network Operator $ 2,426,964 $ 15,484,392 Comprehensive Platform Services 155,295 198,197 Lead Generation 899,485 2,619,521 Other 198,197 58,919 Corporate overhead 9,841,902 10,524,224 Total $ 13,521,843 $ 28,885,253 All intercompany accounts are separately presented above as both a component of the assets and liabilities. These amounts net to $ 0 |
Installment Sale Liability
Installment Sale Liability | 12 Months Ended |
Dec. 31, 2023 | |
Installment Sale Liability | |
Installment Sale Liability | Note 11 – Installment Sale Liability Agreement In 2022, the Company executed a two-year (2) financing arrangement with Affordable Connectivity Financing (“ACF”, “Seller”) to receive up to $ 25,000,000 This agreement was based upon the Company submitting a purchase order and ACF approving the request. The Company could cancel the purchase order prior to ACF paying for the devices. The agreement could be extended by a period of one (1) year upon mutual consent. Under the terms of the agreement, ACF was directly purchasing products and reselling to the Company at a markup. At December 31, 2022, the markup was 9.85 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Repayment Period Each installment sale contract was to be repaid over a period of nine (9) months. Security This arrangement was fully secured by all assets of the Company. Minimum Outstanding Balance 3 month rolling average of 70% of the installment sale credit amount. Prepayment Penalty The Company was subject to a cancellation fee of 3% during the first year and 2% during the second year Administrative Fee The Company was required to pay $ 2,000 Default Rate For any unpaid amounts under this agreement, the Company was subject to a fee of 1.35% per month (16.2% annualized). Commitment Fee ACF charged a 2 2 5,000,000 For example, if the initial installment sale credit amount is $15,000,000, the credit availability fee would be $300,000 (2%). Any subsequent increase of $5,000,000 or more would result in an additional fee of $100,000 (2%). Commitment fees are paid over a period of 12 months as part of the Seller’s monthly invoicing. Covenants At December 31, 2023 and December 31, 2022, respectively, the Company was in compliance with all of the following ratios: 1. Company adjusted EBITDA, 2. Total Leverage Ratio, 3. Fixed Charge Coverage Ratio, 4. Minimum Subscriber Base; and 5. Minimum Liquidity Additionally, the Company is required to provide various data to the vendor on a periodic basis. The Company has not received notice from the vendor regarding any instances of non-compliance. Lockbox The Company will maintain a lockbox for the benefit of the Seller. Installment Sale Liability At December 31, 2023 and 2022, the Company has recorded an installment sale liability of $ 0 13,018,184 During the years ended December 31, 2023 and 2022, the Company paid fees of $ 491,536 1,499,007 The liability was repaid in full in 2023. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income Taxes Provision (benefit) for Income Taxes and Effective Income Tax Rate Schedule of Income Taxes and Effective Income Tax Rate December 31, 2023 December 31, 2022 Federal Current $ 570,000 $ - Deferred (2,835,000 ) - Total provision (benefit) $ (2,265,000 ) $ - State Current $ - $ - Deferred - - Total provision (benefit) $ - $ - A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate of 21% to income before provision for income taxes for the years ended December 31, 2023 and 2022, respectively, is as follows: Schedule of Components of Income Tax Expense (Benefit) December 31, 2023 December 31, 2022 Federal income tax expense (benefit) - 19.64 $ 3,848,000 $ (134,000 ) Federal income tax expense (benefit) - 19.64 $ 3,848,000 $ (134,000 ) State income tax expense (benefit) - 6.5 923,000 (44,000 ) Tax-exempt income - (137,000 ) Non-deductible items 174,000 138,000 Subtotal 4,945,000 (177,000 ) Change in valuation allowance (7,210,000 ) 177,000 Income tax expense (benefit) $ (2,265,000 ) $ - Effective tax rate -12.36 % 0.00 % Deferred Tax Assets and Liabilities As of December 31, 2023 and 2022, respectively, the significant components of deferred tax assets and liabilities is as follows: Schedule of Deferred Tax Assets December 31, 2023 December 31, 2022 Deferred Tax Assets Reserve for uncollectible accounts $ 5,000 $ 5,000 Net operating loss carryforwards 3,844,000 8,000,000 Total deferred tax assets 3,849,000 8,005,000 Less: valuation allowance (790,000 ) (8,005,000 ) Net deferred tax assets 3,059,000 - Deferred Tax Liabilities Depreciation 224,000 - Deferred income taxes - net $ 2,835,000 $ - Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary differences and other tax attributes, such as net operating loss carryforwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse. As of December 31, 2023, the Company had federal and state net operating loss carryforwards of approximately $ 15,000,000 12,000,000 During the year ended December 31, 2023, the valuation allowance decreased by approximately $ 7,619,000 The Company is in the process of analyzing their NOL and has not determined if the Company has had any change of control issues that could limit the future use of these NOL’s. As of December 31, 2023, all federal NOL carryforwards that were generated after 2017 may only be used to offset 80% of taxable income and are carried forward indefinitely. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 The Company follows the provisions of ASC 740, which requires the computations of current and deferred income tax assets and liabilities only consider tax positions that are more likely than not (defined as greater than 50% chance) to be sustained if the taxing authorities examined the positions. There are no significant differences between the tax provisions represented in the accompanying consolidated financial statements and that reported in the Company’s income tax returns. The Company is subject to U.S. Federal and State income tax examination by taxing authorities for the years after December 31, 2020. The Company files corporate income tax returns in the United States and State of Tennessee jurisdictions. Due to the Company’s net operating loss posture, all tax years are open and subject to income tax examination by tax authorities. The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. At December 31, 2023 and 2022, respectively, there are no unrecognized tax benefits, and there were no significant accruals for interest related to unrecognized tax benefits or tax penalties. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 – Subsequent Events Acquisition of ClearLine Mobile, Inc (Asset Purchase) On January 5, 2024, the Company closed a purchase agreement and acquired ClearLine Mobile, Inc’s. (“CLMI”) software development and point-of-sale (“POS”) equipment and operations in exchange for $2,500,000. Payments are due as follows: - $ 100,000 - $ 800,000 - $ 800,000 - $ 800,000 At the time of purchase, CLMI’s assets and operations were insignificant. Pursuant to ASU 2017-01, Business Combinations (Topic 805): “Clarifying the Definition of a Business”, this acquisition was determined to be that of an asset and not a business, therefore, there was not a business combination requiring acquisition accounting or related financial reporting. Since this was deemed to be an asset purchase, this did not result in the recognition of goodwill or other identifiable intangible assets. This transaction did not involve the purchase of a “significant amount of assets” as defined in the Instructions to Item 2.01 of Form 8-K. Additionally, the acquisition of CLMI was not deemed to be significant at any level under SEC Regulation S-X 3.05 and did not require the presentation of any additional historical audited financial statements. Stock Issued for Cash - Capital Raise On January 17, 2024, the Company, entered into an underwriting agreement (the “Underwriting Agreement”) with Titan Partners Group, a division of American Capital Partners, as representative of the underwriters named therein (the “Underwriters”) relating to the issuance and sale of 2,678,571 0.001 The price to the public of the Shares was $5.60, before underwriting discounts and commissions. Under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 45 days, to purchase up to an additional 401,785 shares of common stock. The net proceeds to the Company from the Offering will be approximately $13.7 million, or approximately $15.9 million if the Underwriters exercise in full their option to purchase additional shares, in both instances after deducting underwriting discounts and commissions and estimated Offering expenses payable by the Company. The Offering was made pursuant to the Company’s registration statement on Form S-3 (File No. 333-273110) previously filed with the Securities and Exchange Commission (the “SEC”) on July 3, 2023, as amended, and declared effective by the SEC on November 3, 2023. A preliminary and final prospectus supplement were filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933 (the “Securities Act”) on January 17, 2024 and January 19, 2024, respectively. The Offering closed on January 22, 2024. On February 12, 2024, the underwriters exercised their over-allotment option to purchase an additional 401,785 2,249,996 5.60 7 157,500 2,092,496 Exercise of Warrants From January 1, 2024 through March 6, 2024, the Company issued 1,824,497 1,824,497 8,629,871 4.73 Consolidated Amended and Restated Note On March 12, 2024, the Company entered into an amended and restated promissory note (the “Amended Note”) with SMDMM Funding, LLC, with which the Company currently has two outstanding notes, one in the original principal amount of $ 1,108,150.31 4,026,413.00 4,758,088.74 SMDMM Funding, LLC is a Wyoming limited liability company for which the Company’s CEO, Brian Cox, is the Manager. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Non-Controlling Interest | Principles of Consolidation and Non-Controlling Interest These consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. For entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other than the Company. The aggregate of the income or loss and corresponding equity that is not owned by us is included in Non-controlling Interests in the consolidated financial statements. |
Business Combinations | Business Combinations The Company accounts for business acquisitions using the acquisition method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed. Significant judgments are used in determining fair values of assets acquired and liabilities assumed, as well as intangibles. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows, and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company’s current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to fair values of assets and liabilities made after the end of the measurement period are recorded within the Company’s operating results. Effective January 1, 2022, the Company executed a management agreement with Torch Wireless (“Torch” or “TW”). Generally, the Company was engaged to handle the following services: ● Oversee management of the business being conducted by Torch, ● Involved in the performance of Torch’s obligations under contracts regarding its business operations and maintenance of Torch’s customer relationships, ● Assist Torch with regulatory compliance, ● Manage all billing and collection functions, including the right to collect revenues related to Torch’s business operations, as part of the agreement, Torch may not participate in this function; and ● Manage all payment functions related to the business, including the right to disburse funds, as part of the agreement, Torch may not participate in this function SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Torch is a provider of subsidized mobile broadband services to consumers qualifying under the federal guidelines of the U.S. Federal Communication Commission’s Affordable Connectivity Program (“ACP”). The ACP provides the Company with up to a $ 100 30 It was determined that the Company had acquired 100 At the time of acquisition, Torch had no significant assets or liabilities. The Company paid $ 800,000 800,000 At the time of acquisition, Torch had nominal revenues and losses. As a result, and given the immaterial nature of this acquisition, the Company elected not to present any pro-forma financial information during the year ended December 31, 2022. In addition, the Company was required to pay the Sellers monthly residual payments for customers enrolled by the Company through December 31, 2022 of either $ 2 3 For the years ended December 31, 2023 and 2022, the Company incurred expenses of $ 0 1,679,723 This transaction did not involve the purchase of a “significant amount of assets” as defined in the Instructions to Item 2.01 of Form 8-K. Additionally, the acquisition of Torch was not deemed to be significant at any level under SEC Regulation S-X 3.05 and did not require the presentation of any additional historical audited financial statements. For financial reporting purposes, Torch has been consolidated into the Company’s consolidated statements of financial position, results of operations, and cash flows. At December 31, 2023 and December 31, 2022 goodwill was $ 1,666,782 There were no |
Note Receivable (Sale of Former Subsidiary) | Note Receivable (Sale of Former Subsidiary) On May 7, 2021, the Company disposed of its subsidiary True Wireless, Inc. In connection with the sale, the Company received an unsecured note receivable for $ 176,851 0.6 10 7,461 Payments are scheduled as follows: Schedule of Receivables For the Year Ended December 31, 2024 $ 141,759 ** 2025 44,766 186,525 Less: amount representing interest (9,674 ) Total $ 176,851 On July 12, 2023, Notice of Default was provided by SurgePays, Inc. to Blue Skies Connections, LLC for failure to pay amounts due under that certain Promissory Note dated June 14, 2021 by Blue Skies Connections, LLC in favor of SurgePays, Inc. in the original principal amount of $ 176,851 See Note 8 for Contingencies – Legal Matters for additional discussion. ** 52,227 As of December 31, 2023, the Company believes the note is collectible. |
Business Segments and Concentrations | Business Segments and Concentrations The Company uses the “management approach” to identify its reportable segments. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. The Company manages its business as multiple reportable segments. See Note 10 regarding segment disclosure. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 The Mobile Virtual Network Operators consisting of SurgePhone Wireless and Torch Wireless business segment made up approximately 86 73 Revenues related to this business segment are 100 Accounts receivable related to these programs made up 97 96 Customers in the United States accounted for 100 |
Use of Estimates | Use of Estimates Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material. Significant estimates during the years ended December 31, 2023 and 2022, respectively, include, allowance for doubtful accounts and other receivables, inventory reserves and classifications, valuation of loss contingencies, valuation of stock-based compensation, estimated useful lives related to intangible assets, capitalized internal-use software development costs, and property and equipment, implicit interest rate in right-of-use operating leases, uncertain tax positions, income tax payable and the valuation allowance on deferred tax assets. |
Risks and Uncertainties | Risks and Uncertainties The Company operates in an industry that is subject to intense competition and changes in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. The Company has experienced, and in the future may experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. Effective February 7, 2024, the Affordable Connectivity Program (“ACP”) stopped accepting new applications and enrollments. The program will cease to be funded after April 2024. The Company believes that the program will be funded by Congress, however, at this time, we cannot predict any outcome. See discussion below regarding revenue recognition. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: ● Level 1 – Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 – Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and ● Level 3 – Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate. Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. The Company’s financial instruments, including cash, accounts receivable, note receivable, accounts payable and accrued expenses, and accounts payable and accrued expenses – related party, are carried at historical cost. At December 31, 2023 and 2022, respectively, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. ASC 825-10 “Financial Instruments” |
Cash and Cash Equivalents and Concentration of Credit Risk | Cash and Cash Equivalents and Concentration of Credit Risk For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At December 31, 2023 and 2022, respectively, the Company did not have any cash equivalents. The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $ 250,000 At December 31, 2023 and 2022, respectively, the Company did not experience any losses on cash balances in excess of FDIC insured limits. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is made. Allowance for doubtful accounts was $ 17,525 There was bad debt expense of $ 90,009 0 Bad debt expense (recoveries) is recorded as a component of general and administrative expenses in the accompanying consolidated statements of operations. |
Inventory | Inventory Inventory primarily consists of tablets, cell phones and sim cards. Inventories are stated at the lower of cost or net realizable value using the average cost valuation method. There was a provision for inventory obsolescence of $ 0 51,718 During 2023, management determined that $ 2,411,445 At December 31, 2023 and 2022, the Company had inventory of $ 9,046,594 11,186,242 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 |
Impairment of Long-lived Assets including Internal Use Capitalized Software Costs | Impairment of Long-lived Assets including Internal Use Capitalized Software Costs Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets.” If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. There were no |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management reviews the carrying value of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. There were no |
Internal Use Software Development Costs | Internal Use Software Development Costs We capitalize certain internal use software development costs associated with creating and enhancing internally developed software related to our technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not meet the qualification for capitalization, as further discussed below, are expensed as incurred and recorded in general and administrative expenses in the consolidated results of operations. Software development activities generally consist of three stages: (i) planning stage, (ii) application and infrastructure development stage, and (iii) post implementation stage. Costs incurred in the planning and post implementation stages of software development, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. We capitalize costs associated with software developed for internal use when the planning stage is completed, management has authorized further funding for the completion of the project, and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development stages, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete, and the software and technologies are ready for their intended purpose. There is judgment involved in estimating the stage of development as well as estimating time allocated to a particular project. A significant change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent periods. We amortize internal use software development costs using a straight-line method over a three-year estimated useful life, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. We determined the life of internal use software based on historical software upgrades and replacement. On an ongoing basis, we assess if the estimated remaining useful lives of capitalized projects continue to be reasonable based on the remaining expected benefit and usage. If the remaining useful life of a capitalized project is revised, it is accounted for as a change in estimate and the remaining unamortized cost of the underlying asset is amortized prospectively over the updated remaining useful life. We also evaluate internal use software for abandonment and use that as a significant indicator for impairment on a quarterly basis. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 |
Right of Use Assets and Lease Obligations | Right of Use Assets and Lease Obligations The Right of Use Asset and Lease Liability reflect the present value of the Company’s estimated future minimum lease payments over the lease term, which may include options that are reasonably assured of being exercised, discounted using a collateralized incremental borrowing rate. Typically, renewal options are considered reasonably assured of being exercised if the associated asset lives of the building or leasehold improvements exceed that of the initial lease term, and the performance of the business remains strong. Therefore, the Right of Use Asset and Lease Liability may include an assumption on renewal options that have not yet been exercised by the Company. The Company’s operating leases contained renewal options that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. As the rate implicit in leases are not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease within a particular currency environment. See Note 8 regarding operating leases. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606 to align revenue recognition more closely with the delivery of the Company’s services and will provide financial statement readers with enhanced disclosures. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps: Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts contain a significant financing component and there are no contracts with variable consideration. Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. For example, a bonus or penalty may be associated with one or more, but not all, distinct services promised in a series of distinct services that forms part of a single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised service to a customer. The following reflects additional discussion regarding our revenue recognition policies for each of our material revenue streams. For each revenue stream we do not offer any returns, refunds or warranties, and no arrangements are cancellable. Additionally, all contract consideration is fixed and determinable at the initiation of the contract. Performance obligations for Torch and LogicsIQ are satisfied when services are performed. Performance obligations for ECS and SB are satisfied at point of sale. For each of our revenue streams we only have a single performance obligation. Mobile Virtual Network Operators SurgePhone Wireless (“SPW”) and Torch Wireless are licensed to provide subsidized mobile broadband services through the ACP to qualifying low-income customers to all fifty (50) states. Revenues are recognized when an ACP application is completed and accepted. Each month we reconcile subscriber usage to ensure the service was utilized. A monthly file is submitted to the Universal Service Administrative Company for review and approval, at which time we have completed our performance obligation and recognize accounts receivable and revenue. Revenues are recorded in the month when services were rendered, with payment typically received on the 28th of the following month. Lead Generation Services LogicsIQ, Inc. is a lead generation and case management solutions company primarily serving law firms in the mass tort industry. Revenues are earned from our lead generation retained services offerings and call center activities through CenterCom. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 Lead generation consist of sourcing leads, which requires us to drive traffic to our landing pages for a specific marketing campaign. We also achieve this in certain marketing campaigns by using third-party preferred vendors to meet the needs of our clients. Revenues are recognized at the time the lead is delivered to the client. If payment is received in advance of the delivery of services, it is included in deferred revenue, and subsequently recognized once the performance obligation has been completed. Retained service offerings consist of turning leads into a retained legal case. To provide this service to our customers, we qualify leads through verification of information collected during the lead generation process. Additionally, we further qualify these leads using a client questionnaire which assists in determining the services to be provided. The qualification process is completed using our call center operations. Effective February 1, 2023, LogicsIQ started offering call center services to existing clients. These services are similar in nature to the services CenterCom offers LogicsIQ. The total revenue from these services for the years ended December 31, 2023 and 2022, was $ 1,545,397 0 If payment is received in advance of the delivery of services, it is included in deferred revenue, and subsequently recognized once the performance obligation has been completed. At the time of delivery of leads and the creation of retained cases (customers are qualified at this point), our performance obligation has been completed and revenues are recognized. Arrangements with customers do not provide the customer with the right to take possession of our software or platform at any time. Once the advertising is delivered, it is non-refundable. Comprehensive Platform Services Revenues are generated through the sale of telecommunication products such as mobile phones, wireless top-up refills, and other mobile related products. At the time in which our products are sold through our online web portal (point of sale), our performance obligation is considered complete. At point of sale (completion of performance obligation), our web portal platform initiates an automated clearing house transaction (ACH) resulting in the recording revenue. |
Contract Liabilities (Deferred Revenue) | Contract Liabilities (Deferred Revenue) Contract liabilities represent deposits made by customers before the satisfaction of performance obligation and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer deposit is relieved and revenue is recognized. At December 31, 2023 and 2022, the Company had deferred revenue of $ 20,000 243,110 The following represents the Company’s disaggregation of revenues for the years ended December 31, 2023 and 2022: Schedule of Disaggregation of Revenue from Contracts With Customers For the Year Ended December 31, 2023 2022 Revenue Revenue % of Revenues Revenue % of Revenues Mobile Virtual Network Operators $ 118,577,920 86.46 % $ 88,351,547 72.69 % Comprehensive Platform Services 11,341,183 8.27 % 16,319,076 13.43 % Lead Generation 7,184,283 5.24 % 16,760,656 13.79 % Other 38,446 0.03 % 112,911 0.09 % Total Revenues $ 137,141,832 100 % $ 121,544,190 100 % The above disaggregation of revenues includes the following entities: Mobile Virtual Network Operators (SPW and TW), Comprehensive Platform Services (Surge Fintech and ECS), Lead Generation (LogicsIQ); and Other (Surge Blockchain) SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 |
Cost of Revenues | Cost of Revenues Cost of revenues consists of purchased telecom services including data usage and access to wireless networks. Additionally, cost of revenues consists of prepaid phone cards, commissions, and advertising costs. |
Income Taxes | Income Taxes The Company accounts for income tax using the asset and liability method prescribed by ASC 740, “Income Taxes”. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2023 and 2022, respectively, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. The Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related to uncertain income tax positions were recorded for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023, the Company generated net income. The Company currently has an unapplied net operating loss carryforward (deferred tax asset), which was evaluated for applicability in offsetting the current taxable net income. The Company has determined that the net operating loss carryforward is limited to 80% of the current year’s net taxable income. The Company has accrued an income tax liability of $ 570,000 |
Investment – Former Related Party | Investment – Former Related Party On January 17, 2019, we announced the completion of an agreement to acquire a 40 Anthony N. Nuzzo, a former director and officer and the holder of approximately 10% of our voting equity, had a controlling interest in CenterCom Global. During 2022, Mr. Nuzzo passed away. See Form 8-K filed on March 24, 2022. The strategic partnership with CenterCom as a bilingual operations hub has powered our growth and revenue. CenterCom has been built to support the infrastructure required to rapidly scale in synergy and efficiency to support our sales growth, customer service and development. We account for this investment under the equity method. Investments accounted for under the equity method are recorded based upon the amount of our investment and adjusted each period for our share of the investee’s income or loss. All investments are reviewed for changes in circumstance or the occurrence of events that suggest an other than temporary event where our investment may not be recoverable. The financial information used to account for the investment is unaudited. At December 31, 2023 and December 31, 2022, our investment in CenterCom was $ 464,409 354,206 During the years ended December 31, 2023 and 2022, we recognized a gain of $ 110,203 89,082 |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising costs are included as a component of general and administrative expense in the consolidated statements of operations. The Company recognized $ 152,851 259,393 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for our stock-based compensation under ASC 718 “Compensation – Stock Compensation” The Company uses the fair value method for equity instruments granted to non-employees and uses the Black-Scholes model for measuring the fair value of options. The fair value of stock-based compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods. When determining fair value of stock-based compensation, the Company considers the following assumptions in the Black-Scholes model: ● Exercise price, ● Expected dividends, ● Expected volatility, ● Risk-free interest rate; and ● Expected life of option Stock Warrants In connection with certain financing (debt or equity), consulting and collaboration arrangements, the Company may issue warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of warrants issued for compensation using the Black-Scholes option pricing model as of the measurement date. However, for warrants issued that meet the definition of a derivative liability, fair value is determined based upon the use of a binomial pricing model. Warrants issued in conjunction with the issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants (for services) are recorded at fair value and expensed over the requisite service period or at the date of issuance if there is not a service period. |
Basic and Diluted Earnings (Loss) per Shar | Basic and Diluted Earnings (Loss) per Shar Pursuant to ASC 260-10-45, basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the periods presented. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares may consist of contingently issuable shares, common stock issuable upon the conversion of stock options and warrants (using the treasury stock method), and convertible debt. These common stock equivalents may be dilutive in the future. In the event of a net loss, diluted loss per share is the same as basic loss per share since the effect of the potential common stock equivalents upon conversion would be anti-dilutive. The following potentially dilutive equity securities outstanding as of December 31, 2023 and 2022 were as follows: Schedule of Diluted Net Income (Loss) Per Share December 31, 2023 December 31, 2022 Warrants 5,574,253 5,681,392 Stock options 116,174 6,801 Total common stock equivalents 5,690,427 5,688,193 Warrants and stock options included as commons stock equivalents represent those that are fully vested and exercisable. See Note 9. Based on the potential common stock equivalents noted above at December 31, 2023, the Company has sufficient authorized shares of common stock ( 500,000,000 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 The following table shows the computation of basic and diluted earnings per share for the years ended December 31, 2023 and 2022. The Company had a net loss in 2022, as a result, basic and diluted earnings per share for the year ended December 31, 2022 are the same. Schedule of Earnings per Share Basic and Diluted Year Ended Year Ended December 31, 2023 December 31, 2022 Numerator Net income $ 20,617,903 $ (680,763 ) Denominator Weighted average shares outstanding - basic 14,258,172 12,395,364 Effect of dilutive securities 664,709 - Weighted average shares outstanding - diluted 14,922,881 12,395,364 Earnings (loss) per share - basic $ 1.45 $ (0.05 ) Earnings (loss) per share - diluted $ 1.38 $ (0.05 ) |
Related Parties | Related Parties Parties are considered to be related to the Company if the parties, directly or indirectly, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. During the years ended December 31, 2023 and 2022, the Company incurred expenses with related parties in the normal course of business totaling $ 166,356 20,125,153 Schedule of Related Party Expenses Related Parties December 31, 2023 December 31, 2022 321 Communications, Inc. $ - $ 16,035,093 3 Carddawg Investments, Inc. 166,356 166,356 1 CenterCom USA, Inc. - 2,759,763 2 National Relief Telecom - 1,163,941 3 Total $ 166,356 $ 20,125,153 1 - represents an affiliate of our Chief Executive Officer (Kevin Brian Cox) 2 - represents an entity controlled by a former officer and director (Anthony N. Nuzzo), who passed away in 2022. 3 - represents an entity controlled by a former director (Jay Jones), who resigned in 2022. From time to time, the Company may use credit cards to pay corporate expenses, these credit cards are in the names of certain of the Company’s officers and directors. These amounts are insignificant. See Note 6 for debt transactions with our Chief Executive Officer. |
Recent Accounting Standards | Recent Accounting Standards Changes to accounting principles are established by the FASB in the form of Accounting Standards Updates (“ASU’s”) to the FASB’s Codification. We consider the applicability and impact of all ASU’s on our consolidated financial position, results of operations, stockholders’ equity, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements issued through the date these financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective accounting pronouncements, when adopted, will have a material impact on the consolidated financial statements of the Company. In March 2022, the Financial Accounting Standards Board (the “FASB”) issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates the accounting guidance on troubled debt restructurings (“TDRs”) for creditors in ASC 310, Receivables (Topic 310), and requires entities to provide disclosures about current period gross write-offs by year of origination. Also, ASU 2022-02 updates the requirements related to accounting for credit losses under ASC 326, Financial Instruments – Credit Losses (Topic 326), and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 was effective for the Company January 1, 2023. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 This guidance was adopted on January 1, 2023. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no material effect on the consolidated results of operations, stockholders’ equity, or cash flows. |
Organization and Nature of Op_2
Organization and Nature of Operations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Subsidiaries | The parent (SurgePays, Inc.) and subsidiaries are organized as follows: Schedule of Subsidiaries Company Name Incorporation Date State of Incorporation SurgePays, Inc August 18, 2006 Nevada KSIX Media, Inc November 5, 2014 Nevada KSIX, LLC September 14, 2011 Nevada Surge Blockchain, LLC January 29, 2009 Nevada Injury Survey, LLC July 28, 2020 Nevada DigitizeIQ, LLC July 23, 2014 Illinois LogicsIQ, Inc October 2, 2018 Nevada Surge Payments, LLC December 17, 2018 Nevada SurgePhone Wireless, LLC August 29, 2019 Nevada SurgePays Fintech, Inc August 22, 2019 Nevada ECS Prepaid, LLC June 9, 2009 Missouri Central States Legal Services, Inc August 1, 2003 Missouri Electronic Check Services, Inc May 19, 1999 Missouri Torch Wireless January 29, 2019 Wyoming * Effective January 1, 2022, the Company acquired Torch Wireless |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Receivables | Payments are scheduled as follows: Schedule of Receivables For the Year Ended December 31, 2024 $ 141,759 ** 2025 44,766 186,525 Less: amount representing interest (9,674 ) Total $ 176,851 |
Schedule of Disaggregation of Revenue from Contracts With Customers | The following represents the Company’s disaggregation of revenues for the years ended December 31, 2023 and 2022: Schedule of Disaggregation of Revenue from Contracts With Customers For the Year Ended December 31, 2023 2022 Revenue Revenue % of Revenues Revenue % of Revenues Mobile Virtual Network Operators $ 118,577,920 86.46 % $ 88,351,547 72.69 % Comprehensive Platform Services 11,341,183 8.27 % 16,319,076 13.43 % Lead Generation 7,184,283 5.24 % 16,760,656 13.79 % Other 38,446 0.03 % 112,911 0.09 % Total Revenues $ 137,141,832 100 % $ 121,544,190 100 % |
Schedule of Diluted Net Income (Loss) Per Share | The following potentially dilutive equity securities outstanding as of December 31, 2023 and 2022 were as follows: Schedule of Diluted Net Income (Loss) Per Share December 31, 2023 December 31, 2022 Warrants 5,574,253 5,681,392 Stock options 116,174 6,801 Total common stock equivalents 5,690,427 5,688,193 |
Schedule of Earnings per Share Basic and Diluted | The following table shows the computation of basic and diluted earnings per share for the years ended December 31, 2023 and 2022. The Company had a net loss in 2022, as a result, basic and diluted earnings per share for the year ended December 31, 2022 are the same. Schedule of Earnings per Share Basic and Diluted Year Ended Year Ended December 31, 2023 December 31, 2022 Numerator Net income $ 20,617,903 $ (680,763 ) Denominator Weighted average shares outstanding - basic 14,258,172 12,395,364 Effect of dilutive securities 664,709 - Weighted average shares outstanding - diluted 14,922,881 12,395,364 Earnings (loss) per share - basic $ 1.45 $ (0.05 ) Earnings (loss) per share - diluted $ 1.38 $ (0.05 ) |
Schedule of Related Party Expenses | Schedule of Related Party Expenses Related Parties December 31, 2023 December 31, 2022 321 Communications, Inc. $ - $ 16,035,093 3 Carddawg Investments, Inc. 166,356 166,356 1 CenterCom USA, Inc. - 2,759,763 2 National Relief Telecom - 1,163,941 3 Total $ 166,356 $ 20,125,153 1 - represents an affiliate of our Chief Executive Officer (Kevin Brian Cox) 2 - represents an entity controlled by a former officer and director (Anthony N. Nuzzo), who passed away in 2022. 3 - represents an entity controlled by a former director (Jay Jones), who resigned in 2022. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment Estimated Useful Type December 31, 2023 December 31, 2022 Lives (Years) Computer equipment and software $ 1,006,286 $ 1,006,286 3 5 Furniture and fixtures 82,752 82,752 5 7 1,089,038 1,089,038 Less: accumulated depreciation/amortization 727,197 445,665 Property and equipment - net $ 361,841 $ 643,373 |
Intangibles (Tables)
Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangibles consisted of the following: Schedule of Intangible Assets Estimated Useful Type December 31, 2023 December 31, 2022 Lives (Years) Proprietary Software $ 4,286,402 $ 4,286,402 7 Tradenames/trademarks 617,474 617,474 15 ECS membership agreement 465,000 465,000 1 Noncompetition agreement 201,389 201,389 2 Customer Relationships 183,255 183,255 5 Intangible assets gross 5,753,520 5,753,520 Less: accumulated amortization (3,627,050 ) (2,973,543 ) Intangibles - net $ 2,126,470 $ 2,779,977 |
Schedule of Estimated Amortization Expenses | Estimated amortization expense for each of the five (5) succeeding years is as follows: Schedule of Estimated Amortization Expenses For the Years Ended December 31: 2024 653,507 2025 653,507 2026 653,507 2027 165,949 Total $ 2,126,470 |
Internal Use Software Develop_2
Internal Use Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Intangible Assets | Intangibles consisted of the following: Schedule of Intangible Assets Estimated Useful Type December 31, 2023 December 31, 2022 Lives (Years) Proprietary Software $ 4,286,402 $ 4,286,402 7 Tradenames/trademarks 617,474 617,474 15 ECS membership agreement 465,000 465,000 1 Noncompetition agreement 201,389 201,389 2 Customer Relationships 183,255 183,255 5 Intangible assets gross 5,753,520 5,753,520 Less: accumulated amortization (3,627,050 ) (2,973,543 ) Intangibles - net $ 2,126,470 $ 2,779,977 |
Schedule of Estimated Amortization Expenses | Estimated amortization expense for each of the five (5) succeeding years is as follows: Schedule of Estimated Amortization Expenses For the Years Ended December 31: 2024 653,507 2025 653,507 2026 653,507 2027 165,949 Total $ 2,126,470 |
Software and Software Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Estimated Amortization Expenses | Estimated amortization expense is as follows for the years ended December 31: Schedule of Estimated Amortization Expenses 2024 222,828 2025 222,828 2026 93,768 Total $ 539,424 |
Software and Software Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Intangible Assets | Internal Use Software Development Costs consisted of the following: Schedule of Intangible Assets Estimated Useful Type December 31, 2023 December 31, 2022 Life (Years) Internal Use Software Development Costs $ 668,484 $ 387,180 3 Less: accumulated amortization 129,060 - Internal Use Software Development Costs - net $ 539,424 $ 387,180 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Short-Term Debt [Line Items] | |
Schedule of Debt Maturities | The following represents the maturities of the Company’s various debt arrangements for each of the five (5) succeeding years and thereafter as follows: Schedule of Debt Maturities For the Year Ended December 31, Notes Payable - Related Parties Notes Payable - SBA Government Total 2024 $ 4,584,563 $ - $ 4,584,563 Thereafter - 460,523 460,523 Total $ 4,584,563 $ 460,523 $ 5,045,086 |
Notes Payable [Member] | |
Short-Term Debt [Line Items] | |
Schedule of Notes Payable | Notes Payable Schedule of Notes Payable 1 2 3 4 Terms Notes Notes Notes Note Total Issuance dates of notes April/May 2022 April/June 2022 March 2022 2022 Maturity date October/November 2022 January/February 2023 March 2023 2025 Interest rate 19% 24% 19% 1% Default interest rate 26% N/A 26% 0% Collateral Unsecured All assets Unsecured Unsecured Warrants issued as debt discount/issue costs 36,000 N/A 15,000 N/A Balance - December 31, 2021 $ - $ - $ - $ - $ - Gross proceeds 1,200,000 5,000,000 500,000 - 6,700,000 Reclassification from SBA - PPP note payable - - - 126,418 126,418 Repayments (100,000 ) (5,000,000 ) (100,000 ) (31,251 ) (5,231,251 ) Debt issue costs (76,451 ) - (38,953 ) - (115,404 ) Amortization of debt issue costs 76,451 - 38,953 - 115,404 Balance - December 31, 2022 1,100,000 - 400,000 95,167 1,595,167 Repayments (1,100,000 ) - (400,000 ) (95,167 ) (1,595,167 ) Balance - December 31, 2023 $ - $ - $ - $ - $ - 1- These notes were issued with 36,000 3 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 2- The Company executed a $ 5,000,000 80 3- These notes were issued with 15,000 3 12,000 3 400,000 100,000 4- This loan, originally a PPP loan, was refinanced in 2022 and was extended from October 2021 to March 2025. Monthly payments were $ 3,566 |
Related Party [Member] | |
Short-Term Debt [Line Items] | |
Schedule of Notes Payable | Notes Payable – Related Parties Schedule of Notes Payable 1 2 Note Payable Note Payable Terms Related Party Related Party Total Issuance dates of notes Various August 2021 Maturity dates December 31, 2023 December 31, 2024 August 2031 Interest rate 10% 10% Collateral Unsecured Unsecured Conversion price N/A N/A Balance - December 31, 2021 $ 5,593,431 $ 467,385 6,060,816 Conversion of debt into common stock (1,086,413 ) - (1,086,413 ) Reclass of accrued interest to note payable 627,545 - 627,545 Balance - December 31, 2022 5,134,563 467,385 5,601,948 Less: short term 1,108,150 - 1,108,150 Long term $ 4,026,413 $ 467,385 $ 4,493,798 Balance - December 31, 2022 $ 5,134,563 $ 467,385 $ 5,601,948 Repayments (550,000 ) (467,385 ) (1,017,385 ) Balance - December 31, 2023 4,584,563 - 4,584,563 Less: short term 4,584,563 - 4,584,563 Long term $ - $ - $ - 1- Activity is with the Company’s Chief Executive Officer and Board Member (Kevin Brian Cox). In 2022, the Company included $ 627,545 270,745 4.01 1,086,413 1,086,413 At December 31, 2023, of the total $ 4,584,563 558,150 4,026,413 SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 AND 2022 In March 2024, as approved by the Audit Committee, the Company consolidated all remaining outstanding principal ($ 4,584,563 498,991 5,083,554 36 5,905,427 164,039 Subsequent to year end the Company is current in all payments due. 2- Activity is with David May, who is a Board Member. The note of $ 467,385 63,641 531,026 |
Paycheck Protection Program And Economic Injury Disaster Loan [Member] | |
Short-Term Debt [Line Items] | |
Schedule of Notes Payable | Schedule of Notes Payable PPP EIDL EIDL PPP Terms SBA SBA SBA SBA Total Issuance dates of SBA loans April 2020 May 2020 July 2020 March 2021 Term 18 months 30 30 5 Maturity date October 2021 May 2050 July 2050 March 2026 Default interest rate Interest rate 1 3.75 3.75 1 Collateral Unsecured Unsecured Unsecured Unsecured Warrants issued as debt discount/issue costs Conversion price N/A N/A N/A N/A Balance - December 31, 2021 $ 126,418 $ 150,000 $ 336,600 $ 518,167 $ 1,131,185 Forgiveness of loan - - - (518,167 ) (518,167 ) 1 Conversion of debt into common stock Reclass of accrued interest to note payable Gross proceeds Reclassification from SBA - PPP note payable Debt issue costs Amortization of debt issue costs Repayments - (4,078 ) (7,676 ) - (11,754 ) Reclassification to note payable (126,418 ) - - - (126,418 ) 2 Balance - December 31, 2022 - 145,922 328,924 - 474,846 Repayments - (3,928 ) (10,395 ) - (14,323 ) Balance - December 31, 2023 $ - $ 141,994 $ 318,529 $ - $ 460,523 1 During 2022, the Company received forgiveness on a PPP loan totaling $ 524,143 518,167 5,976 2 During 2021, the Company received a partial forgiveness on a PPP loan totaling $ 377,743 371,664 6,079 Monthly payments are $3,566/month |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Expense | The tables below present information regarding the Company’s operating lease assets and liabilities at December 31, 2023 and 2022, respectively: Schedule of Lease Expense For the Year Ended For the Year Ended December 31, 2023 December 31, 2022 Operating Leases $ 43,483 $ 34,294 Interest on lease liabilities 20,804 11,598 Total net lease cost $ 64,287 $ 45,892 |
Schedule of Supplemental Cash Flow and Other Information Related to Leases | Supplemental cash flow and other information related to leases was as follows: Schedule of Supplemental Cash Flow and Other Information Related to Leases For the Year Ended For the Year Ended December 31, 2023 December 31, 2022 Cash paid for amounts included in measurement of lease liabilities Operating cash flows from operating leases $ 39,490 $ 30,948 ROU assets obtained in exchange for lease liabilities Operating leases $ - $ - Weighted average remaining lease term (in years) Operating leases 6.50 7.99 Weighted average discount rate Operating leases 5 % 5 % |
Schedule of Future Minimum Payments | Future minimum lease payments for the years ended December 31: Schedule of Future Minimum Payments 2024 $ 61,876 2025 73,460 2026 65,044 2027 66,627 2028 100,246 Thereafter 107,261 Total lease payments 474,514 Less: amount representing interest (75,101 ) Total lease obligations 399,413 Less: short term lease liability (43,137 ) Long term lease liability $ 356,276 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Schedule of Non-vested Shares Related Parties | The following is a summary of the Company’s non-vested shares at December 31, 2023. Schedule of Non-vested Shares Related Parties Weighted Average Non-Vested Shares Number of Shares Grant Date Fair Value Balance - December 31, 2022 - $ - Granted 695,000 5.24 Vested - - Cancelled/Forfeited - - Balance - December 31, 2023 695,000 $ 5.24 Unrecognized Compensation $ 3,103,967 Weighted average period (years) 1.23 |
Schedule of Stock Option Transactions | Stock option transactions for the years ended December 31, 2023 and 2022 are summarized as follows: Schedule of Stock Option Transactions Stock Options Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Weighted Average Grant Date Fair Value Outstanding - December 31, 2021 17,004 $ 16.00 5.16 $ - Vested and Exercisable - December 31, 2021 3,401 $ 16.00 5.16 $ - Unvested and non-exercisable - December 31, 2021 13,603 $ 16.00 5.16 $ - Granted - - $ - Exercised - - Cancelled/Forfeited - - Outstanding - December 31, 2022 17,004 $ 16.00 4.16 $ - Vested and Exercisable - December 31, 2022 6,801 $ 16.00 4.16 $ - Unvested and non-exercisable - December 31, 2022 10,203 $ 16.00 4.16 $ - Granted 104,272 6.45 $ 5.53 Exercised - - Cancelled/Forfeited - - Outstanding - December 31, 2023 121,276 $ 7.79 6.47 $ - Vested and Exercisable - December 31, 2023 116,174 $ 7.43 6.61 $ - Unvested and non-exercisable - December 31, 2023 5,101 $ 16.00 3.16 $ - |
Schedule of Fair Value of Stock Options | The fair value of these stock options was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Stock Options Expected term 7 Expected volatility 106 Expected dividends 0 Risk free interest rate 3.88 |
Schedule of Warrants Activity | Warrant activity for the years ended December 31, 2023 and 2022 are summarized as follows: Schedule of Warrants Activity Warrants Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding - December 31, 2021 6,082,984 $ 8.68 2.93 $ - Vested and Exercisable - December 31, 2021 5,852,984 $ 8.70 2.85 $ - Unvested - December 31, 2021 230,000 $ 8.00 4.85 $ - Granted 189,000 $ 4.73 - Exercised (498,850 ) $ 6.49 - Cancelled/Forfeited (91,743 ) $ 40.02 - Outstanding - December 31, 2022 5,681,392 $ 5.05 1.85 $ 10,026,387 Vested and Exercisable - December 31, 2022 5,681,392 $ 5.05 1.85 $ 10,026,387 Unvested - December 31, 2022 - $ - - $ - Granted - $ - - Exercised (43,814 ) $ 4.73 - Cancelled/Forfeited (63,325 ) $ 26.39 - Outstanding - December 31, 2023 5,574,253 $ 4.81 0.86 $ 9,348,348 Vested and Exercisable - December 31, 2023 5,574,253 $ 4.81 0.86 $ 9,348,348 Unvested and non-exercisable - December 31, 2023 - $ - - $ - |
Warrant One [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Schedule of Fair Value of Warrants | The fair value of these warrants was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Warrants Expected term (years) 3 Expected volatility 119 120 Expected dividends 0 Risk free interest rate 2.45 2.80 |
Warrant Two [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Schedule of Fair Value of Warrants | The fair value of these warrants was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Warrants Expected term (years) 3 Expected volatility 120 Expected dividends 0 Risk free interest rate 2.71 |
Warrant Three [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Schedule of Fair Value of Warrants | The fair value of these warrants was determined using a Black-Scholes option pricing model with the following inputs: Schedule of Fair Value of Warrants Expected term (years) 3 Expected volatility 116 119 Expected dividends 0 Risk free interest rate 4.13 4.25 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | Segment information for the Company’s operations for the years ended December 31, 2023 and 2022, are as follows: Schedule of Operating Segments 2023 2022 For the Year Ended December 31, 2023 2022 Revenues Mobile Virtual Network Operator $ 118,577,920 $ 88,351,547 Comprehensive Platform Services 11,341,183 16,319,076 Lead Generation 7,184,283 16,760,656 Other 38,446 112,911 Total $ 137,141,832 $ 121,544,190 Cost of revenues Mobile Virtual Network Operator $ 83,918,968 $ 76,130,286 Comprehensive Platform Services 11,281,722 16,966,332 Lead Generation 6,228,650 14,975,647 Other 70,001 2,517 Total $ 101,499,341 $ 108,074,782 Operating expenses Mobile Virtual Network Operator $ 427,493 $ 299,406 Comprehensive Platform Services 1,799,469 1,327,517 Lead Generation 775,704 1,460,750 Other 3,256 53,571 Corporate overhead 13,771,185 9,694,379 Total $ 16,777,107 $ 12,835,623 Income (loss) from operations Mobile Virtual Network Operator $ 34,231,459 $ 11,921,855 Comprehensive Platform Services (1,740,008 ) (1,974,773 ) Lead Generation 179,929 324,259 Other (34,811 ) 56,823 Corporate overhead (13,771,185 ) (9,694,379 ) Total $ 18,865,384 $ 633,785 Segment information for the Company’s assets and liabilities at December 31, 2023 and 2022, are as follows: December 31, 2023 December 31, 2022 Total Assets Mobile Virtual Network Operator $ 32,502,760 $ 25,550,587 Comprehensive Platform Services 2,584,245 3,205,030 Lead Generation 1,596,236 1,880,087 Other 135,548 165,172 Corporate overhead 5,106,518 3,202,630 Total $ 41,925,307 $ 34,003,506 Total Liabilities Mobile Virtual Network Operator $ 2,426,964 $ 15,484,392 Comprehensive Platform Services 155,295 198,197 Lead Generation 899,485 2,619,521 Other 198,197 58,919 Corporate overhead 9,841,902 10,524,224 Total $ 13,521,843 $ 28,885,253 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Taxes and Effective Income Tax Rate | Provision (benefit) for Income Taxes and Effective Income Tax Rate Schedule of Income Taxes and Effective Income Tax Rate December 31, 2023 December 31, 2022 Federal Current $ 570,000 $ - Deferred (2,835,000 ) - Total provision (benefit) $ (2,265,000 ) $ - State Current $ - $ - Deferred - - Total provision (benefit) $ - $ - |
Schedule of Components of Income Tax Expense (Benefit) | A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate of 21% to income before provision for income taxes for the years ended December 31, 2023 and 2022, respectively, is as follows: Schedule of Components of Income Tax Expense (Benefit) December 31, 2023 December 31, 2022 Federal income tax expense (benefit) - 19.64 $ 3,848,000 $ (134,000 ) Federal income tax expense (benefit) - 19.64 $ 3,848,000 $ (134,000 ) State income tax expense (benefit) - 6.5 923,000 (44,000 ) Tax-exempt income - (137,000 ) Non-deductible items 174,000 138,000 Subtotal 4,945,000 (177,000 ) Change in valuation allowance (7,210,000 ) 177,000 Income tax expense (benefit) $ (2,265,000 ) $ - Effective tax rate -12.36 % 0.00 % |
Schedule of Deferred Tax Assets | As of December 31, 2023 and 2022, respectively, the significant components of deferred tax assets and liabilities is as follows: Schedule of Deferred Tax Assets December 31, 2023 December 31, 2022 Deferred Tax Assets Reserve for uncollectible accounts $ 5,000 $ 5,000 Net operating loss carryforwards 3,844,000 8,000,000 Total deferred tax assets 3,849,000 8,005,000 Less: valuation allowance (790,000 ) (8,005,000 ) Net deferred tax assets 3,059,000 - Deferred Tax Liabilities Depreciation 224,000 - Deferred income taxes - net $ 2,835,000 $ - |
Schedule of Subsidiaries (Detai
Schedule of Subsidiaries (Details) | 12 Months Ended | |
Dec. 31, 2023 | ||
Entity incorporation, state or country code | NV | |
SurgePays, Inc. [Member] | ||
Name of subsidiary | SurgePays, Inc | |
Incorporation date | Aug. 18, 2006 | |
Entity incorporation, state or country code | NV | |
KSIX Media, Inc. [Member] | ||
Name of subsidiary | KSIX Media, Inc | |
Incorporation date | Nov. 05, 2014 | |
Entity incorporation, state or country code | NV | |
KSIX, LLC [Member] | ||
Name of subsidiary | KSIX, LLC | |
Incorporation date | Sep. 14, 2011 | |
Entity incorporation, state or country code | NV | |
Surge Blockchain, LLC [Member] | ||
Name of subsidiary | Surge Blockchain, LLC | |
Incorporation date | Jan. 29, 2009 | |
Entity incorporation, state or country code | NV | |
Injury Survey, LLC [Member] | ||
Name of subsidiary | Injury Survey, LLC | |
Incorporation date | Jul. 28, 2020 | |
Entity incorporation, state or country code | NV | |
DigitizeIQ, LLC [Member] | ||
Name of subsidiary | DigitizeIQ, LLC | |
Incorporation date | Jul. 23, 2014 | |
Entity incorporation, state or country code | IL | |
LogicsIQ, Inc [Member] | ||
Name of subsidiary | LogicsIQ, Inc | |
Incorporation date | Oct. 02, 2018 | |
Entity incorporation, state or country code | NV | |
Surge Payments, LLC [Member] | ||
Name of subsidiary | Surge Payments, LLC | |
Incorporation date | Dec. 17, 2018 | |
Entity incorporation, state or country code | NV | |
SurgePhone Wireless, LLC [Member] | ||
Name of subsidiary | SurgePhone Wireless, LLC | |
Incorporation date | Aug. 29, 2019 | |
Entity incorporation, state or country code | NV | |
SurgePays Fintech, Inc [Member] | ||
Name of subsidiary | SurgePays Fintech, Inc | |
Incorporation date | Aug. 22, 2019 | |
Entity incorporation, state or country code | NV | |
ECS Prepaid, LLC [Member] | ||
Name of subsidiary | ECS Prepaid, LLC | |
Incorporation date | Jun. 09, 2009 | |
Entity incorporation, state or country code | MO | |
Central States Legal Services, Inc. [Member] | ||
Name of subsidiary | Central States Legal Services, Inc | |
Incorporation date | Aug. 01, 2003 | |
Entity incorporation, state or country code | MO | |
Electronic Check Services, Inc. [Member] | ||
Name of subsidiary | Electronic Check Services, Inc | |
Incorporation date | May 19, 1999 | |
Entity incorporation, state or country code | MO | |
Torch Wireless [Member] | ||
Name of subsidiary | Torch Wireless | [1] |
Incorporation date | Jan. 29, 2019 | [1] |
Entity incorporation, state or country code | WY | [1] |
[1]Effective January 1, 2022, the Company acquired Torch Wireless |
Organization and Nature of Op_3
Organization and Nature of Operations (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net income available to common stockholders | $ 20,617,903 | $ (680,763) | |
Net cash provided by operations | 10,287,345 | 793,272 | |
Accumulated deficit | 15,186,203 | 35,804,106 | |
Stockholders equity | 28,403,464 | 5,118,253 | $ 3,551,321 |
Working capital | 20,661,617 | ||
Cash on hand | $ 14,622,060 | $ 7,035,654 |
Schedule of Receivables (Detail
Schedule of Receivables (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
2024 | $ 141,759 | |
2025 | 44,766 | |
Receivables, gross | 186,525 | |
Less: amount representing interest | (9,674) | |
Total | $ 176,851 | $ 176,851 |
Schedule of Disaggregation of R
Schedule of Disaggregation of Revenue from Contracts With Customers (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Information [Line Items] | ||
Total Revenue | $ 137,141,832 | $ 121,544,190 |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Product Information [Line Items] | ||
Percentage of Revenues | 100% | 100% |
Mobile Virtual Network Operators [Member] | ||
Product Information [Line Items] | ||
Total Revenue | $ 118,577,920 | $ 88,351,547 |
Mobile Virtual Network Operators [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Product Information [Line Items] | ||
Percentage of Revenues | 86.46% | 72.69% |
Comprehensive Platform Services [Member] | ||
Product Information [Line Items] | ||
Total Revenue | $ 11,341,183 | $ 16,319,076 |
Comprehensive Platform Services [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Product Information [Line Items] | ||
Percentage of Revenues | 8.27% | 13.43% |
Lead Generation [Member] | ||
Product Information [Line Items] | ||
Total Revenue | $ 7,184,283 | $ 16,760,656 |
Lead Generation [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Product Information [Line Items] | ||
Percentage of Revenues | 5.24% | 13.79% |
Other [Member] | ||
Product Information [Line Items] | ||
Total Revenue | $ 38,446 | $ 112,911 |
Other [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Product Information [Line Items] | ||
Percentage of Revenues | 0.03% | 0.09% |
Schedule of Diluted Net Income
Schedule of Diluted Net Income (Loss) Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents | 5,690,427 | 5,688,193 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents | 5,574,253 | 5,681,392 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents | 116,174 | 6,801 |
Schedule of Earnings per Share
Schedule of Earnings per Share Basic and Diluted (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator | ||
Net income | $ 20,617,903 | $ (680,763) |
Denominator | ||
Weighted average shares outstanding - basic | 14,258,172 | 12,395,364 |
Effect of dilutive securities | 664,709 | |
Weighted average shares outstanding - diluted | 14,922,881 | 12,395,364 |
Earnings (loss) per share - basic | $ 1.45 | $ (0.05) |
Earnings (loss) per share - diluted | $ 1.38 | $ (0.05) |
Schedule of Related Party Expen
Schedule of Related Party Expenses (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Total related party expenses | $ 166,356 | $ 20,125,153 | |
Three Two One Communications Inc [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total related party expenses | [1] | 16,035,093 | |
Carddawg Investments, Inc. [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total related party expenses | [2] | 166,356 | 166,356 |
CenterCom USA Inc [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total related party expenses | [3] | 2,759,763 | |
National Relief Telecom [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total related party expenses | [1] | $ 1,163,941 | |
[1]- represents an entity controlled by a former director (Jay Jones), who resigned in 2022.[2]- represents an affiliate of our Chief Executive Officer (Kevin Brian Cox)[3]- represents an entity controlled by a former officer and director (Anthony N. Nuzzo), who passed away in 2022. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Jan. 17, 2019 | |
Reimbursement cost | $ 100 | ||
Reimbursement cost per customer | 30 | ||
Payments to acquire businesses | $ 800,000 | ||
Goodwill | 1,666,782 | 1,666,782 | |
Expenses incurred to residual payments | 0 | 1,679,723 | |
Impairment losses | 0 | 0 | |
Note receivable | 176,851 | 176,851 | |
Amount due | 52,227 | ||
Insured by FDIC | 250,000 | ||
Allowance for doubtful accounts | 17,525 | 17,525 | |
Bad debt expense | 90,009 | (59,485) | |
Provision for inventory obsolescence | 51,718 | ||
Availability of distribution not claimed | 2,411,445 | ||
Inventory, net | 9,046,594 | 11,186,242 | |
Impairnent loss on property and equipment | 0 | 0 | |
Revenues | 137,141,832 | 121,544,190 | |
Deferred revenue | 20,000 | 243,110 | |
Income tax liability | 570,000 | ||
Investments | 464,409 | 354,206 | |
Gain on investment | 110,203 | (89,082) | |
Loss on investment | (110,203) | 89,082 | |
Advertising expenses | $ 152,851 | $ 259,393 | |
Authorized shares | 500,000,000 | 500,000,000 | |
Related Party [Member] | |||
Expenses with related parties | $ 166,356 | $ 20,125,153 | |
General and Administrative Expense [Member] | |||
Bad debt expense | 90,009 | 0 | |
CenterCom Global [Member] | |||
Investments | $ 464,409 | $ 354,206 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Concentrations risk percentage | 100% | 100% | |
Customer Concentration Risk [Member] | Surge Phone and Torck Wireless [Member] | Revenue from Contract with Customer Benchmark [Member] | |||
Concentrations risk percentage | 86% | 73% | |
Customer Concentration Risk [Member] | Federal Communications Commission [Member] | Revenue Benchmark [Member] | |||
Concentrations risk percentage | 100% | ||
Customer Concentration Risk [Member] | Federal Communications Commission [Member] | Accounts Receivable [Member] | |||
Concentrations risk percentage | 97% | 96% | |
True Wireless, Inc. [Member] | |||
Note receivable | $ 176,851 | ||
Interest rate | 0.60% | ||
Default interest rate | 10% | ||
Repayment of principal and interest | $ 7,461 | ||
Blue Skies Connections LLC [Member] | |||
Note receivable | 176,851 | ||
Logics IQ [Member] | |||
Revenues | 1,545,397 | $ 0 | |
Customer One [Member] | |||
Residual payments | 2 | ||
Customer Two [Member] | |||
Residual payments | $ 3 | ||
Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Concentrations risk percentage | 100% | ||
Torch Wireless Inc [Member] | |||
Payments to acquire businesses | $ 800,000 | ||
Goodwill | $ 800,000 | ||
CenterCom Global [Member] | |||
Equity method investment ownership percentage | 40% | ||
Torch Wireless Inc [Member] | |||
Percentage of business acquisition | 100% |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Computer equipment and software | $ 1,006,286 | $ 1,006,286 |
Furniture and fixtures | 82,752 | 82,752 |
Property and equipment, gross | 1,089,038 | 1,089,038 |
Less: accumulated depreciation/amortization | 727,197 | 445,665 |
Property and equipment - net | $ 361,841 | $ 643,373 |
Computer Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful lives (years) | 3 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful lives (years) | 5 years | |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful lives (years) | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful lives (years) | 7 years |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |||
Software acquire fair value | $ 711,400 | ||
Payments for software | $ 300,000 | $ 300,000 | |
Purchase of assets, shares | 85,000 | ||
Purchase of assets, value | $ 411,400 | ||
Price per share | $ 4.84 | ||
Depreciation and amortization expense | $ 281,532 | $ 279,877 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Internal use software development costs | $ 5,753,520 | $ 5,753,520 |
Less: accumulated amortization | (3,627,050) | (2,973,543) |
Internal use software development costs - net | 2,126,470 | 2,779,977 |
Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Internal use software development costs | $ 4,286,402 | 4,286,402 |
Intangible assets, estimated useful lives (years) | 7 years | |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Internal use software development costs | $ 617,474 | 617,474 |
Intangible assets, estimated useful lives (years) | 15 years | |
ECS Membership Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Internal use software development costs | $ 465,000 | 465,000 |
Intangible assets, estimated useful lives (years) | 1 year | |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Internal use software development costs | $ 201,389 | 201,389 |
Intangible assets, estimated useful lives (years) | 2 years | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Internal use software development costs | $ 183,255 | 183,255 |
Intangible assets, estimated useful lives (years) | 5 years | |
Software and Software Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Internal use software development costs | $ 668,484 | 387,180 |
Less: accumulated amortization | 129,060 | |
Internal use software development costs - net | $ 539,424 | $ 387,180 |
Internal use software development costs, estimated useful life (years) | 3 years |
Schedule of Estimated Amortizat
Schedule of Estimated Amortization Expenses (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
2024 | $ 653,507 | |
2025 | 653,507 | |
2026 | 653,507 | |
2027 | 165,949 | |
Total | 2,126,470 | $ 2,779,977 |
Software and Software Development Costs [Member] | ||
Property, Plant and Equipment [Line Items] | ||
2024 | 222,828 | |
2025 | 222,828 | |
2026 | 93,768 | |
Total | $ 539,424 |
Intangibles (Details Narrative)
Intangibles (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 653,507 | $ 653,507 |
Internal Use Software Develop_3
Internal Use Software Development Costs (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of internal use software development costs | $ 129,060 | $ 0 |
Software and Software Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Additional costs | $ 281,304 | $ 387,180 |
Schedule of Notes Payable (Deta
Schedule of Notes Payable (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | |||
Short-Term Debt [Line Items] | ||||
Beginning balance | $ 474,846 | $ 1,131,185 | ||
Forgiveness of loan | [1] | (518,167) | ||
Repayments | (14,323) | (11,754) | ||
Reclassification to note payable | [2] | (126,418) | ||
Ending balance | 460,523 | 474,846 | ||
Long term debt | $ 5,045,086 | |||
Kevin Brian Cox [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | [3] | Various | ||
Maturity date | [3] | December 31, 2023 December 31, 2024 | ||
Interest rate | [3] | 10% | ||
Collateral | [3] | Unsecured | ||
Beginning balance | [3] | $ 5,134,563 | 5,593,431 | |
Conversion of debt into common stock | [3] | (1,086,413) | ||
Reclass of accrued interest to note payable | [3] | 627,545 | ||
Repayments | [3] | (550,000) | ||
Ending balance | [3] | 4,584,563 | 5,134,563 | |
Less: short term | [3] | 4,584,563 | 1,108,150 | |
Short term debt | [3] | $ 4,584,563 | 1,108,150 | |
Long term debt | [3] | 4,026,413 | ||
David May [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | [4] | August 2021 | ||
Maturity date | [4] | August 2031 | ||
Interest rate | [4] | 10% | ||
Collateral | [4] | Unsecured | ||
Beginning balance | [4] | $ 467,385 | 467,385 | |
Conversion of debt into common stock | [4] | |||
Reclass of accrued interest to note payable | [4] | |||
Repayments | [4] | (467,385) | ||
Ending balance | [4] | 467,385 | ||
Less: short term | [4] | |||
Short term debt | [4] | |||
Long term debt | [4] | 467,385 | ||
Related Party [Member] | ||||
Short-Term Debt [Line Items] | ||||
Beginning balance | 5,601,948 | 6,060,816 | ||
Conversion of debt into common stock | (1,086,413) | |||
Reclass of accrued interest to note payable | 627,545 | |||
Repayments | (1,017,385) | |||
Ending balance | 4,584,563 | 5,601,948 | ||
Less: short term | 4,584,563 | 1,108,150 | ||
Short term debt | 4,584,563 | 1,108,150 | ||
Long term debt | 4,493,798 | |||
Chief Executive Officer [Member] | ||||
Short-Term Debt [Line Items] | ||||
Long term debt | [3] | |||
Nonrelated Party [Member] | ||||
Short-Term Debt [Line Items] | ||||
Beginning balance | 1,595,167 | |||
Gross proceeds | 6,700,000 | |||
Reclassification from SBA - PPP note payable | 126,418 | |||
Debt issue costs | (115,404) | |||
Amortization of debt issue costs | 115,404 | |||
Repayments | (1,595,167) | (5,231,251) | ||
Ending balance | 1,595,167 | |||
Nonrelated Party [Member] | Notes Payable One [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | [5] | April/May 2022 | ||
Maturity date | [5] | October/November 2022 | ||
Default interest rate | [5] | 26% | ||
Interest rate | [5] | 19% | ||
Collateral | [5] | Unsecured | ||
Warrants issued as debt discount/issue costs | [5] | 36,000 | ||
Beginning balance | [5] | $ 1,100,000 | ||
Gross proceeds | [5] | 1,200,000 | ||
Reclassification from SBA - PPP note payable | [5] | |||
Debt issue costs | [5] | (76,451) | ||
Amortization of debt issue costs | [5] | 76,451 | ||
Repayments | [5] | (1,100,000) | (100,000) | |
Ending balance | [5] | 1,100,000 | ||
Nonrelated Party [Member] | Notes Payable Two [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | [6] | April/June 2022 | ||
Maturity date | [6] | January/February 2023 | ||
Interest rate | [6] | 24% | ||
Collateral | [6] | All assets | ||
Beginning balance | [6] | |||
Gross proceeds | [6] | 5,000,000 | ||
Reclassification from SBA - PPP note payable | [6] | |||
Debt issue costs | [6] | |||
Amortization of debt issue costs | [6] | |||
Repayments | [6] | (5,000,000) | ||
Ending balance | [6] | |||
Nonrelated Party [Member] | Notes Payable Three [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | [7] | March 2022 | ||
Maturity date | [7] | March 2023 | ||
Default interest rate | [7] | 26% | ||
Interest rate | [7] | 19% | ||
Collateral | [7] | Unsecured | ||
Warrants issued as debt discount/issue costs | 15,000 | [7] | 12,000 | |
Beginning balance | [7] | $ 400,000 | ||
Gross proceeds | [7] | 500,000 | ||
Reclassification from SBA - PPP note payable | [7] | |||
Debt issue costs | [7] | (38,953) | ||
Amortization of debt issue costs | [7] | 38,953 | ||
Repayments | [7] | (400,000) | (100,000) | |
Ending balance | [7] | 400,000 | ||
Nonrelated Party [Member] | Notes Payable Four [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | [8] | 2022 | ||
Maturity date | [8] | 2025 | ||
Default interest rate | [8] | 0% | ||
Interest rate | [8] | 1% | ||
Collateral | [8] | Unsecured | ||
Beginning balance | [8] | $ 95,167 | ||
Gross proceeds | [8] | |||
Reclassification from SBA - PPP note payable | [8] | 126,418 | ||
Amortization of debt issue costs | [8] | |||
Repayments | [8] | (95,167) | (31,251) | |
Ending balance | [8] | 95,167 | ||
Nonrelated Party [Member] | Paycheck Protection Program And Economic Injury Disaster Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt issue costs | [8] | |||
Paycheck Protection Program [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | April 2020 | |||
Term | 18 months | |||
Maturity date | October 2021 | |||
Interest rate | 1% | |||
Collateral | Unsecured | |||
Beginning balance | 126,418 | |||
Forgiveness of loan | ||||
Repayments | ||||
Reclassification to note payable | (126,418) | |||
Ending balance | ||||
Economic Injury Disaster Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | May 2020 | |||
Term | 30 years | |||
Maturity date | May 2050 | |||
Interest rate | 3.75% | |||
Collateral | Unsecured | |||
Beginning balance | $ 145,922 | 150,000 | ||
Forgiveness of loan | ||||
Repayments | (3,928) | (4,078) | ||
Reclassification to note payable | ||||
Ending balance | $ 141,994 | 145,922 | ||
Economic Injury Disaster Loan One [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | July 2020 | |||
Term | 30 years | |||
Maturity date | July 2050 | |||
Interest rate | 3.75% | |||
Collateral | Unsecured | |||
Beginning balance | $ 328,924 | 336,600 | ||
Forgiveness of loan | ||||
Repayments | (10,395) | (7,676) | ||
Reclassification to note payable | ||||
Ending balance | $ 318,529 | 328,924 | ||
Paycheck Protection Program One [Member] | ||||
Short-Term Debt [Line Items] | ||||
Issuance dates of notes | March 2021 | |||
Term | 5 years | |||
Maturity date | March 2026 | |||
Interest rate | 1% | |||
Collateral | Unsecured | |||
Beginning balance | 518,167 | |||
Forgiveness of loan | (518,167) | |||
Repayments | ||||
Reclassification to note payable | ||||
Ending balance | ||||
[1]During 2022, the Company received forgiveness on a PPP loan totaling $ 524,143 518,167 5,976 377,743 371,664 6,079 Monthly payments are $3,566/month 467,385 63,641 531,026 36,000 3 5,000,000 80 15,000 3 12,000 3 400,000 100,000 3,566 |
Schedule of Notes Payable (De_2
Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 12, 2024 | Oct. 31, 2022 | Jun. 30, 2022 | |||
Debt Instrument [Line Items] | |||||||||
Debt instrument, decrease, forgiveness | $ 524,143 | $ 377,743 | |||||||
Debt instrument, frequency of periodic payment | Monthly payments are $3,566/month | ||||||||
Shares issued, price per share | $ 4.84 | ||||||||
Long term debt, gross | $ 460,523 | 474,846 | $ 1,131,185 | ||||||
Repayments of related party debt | 1,017,385 | ||||||||
Notes Payable Four [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, monthly payment | 3,566 | ||||||||
Kevin Brian Cox [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Accrued interest | $ 627,545 | ||||||||
Stock issued during period, shares, conversion of convertible securities | 270,745 | ||||||||
Shares issued, price per share | $ 4.01 | ||||||||
Debt amount | $ 1,086,413 | ||||||||
Adjustment to additional paid-in capital, convertible debt instrument issued at substantial premium | 1,086,413 | ||||||||
Long term debt, gross | [1] | 4,584,563 | 5,134,563 | 5,593,431 | |||||
Debt outstanding | 558,150 | ||||||||
Long term debt | 4,026,413 | ||||||||
Kevin Brian Cox [Member] | Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument face amount | $ 4,584,563 | ||||||||
Debt instrument, monthly payment | $ 164,039 | ||||||||
David May [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Accrued interest | 63,641 | ||||||||
Long term debt, gross | [2] | 467,385 | 467,385 | ||||||
Repayments of related party debt | 531,026 | ||||||||
Nonrelated Party [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt, gross | 1,595,167 | ||||||||
Nonrelated Party [Member] | Notes Payable One [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt, gross | [3] | 1,100,000 | |||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | [3] | 36,000 | |||||||
Warrants and Rights Outstanding, Term | 3 years | ||||||||
Nonrelated Party [Member] | Notes Payable Two [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt, gross | [4] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | ||||||||
Accounts receivable eligible percentage | 80% | ||||||||
Nonrelated Party [Member] | Notes Payable Three [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt amount | $ 100,000 | ||||||||
Long term debt, gross | [5] | $ 400,000 | |||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 15,000 | [5] | 12,000 | ||||||
Warrants and Rights Outstanding, Term | 3 years | 3 years | |||||||
Interest Expense | $ 400,000 | ||||||||
Nonrelated Party [Member] | Notes Payable Four [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt, gross | [6] | 95,167 | |||||||
Principal Amount [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, decrease, forgiveness | 518,167 | 371,664 | |||||||
Accrued Interest [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, decrease, forgiveness | $ 5,976 | $ 6,079 | |||||||
[1]Activity is with the Company’s Chief Executive Officer and Board Member (Kevin Brian Cox).[2]Activity is with David May, who is a Board Member. The note of $ 467,385 63,641 531,026 36,000 3 5,000,000 80 15,000 3 12,000 3 400,000 100,000 3,566 |
Schedule of Debt Maturities (De
Schedule of Debt Maturities (Details) | Dec. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |
2024 | $ 4,584,563 |
Thereafter | 460,523 |
Total | 5,045,086 |
Notes Payable Related Parties [Member] | |
Debt Instrument [Line Items] | |
2024 | 4,584,563 |
Thereafter | |
Total | 4,584,563 |
Notes Payable SBA Government [Member] | |
Debt Instrument [Line Items] | |
2024 | |
Thereafter | 460,523 |
Total | $ 460,523 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Mar. 31, 2024 | Jun. 30, 2022 | Apr. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Secured Revolving Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Accrued interest | $ 46,027 | |||||
Maximum borrowing capacity | $ 3,000,000 | |||||
Increased amount | $ 5,000,000 | |||||
Interest rate | 2% | |||||
Annual interest rate | 24% | |||||
Accounts receivable current eligible percentage | 80% | |||||
Outstanding amount | $ 5,000,000 | |||||
Accounts receivable eligible percentage | 80% | |||||
Repayments of debt | $ 5,000,000 | |||||
Kevin Brian Cox [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | [1] | 10% | ||||
Subsequent Event [Member] | Kevin Brian Cox [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument monthly payments | $ 164,039 | |||||
Accrued interest | 498,991 | |||||
Debt instrument total | $ 5,083,554 | |||||
Debt instrument term | 36 months | |||||
Repayments of debt | $ 5,905,427 | |||||
Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument monthly payments | $ 109 | |||||
Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument monthly payments | $ 751 | |||||
[1]Activity is with the Company’s Chief Executive Officer and Board Member (Kevin Brian Cox). |
Schedule of Lease Expense (Deta
Schedule of Lease Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating Leases | $ 43,483 | $ 34,294 |
Interest on lease liabilities | 20,804 | 11,598 |
Total net lease cost | $ 64,287 | $ 45,892 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow and Other Information Related to Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash flows from operating leases | $ 39,490 | $ 30,948 |
Operating leases | ||
Weighted average remaining lease term (in years) Operating leases | 6 years 6 months | 7 years 11 months 26 days |
Weighted average discount rate Operating leases | 5% | 5% |
Schedule of Future Minimum Paym
Schedule of Future Minimum Payments (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
2024 | $ 61,876 | |
2025 | 73,460 | |
2026 | 65,044 | |
2027 | 66,627 | |
2028 | 100,246 | |
Thereafter | 107,261 | |
Total lease payments | 474,514 | |
Less: amount representing interest | (75,101) | |
Total lease obligations | 399,413 | |
Less: short term lease liability | (43,137) | $ (39,490) |
Long term lease liability | $ 356,276 | $ 399,413 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Nov. 10, 2023 | Aug. 08, 2023 | Dec. 17, 2021 | Dec. 31, 2023 | Nov. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards | 121,276 | 121,276 | 17,004 | 17,004 | ||||
Plaintiff amount | $ 73,000 | |||||||
General and Administrative Expense [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Litigation settlement expense | $ 60,000 | |||||||
Blue Skies Connections LLC [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Debt instrument, issuance date | Jun. 14, 2021 | |||||||
Debt instrument, principal amount | $ 176,850.56 | |||||||
Debt instrument, monthly payment | $ 7,461.37 | |||||||
Meral Demiray [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Litigation settlement expense | 7,500 | |||||||
Ambess Litigation [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Plaintiff amount | $ 73,000 | |||||||
Litigation settlement expense | $ 60,000 | |||||||
Chief Financial Officer [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Base salary | $ 750,000 | |||||||
Annual cash bonus | $ 870,000 | |||||||
Base salary percentage | 3% | |||||||
Annual revenue goal description | $250,000,000 – value of restricted stock award will be $6,250,000, | |||||||
Annual revenue goal description | $500,000,000 – value of restricted stock award will be $25,000,000 | |||||||
Annual revenue goal description | $1,000,000,000 – value of restricted stock award will be $50,000,000, | |||||||
Annual revenue goal description | $2,000,000,000 – value of restricted tock award will be $100,000,000; and | |||||||
Annual revenue goal description | Each additional $1,000,000,000 – value of restricted tock award will be $50,000,000, | |||||||
Annual EBITDA gaols | $50,000,000 - value of restricted stock award will be $2,500,000, | |||||||
Annual EBITDA gaols | $100,000,000 - value of restricted stock award will be $5,000,000; and | |||||||
Annual EBITDA gaols | Each additional $50,000,000 - value of restricted stock award will be $2,500,000 | |||||||
Chief Financial Officer [Member] | Home Building [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Reimbursement expenses | $ 667 | $ 667 | ||||||
Chief Financial Officer [Member] | Vehicles [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Reimbursement expenses | $ 500 | 500 | ||||||
Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards | 600,000 | |||||||
Restricted stock awards fair value grant | $ 3,114,000 | |||||||
Closing price per share | $ 5.19 | |||||||
Chief Financial Officer [Member] | Restricted Stock Twelve [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Market capitalization goals | $250,000,000 - value of restricted stock award will be $25,000,000, | |||||||
Market capitalization goals | $500,000,000 - value of restricted stock award will be $50,000,000, | |||||||
Market capitalization goals | $1,000,000,000 - value of restricted stock award will be $100,000,000, | |||||||
Market capitalization goals | $2,000,000,000 - value of restricted stock award will be $200,000,000; | |||||||
Market capitalization goals | Each additional $1,000,000,000 - value of restricted stock award will be $100,000,000 | |||||||
Year One [Member] | Chief Financial Officer [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Base salary | 475,000 | |||||||
Annual cash bonus | $ 510,000 | |||||||
Year One [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards, vest | 400,000 | |||||||
Year Two [Member] | Chief Financial Officer [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Base salary | $ 489,250 | |||||||
Year Two [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards, vest | 500,000 | 66,667 | 500,000 | |||||
Year Three [Member] | Chief Financial Officer [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Base salary | $ 503,928 | |||||||
Year Three [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards, vest | 500,000 | 200,000 | 500,000 | |||||
Future Stock Awards [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards | 2,500,000 | 2,500,000 | ||||||
Six Month [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards fair value grant | $ 3,800,000 | |||||||
Closing price per share | $ 7.60 | |||||||
Restricted stock awards, vest | 500,000 | 500,000 | ||||||
Shares per Month [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards, vest | 83,333 | 83,333 | ||||||
Year Four [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards, vest | 500,000 | 500,000 | ||||||
Year Five [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | ||||||||
Product Liability Contingency [Line Items] | ||||||||
Restricted stock awards, vest | 500,000 | 500,000 |
Schedule of Non-vested Shares R
Schedule of Non-vested Shares Related Parties (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Number of shares beginning balance | ||
Number of shares, granted | 695,000 | |
Weighted average grant fair value | 5 years 2 months 26 days | 5 years 2 months 26 days |
Number of shares vested | ||
Number of shares , forefieted | ||
Number of shares Ending balance | 695,000 | |
Unrecognized Compensation | $ 3,103,967 | |
Weighted average period (years) | 1 year 2 months 23 days |
Schedule of Stock Option Transa
Schedule of Stock Option Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||
Number of options, outstanding ending | 17,004 | 17,004 | |
Weighted average exercise price, ending | $ 16 | $ 16 | |
Weighted average remaining contractual term (Years), outstanding | 6 years 5 months 19 days | 4 years 1 month 28 days | 5 years 1 month 28 days |
Aggregate intrinsic value, outstanding ending | |||
Number of options, vested and exercisable, ending | 6,801 | 3,401 | |
Weighted average exercise price, vested and exercisable | $ 16 | $ 16 | |
Weighted average remaining contractual term (Years) vested and exercisable | 6 years 7 months 9 days | 4 years 1 month 28 days | 5 years 1 month 28 days |
Number of options, unvested and non-exercisable, ending | 10,203 | 13,603 | |
Weighted average exercise price, unvested and non-exercisable, ending | $ 16 | $ 16 | |
Weighted average remaining contractual term (Years) unvested and non-exercisable | 3 years 1 month 28 days | 4 years 1 month 28 days | 5 years 1 month 28 days |
Number of options, granted | 104,272 | ||
Weighted average exercise price - granted | $ 6.45 | ||
Weighted average grant-date fair value of options unvested | $ 5.53 | ||
Number of options, exercised | |||
Weighted average exercise price - exercised | |||
Number of options, cancelled/forfeited | |||
Weighted average exercise price - cancelled/forfeited | |||
Number of options, outstanding ending | 121,276 | 17,004 | 17,004 |
Weighted average exercise price, ending | $ 7.79 | $ 16 | $ 16 |
Aggregate intrinsic value, outstanding ending | |||
Number of options, vested and exercisable, ending | 116,174 | 6,801 | 3,401 |
Weighted average exercise price, vested and exercisable | $ 7.43 | $ 16 | $ 16 |
Number of options, unvested and non-exercisable, ending | 5,101 | 10,203 | 13,603 |
Weighted average exercise price, unvested and non-exercisable, ending | $ 16 | $ 16 | $ 16 |
Schedule of Fair Value of Stock
Schedule of Fair Value of Stock Options (Details) - Warrant One [Member] | Dec. 31, 2023 | Dec. 31, 2022 |
Measurement Input, Expected Term [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Expected term (years) | 7 years | 3 years |
Measurement Input, Price Volatility [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 106 | |
Measurement Input, Expected Dividend Rate [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 0 | 0 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 3.88 |
Schedule of Warrants Activity (
Schedule of Warrants Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||
Number of warrants outstanding, Ending balance | 5,681,392 | 6,082,984 | |
Weighted Average Exercise Price Exercisable, Ending balance | $ 5.05 | $ 8.68 | |
Weighted Average Remaining Contractual Life (in years), Outstanding | 10 months 9 days | 1 year 10 months 6 days | 2 years 11 months 4 days |
Warrants Aggregate Intrinsic Value, Ending balance | $ 10,026,387 | ||
Number of warrants outstanding, Vested and Exercisable, Ending balance | 5,681,392 | 5,852,984 | |
Weighted Average Exercise Price, Vested and Exercisable, Ending balance | $ 5.05 | $ 8.70 | |
Weighted Average Remaining Contractual Life (in years), Vetsed and Exercisable | 10 months 9 days | 1 year 10 months 6 days | 2 years 10 months 6 days |
Warrants Aggregate Intrinsic Value, Vested and Exercisable, Ending balance | $ 10,026,387 | ||
Warrants, Unvested, balance | 230,000 | ||
Weighted Average Exercise Price, Unvested, balance | $ 8 | ||
Weighted Average Remaining Contractual Life (in years), Unvested and Non-exercisable | 4 years 10 months 6 days | ||
Warrants Aggregate Intrinsic Value, Unvested Ending balance | |||
Number of warrants outstanding, Granted | 189,000 | ||
Weighted Average Exercise Price, Granted | $ 4.73 | ||
Number of warrants outstanding, Exercised | (43,814) | (498,850) | |
Weighted Average Exercise Price, Exercised | $ 4.73 | $ 6.49 | |
Number of warrants outstanding, Cancelled/Forfeited | (63,325) | (91,743) | |
Weighted Average Exercise Price, Cancelled/Forfeited | $ 26.39 | $ 40.02 | |
Weighted Average Remaining Contractual Life (in years), Unvested and Non-exercisable | |||
Number of warrants outstanding, Ending balance | 5,574,253 | 5,681,392 | 6,082,984 |
Weighted Average Exercise Price Exercisable, Ending balance | $ 4.81 | $ 5.05 | $ 8.68 |
Warrants Aggregate Intrinsic Value, Ending balance | $ 9,348,348 | $ 10,026,387 | |
Number of warrants outstanding, Vested and Exercisable, Ending balance | 5,574,253 | 5,681,392 | 5,852,984 |
Weighted Average Exercise Price, Vested and Exercisable, Ending balance | $ 4.81 | $ 5.05 | $ 8.70 |
Warrants Aggregate Intrinsic Value, Vested and Exercisable, Ending balance | $ 9,348,348 | $ 10,026,387 | |
Warrants, Unvested, balance | 230,000 | ||
Weighted Average Exercise Price, Unvested, balance | $ 8 | ||
Warrants Aggregate Intrinsic Value, Unvested Ending balance |
Schedule of Fair Value of Warra
Schedule of Fair Value of Warrants (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Warrant One [Member] | Measurement Input, Expected Term [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Expected term (years) | 7 years | 3 years |
Warrant One [Member] | Measurement Input, Price Volatility [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 106 | |
Warrant One [Member] | Measurement Input, Price Volatility [Member] | Minimum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 119 | |
Warrant One [Member] | Measurement Input, Price Volatility [Member] | Maximum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 120 | |
Warrant One [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 0 | 0 |
Warrant One [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 3.88 | |
Warrant One [Member] | Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 2.45 | |
Warrant One [Member] | Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 2.80 | |
Warrant Two [Member] | Measurement Input, Expected Term [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Expected term (years) | 3 years | |
Warrant Two [Member] | Measurement Input, Price Volatility [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 120 | |
Warrant Two [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 2.71 | |
Warrant Two [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 0 | |
Warrant Three [Member] | Measurement Input, Expected Term [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Expected term (years) | 3 years | |
Warrant Three [Member] | Measurement Input, Price Volatility [Member] | Minimum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 116 | |
Warrant Three [Member] | Measurement Input, Price Volatility [Member] | Maximum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 119 | |
Warrant Three [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 0 | |
Warrant Three [Member] | Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 4.13 | |
Warrant Three [Member] | Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Warrants measurement input | 4.25 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |||
Common stock, par value | $ 0.001 | $ 0.001 | |||
Common stock, voting rights | Voting at 1 vote per share | ||||
Share based compensation authorized | 1,400,000 | ||||
Share based compensation grant | 4,900,000 | ||||
Common stock issues | 242,615 | 200,000 | |||
Common stock for services, value | $ 1,290,024 | $ 103,500 | |||
Shares issued price per share | $ 4.84 | ||||
Shares grant to issues | |||||
Share price | $ 4.84 | ||||
Share based compensation | 613,801 | $ 37,176 | |||
Adjustments in fair value | 0 | ||||
Stock issued for acquire assets | 711,400 | ||||
Payament for software | $ 300,000 | $ 300,000 | |||
Stock issued shares aquisitions | 85,000 | ||||
Stock issued value aquisitions | $ 411,400 | ||||
Net effect on stockholders' deficit | 28,249,220 | $ 4,990,718 | |||
Warrants issued | 51,000 | ||||
Unrecognized compensation | $ 3,103,967 | ||||
Unrecognized compensation | 6 years 7 months 9 days | 4 years 1 month 28 days | 5 years 1 month 28 days | ||
Notes issued | $ 1,700,000 | ||||
Debt and warrants fair value | $ 115,404 | ||||
Interest Expense [Member] | |||||
Class of Stock [Line Items] | |||||
Warrants issued | 90,000 | ||||
Debt and warrants fair value | $ 212,608 | ||||
Employee Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares grant to issues | 104,272 | ||||
Shares grant to issues | $ 576,625 | ||||
Share price | $ 6.45 | ||||
Stock compensation vesting period | 7 years | ||||
Unrecognized compensation | $ 6,196 | ||||
Unrecognized compensation | 1 month 28 days | ||||
Related Party [Member] | |||||
Class of Stock [Line Items] | |||||
Share based compensation | $ 37,176 | $ 37,176 | |||
Chief Financial Officer [Member] | |||||
Class of Stock [Line Items] | |||||
Share based compensation | $ 486,242 | ||||
Chief Financial Officer [Member] | Related Party [Member] | |||||
Class of Stock [Line Items] | |||||
Shares grant to issues | 5,101 | 3,401 | |||
Chief Financial Officer [Member] | Related Party [Member] | 2024 [Member] | |||||
Class of Stock [Line Items] | |||||
Shares grant to issues | 5,101 | ||||
Board of Directors Chairman [Member] | |||||
Class of Stock [Line Items] | |||||
Share based compensation | $ 43,292 | ||||
Share based compenation | $ 529,534 | ||||
Minimum [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued price per share | $ 4.19 | ||||
Maximum [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued price per share | $ 9.40 | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Stock issued for employee stock purchase plans ,shares | 3,500,000 | ||||
Common stock outstanding percentage | 10% | ||||
Common stock issues | 242,615 | 50,000 | |||
Common stock for services, value | $ 243 | $ 50 | |||
Warrant issued | $ 498,750 | ||||
Shares grant to issues | 200,000 | ||||
Shares grant to issues | $ 200 | ||||
Stock issued shares aquisitions | 85,000 | ||||
Stock issued value aquisitions | $ 85 | ||||
Common Stock [Member] | Chief Financial Officer [Member] | |||||
Class of Stock [Line Items] | |||||
Shares grant to issues | 600,000 | ||||
Shares grant to issues | $ 3,114,000 | ||||
Share price | $ 5.19 | ||||
Common Stock [Member] | Board of Directors Chairman [Member] | |||||
Class of Stock [Line Items] | |||||
Shares grant to issues | 95,000 | ||||
Shares grant to issues | $ 519,500 | ||||
Stock compensation vesting period | 5 years | ||||
Common Stock [Member] | Minimum [Member] | Board of Directors Chairman [Member] | |||||
Class of Stock [Line Items] | |||||
Share price | $ 5.14 | ||||
Common Stock [Member] | Maximum [Member] | Board of Directors Chairman [Member] | |||||
Class of Stock [Line Items] | |||||
Share price | $ 5.53 | ||||
Warrant [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock issues | 100 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 43,814 | ||||
Warrant exercise price | $ 4.73 | ||||
Warrant issued | $ 207,240 | $ 48,000 | |||
Shares grant to issues | 147,153 | ||||
Net effect on stockholders' deficit | $ 0 | ||||
Warrants issued | 473 | ||||
Warrants issued value | $ 473 | ||||
Note payable | 1,600,000 | ||||
Interest expense | $ 153,186 | ||||
Series A Convertible Preferred Stocks [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 13,000,000 | ||||
Preferred stock, shares issued | 0 | ||||
Preferred stock, shares outstanding | 0 | ||||
Preferred stock, par value | $ 0.001 | ||||
Preferred stock, voting rights | Voting at 10 votes per share | ||||
Debt instrument description | Conversion into 1/10 of a share of common stock for each share held | ||||
Series A Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares outstanding | 260,000 | ||||
Common stock converted shares | 1,300,000 | ||||
Net effect on stockholders' deficit | $ 0 | ||||
SeriesC Convertible Preferred Stocks [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 1,000,000 | ||||
Preferred stock, shares issued | 0 | ||||
Preferred stock, shares outstanding | 0 | ||||
Preferred stock, par value | $ 0.001 | ||||
Preferred stock, voting rights | Voting at 250 votes per share | ||||
Debt instrument description | Conversion into 250 shares of common stock for each share held |
Schedule of Operating Segments
Schedule of Operating Segments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 137,141,832 | $ 121,544,190 |
Cost of revenues | 101,499,341 | 108,074,782 |
Operating expenses | 16,777,107 | 12,835,623 |
Income (loss) from operations | 18,865,384 | 633,785 |
Total assets | 41,925,307 | 34,003,506 |
Total liabilities | 13,521,843 | 28,885,253 |
Mobile Virtual Network Operator [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 118,577,920 | 88,351,547 |
Cost of revenues | 83,918,968 | 76,130,286 |
Operating expenses | 427,493 | 299,406 |
Income (loss) from operations | 34,231,459 | 11,921,855 |
Total assets | 32,502,760 | 25,550,587 |
Total liabilities | 2,426,964 | 15,484,392 |
Comprehensive Platform Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 11,341,183 | 16,319,076 |
Cost of revenues | 11,281,722 | 16,966,332 |
Operating expenses | 1,799,469 | 1,327,517 |
Income (loss) from operations | (1,740,008) | (1,974,773) |
Total assets | 2,584,245 | 3,205,030 |
Total liabilities | 155,295 | 198,197 |
Lead Generation [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 7,184,283 | 16,760,656 |
Cost of revenues | 6,228,650 | 14,975,647 |
Operating expenses | 775,704 | 1,460,750 |
Income (loss) from operations | 179,929 | 324,259 |
Total assets | 1,596,236 | 1,880,087 |
Total liabilities | 899,485 | 2,619,521 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 38,446 | 112,911 |
Cost of revenues | 70,001 | 2,517 |
Operating expenses | 3,256 | 53,571 |
Income (loss) from operations | (34,811) | 56,823 |
Total assets | 135,548 | 165,172 |
Total liabilities | 198,197 | 58,919 |
Corporate Overhead [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating expenses | 13,771,185 | 9,694,379 |
Income (loss) from operations | (13,771,185) | (9,694,379) |
Total assets | 5,106,518 | 3,202,630 |
Total liabilities | $ 9,841,902 | $ 10,524,224 |
Segment Information (Details Na
Segment Information (Details Narrative) | Dec. 31, 2023 USD ($) |
Segment Reporting [Abstract] | |
Assets | $ 0 |
Installment Sale Liability (Det
Installment Sale Liability (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Purchase asset | $ 25,000,000 | |
Agreement extended period | The agreement could be extended by a period of one (1) year upon mutual consent. | |
Sale of asset percentage | 9.85% | |
Installment sale credit amount | 3 month rolling average of 70% of the installment sale credit amount. | |
Prepayment cancellation fee | The Company was subject to a cancellation fee of 3% during the first year and 2% during the second year | |
Administrative fees | $ 2,000 | |
Default rate | For any unpaid amounts under this agreement, the Company was subject to a fee of 1.35% per month (16.2% annualized). | |
Commitment fee percentage | 2% | |
Increase incremental commitment fee | $ 5,000,000 | |
Commitment fee details | For example, if the initial installment sale credit amount is $15,000,000, the credit availability fee would be $300,000 (2%). Any subsequent increase of $5,000,000 or more would result in an additional fee of $100,000 (2%). Commitment fees are paid over a period of 12 months as part of the Seller’s monthly invoicing. | |
Installment sale liability | $ 13,018,184 | |
Paid fees | $ 491,536 | $ 1,499,007 |
Maximum [Member] | ||
Commitment fee percentage | 2% |
Schedule of Income Taxes and Ef
Schedule of Income Taxes and Effective Income Tax Rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 570,000 | |
Deferred | (2,835,000) | |
Total provision (benefit) | (2,265,000) | |
Current | ||
Deferred | ||
Total provision (benefit) |
Schedule of Components of Incom
Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax expense (benefit) - 19.64% | $ 3,848,000 | $ (134,000) |
State income tax expense (benefit) - 6.5% - net of federal effect | 923,000 | (44,000) |
Tax-exempt income | (137,000) | |
Non-deductible items | 174,000 | 138,000 |
Subtotal | 4,945,000 | (177,000) |
Change in valuation allowance | (7,210,000) | 177,000 |
Income tax expense (benefit) | $ (2,265,000) | |
Effective tax rate | (12.36%) | 0% |
Schedule of Components of Inc_2
Schedule of Components of Income Tax Expense (Benefit) (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Federal income tax rate | 19.64% |
State and local tax rate | 6.50% |
Schedule of Deferred Tax Assets
Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets | ||
Reserve for uncollectible accounts | $ 5,000 | $ 5,000 |
Net operating loss carryforwards | 3,844,000 | 8,000,000 |
Total deferred tax assets | 3,849,000 | 8,005,000 |
Less: valuation allowance | (790,000) | (8,005,000) |
Net deferred tax assets | 3,059,000 | |
Deferred Tax Liabilities | ||
Depreciation | 224,000 | |
Deferred income taxes - net | $ 2,835,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Federal operating loss carryforwards | $ 3,844,000 | $ 8,000,000 |
Valuation allowance increase (decrease) | 7,619,000 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Federal operating loss carryforwards | 15,000,000 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Federal operating loss carryforwards | $ 12,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 2 Months Ended | 12 Months Ended | |||||
Feb. 12, 2024 | Jan. 17, 2024 | Jan. 05, 2024 | Mar. 06, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 12, 2024 | |
Subsequent Event [Line Items] | |||||||
Common stock par value | $ 0.001 | $ 0.001 | |||||
Exercise of warrants | |||||||
Share price | $ 4.84 | ||||||
Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Common stock issued, shares | 200,000 | ||||||
Common Stock [Member] | Forecast [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Exercise of warrants | 1,824,497 | ||||||
Exercise of warrants value | $ 8,629,871 | ||||||
Common stock issued, shares | 1,824,497 | ||||||
Exercise price per share | $ 4.73 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds for sale | 2,678,571 | ||||||
Common stock par value | $ 0.001 | ||||||
Subsequent descripition | The price to the public of the Shares was $5.60, before underwriting discounts and commissions. Under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 45 days, to purchase up to an additional 401,785 shares of common stock. The net proceeds to the Company from the Offering will be approximately $13.7 million, or approximately $15.9 million if the Underwriters exercise in full their option to purchase additional shares, in both instances after deducting underwriting discounts and commissions and estimated Offering expenses payable by the Company. | ||||||
Subsequent Event [Member] | Consolidated Amemded And Restated Note [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument principal amount | $ 4,758,088.74 | ||||||
Subsequent Event [Member] | Consolidated Amemded And Restated Note [Member] | One Year Note [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument principal amount | 1,108,150.31 | ||||||
Subsequent Event [Member] | Consolidated Amemded And Restated Note [Member] | Two Year Note [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt instrument principal amount | $ 4,026,413 | ||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Exercise of warrants | 401,785 | ||||||
Exercise of warrants value | $ 2,249,996 | ||||||
Share price | $ 5.60 | ||||||
Underwriting discount percentage | 7% | ||||||
Payments for Underwriting Expense | $ 157,500 | ||||||
Share price | $ 2,092,496 | ||||||
Signing [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Assets purchase | $ 100,000 | ||||||
Closing [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Assets purchase | 800,000 | ||||||
90 Days from Closing [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Assets purchase | 800,000 | ||||||
180 Days from Closing [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Assets purchase | $ 800,000 |