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Our New Pick is: SURG
Current Price: $0.3085
Price Target: $3.25 (Goldman Small Cap Research)
Float: 18.32
Shareholder Presentation
========================
Members,
Please turn your immediate attention to SURG (SURG Holdings Inc.).
The last time we brought this ticker to your attention shares ran up from a low of $0.33 to a high of $0.4250, for gains of over +28%!
SURG has since pulled back, and is now trading at a much more attractive entry price of $0.3125.
We've been keeping a close eye on this explosive ticker, and anticipating another big move for SURG this week.
Based on our very own technical analysis , we could see a move of over +50% from here!
This is a highly realistic target, especially when you take into account SURG's acquisition ECS Prepaid Wireless Business and Software Platform which is expected to bring in $48.7 Million of Annualized Revenue.
The Company has made several blockbuster announcements over the past few days, all of which could be considered major catalysts for an increase in share price.
SURG Meets Of Our Requirements For A Breakout Pick
Low-Float
Big Announcements
Growing Revenues (+21% Increase In Q3)
Strong Management
Undervalued/Oversold
Strong Guidance
Strong Technicals
About Surge Holdings Inc.
Surge Holdings, Inc. is a retail supply chain company leveraging blockchain technology to provide a virtual distribution hub for retailers, as well as offer telecom services for low income customers and financial payment services for the unbanked and under-banked. Surge products are delivered through a nationwide network of convenience stores and corner markets connected to the SurgePays™ retail blockchain network. This retail platform is designed to transform the traditional supply chain by providing local retailers seamless access to global products, and empowers the corner store to select, order and fulfill delivery of wholesale goods from around the country. This platform also provides manufacturers a cost-effective and efficient platform to access local retailers. For more information on Surge Holdings and its subsidiaries, please visit: surgeholdings.com.
Surge Logics Completes Development of Intake Logistics
Proprietary Sales and Customer Relationship Solution for Mass Tort Law Firms
On Tuesday, the Company announced its wholly owned subsidiary, Surge Logics, completed the development and launch of InTake Logistics, a proprietary sales and customer relationship solution for law firms specializing in mass tort lawsuits.
Carter Matzinger, President of Surge Logics, commented, “After months of development, we are excited to launch InTake Logistics, a proprietary CRM software solution that facilitates the entire process of delivering signed retainer services to law firms. This new software enables us to work with a broad range of attorneys that do not have the staff and infrastructure to handle the volume of qualified leads Surge Logics can generate while managing the work flow of converting those leads into signed clients for their contributions to mass tort cases.”
InTake Logistics is a custom developed sales and client management intake solution software for the purpose of procuring signed client retainer documents for attorneys that specialize in mass tort litigation.
“This is a great example of how our strategic equity stake in CenterCom Global is positively impacting not only our revenue, but our ability to scale the business for years to come. CenterCom’s ability to develop and support this platform, which now includes forty-two full-time staff members handling intake, reporting and technical support, streamline our operations for an efficient and productive workflow. Phase 2 of the development project will allow us to license the system, so attorneys can install our software to replace their existing in-house customer and document management platform. This should improve these firms’ efficiency and results, while increasing Surge Logics’ revenue,” stated Mr. Matzinger.
As disclosed in Surge’s most recent Quarterly Report, Surge Logic's gross revenue has grown to approximately $4.4 million (unaudited results through September 30, 2019) as compared to $1.5 million in gross revenue in 2018.
SurgePhone Wireless Signs Distribution Agreement with Softel Technologies
Deploying sales teams across ten states including California
Last Monday, the Company announced its wholly owned subsidiary SurgePhone Wireless has signed a distribution agreement with Softel Technologies, a leading refurbisher of cell phones and wireless carrier. Under the agreement, Surge will market Softel’s wireless handsets and enroll qualifying customers in Lifeline, the FCC’s discounted communications program. Softel will provide the phones to Surge at no upfront cost, and both Surge and Softel will benefit based on customer usage.
Hung Do, President of Softel Technologies, stated, “We are delighted to partner with Surge Holdings, a true innovator, providing unique solutions to underserved markets. Given their impressive distribution capabilities and track record in terms of both sales and compliance, we believe this relationship will help propel sales of our phones and Lifeline program. As we can procure fully equipped phones, we have the ability to support Surge in rolling this product out to hundreds of thousands of users.”
Jonathon Coffman, VP of Wireless Sales for Surge, commented, “We are excited to partner with Softel, as this supply and distribution agreement removes constraints procuring quality phones and opens new and much larger markets. Additionally, this agreement alleviates the upfront capital requirements, where previously we had to first purchase the Androids and then realize our returns over a number of months. Instead, we can use the same management team to oversee enrollments in these additional states, and Softel provides the phones at no upfront cost. This significantly enhances our cash flow model and should allow us to more rapidly scale the business. We look forward to aggressively rolling out this unique offering across ten states initially, including California, with additional products to follow.”
Lifeline is the FCC's program to help make communications services more affordable for low-income consumers. Lifeline provides subscribers a discount on monthly telephone service purchased from participating providers in the marketplace. To participate in the program, subscribers must either have an income that is at or below 135% of the federal Poverty Guidelines or participate in certain assistance programs such as Medicaid and Supplemental Nutrition Assistance Program. (Food Stamps or SNAP)
Surge Holdings Announces Official Launch of the SurgePays™ Visa® Prepaid Card
SurgePays™ Prepaid Card utilizes state of the art fintech to address the financial needs of the more than 68 million unbanked and underbanked adults in the United States
Offers flexibility including allowing employers to directly load payroll to employee’s cards as well as the ability to “Photo Load” paychecks and other checks
Free Personalized card, no credit check, no activation fee and no monthly maintenance fee
In late August, the Comany successfully launched the SurgePays™ Visa® Prepaid Card (the “Card”).
In addition to the benefits of increased safety, security, and convenience of using the Card anywhere that accepts Visa®, some of the integrated life enhancing benefits for SurgePays Cardholders, include ATM withdrawals, the ability to accept direct loading wages and earnings from employers, loading the card by taking a picture of the front and back of paychecks and other checks (“PHOTO LOAD”), accessing accounts from the Card app on their mobile device; as well as TRANSCARD usage, which allows users to send money to friends and relatives locally and internationally.
In 2012, the FDIC issued a report stating that approximately 68 million adults living in the United States were unbanked or underbanked. The Card is designed to provide these people, and the additional immigrant population, a convenient way to manage their money starting with simple online signup that features no credit check, no activation fee, a free personalized card and no monthly minimum balance or monthly maintenance fees. Customers can sign up for the card now at: www.surgepayscard.com.
The Company’s wholly owned subsidiary, SurgePays Fintech, Inc., is headed by Kenneth Reaves, Ph .D. Dr . Reaves has been a pioneer in the prepaid debit card industry while previously spearheading two of the most successful card launches and rollouts of the last 20 years.
Dr . Reaves, President of SurgePays Fintech, Inc., stated, “The SurgePays™ Visa® Prepaid Card is “THE ONLY CARD THAT YOU WILL NEED IN YOUR WALLET” to obtain and maintain control of your money. The Card delivers our cardholders life enhancing features and services. For the millions of individuals who wait in line to pay high fees to cash their checks, they now have an alternative to seamlessly load their checks onto their SurgePays™ Visa® Prepaid Card. Cardholders can add secondary cards to their account as a way to facilitate transfers to family members in the US and abroad. The fintech solutions delivered through the SurgePays™ Visa® Prepaid Card will provide significant tangible benefits to so many in their daily activities.”
Brian Cox, Chairman and CEO of Surge Holdings, commented, “We believe Dr . Reaves has done a fabulous job utilizing his wisdom and experience to navigate the over one-year planning, development and integration of the Card. His team’s ability to position Surge with a strategic card in a sector that has significant barriers to entry reinforces our overall goal of increasing shareholder value. I am excited about the additional life enhancing benefits currently being integrated as well as the national rollout.”
Anthony Nuzzo, President of Surge Holdings, Inc stated, “Our competitive advantage is our ability to offer this card with a discounted fee structure with the goal to create a larger and more loyal customer base looking to stretch their money further by taking advantage of our other Surge products and rewards programs. We believe the Card will become an important profit center and we look forward to introducing additional differentiated products through our network in order to drive value for our partners and shareholders.”
SURG Delivers Huge Increase In Revenue For Q3
On Friday, the Company announced financial results for the third quarter ended September 30, 2019.
Let's just say after hearing the results, we are more than confident that SURG is well on its way to Goldman Small Cap Research's $3.25 Price Target.
Surge Holdings Reports 21% Increase in Revenue to $4.9 Million for the Third Quarter of 2019 and Provides Business Update
Reports continued progress with rollout of SurgePays™ Network through AATAC
Asset purchase of ECS prepaid wireless business and software platform adds 9,800 retail locations to SurgePays™ Network
Launches SurgeRewards app enabling wireless customers to earn free unlimited service
Launches SurgePays™ Reloadable Debit Card
Completes investment into SurgeRewards App and Surge Logics InTake CRM Software
Brian Cox, CEO and Chairman of Surge Holdings, commented, “I am pleased to report we achieved 21% growth in revenue to $4.9 million for the third quarter of 2019. That said, the R&D portion of the Surge lifecycle is complete, and each of the subsidiaries are rolling out products to market. We believe we have built a solid foundation for accelerated revenue growth in 2020. Surge has raised over $3 million in 2019 to support the development of multiple proprietary software programs and applications. I am happy with our team’s performance in executing our strategic plan for scalable growth.”
“First, we continue to gain traction and are moving ahead aggressively with the rollout of the SurgePays™ Network through AATAC, one of the largest private trade associations, representing over 110,000 retail locations. The SurgePays™ Network offers the merchant a wholesale marketplace to order products from regional manufacturers. At the same time, manufacturers are now able to distribute their products nationwide in a more efficient and effective manner. The AATAC model called for Surge to be coupled with Pastime Foods and Weekend Warrior Wellness’ products to be sold, setup and installed in the c-stores and at the same time to share the cost. During phase one, there was a delay in the packaging for one of the third-party companies. During the delay, Surge negotiated an exclusive master distribution agreement with both Pastime Foods and Weekend Warrior Wellness . Through the SurgePays™ Marketplace Portal, these companies’ products and payments will all be centralized and aggregated, while additionally allowing Surge to realize more than twice the expected revenue per store from the AATAC rollout. Another benefit is AATAC utilizing SurgePays™ as a solution by requiring its DRIP member stores, 40,000 locations, to be set up on SurgePays™ so that AATAC membership fees can be paid through the SurgePays™ portal. By bringing these member stores online, Surge will be able to assist future AATAC product rollouts and become the FinTech solution for AATAC distribution and payments. This bolsters our mid-term goal of 100,000 retail locations.”
“We also announced that we successfully completed the asset purchase of the ECS Prepaid business, which marks a major inflection point for Surge, by immediately adding over 9,800 new retail locations, $48.7 million in additional projected annualized revenue, and 160 ISO salespeople. Our goal is to immediately integrate the SurgePays Network within these new retail locations so that we can upsell both Surge owned and other wholesale products.”
“In August, we announced the successful launch of the SurgePays™ Reloadable Debit Card. According to the FDIC, over 25% of Americans are underbanked, and our card is designed to provide these individuals with a convenient way to manage their money. This integration and onboarding took well over a year, but we feel this was well worth it. Our market rollout will propel forward by requiring SurgeRewards App customers to be a SurgePays™ Reloadable Debit Card holder in order to get their monthly cash reward payments disbursed to their personalized card.”
“Another significant investment into software assets was the development and launch of our proprietary SurgeRewards software app. Customers can earn rewards points from the ad impressions that appear when they unlock their phone and by opening the SurgeRewards app to watch videos and ads, as well as by participating in short surveys. The SurgeRewards App allows Surge to more aggressively rollout the SurgePhone Wireless free service offering, since we own and control the app, which should result in more revenue and better results. In addition to our free SurgePhone Wireless service, the app will be preloaded on the Android handsets of True Wireless customers as well as other third-party Lifeline companies’ handsets. This should provide an additional stream of profit through ad network revenue sharing. All these monthly cash disbursements will require these customers to obtain a SurgePays Debit card for monthly cash reward disbursements. We expect this will drive between 15,000 to 20,000 SurgePays™ Reloadable Debit card activations per month, further enhancing brand loyalty and enabling us to maximize our relationship with underbanked customers.”
“Surge Logics completed the development and launch of InTake Logistics, a proprietary CRM software solution that delivers signed retainer services to clients. It is proving to be a direct benefit to clients that do not have the staff and infrastructure to handle the volume of leads Surge Logics generates. A strategic partnership with our affiliate, CenterCom Global, was formed to support these advancements. Forty-two (42) full-time staff members handle intake, reporting and technical support to streamline operations for an efficient and productive workflow. Surge Logics’ exponential growth can be attributed directly to proprietary software development and synergy with CenterCom Global. Surge Logic's revenue has grown to over $4.4 million year to date as compared to $1.5 million in gross revenue in 2018. We expect the upward revenue trajectory to continue.”
Third Quarter 2019 Financial Results
For the three months ended September 30, 2019, revenues were approximately $4.9 million compared to approximately $4.1 million for the same period last year. Operating loss for three months ended September 30, 2019 was approximately $(1.1 million) versus operating loss of approximately $(399,815) for the quarter ended September 30, 2018. Net loss for the three months ended September 30, 2019 was approximately $(1.2 million), or $(0.01) per share, versus a net loss of approximately $(425,724), or $(0.00) per share, in the same period last year.
Recent Acquisition Could Add Roughly $50M In Revenue For SURG
Surge Holdings Provides Update on Completing Asset Purchase of ECS Prepaid Wireless Business and Software Platform; Adds 9,800 Retail Locations to SurgePays™ Network and Projected $48.7 Million of Additional Annualized Revenue*
ECS platform currently processes over 18,000 transactions per day and supports over 160 independent sales organizations and agents representing potential new Surge partners and customers
Immediate goal to launch high demand and trending retail products through the SurgePays Network to rapidly scale revenue
Transaction expected to be immediately accretive to earnings
Earlier this month, SURG provided an update on completing the asset purchase of the ECS Prepaid business, Electronic Check Services business and the Central States Legal Services business (collectively, “ECS”).
Through its proprietary Fintech software platform, ECS is a leading provider of prepaid wireless load and top-ups, check cashing and wireless SIM activation to convenience stores and bodegas nationwide. Since 2008, ECS has grown to a network of over 9,800 retail locations and 160 independent sales organizations (“ISO”) processing over 18,000 transactions per day. Surge will integrate the ECS software with its SurgePays™ Network in order to offer both wholesale products from third-party manufacturers, as well as Surge products, including the SurgePays™ Reloadable Debit Card, SurgePhone Wireless and SIM Starter Kits. The transaction is expected to be immediately accretive to earnings .
Brian Cox, Chairman and CEO of Surge Holdings, commented, “This transaction marks a major inflection point for Surge, by immediately adding over 9,800 new retail locations, $48.7 million in additional projected annualized revenue, and 160 ISO salespeople. The developers are already working to integrate software platforms to include the ability to cross market the SurgePays™ Reloadable Debit Card, SurgePhone Wireless and SIM Starter Kits, as well as layer on additional high demand and trending products through the SurgePays™ Network. ECS and their management team of Derron Winfrey and Mark Garner have been a leader in our sector for a long time. We are excited about working with them to scale up the business - not only by adding stores, but also increasing same store revenue.”
Derron Winfrey, President of ECS, commented, “We are extremely excited about the integration with Surge and the opportunity to bring Surge’s product offering to our network. Our business models are closely aligned and highly complementary. The significant and immediate synergies will allow us to scale much more rapidly, growing both the network and product offerings. ECS was built as a preferred partner to our ISO’s and independent retailers, catering to mom and pop shop owners by bringing them a level of service typically only found in the big box space. Many people do not realize that independent store owners make up approximately 53% of the entire convenience store marketplace, so this is a significant, underserved addressable market. We believe the level of service and product offerings that come from combining the strengths of Surge and ECS are unmatched in the industry and we are aligning our organizations to bring this advanced technology and service offering to our retail and ISO partners.”
Goldman Small Cap Research Slaps On $3.25 Price Target. +968% Upside From Here
Investment Highlights
In July 2019, we liked SURG. Today, we love it. At current levels, there may be no better risk/reward offering than Surge Holdings, Inc. The stock has three things in its favor and each one on its own would serve as a major catalyst. Combined, however, and major stock gains are projected ahead. Thus, we reiterate our sentiment and $3.25 price target on these shares. Here are three reasons to buy the stock.
New Acquisition is a Substantial Catalyst. The Company just announced an acquisition that will add roughly $50M in annual revenue to SURG. Given the cross-sale opportunities, we believe that this segment’s top-line could grow by 40-50% in its first full year, potentially taking it to the $70-75M level in 2020.
Surge’s “Multiplier Model” Translates into Exponential Growth. In our view, the best way to describe the core of Surge’s approach is what we term the “Multiplier Model.” The essence of Surge’s capabilities is its inherent, exponential growth model. Top-line growth rises exponentially as new locations are on-boarded, and when new products/services are executed in existing or new stores through the Surge platform. Thus, revenue growth forecasts remain high.
The First National In-Store CBD Sales Channel? The sale of CBD products is one of the fastest growing and most popular consumer offerings and is limited only by the current lack of true, national, in-store availability. Through the Surge network of local retailers and C-stores, a primary sales channel for these products, Surge has just begun to offer products with strong results. The Multiplier Model targeting the introduction of the top CBD products will drive industry sales and add major revenue/profit growth to Surge.
Source: www.goldmanresearch.com/20191031...
SURG Market Opportunity
A report by the Consumer Financial Protection Bureau found that 26 million U.S. adults were “credit invisible”
46% of Americans spend more than they earn every month, which means increased likelihood that bills won’t be paid.
19 million adults were “unscorable”, meaning they lacked a sufficient or recent enough credit history to be given a credit score.
Nearly one in five consumers have no credit history or credit score. 51% of credit users have “subprime” credit scores.
Approximately 14% of the population has no credit score whatsoever and is labeled as credit invisible.
Traditionally, a poor credit score or a lack of documented credit history created a vicious cycle for a vast number of consumers. These consumers have been shut out of opportunities for borrowing, purchasing and best pricing on base goods and services. Additionally, access to communication services and security has been sorely lacking for these consumers. These circumstances have made it extremely difficult for these consumers to acquire assets and secure a sense of financial well-being
Technical Analysis
As with most of our past winners, we see little downside risk with SURG.
The last time SURG was trading at these levels shares shot up nearly +30% in one session!
Based on our very own technical analysis , we are anticipating a move of +50%!
Key Indicators
Bullish Falling Wedge Reaches its Apex and Meeting Pressure From Rising Long-term Support, Signaling a Break to the Upside.
Strong Bullish Uptrend on the RSI
Momentum is a Leading Indicator and Holds Strong Bullish Divergence Against Price
Move Above Zero Line is a Buy Signal Historically
SURG hasn't closed under $0.25 in over a year
SURG is trading well off its 52-week high of $0.94, giving it an immediate upside of over +200%!
With it's tight float of just 18.32M, there is just over $5.7M of shares available to the public for trading.
With this week's anticipated increase in trade volume , we could easily see a move of +50% or more by Friday.
Let's also not forget, that just like several of our past big winners, SURG trades on the OTCQB Venture Marketplace.
Securities trading on OTCQB have higher reporting and certification standards, which tends to lead to increased liquidity, investor confidence, as well as enhanced shareholder value.
The Bottom Line:
Based on our research, we believe that sure SURG has the potential to be one of our biggest Q4 winners....
The Company has strong revenue growth, and a management team committed to success.
It appears to be an absolute steal at today's alert price.
We've watched SURG break out from these levels several times before.
This could be the perfect entry point for traders looking to get their maximum ROI on a ticker that appears to be destined for a breakout.
As such, we are urging all members to act fast, start their research, and make sure to add SURG to the top of their watchlist
(*Remember to use a Stop-Loss Order or basic Limit Order to protect your gains, as well as limit possible losses.)
Best Regards,
Past performance is not an indicator of future returns. The publishers of this report are not investment advisors and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. The publishers of this report has received fifteen thousand dollars compensation to complete this marketing campaign for SURG . We have previously been compensated five thousand dollars by a third party, to conduct investor relations marketing for SURG -which has now expired. Never make investment decisions based on anything the publisher of this report says. This message is meant for informational and educational purposes only and does not provide investment advice.
Our New Pick is: SURG
Current Price: $0.3085
Price Target: $3.25 (Goldman Small Cap Research)
Float: 18.32
Shareholder Presentation
========================
Members,
Please turn your immediate attention to SURG (SURG Holdings Inc.).
The last time we brought this ticker to your attention shares ran up from a low of $0.33 to a high of $0.4250, for gains of over +28%!
SURG has since pulled back, and is now trading at a much more attractive entry price of $0.3125.
We've been keeping a close eye on this explosive ticker, and anticipating another big move for SURG this week.
Based on our very own technical analysis , we could see a move of over +50% from here!
This is a highly realistic target, especially when you take into account SURG's acquisition ECS Prepaid Wireless Business and Software Platform which is expected to bring in $48.7 Million of Annualized Revenue.
The Company has made several blockbuster announcements over the past few days, all of which could be considered major catalysts for an increase in share price.
SURG Meets Of Our Requirements For A Breakout Pick
Low-Float
Big Announcements
Growing Revenues (+21% Increase In Q3)
Strong Management
Undervalued/Oversold
Strong Guidance
Strong Technicals
About Surge Holdings Inc.
Surge Holdings, Inc. is a retail supply chain company leveraging blockchain technology to provide a virtual distribution hub for retailers, as well as offer telecom services for low income customers and financial payment services for the unbanked and under-banked. Surge products are delivered through a nationwide network of convenience stores and corner markets connected to the SurgePays™ retail blockchain network. This retail platform is designed to transform the traditional supply chain by providing local retailers seamless access to global products, and empowers the corner store to select, order and fulfill delivery of wholesale goods from around the country. This platform also provides manufacturers a cost-effective and efficient platform to access local retailers. For more information on Surge Holdings and its subsidiaries, please visit: surgeholdings.com.
Surge Logics Completes Development of Intake Logistics
Proprietary Sales and Customer Relationship Solution for Mass Tort Law Firms
On Tuesday, the Company announced its wholly owned subsidiary, Surge Logics, completed the development and launch of InTake Logistics, a proprietary sales and customer relationship solution for law firms specializing in mass tort lawsuits.
Carter Matzinger, President of Surge Logics, commented, “After months of development, we are excited to launch InTake Logistics, a proprietary CRM software solution that facilitates the entire process of delivering signed retainer services to law firms. This new software enables us to work with a broad range of attorneys that do not have the staff and infrastructure to handle the volume of qualified leads Surge Logics can generate while managing the work flow of converting those leads into signed clients for their contributions to mass tort cases.”
InTake Logistics is a custom developed sales and client management intake solution software for the purpose of procuring signed client retainer documents for attorneys that specialize in mass tort litigation.
“This is a great example of how our strategic equity stake in CenterCom Global is positively impacting not only our revenue, but our ability to scale the business for years to come. CenterCom’s ability to develop and support this platform, which now includes forty-two full-time staff members handling intake, reporting and technical support, streamline our operations for an efficient and productive workflow. Phase 2 of the development project will allow us to license the system, so attorneys can install our software to replace their existing in-house customer and document management platform. This should improve these firms’ efficiency and results, while increasing Surge Logics’ revenue,” stated Mr. Matzinger.
As disclosed in Surge’s most recent Quarterly Report, Surge Logic's gross revenue has grown to approximately $4.4 million (unaudited results through September 30, 2019) as compared to $1.5 million in gross revenue in 2018.
SurgePhone Wireless Signs Distribution Agreement with Softel Technologies
Deploying sales teams across ten states including California
Last Monday, the Company announced its wholly owned subsidiary SurgePhone Wireless has signed a distribution agreement with Softel Technologies, a leading refurbisher of cell phones and wireless carrier. Under the agreement, Surge will market Softel’s wireless handsets and enroll qualifying customers in Lifeline, the FCC’s discounted communications program. Softel will provide the phones to Surge at no upfront cost, and both Surge and Softel will benefit based on customer usage.
Hung Do, President of Softel Technologies, stated, “We are delighted to partner with Surge Holdings, a true innovator, providing unique solutions to underserved markets. Given their impressive distribution capabilities and track record in terms of both sales and compliance, we believe this relationship will help propel sales of our phones and Lifeline program. As we can procure fully equipped phones, we have the ability to support Surge in rolling this product out to hundreds of thousands of users.”
Jonathon Coffman, VP of Wireless Sales for Surge, commented, “We are excited to partner with Softel, as this supply and distribution agreement removes constraints procuring quality phones and opens new and much larger markets. Additionally, this agreement alleviates the upfront capital requirements, where previously we had to first purchase the Androids and then realize our returns over a number of months. Instead, we can use the same management team to oversee enrollments in these additional states, and Softel provides the phones at no upfront cost. This significantly enhances our cash flow model and should allow us to more rapidly scale the business. We look forward to aggressively rolling out this unique offering across ten states initially, including California, with additional products to follow.”
Lifeline is the FCC's program to help make communications services more affordable for low-income consumers. Lifeline provides subscribers a discount on monthly telephone service purchased from participating providers in the marketplace. To participate in the program, subscribers must either have an income that is at or below 135% of the federal Poverty Guidelines or participate in certain assistance programs such as Medicaid and Supplemental Nutrition Assistance Program. (Food Stamps or SNAP)
Surge Holdings Announces Official Launch of the SurgePays™ Visa® Prepaid Card
SurgePays™ Prepaid Card utilizes state of the art fintech to address the financial needs of the more than 68 million unbanked and underbanked adults in the United States
Offers flexibility including allowing employers to directly load payroll to employee’s cards as well as the ability to “Photo Load” paychecks and other checks
Free Personalized card, no credit check, no activation fee and no monthly maintenance fee
In late August, the Comany successfully launched the SurgePays™ Visa® Prepaid Card (the “Card”).
In addition to the benefits of increased safety, security, and convenience of using the Card anywhere that accepts Visa®, some of the integrated life enhancing benefits for SurgePays Cardholders, include ATM withdrawals, the ability to accept direct loading wages and earnings from employers, loading the card by taking a picture of the front and back of paychecks and other checks (“PHOTO LOAD”), accessing accounts from the Card app on their mobile device; as well as TRANSCARD usage, which allows users to send money to friends and relatives locally and internationally.
In 2012, the FDIC issued a report stating that approximately 68 million adults living in the United States were unbanked or underbanked. The Card is designed to provide these people, and the additional immigrant population, a convenient way to manage their money starting with simple online signup that features no credit check, no activation fee, a free personalized card and no monthly minimum balance or monthly maintenance fees. Customers can sign up for the card now at: www.surgepayscard.com.
The Company’s wholly owned subsidiary, SurgePays Fintech, Inc., is headed by Kenneth Reaves, Ph .D. Dr . Reaves has been a pioneer in the prepaid debit card industry while previously spearheading two of the most successful card launches and rollouts of the last 20 years.
Dr . Reaves, President of SurgePays Fintech, Inc., stated, “The SurgePays™ Visa® Prepaid Card is “THE ONLY CARD THAT YOU WILL NEED IN YOUR WALLET” to obtain and maintain control of your money. The Card delivers our cardholders life enhancing features and services. For the millions of individuals who wait in line to pay high fees to cash their checks, they now have an alternative to seamlessly load their checks onto their SurgePays™ Visa® Prepaid Card. Cardholders can add secondary cards to their account as a way to facilitate transfers to family members in the US and abroad. The fintech solutions delivered through the SurgePays™ Visa® Prepaid Card will provide significant tangible benefits to so many in their daily activities.”
Brian Cox, Chairman and CEO of Surge Holdings, commented, “We believe Dr . Reaves has done a fabulous job utilizing his wisdom and experience to navigate the over one-year planning, development and integration of the Card. His team’s ability to position Surge with a strategic card in a sector that has significant barriers to entry reinforces our overall goal of increasing shareholder value. I am excited about the additional life enhancing benefits currently being integrated as well as the national rollout.”
Anthony Nuzzo, President of Surge Holdings, Inc stated, “Our competitive advantage is our ability to offer this card with a discounted fee structure with the goal to create a larger and more loyal customer base looking to stretch their money further by taking advantage of our other Surge products and rewards programs. We believe the Card will become an important profit center and we look forward to introducing additional differentiated products through our network in order to drive value for our partners and shareholders.”
SURG Delivers Huge Increase In Revenue For Q3
On Friday, the Company announced financial results for the third quarter ended September 30, 2019.
Let's just say after hearing the results, we are more than confident that SURG is well on its way to Goldman Small Cap Research's $3.25 Price Target.
Surge Holdings Reports 21% Increase in Revenue to $4.9 Million for the Third Quarter of 2019 and Provides Business Update
Reports continued progress with rollout of SurgePays™ Network through AATAC
Asset purchase of ECS prepaid wireless business and software platform adds 9,800 retail locations to SurgePays™ Network
Launches SurgeRewards app enabling wireless customers to earn free unlimited service
Launches SurgePays™ Reloadable Debit Card
Completes investment into SurgeRewards App and Surge Logics InTake CRM Software
Brian Cox, CEO and Chairman of Surge Holdings, commented, “I am pleased to report we achieved 21% growth in revenue to $4.9 million for the third quarter of 2019. That said, the R&D portion of the Surge lifecycle is complete, and each of the subsidiaries are rolling out products to market. We believe we have built a solid foundation for accelerated revenue growth in 2020. Surge has raised over $3 million in 2019 to support the development of multiple proprietary software programs and applications. I am happy with our team’s performance in executing our strategic plan for scalable growth.”
“First, we continue to gain traction and are moving ahead aggressively with the rollout of the SurgePays™ Network through AATAC, one of the largest private trade associations, representing over 110,000 retail locations. The SurgePays™ Network offers the merchant a wholesale marketplace to order products from regional manufacturers. At the same time, manufacturers are now able to distribute their products nationwide in a more efficient and effective manner. The AATAC model called for Surge to be coupled with Pastime Foods and Weekend Warrior Wellness’ products to be sold, setup and installed in the c-stores and at the same time to share the cost. During phase one, there was a delay in the packaging for one of the third-party companies. During the delay, Surge negotiated an exclusive master distribution agreement with both Pastime Foods and Weekend Warrior Wellness . Through the SurgePays™ Marketplace Portal, these companies’ products and payments will all be centralized and aggregated, while additionally allowing Surge to realize more than twice the expected revenue per store from the AATAC rollout. Another benefit is AATAC utilizing SurgePays™ as a solution by requiring its DRIP member stores, 40,000 locations, to be set up on SurgePays™ so that AATAC membership fees can be paid through the SurgePays™ portal. By bringing these member stores online, Surge will be able to assist future AATAC product rollouts and become the FinTech solution for AATAC distribution and payments. This bolsters our mid-term goal of 100,000 retail locations.”
“We also announced that we successfully completed the asset purchase of the ECS Prepaid business, which marks a major inflection point for Surge, by immediately adding over 9,800 new retail locations, $48.7 million in additional projected annualized revenue, and 160 ISO salespeople. Our goal is to immediately integrate the SurgePays Network within these new retail locations so that we can upsell both Surge owned and other wholesale products.”
“In August, we announced the successful launch of the SurgePays™ Reloadable Debit Card. According to the FDIC, over 25% of Americans are underbanked, and our card is designed to provide these individuals with a convenient way to manage their money. This integration and onboarding took well over a year, but we feel this was well worth it. Our market rollout will propel forward by requiring SurgeRewards App customers to be a SurgePays™ Reloadable Debit Card holder in order to get their monthly cash reward payments disbursed to their personalized card.”
“Another significant investment into software assets was the development and launch of our proprietary SurgeRewards software app. Customers can earn rewards points from the ad impressions that appear when they unlock their phone and by opening the SurgeRewards app to watch videos and ads, as well as by participating in short surveys. The SurgeRewards App allows Surge to more aggressively rollout the SurgePhone Wireless free service offering, since we own and control the app, which should result in more revenue and better results. In addition to our free SurgePhone Wireless service, the app will be preloaded on the Android handsets of True Wireless customers as well as other third-party Lifeline companies’ handsets. This should provide an additional stream of profit through ad network revenue sharing. All these monthly cash disbursements will require these customers to obtain a SurgePays Debit card for monthly cash reward disbursements. We expect this will drive between 15,000 to 20,000 SurgePays™ Reloadable Debit card activations per month, further enhancing brand loyalty and enabling us to maximize our relationship with underbanked customers.”
“Surge Logics completed the development and launch of InTake Logistics, a proprietary CRM software solution that delivers signed retainer services to clients. It is proving to be a direct benefit to clients that do not have the staff and infrastructure to handle the volume of leads Surge Logics generates. A strategic partnership with our affiliate, CenterCom Global, was formed to support these advancements. Forty-two (42) full-time staff members handle intake, reporting and technical support to streamline operations for an efficient and productive workflow. Surge Logics’ exponential growth can be attributed directly to proprietary software development and synergy with CenterCom Global. Surge Logic's revenue has grown to over $4.4 million year to date as compared to $1.5 million in gross revenue in 2018. We expect the upward revenue trajectory to continue.”
Third Quarter 2019 Financial Results
For the three months ended September 30, 2019, revenues were approximately $4.9 million compared to approximately $4.1 million for the same period last year. Operating loss for three months ended September 30, 2019 was approximately $(1.1 million) versus operating loss of approximately $(399,815) for the quarter ended September 30, 2018. Net loss for the three months ended September 30, 2019 was approximately $(1.2 million), or $(0.01) per share, versus a net loss of approximately $(425,724), or $(0.00) per share, in the same period last year.
Recent Acquisition Could Add Roughly $50M In Revenue For SURG
Surge Holdings Provides Update on Completing Asset Purchase of ECS Prepaid Wireless Business and Software Platform; Adds 9,800 Retail Locations to SurgePays™ Network and Projected $48.7 Million of Additional Annualized Revenue*
ECS platform currently processes over 18,000 transactions per day and supports over 160 independent sales organizations and agents representing potential new Surge partners and customers
Immediate goal to launch high demand and trending retail products through the SurgePays Network to rapidly scale revenue
Transaction expected to be immediately accretive to earnings
Earlier this month, SURG provided an update on completing the asset purchase of the ECS Prepaid business, Electronic Check Services business and the Central States Legal Services business (collectively, “ECS”).
Through its proprietary Fintech software platform, ECS is a leading provider of prepaid wireless load and top-ups, check cashing and wireless SIM activation to convenience stores and bodegas nationwide. Since 2008, ECS has grown to a network of over 9,800 retail locations and 160 independent sales organizations (“ISO”) processing over 18,000 transactions per day. Surge will integrate the ECS software with its SurgePays™ Network in order to offer both wholesale products from third-party manufacturers, as well as Surge products, including the SurgePays™ Reloadable Debit Card, SurgePhone Wireless and SIM Starter Kits. The transaction is expected to be immediately accretive to earnings .
Brian Cox, Chairman and CEO of Surge Holdings, commented, “This transaction marks a major inflection point for Surge, by immediately adding over 9,800 new retail locations, $48.7 million in additional projected annualized revenue, and 160 ISO salespeople. The developers are already working to integrate software platforms to include the ability to cross market the SurgePays™ Reloadable Debit Card, SurgePhone Wireless and SIM Starter Kits, as well as layer on additional high demand and trending products through the SurgePays™ Network. ECS and their management team of Derron Winfrey and Mark Garner have been a leader in our sector for a long time. We are excited about working with them to scale up the business - not only by adding stores, but also increasing same store revenue.”
Derron Winfrey, President of ECS, commented, “We are extremely excited about the integration with Surge and the opportunity to bring Surge’s product offering to our network. Our business models are closely aligned and highly complementary. The significant and immediate synergies will allow us to scale much more rapidly, growing both the network and product offerings. ECS was built as a preferred partner to our ISO’s and independent retailers, catering to mom and pop shop owners by bringing them a level of service typically only found in the big box space. Many people do not realize that independent store owners make up approximately 53% of the entire convenience store marketplace, so this is a significant, underserved addressable market. We believe the level of service and product offerings that come from combining the strengths of Surge and ECS are unmatched in the industry and we are aligning our organizations to bring this advanced technology and service offering to our retail and ISO partners.”
Goldman Small Cap Research Slaps On $3.25 Price Target. +968% Upside From Here
Investment Highlights
In July 2019, we liked SURG. Today, we love it. At current levels, there may be no better risk/reward offering than Surge Holdings, Inc. The stock has three things in its favor and each one on its own would serve as a major catalyst. Combined, however, and major stock gains are projected ahead. Thus, we reiterate our sentiment and $3.25 price target on these shares. Here are three reasons to buy the stock.
New Acquisition is a Substantial Catalyst. The Company just announced an acquisition that will add roughly $50M in annual revenue to SURG. Given the cross-sale opportunities, we believe that this segment’s top-line could grow by 40-50% in its first full year, potentially taking it to the $70-75M level in 2020.
Surge’s “Multiplier Model” Translates into Exponential Growth. In our view, the best way to describe the core of Surge’s approach is what we term the “Multiplier Model.” The essence of Surge’s capabilities is its inherent, exponential growth model. Top-line growth rises exponentially as new locations are on-boarded, and when new products/services are executed in existing or new stores through the Surge platform. Thus, revenue growth forecasts remain high.
The First National In-Store CBD Sales Channel? The sale of CBD products is one of the fastest growing and most popular consumer offerings and is limited only by the current lack of true, national, in-store availability. Through the Surge network of local retailers and C-stores, a primary sales channel for these products, Surge has just begun to offer products with strong results. The Multiplier Model targeting the introduction of the top CBD products will drive industry sales and add major revenue/profit growth to Surge.
Source: www.goldmanresearch.com/20191031...
SURG Market Opportunity
A report by the Consumer Financial Protection Bureau found that 26 million U.S. adults were “credit invisible”
46% of Americans spend more than they earn every month, which means increased likelihood that bills won’t be paid.
19 million adults were “unscorable”, meaning they lacked a sufficient or recent enough credit history to be given a credit score.
Nearly one in five consumers have no credit history or credit score. 51% of credit users have “subprime” credit scores.
Approximately 14% of the population has no credit score whatsoever and is labeled as credit invisible.
Traditionally, a poor credit score or a lack of documented credit history created a vicious cycle for a vast number of consumers. These consumers have been shut out of opportunities for borrowing, purchasing and best pricing on base goods and services. Additionally, access to communication services and security has been sorely lacking for these consumers. These circumstances have made it extremely difficult for these consumers to acquire assets and secure a sense of financial well-being
Technical Analysis
As with most of our past winners, we see little downside risk with SURG.
The last time SURG was trading at these levels shares shot up nearly +30% in one session!
Based on our very own technical analysis , we are anticipating a move of +50%!
Key Indicators
Bullish Falling Wedge Reaches its Apex and Meeting Pressure From Rising Long-term Support, Signaling a Break to the Upside.
Strong Bullish Uptrend on the RSI
Momentum is a Leading Indicator and Holds Strong Bullish Divergence Against Price
Move Above Zero Line is a Buy Signal Historically
SURG hasn't closed under $0.25 in over a year
SURG is trading well off its 52-week high of $0.94, giving it an immediate upside of over +200%!
With it's tight float of just 18.32M, there is just over $5.7M of shares available to the public for trading.
With this week's anticipated increase in trade volume , we could easily see a move of +50% or more by Friday.
Let's also not forget, that just like several of our past big winners, SURG trades on the OTCQB Venture Marketplace.
Securities trading on OTCQB have higher reporting and certification standards, which tends to lead to increased liquidity, investor confidence, as well as enhanced shareholder value.
The Bottom Line:
Based on our research, we believe that sure SURG has the potential to be one of our biggest Q4 winners....
The Company has strong revenue growth, and a management team committed to success.
It appears to be an absolute steal at today's alert price.
We've watched SURG break out from these levels several times before.
This could be the perfect entry point for traders looking to get their maximum ROI on a ticker that appears to be destined for a breakout.
As such, we are urging all members to act fast, start their research, and make sure to add SURG to the top of their watchlist
(*Remember to use a Stop-Loss Order or basic Limit Order to protect your gains, as well as limit possible losses.)
Best Regards,
Past performance is not an indicator of future returns. The publishers of this report are not investment advisors and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. The publishers of this report has received fifteen thousand dollars compensation to complete this marketing campaign for SURG . We have previously been compensated five thousand dollars by a third party, to conduct investor relations marketing for SURG -which has now expired. Never make investment decisions based on anything the publisher of this report says. This message is meant for informational and educational purposes only and does not provide investment advice.
