Form 8-K

8-K — SurgePays, Inc.

Accession: 0001493152-26-017083

Filed: 2026-04-16

Period: 2026-04-14

CIK: 0001392694

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

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — form8-k.htm (Primary)

EX-99.1 (ex99-1.htm)

EX-99.2 (ex99-2.htm)

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8-K

8-K (Primary)

Filename: form8-k.htm · Sequence: 1

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0001392694

2026-04-14

iso4217:USD

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

8-K

CURRENT

REPORT

PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES

EXCHANGE ACT OF 1934

Date

of Report (Date of earliest event reported): April 14, 2026

SURGEPAYS,

INC.

(Exact

name of registrant as specified in its charter)

Nevada

001-40992

98-0550352

(State

or other jurisdiction

incorporation)

(Commission

File

Number)

(IRS

Employer

Identification

No.)

3124

Brother Blvd., Suite 104

Bartlett,

TN 38133

(Address

of principal executive offices, including zip code)

Registrant’s

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

(Former

name or former address, if changed since last report)

Check

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

any of the following provisions:

☐

Written

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

☐

Soliciting

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

☐

Pre-commencement

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

☐

Pre-commencement

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

Securities

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

Title

of each class

Trading

Symbol(s)

Name

of each exchange on which registered

Common

Stock

SURG

The

Nasdaq Stock Market, LLC

Indicate

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

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

Emerging

growth company ☐

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

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

Item

2.02. Results of Operations and Financial Condition.

April 14, 2026, 2025, SurgePays, Inc. (the “Company”) issued a press release announcing its financial results for

the year ended December 31, 2025, and the Company held a conference call to discuss the financial results. A copy of the press release

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

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

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

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

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

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

Item

9.01 Financial Statements and Exhibits

99.1

Press Release, dated April 14, 2026, issued by SurgePays, Inc.

99.2

Transcript of Conference Call held on April 14, 2026.

104

Cover

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

SIGNATURES

Pursuant

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

the undersigned hereunto duly authorized.

SURGEPAYS,

INC.

Date:

April 16, 2026

By:

/s/

Kevin Brian Cox

Name:

Kevin

Brian Cox

Title:

Chief

Executive Officer

EX-99.1

Filename: ex99-1.htm · Sequence: 2

Exhibit

99.1

SurgePays

Reports Full Year 2025 Results and Highlights Scalable Growth Model with Improved Cost Structure Entering 2026

Reduced

Cash Burn and Expansion Across Multiple Revenue Channels Support a More Efficient Growth Model

BARTLETT,

Tenn., April 14, 2026 — SurgePays, Inc. (NASDAQ: SURG) (“SurgePays” or the “Company”), a wireless and

fintech technology company connecting subprime and underserved consumers to essential mobile and financial services, today reported its

financial results for the year ended December 31, 2025.

Brian

Cox, President and CEO of SurgePays, stated, “2025 was a year where we demonstrated the scalability of our platform and repositioned

the business for more disciplined growth. We delivered steady sequential revenue growth through the first three quarters, increasing

from approximately $10.6 million in Q1 to $11.5 million in Q2, and reaching $18.7 million in Q3. That third quarter demonstrated how

quickly we can scale when capital is deployed into subscriber growth.”

Mr.

Cox continued, “In Q3, we deployed capital into subscriber acquisition and saw a clear step-function increase in revenue. In Q4,

we reduced that level of spend to prioritize capital efficiency. While revenue declined sequentially from Q3, it remained significantly

higher than the fourth quarter of 2024. The key takeaway is that we have demonstrated both the ability to scale and discipline to manage

that growth.”

“Equally

important, we materially improved our cost structure. Total general and administrative expenses declined to approximately $20.1 million

in 2025 from $27.5 million in 2024. Q4 included items that are not indicative of our current operating run rate, including legal and

certain non-cash expenses. Since year end, we have taken additional actions to reduce operating expenses. Based on those actions, we

estimate our current monthly cash burn at the end of the first quarter of 2026 to be approximately $250,000 to $300,000.”

Mr.

Cox added, “Today, SurgePays is operating with multiple revenue channels, including government-subsidized wireless, LinkUp Mobile

prepaid, wholesale MVNE relationships, and our point-of-sale fintech and data platforms. We are no longer dependent on a single program.

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

monetization initiatives such as our Managed Marketing Services platform, we are positioned to grow in a more controlled and capital

efficient way.”

Full Year 2025 Operational Highlights:

● Repositioned

the business following the conclusion of the Affordable Connectivity Program, expanding across

multiple revenue channels, including wireless, wholesale, and fintech solutions.

● Generated

$13.5 million in MVNO revenue, representing approximately 24% of total revenue for the year.

● Completed

integration with the AT&T best-in-class network, strengthening network performance and

service quality.

● Launched

LinkUp Mobile nationwide, expanding prepaid wireless offerings and contributing to growth

in the Point-of-Sale and Prepaid Services segment, which generated approximately $43.5 million,

or approximately 76% of total revenue.

● Continued

expansion of the Company’s retail distribution network, supporting wireless activations

and fintech transactions across more than 9,000 locations.

● Advanced

MVNE platform capabilities, supporting wholesale wireless enablement opportunities.

● Launched

ProgramBenefits.com, establishing a scalable digital channel for customer acquisition and

monetization beyond wireless services.

● Executed

cost optimization initiatives, reducing general and administrative expenses by approximately

28% year over year.

Subsequent

Operational Highlights:

● LinkUp

Mobile surpassed 100,000 subscriber lines, reflecting continued momentum in the Company’s

prepaid wireless business.

● Expanded

digital acquisition initiatives through ProgramBenefits.com.

● Deployed

the Company’s Managed Marketing Services platform, enabling in-store digital advertising

and introducing an additional monetization layer.

● Initiated

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

● Entered

into a strategic partnership with Alpha Modus to expand distribution of fintech and consumer

engagement solutions.

● Launched

a fully integrated stored value and loyalty platform, enabling merchants to offer branded

gift cards, store credit, and loyalty programs through the SurgePays point-of-sale system.

Full

Year 2025 Financial Highlights:

● Revenue

totaled approximately $57.0 million, compared to $60.9 million in 2024, reflecting the expected

impact from the conclusion of the Affordable Connectivity Program in mid-2024 and the Company’s

transition to a more diversified revenue model.

● Gross

loss improved to approximately $(10.6) million, compared to $(14.3) million in 2024.

● Total

general and administrative expenses declined to approximately $20.1 million, compared to

$27.5 million in 2024.

● Operating

loss improved to approximately $(30.7) million, compared to $(41.8) million in 2024.

Fourth

Quarter and Full Year 2025 Financial Results Conference Call

Date:

Tuesday, April 14, 2026

Time: 5:00 p.m. ET

Dial-in Number: 1-888-506-0062

Access Code: 395490

Webcast:

https://ir.surgepays.com/company-events

Replay

of the webcast will be available for a one year period.

About

SurgePays, Inc.

SurgePays,

Inc. (NASDAQ: SURG) is a wireless and fintech technology company focused on expanding access to essential mobile and financial services

for subprime and underserved consumers. The Company operates a nationwide ecosystem that includes its own wireless brands and a proprietary

point of sale platform inside thousands of retail locations. This infrastructure supports SIM activations, top-ups, financial transactions,

and other digital services used daily by prepaid and underbanked customers.

SurgePays

is building on this foundation by expanding into data driven marketing and digital partnerships that monetize verified consumer engagement

and increase revenue per retail location. The Company’s strategy is to build an integrated platform that serves as the operating

system for independent retailers while creating recurring revenue streams across wireless, fintech, digital marketing, and stored value

programs.

Visit

www.SurgePays.com for more information.

SurgePays

Cautionary Note Regarding Forward-Looking Statements

This

press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning

of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks

and uncertainties and generally relate to future events or our future financial or operating performance. These statements may include

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

statements regarding subscriber growth, distribution expansion, and operating scale.

some cases, you can identify forward-looking statements by words such as “may,” “will,” “could,”

“would,” “should,” “expect,” “intend,” “plan,” “anticipate,”

“believe,” “estimate,” “predict,” “project,” “potential,” “continue,”

or similar terminology.

Although

we believe the expectations reflected in these forward-looking statements are reasonable, they involve known and unknown risks and uncertainties

that may cause actual results to differ materially from those described in the forward-looking statements. These risks include, but are

not limited to, our ability to scale our prepaid wireless business, maintain retail distribution relationships, expand our merchant platform,

and achieve anticipated subscriber growth.

Additional

information regarding these and other risks can be found in our filings with the Securities and Exchange Commission, including our Annual

Report on Form 10-K for the fiscal year ended December 31, 2024. The forward-looking statements in this press release speak only as of

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

Investor

Contact:

Valter Pinto

Managing Director

KCSA Strategic Communications

212.896.1254

SurgePays@KCSA.com

SurgePays,

Inc. and Subsidiaries

Consolidated

Balance Sheets

December

31, 2025

December 31, 2024

Assets

Current Assets

Cash and cash equivalents

$ 1,731,400

$ 11,790,389

Restricted cash - line of credit reserve

281,811

Restricted cash - held in escrow

1,000,000

Accounts receivable - net

4,045,162

3,000,209

Inventory

339,570

1,781,365

Prepaids and other

581,823

298,360

Total Current Assets

6,979,766

17,870,323

Property and equipment - net

403,517

591,088

Other Assets

Note receivable

176,851

Intangibles - net

819,153

1,472,962

Goodwill

3,300,000

Operating lease - right of use asset - net

313,410

564,781

Total Other Assets

1,132,563

5,514,594

Total Assets

$ 8,515,846

$ 23,976,005

Liabilities and Stockholders’ Equity (Deficit)

Current Liabilities

Accounts payable and accrued expenses

$ 10,219,011

$ 3,929,195

Accounts payable and accrued expenses - related party

117,546

192,845

Operating lease liability

219,997

248,069

Notes payable

1,834,008

Note payable - related party

2,730,796

1,689,367

Convertible notes payable - net

3,068,878

Total Current Liabilities

18,190,236

6,059,476

Long Term Liabilities

Note payable - related party

1,866,288

Notes payable - SBA government

458,334

469,396

Operating lease liability

99,235

319,232

Convertible notes payable - net

5,170,860

Total Long Term Liabilities

5,728,429

2,654,916

Total Liabilities

23,918,665

8,714,392

Stockholders’ Equity (Deficit)

Common stock, $0.001 par value, 500,000,000 shares authorized 21,847,927 and 20,431,549 shares issued and 21,151,974 and 20,068,929 shares outstanding, at December 31, 2025 and December 31, 2024, respectively

21,852

20,435

Additional paid-in capital

83,246,736

76,842,878

Treasury stock - at cost (695,953 and 362,620 shares, respectively)

(1,631,966 )

(631,967 )

Accumulated deficit

(96,984,297 )

(60,915,427 )

Stockholders’ equity (deficit)

(15,347,675 )

15,315,919

Non-controlling interest

(55,144 )

(54,306 )

Total SurgePays Inc. Stockholders’ Equity (Deficit)

(15,402,819 )

15,261,613

Total Liabilities and Stockholders’ Equity (Deficit)

$ 8,515,846

$ 23,976,005

SurgePays,

Inc. and Subsidiaries

Consolidated

Statements of Operations

For the Years Ended December 31,

2025

2024

Revenues, net

$ 56,962,920

$ 60,881,173

Costs and expenses

Cost of revenues

67,551,811

75,205,372

General and administrative expenses

20,071,121

27,458,152

Total costs and expenses

87,622,932

102,663,524

Loss from operations

(30,660,012 )

(41,782,351 )

Other income (expense)

Interest expense (including amortization of debt discount)

(2,003,935 )

(554,200 )

Loss on lease termination - net

(194,863 )

Other income

7,140

636,868

Interest income

63,950

105,395

Realized gains - investments

13,613

Dividends, interest and other income - investments

355,549

Gain on investment in CenterCom

33,864

Impairment loss - note receivable

(176,851 )

Impairment loss - CenterCom

(498,273 )

Impairment loss - internal use software development costs

(316,594 )

Impairment loss - goodwill

(3,300,000 )

(866,782 )

Total other income (expense) - net

(5,409,696 )

(1,285,423 )

Net income (loss) before provision for income taxes

(36,069,708 )

(43,067,774 )

Provision for income tax benefit (expense)

(2,870,000 )

Net income (loss) including non-controlling interest

(36,069,708 )

(45,937,774 )

Non-controlling interest

(838 )

(208,550 )

Net income (loss) available to common stockholders

$ (36,068,870 )

$ (45,729,224 )

Earnings per share - attributable to common stockholders

Basic

$ (1.80 )

$ (2.39 )

Diluted

$ (1.80 )

$ (2.39 )

Weighted average number of shares outstanding - attributable to common stockholders

Basic

20,085,138

19,119,181

Diluted

20,085,138

19,119,181

SurgePays,

Inc. and Subsidiaries

Consolidated

Statements of Cash Flows

For the Years Ended December 31,

2025

2024

Operating activities

Net loss - including non-controlling interest

$ (36,069,708 )

$ (45,937,774 )

Adjustments to reconcile net loss to net cash used in operations

Depreciation and amortization

859,970

942,450

Amortization of right-of-use assets

251,371

126,970

Amortization of debt discount/debt issue costs

759,926

Amortization of internal use software development costs

222,830

Impairment loss - CenterCom

498,273

Impairment loss - internal use software development costs

316,594

Impairment loss - goodwill - Clearline

2,500,000

866,782

Impairment loss - goodwill - Torch

800,000

Impairment loss - note receivable

176,851

Stock issued for services

641,430

411,740

Recognition of stock based compensation - unvested shares - related parties

939,990

6,752,706

Recognition of share based compensation - options

1,149,449

986,244

Recognition of share based compensation - options - related party

552,286

622,949

Realized gain in sale of investments

(13,613 )

Interest expense adjustment - SBA loans

19,750

Right-of-use asset lease payment adjustment true up

(267,347 )

Gain on equity method investment - CenterCom

(33,864 )

Cash paid for lease termination

(212,175 )

Loss on lease termination - net

194,863

Changes in operating assets and liabilities

(Increase) decrease in

Accounts receivable

(1,044,953 )

6,535,865

Inventory

1,441,795

7,265,229

Prepaids and other

(283,463 )

(136,427 )

Deferred income taxes - net

2,835,000

Increase (decrease) in

Accounts payable and accrued expenses

6,355,272

(2,509,925 )

Accounts payable and accrued expenses - related party

(75,299 )

(356,388 )

Accrued income taxes payable

(570,000 )

Deferred revenue

(20,000 )

Operating lease liability

(248,069 )

148,665

Net cash used in operating activities

(21,293,152 )

(21,310,603 )

Investing activities

Purchase of property and equipment

(18,590 )

(518,189 )

Purchase of investments - net

(10,159,444 )

Proceeds from sale of investments

10,173,057

Cash paid for acquisition of Clearline Mobile, Inc.

(2,500,000 )

Net cash used in investing activities

(18,590 )

(3,004,576 )

Financing activities

Proceeds from stock issued for cash

1,774,636

17,249,994

Proceeds from exercise of common stock warrants

8,799,257

Cash paid as direct offering costs - common stock

(123,197 )

(1,395,000 )

Proceeds from issuance of notes payable

6,628,811

Repayments of notes payable

(4,751,765 )

Proceeds from issuance of convertible notes payable

8,450,000

Cash paid as direct offering costs - convertibles note payable

(608,000 )

Repayments of loans - related party

(824,859 )

(1,527,899 )

Repayments on notes payable - SBA government

(11,062 )

(10,877 )

Treasury shares repurchased (share buy-backs)

(631,967 )

Net cash provided by financing activities

10,534,564

22,483,508

Net decrease in cash, cash equivalents and restricted cash

(10,777,178 )

(1,831,671 )

Cash, cash equivalents and restricted cash - beginning of year

12,790,389

14,622,060

Cash, cash equivalents and restricted cash - end of year

$ 2,013,211

$ 12,790,389

Supplemental disclosure of cash flow information

Cash paid for interest

$ 245,855

$ 470,208

Cash paid for income tax

$ -

Supplemental disclosure of non-cash investing and financing activities

Treasury stock reacquired in connection with convertible debt financing

$ 999,999

$ -

Debt discount - convertible notes payable - original issue discount

$ 245,000

$ -

Debt discount - convertible notes payable - issuance of common stock

$ 271,880

$ -

Debt discount - convertible notes payable - issuance of warrants

$ 1,084,927

$ -

Debt discount - convertible notes payable - stated interest

$ 215,600

$ -

Debt discount - note payable - issuance of warrants

$ 48,418

$ -

Stock issued in settlement of accounts payable

$ 65,456

$ -

Reclassification of accrued interest - related party to note payable - related party

$ -

$ 498,991

Exercise of warrants - cashless

$ -

$ 41

Termination of ROU operating lease assets and liabilities

$ -

$ 327,139

Right-of-use asset obtained in exchange for new operating lease liability

$ -

$ 664,288

EX-99.2

Filename: ex99-2.htm · Sequence: 3

Exhibit

99.2

Company

Participants

Brian Cox - CEO & Director

Chelsea Pullano - Interim Chief Financial Officer

Conference

Call Participants

Valter

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

Edward Woo - Ascendiant Capital Markets LLC, Research Division

Presentation

Operator

Greetings.

Welcome to the SurgePays Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this conference is being

recorded.

will now turn the conference over to your host, Valter Pinto, Investor Relations at SurgePays. You may begin.

Valter

Pinto

Kanan, Corbin, Schupak & Aronow, Inc.

Thank

you, operator, and good afternoon, everyone. Welcome to the SurgePays 2025 Fourth Quarter and Full Year Financial Results Conference

Call. Today’s date is April 14, 2026. And on the call today from the company are Brian Cox, President and CEO; and Chelsea Pullano,

Interim Chief Financial Officer.

Before

we begin, I’d like to remind everyone that this call may contain forward-looking statements as they are defined under the Private

Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to

differ materially from those expressed in the forward-looking statements.

For

a discussion of such risks and uncertainties, please see SurgePays’ most recent filings with the SEC. All forward-looking statements

made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that

occur after this call.

Copies

of today’s press release are accessible on SurgePays’ Investor Relations website, ir.surgepays.com. And SurgePays’

Form 10-K for the year ended December 31, 2025, will also be available on SurgePays’ Investor Relations website.

And

now I’d like to turn the call over to President and CEO, Brian Cox.

Brian Cox

CEO & Director

Thank

you, Valter. Good afternoon, everyone, and thank you for joining us. Today, I will walk through our 2025 performance and what we proved

operationally and how that directly translates into our outlook for 2026.

For

the full year 2025, we generated approximately $57 million in revenue, including $16.2 million in the fourth quarter. As you review our

results, it’s important to understand the progression of the year. We saw steady growth from Q1 through Q3, with revenue increasing

from approximately $10.6 million in Q1 to $11.5 million in Q2 and then reaching $18.7 million in Q3. That third quarter was an inflection

point that demonstrated the scalability of our platform when capital is deployed into subscriber growth.

of 2025 is best understood in the context of what we demonstrated in Q3. In Q3, we deployed capital into subscriber acquisition and saw

a clear step-function and increase in revenue. That quarter proved the scalability of our model when capital is applied.

Q4, we made the decision to pull back on that level of spend and focus on capital discipline and efficiency. As a result, revenue in

Q4 declined sequentially from Q3 but remained significantly higher than Q4 of 2024. That is the key point. We proved we can scale, and

we demonstrated discipline in how we manage that growth. Just as importantly, Q4 included items that are not indicative of our current

operating run rate, including legal and certain noncash expenses.

For

the full year, total general and administrative expense declined to approximately $20.1 million from $27.5 million in 2024. That reduction

reflects the cost actions we began taking as we exited the ACP period and repositioned the business.

the same time, we continued to invest in the core infrastructure of the business, including our retail distribution network, our wireless

platform and our digital acquisition capabilities. Today, we are not reliant on a single subsidized program. We have multiple revenue

channels, including government-subsidized wireless, LinkUp Mobile prepaid, wholesale MVNE relationships and our point-of-sale fintech

and data platforms. We believe that diversification fundamentally changes the quality and durability of our revenue. We are not demand

constrained. We are capital disciplined. This leads directly into how we are thinking about 2026.

Many

of our investors remember what occurred during the ACP period. We leveraged existing capital relationships to fund subscriber acquisition,

and the result was revenue growth and meaningful stock appreciation. We are now executing a similar strategy but with a materially stronger

foundation. We have multiple independent revenue streams. We have an established retail footprint of more than 9,000 locations. We have

a customer acquisition engine through ProgramBenefits.com, and we have additional monetization layers, including wholesale and in-store

media platforms. That combination should allow us to deploy capital into growth while also improving the underlying economics of the

business.

Turning

to the balance sheet. We ended 2025 with approximately $1.7 million in cash. Since year-end, we have taken additional actions to reduce

our operating expense base and improve efficiency across the organization. Based on actions already taken, we estimate our current monthly

cash burn at the end of Q1 2026 to be approximately $250,000 to $300,000. This is a meaningful shift from the cost structure exiting

2025 and reflects an even more disciplined operating model as we move forward in 2026.

The

key takeaway is this. We have already demonstrated that when we deploy capital, we can scale revenue quickly. Now we are combining that

capability with a more efficient cost structure and multiple revenue streams. We believe that positions us to drive growth in a more

controlled and repeatable way.

With

that, I will turn the call over to Chelsea to walk through the financials in more detail.

Chelsea

Pullano

Interim Chief Financial Officer

Thank

you, Brian, and good afternoon, everyone. I’m honored to step into the role of Interim Chief Financial Officer at such an important

time for SurgePays. I want to thank Brian and the Board for their confidence. I’m excited about the opportunity to help support

the company’s next phase of growth by strengthening financial discipline, improving transparency and helping drive our path towards

profitability.

Now

turning to the results. For the year ended December 31, 2025, total revenue was approximately $57 million compared to $60.9 million in

2024. The decrease was primarily driven by the expected decline in subsidized revenue following the expiration of the Affordable Connectivity

Program in mid-2024.

Despite

that, we saw strong performance in our point-of-sale and Prepaid Services segment, which increased by approximately $26.1 million year-over-year,

partially offsetting the decline in MVNO revenue.

Cost

of revenue for 2025 was approximately $67.6 million compared to $75.2 million in 2024. Gross loss improved to $10.6 million compared

to $14.3 million in the prior year.

expect continued improvement in gross margins as we scale higher-margin revenue streams and benefit from the cost structure already put

in place.

Selling,

general and administrative expense, excluding depreciation and amortization, declined to approximately $19.2 million from $26.3 million

in 2024. This reflects reductions across multiple expense categories, including compensation, professional services and contractor expenses.

Net

loss from operations was approximately $30.7 million compared to $41.8 million in 2024, representing a significant improvement year-over-year.

Net

cash used in operating activities was approximately $21.3 million for 2025, reflecting the transition period following the end of ACP

and the investments made to reposition the business.

Net

cash provided by financing activities was approximately $10.5 million, primarily from the use of our at-the-market facility and additional

capital raises during the year.

Brian mentioned, we’ve taken meaningful actions since year-end to reduce our operating expenses, and we are seeing those improvements

reflected in our current run rate as we move through the first quarter of 2026. It’s important to note that in the fourth quarter,

our SG&A included approximately $2.3 million of nonrecurring expenses, including legal costs and noncash items, which are not indicative

of our ongoing operating expense run rate.

December 31, 2025, we had a working capital deficit of approximately $16.2 million compared to a surplus of $11.8 million at the end

of 2024. This reflects a shift in the business following the expiration of ACP and the timing of liabilities and capital deployment.

continue to actively manage our liquidity and capital structure with a focus on supporting growth initiatives while maintaining financial

discipline. Overall, 2025 was a transition year for the company. We repositioned the business, reduced operating expenses and established

the foundation for a more diversified and scalable model. As we move into 2026, our focus is on executing against that foundation, improving

margins and driving growth across our core revenue channels.

will now turn the call back to Brian for closing remarks.

Brian Cox

CEO & Director

Appreciate

it, Chelsea. I want to close with this. 2025 was about proving the model and resetting the foundation of the business. We demonstrated

that when we deploy capital, we can scale revenue quickly. We also made the necessary adjustments to operate more efficiently and build

a more durable business.

are now moving forward in 2026 with multiple revenue streams, a significantly improved cost structure and a clear path to growth. We

understand the market’s concerns around capital and execution. Our focus is on showing, not telling. You will see that in how we

manage expenses, how we deploy capital and how we grow the business. We believe we are positioned to execute, and we look forward to

updating you on our progress throughout the year.

Thank

you for your time and continued support. I will now pass it back to the operator for questions.

Question-and-Answer

Session

Operator

[Operator

Instructions] Our first question comes from Ed Woo with Ascendiant Capital.

Edward

Woo

Ascendiant Capital Markets LLC, Research Division

Congratulations

on all the progress, Brian. I had a question. I know you’re not giving out guidance, but what should we be most excited about of

the various products you have that’s going to be the biggest driver for revenue this year?

Brian Cox

CEO & Director

Ed,

thanks for the question. I think as we look forward, interestingly enough, we’ve got the subsidized wireless. We’ve got LinkUp

Mobile, and we’ve got some other kind of exciting things we’ve talked about that are going to start showing up on the financials.

you had to pin me down right now, LinkUp Mobile is doing really well. Starting an MVNO, a prepaid wireless company from scratch, the

team has done a phenomenal job. It’s definitely a grind getting traction in the market. And keep in mind that while some of that

is sold online, the majority of it is sold through dealerships and setting up relationships with dealers and sending out point-of-sale

materials, getting SIM cards, training folks and then that store has your product and usually, let’s say, 3 other prepaid companies

as well. So that’s a big deal for us, and it’s staying power, and that’s cash flow. And I think that’s going

to be the one that you’ll start seeing some pretty significant numbers off of.

And

there’s some — I think we’ve got some pretty exciting news coming up with LinkUp Mobile that I wish we had crossed

a couple of thresholds before today, so we can talk about it today, but it will give us something to talk about in the upcoming months.

Edward

Woo

Ascendiant Capital Markets LLC, Research Division

Great.

And one last question I have is, you guys, like I said, serve the underserved markets through your convenience store operators. What

are you hearing from these operators in terms of the economy is how are their customers? Are they doing better? Are they worse? Are they

open to new products, et cetera?

Brian Cox

CEO & Director

love this question. As you know, most of the folks on our team have been in this prepaid subprime, underserved, underbanked. There’s

a lot of words for it, and there’s different scopes. The largest scope would be the subprime market. But our market at a time of

where things are difficult and may be more expensive in the economy as they say, too much month, not enough check, there’s always

going to be a segment on the lower end of that socioeconomic that’s not really affected. They’re already lower income. It

doesn’t really hit them as much.

mean when certain things — your essential services are taken care of by the government, you’re kind of below the water break

line. If you think about the ocean where waves are crashing, the ups and downs, you’re a little bit below that break line.

But

what’s interesting as we’ve expanded the scope of our company and our target market into the subprime market, we do push

up into people that do spend money that do have money that don’t specifically rely on the government who are getting squeezed.

And I think what we’re seeing, the ebbs and flows of all the folks on our team that we talk about this often, 20 years we’ve

been doing this. And when times in the economy get a little difficult, that’s when people take a step back and are more aware of

their spending, more aware of value.

we’ve always done the best and had our best runs when things in the economy were tough because that’s when people will listen

to you if you’re offering a better value. Otherwise, it’s just a rut in the road, I’m going to pay $40 a month for

my wireless service because that’s just what I do and I just pay it and I do it 2 20s on the countertop, boom. But when things

are tough and putting 2 20s on the countertop at the convenience store kind of pulls a little bit more for me. It feels a little heavier

when I lay it down. Well, then if I look over and say, “Hey, wait a minute, I got a company here that will give me the exact same

thing for $30. What is that? Well, tell me about LinkUp.”

I think that it’s actually an opportunity for us, and it opens people’s eyes. They’re looking up. They’re aware

of their finances. They’re aware of other value. So — and we look to capitalize on that. We never wish ill on the economy.

But historically, we’ve done our best and had our best runs when there’s — I don’t want to say blood on the street,

that’s not accurate, but when the economy is going through a difficult time.

Operator

[Operator

Instructions] We have reached the end of the question-and-answer session. This concludes today’s conference, and you may disconnect

your lines at this time. Thank you for your participation.

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