SurgePays Announces Closing of $15 Million Public Offering

Rhea-AI Summary

SurgePays, Inc. (Nasdaq: SURG) has successfully closed an underwritten public offering of 2,678,571 shares of its common stock, generating approximately $15 million in gross proceeds. The offering was priced at $5.60 per share and was made pursuant to an effective 'shelf' registration statement previously filed with the SEC. Titan Partners Group, a division of American Capital Partners, acted as the sole book-running manager for the offering.

Insights

Financial Analyst

The recent public offering by SurgePays, involving the sale of 2,678,571 shares at a price of $5.60 per share, generating gross proceeds of approximately $15 million, is a strategic move that can be analyzed from a financial perspective. The capital raised through this offering is critical for the company's growth trajectory, particularly in expanding its reach within the underbanked and underserved communities. By securing this funding, SurgePays can potentially accelerate its product development and market penetration efforts.

From an investor's standpoint, the offering price per share provides insight into the market's valuation of the company. The use of a shelf registration statement indicates a pre-planned financing strategy, allowing the company to act swiftly when market conditions are favorable. However, it is important to consider the dilutive effect on existing shareholders, as the increase in the number of outstanding shares could lead to a decrease in earnings per share (EPS) if net income does not increase proportionately.

Moreover, the role of Titan Partners Group as the sole book-running manager suggests a level of confidence in the firm's ability to manage such offerings. The expenses related to underwriting discounts and commissions, as well as other offering costs, will reduce the net proceeds, which is a common aspect to factor into the overall assessment of the capital raise's efficiency.

Market Research Analyst

SurgePays' focus on technology and telecom solutions for the underbanked is a niche market with significant growth potential. The additional capital from the public offering may enable the company to invest in competitive technologies and expand its customer base. Market trends indicate an increasing demand for financial services that cater to populations traditionally underserved by conventional banks, suggesting a favorable environment for SurgePays' business model.

Understanding the competitive landscape is essential, as SurgePays may face competition from both fintech startups and established financial institutions seeking to capture market share in this segment. The company's ability to leverage the proceeds to create a sustainable competitive advantage will be crucial for long-term success. The impact of this capital infusion on SurgePays' market position should be monitored closely by stakeholders.

Economist

The infusion of $15 million into SurgePays can be viewed through an economic lens, particularly in terms of its potential to stimulate economic activity within the underbanked communities. By providing technology and telecom solutions to these areas, SurgePays may contribute to increased financial inclusion, which is a significant factor in economic development. Financial inclusion can lead to higher savings rates, investment in education and entrepreneurship, thereby fostering economic growth.

Additionally, the timing of the offering aligns with the current economic climate and interest rate environment. The decision to raise capital must be juxtaposed with the cost of capital, which is influenced by prevailing interest rates. In a rising interest rate environment, the cost of debt financing increases, making equity offerings like this one a more attractive option for companies seeking to raise funds without incurring high-interest debt.

BARTLETT, Tenn., Jan. 22, 2024 (GLOBE NEWSWIRE) -- SurgePays, Inc. (Nasdaq: SURG) (“SurgePays”), a technology and telecom company focused on the underbanked and underserved communities, announced today the closing of its previously announced underwritten public offering of 2,678,571 shares of its common stock. Each share of common stock was sold at a price to the public of $5.60 per share of common stock. The gross proceeds to SurgePays from this offering are expected to be approximately $15 million, before deducting the underwriting discounts and commissions and other estimated offering expenses payable by SurgePays.

Titan Partners Group, a division of American Capital Partners, acted as sole book-running manager for the offering.

The offering was made pursuant to an effective “shelf” registration statement on (File No. 333-273110) previously filed with the Securities and Exchange Commission (the “SEC”) on July 3, 2023, as amended on August 4, 2023, September 9, 2023, October 23, 2023, and declared effective by the SEC on November 3, 2023. A final prospectus supplement and the accompanying prospectus relating to and describing the terms of the offering were filed with the SEC on January 19, 2024. Electronic copies of the final prospectus supplement and the accompanying prospectus relating to the offering,, may be obtained by visiting the SEC’s website at www.sec.gov or by contacting Titan Partners Group, LLC, a division of American Capital Partners, LLC, 4 World Trade Center, 29th Floor, New York, New York 10007, by phone at (929) 833-1246 or by email at info@titanpartnersgrp.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About SurgePays

SurgePays, Inc. is a technology and telecom company focused on the underbanked and underserved communities. SurgePays technology layered platform empowers clerks at over 8,000 convenience stores to provide a suite of prepaid wireless and financial products to underbanked customers. SurgePays prepaid wireless companies provide services to over 250,000 low-income subscribers nationwide.

Forward-Looking Statements

This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the final prospectus supplement and the accompanying prospectus related to the public offering. The forward-looking statements in this press release speak only as of the date on which the statements are made. We undertake no obligation to update, and expressly disclaim the obligation to update, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Contact Information

Brian M. Prenoveau, CFA

MZ Group – MZ North America

brian.prenoveau@mzgroup.us

+561 489 5315

 

FAQ

What is the ticker symbol for SurgePays, Inc.?

The ticker symbol for SurgePays, Inc. is SURG.

How many shares of common stock were offered in the public offering?

2,678,571 shares of common stock were offered in the public offering.

What was the price per share of common stock in the public offering?

The price per share of common stock in the public offering was $5.60.

Who acted as the sole book-running manager for the offering?

Titan Partners Group, a division of American Capital Partners, acted as the sole book-running manager for the offering.