Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

v3.21.2
Subsequent Events
9 Months Ended
Sep. 30, 2021
Subsequent Events [Abstract]  
Subsequent Events

Note 11 – Subsequent Events

 

Centercom Accounts Payable Forgiveness

 

On October 5, 2021, CenterCom, an entity that is 40% owned by SurgePays and 50% owned by Mr. Nuzzo, a director and officer of SurgePays, forgave $429,010 of accounts payable owed by SurgePays to CenterCom. As a result of this debt forgiveness, occurring with a related party, accordingly, there is no gain that is recorded, the Company has increased additional paid in capital.

 

Notes Payable

 

Subsequent to September 30, 2021, the Company issued three (3) notes totaling $715,000. The notes were issued with original issue discounts totaling $65,000, resulting in net proceeds of $650,000. The notes are due one (1) year from issuance and are unsecured. The notes were issued with 3,540,750 three (3) year warrants at an exercise price of $8/share. In the event of default, two (2) of the notes contain a conversion right whereby the notes are convertible at 75% of the market price based upon the VWAP in preceding 10 days. All notes and related accrued interest are required to be repaid upon an uplist to NASDAQ or another senior exchange.

 

Subsequent to September 30, 2021, the Company repaid $715,000 and related accrued interest of $6,148. At this time the remaining debt discount was fully amortized to interest expense.

 

NASDAQ Listing

 

On November 2, 2021, the Company’s common stock and warrants started trading on the Nasdaq Capital Market under the symbols SURG and SURGW, respectively.

 

 

SURGEPAYS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

 

Stock and Warrants Issued for Cash

 

On November 4, 2021, the Company issued 4,600,000 units consisting of one share of common stock and one warrant and 690,000 over-allotment warrants. The units were sold at $4.30 per unit for gross proceeds of $19,786,900 ($19,780,000 from the sale of 4,600,000 units at $4.30 and $6,900 from the sale of 690,000 over-allotment warrants at $0.01). The warrants are exercisable immediately at $4.73/share and expire three (3) years from the issuance date.

 

In connection with the offering, the Company incurred direct offering costs of $2,042,952 which will be charged to additional paid-in capital. Net proceeds were $17,743,948.

 

In connection with this offering, the underwriter was granted a 45-day option to purchase an additional 690,000 shares of common stock and/or up to an additional 690,000 warrants solely to cover over-allotments, at the public offering price per share of common stock and per warrant, less underwriting discounts. The Company received proceeds of $6,900 from the exercise of these 690,000 warrants at $0.01(see above). The underwriter still has the option to purchase an additional 690,000 shares of common stock at $4.30.

 

On November 4, 2021, the Company issued 230,000 five (5) year warrants to the underwriters. These warrants are exercisable beginning May 1, 2022 until November 1, 2026. The exercise price is $4.73/share.

 

Warrant Repricing

 

In connection with the reverse 1 for 50 reverse stock split, all warrants were subject to repricing.