As
filed with the Securities Exchange Commission on September 6, 2023
Registration
No. 333-273110
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment No. 2 to
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SURGEPAYS,
INC.
(Exact
name of registrant as specified in its charter)
| Nevada |
|
98-0550352 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(I.R.S.
Employer
Identification
Number) |
3124
Brother Blvd, Suite 410
Bartlett,
TN 38133
901-302-9587
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Kevin
Brian Cox, Chief Executive Officer
Anthony
Evers, Chief Financial Officer
SurgePays,
Inc.
3124
Brother Blvd, Suite 410
Bartlett,
TN 38133
901-302-9587
(Address,
including zip code, and telephone number, including area code, of agent for service)
With
Copies to:
Joseph
M. Lucosky, Esq.
Steven
A. Lipstein, Esq.
Lucosky
Brookman LLP
101
Wood Avenue South, 5th Floor
Woodbridge,
New Jersey 08830
(732)
395-4400 |
APPROXIMATE
DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check
the following box. ☐
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following
box. ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective
on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”
and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large-Accelerated
Filer |
☐ |
Accelerated
Filer |
☐ |
| Non-Accelerated
Filer |
☒ |
Smaller
Reporting Company |
☒ |
| |
|
Emerging
Growth Company |
☐ |
If
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 7(a)(2)(B) of the Securities Act. ☐
The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject
to Completion, dated September 6, 2023.
PROSPECTUS
SURGEPAYS,
INC.
$100,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Rights
Units
We
may offer and sell up to $100 million in the aggregate of the securities identified above from time to time in one or more offerings.
This prospectus provides you with a general description of the securities.
Each
time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the offering
and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained in this prospectus
with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement before you invest in
any of our securities.
We
may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are
involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement
between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement.
See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution” for more information.
No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms
of the offering of such securities.
INVESTING
IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 8 OF THIS PROSPECTUS AND ANY SIMILAR
SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
The
aggregate market value of our outstanding common stock held by non-affiliates is $52,000,737 based on 14,228,202 shares
of outstanding common stock, of which 5,661,359 are held by affiliates, and a per share price of $6.07 based on the closing sale
price of our common stock on July 10, 2023. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell our common
stock in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our
public float remains below $75,000,000. We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during
the prior 12 calendar month period that ends on and includes the date of this prospectus.
Our
common stock and warrants are listed on the Nasdaq Capital Market under the symbols “SURG” and “SURGW”.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is September 6, 2023.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a “shelf”
registration process. By using a shelf registration statement, we may sell securities from time to time and in one or more offerings
up to a total dollar amount of $100 million as described in this prospectus. Each time that we offer and sell securities, we will provide
a prospectus supplement to this prospectus that contains specific information about the securities being offered and sold and the specific
terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus with respect
to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement,
you should rely on the prospectus supplement. Before purchasing any securities, you should carefully read both this prospectus and the
applicable prospectus supplement, together with the additional information described under the heading “Where You Can Find More
Information; Incorporation by Reference.”
We
have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale
is not permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement to this
prospectus is accurate as of the date on its respective cover, and that any information incorporated by reference is accurate only as
of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations
and prospects may have changed since those dates.
When
we refer to “SurgePays,” “we,” “our,” “us” and the “Company” in this prospectus,
we mean SurgePays, Inc., unless otherwise specified. When we refer to “you,” we mean the holders of the applicable series
of securities.
WHERE
YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available
Information
The
SEC maintains a web site that contains reports, proxy and information statements and other information about issuers, such as us, who
file electronically with the SEC. The address of that website is http://www.sec.gov.
Our
website address is https://surgepays.com. The information on our website, however, is not, and should not be deemed to be, a part of
this prospectus.
This
prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the
information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms
of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement. Statements
in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by
reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant
matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
Incorporation
by Reference
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose
important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference
is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede
that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or replaces that statement.
We
incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus, between
the date of this prospectus and the termination of the offering of the securities described in this prospectus. We are not, however,
incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the future, that are not
deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits
furnished pursuant to Item 9.01 of Form 8-K.
This
prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been
filed with the SEC:
| ● |
Our
Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 30, 2023; |
| |
|
| ● |
Our
Quarterly Report on Form 10-Q for the period ended March 31, 2023, filed with the SEC on
May 11, 2023
|
| |
|
| ● |
Our Quarterly Report on Form 10-Q
for the period ended June 30, 2023, filed with the SEC on August 10, 2023; |
| |
|
| ● |
Our
Current Reports on Form 8-K filed with the SEC on January 11, 2023 and March 13, 2023; and |
| |
|
| ● |
The
description of our common stock, par value $0.001 per share (the “Common Stock”) and warrants with an exercise price
of $4.73 (the “Tradeable Warrants”) contained in our Registration Statement on Form 8-A, filed with the SEC on November
1, 2021, as updated by “Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities
Exchange Act of 1934” filed as Exhibit 4.4 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and
any amendment or report filed for the purpose of updating such description. |
All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior
to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will
also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports
and documents.
You
may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they are specifically
incorporated by reference in the documents) by writing or telephoning us at the following address:
3124
Brother Blvd, Suite 410
Bartlett,
TN 38133
Telephone:
901-302-9587
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus and
any accompanying prospectus supplement.
THE
COMPANY
Business
Overview
SurgePays,
Inc., incorporated in Nevada on August 18, 2006, is a technology and telecom company focused on the underbanked and underserved
communities. SurgePhone and Torch Wireless provide subsidized mobile broadband to over 250,000 low-income subscribers nationwide. SurgePays
fintech platform empowers clerks at thousands of convenience stores to provide a suite of prepaid wireless and financial products to
underbanked customers.
About
SurgePays, Inc.
SurgePays,
Inc. is a financial technology and telecom company focused on providing these essential services to the underbanked community. The Company’s
wireless subsidiaries provide mobile broadband, voice and SMS text messaging to both subsidized and direct retail prepaid customers.
The Company’s blockchain fintech platform utilizes a suite of financial and prepaid products to convert corner stores into tech-hubs
for underbanked neighborhoods.
SurgePhone
Wireless and Torch Wireless
SurgePhone
and Torch, wholly owned subsidiaries of SurgePays, are mobile virtual network operators (MVNO) licensed by the Federal Communications
Commission (the “FCC”) to provide subsidized access to quality internet through mobile broadband services to consumers qualifying
under the federal guidelines of the Affordable Connectivity Program (the “ACP”). The ACP (the successor program, as of March
1, 2022 to the Emergency Broadband Benefit program) provides SurgePhone and Torch up to a $100 reimbursement for the cost of each tablet
device distributed and a $30 per customer, per month subsidy for mobile broadband (internet connectivity) services. SurgePhone and Torch
combined are licensed to offer subsidized mobile broadband to all fifty states.
SurgePays
Fintech (ECS Business)
We
refer to the collective operations of ECS Prepaid, LLC, a Missouri limited liability company, Electronic Check Services, Inc., a Missouri
corporation, and Central States Legal Services, Inc., a Missouri corporation, as “Surge Fintech.” This was previously referred
to as the “ECS Business.”
Surge
Fintech has been a financial technology tech and wireless top-up platform for over 15 years. Through a series of transactions between
October 2019 and January 2020, we acquired the ECS Business primarily for the favorable ACH banking relationship and a fintech transactions
platform processing over 20,000 transactions a day at approximately 8,000 independently owned convenience stores. The platform serves
as the proven backbone for wireless top-up transactions and wireless product aggregation for the SurgePays nationwide network.
Surge
Blockchain
Surge
Blockchain Software is a back-office marketplace (accessed through the SurgePays fintech portal for convenience stores) offering wholesale
consumable goods direct to convenience stores who are transacting on the SurgePays Fintech platform. The wholesale e-commerce platform
is easily accessed through the secure app interface – similar to a website. We believe what makes this sales platform unique is
that it also offers the merchant the ability to order wholesale consumable goods at a significant discount from traditional distributors
with one touch ease. We are able to sell products at a significant discount by using on demand Direct Store Delivery (DSD). Our platform
is connected directly to manufactures, who ship products direct to the store while cutting out the middleman. The goal of the SurgePays
Portal is to leverage the competitive advantage and efficiencies of e-commerce to provide as many commonly sold consumable products as
possible to convenience stores, corner markets, bodegas, and supermarkets while increasing profit margins for these stores.
LogicsIQ,
Inc.
LogicsIQ,
Inc. is a lead generation and case management solutions company primarily serving law firms in the mass tort industry. LogicsIQ’s
CRM “Intake Logics” facilitates the entire life cycle of converting a lead into a signed retainer client integrated into
the law firms case management software. Our proven strategy of delivering cost-effective retained cases to our attorney and law firm
clients means those clients are better able to manage their media and advertising budgets and reach targeted audiences more quickly and
effectively when utilizing our proprietary data driven analytics dashboards. Our ability to deliver transparent results through our integrated
Business Intelligence (B.I.) dashboards has bolstered our reputation as an industry leader in the mass tort client acquisition field.
ShockWave
CRM™
SurgePays
acquired the Software as a Service (SaaS) Customer Relationship Management (CRM) and Billing System software platform “MVNO Cloud
Services” on June 7, 2022. S Payment for the software consisted of $300,000 in cash, of which $100,000 was paid in June 2022, and
the remaining $200,000 in July 2022. Additionally, the Company issued 85,000 shares of Common Stock having a fair value of $411,400 ($4.84/share),
based upon the quoted closing trading price. SurgePays has rebranded the software as ShockWave CRM.
ShockWave
is an end-to-end cloud-based SaaS offering an Omnichannel CRM, billing system and carrier integrations specific to the telecommunication
and broadband industry. Some of these services include sales agent management, device and SIM inventory management, order processing
and provisioning, retail Point of Service (POS) activations and payments, customer service management, retention tools, billing, and
payments.
Centercom
Since
2019, we have owned a 40% equity interest in Centercom Global, S.A. de C.V. (“Centercom”). Centercom is a bilingual operations
center providing the Company with sales support, customer service, IT infrastructure design, graphic media, database programming, software
development, revenue assurance, lead generation, and other various operational back-office services. Centercom is based in El Salvador.
Competition
There
are many competitors in the prepaid wireless and mobile broadband industry. We feel what makes SurgePhone different is we are a grassroots
company with our products placed in convenience stores where the underbanked shop. We can offer prepaid wireless and financial services,
through these stores, at a lower price to customers since we own the transaction software processing the activations and top-ups.
Many
of our current and potential competitors are well established and have longer operating histories, significantly greater financial and
operational resources, and name recognition than we have. Most traditional convenience store distributors are companies that have been
in business for over 50 years and utilize the historical “manufacturing plant to truck to warehouse to truck to store” logistics
model. However, we believe that with our diverse product line, better efficiencies resulting in lower wholesale cost of goods sold, we
have the ability to obtain a large market share and continue to generate sales growth and compete in the industry. We believe, in some
cases, we will be able to partner with our competition through integration and compensate them for helping us grow due to the uniqueness
of the suite of products we offer and the additional revenue stores can unlock. The principal competitive factors in all our product
markets are technical features, quality, availability, price, customer support, and distribution coverage. The relative importance of
each of these factors varies depending on the region. We believe using our direct store distribution model nationwide will open significant
opportunities for growth.
The
markets in which we operate can be generally categorized as highly competitive. In order to maximize our competitive advantages, we continue
to expand our product portfolio to capitalize on market trends, changes in technology and new product releases. Based on available data
for our served markets, we estimate that our market share of the convenience store sales business at this time is less than 1%. A substantial
acquisition would be necessary to meaningfully and rapidly change our market share percentage.
Distributors
generally do not have a broad set of product and service offerings or capabilities, and no single distributor currently provides all
the top selling consumables while offering products and services to enhance the lifestyle of the underbanked such as prepaid wireless,
gift cards, bill payment and reloadable debit cards. We believe this creates a significant opportunity for a dynamic paradigm shift to
a nationwide wholesale e-commerce platform.
Recent
Developments
Listing
on Upstream
On
May 2, 2023, we issued a press release announcing the approval to dual list our Common Stock on the Upstream stock exchange (“Upstream”)
operated by the MERJ Exchange (“MERJ”), an exchange registered in the Seychelles under the Seychelles Securities
Act, 2007. Our shares that are listed and traded on Upstream are uncertificated Common Stock represented by digital securities, or
tokenized equities, called MERJ Depository Interests (“MDIs”), which represent the same class and shares that are currently
traded on the Nasdaq Capital Market. Our shares were made available for trading on May 8, 2023 under the ticker “SURG”. We
believe our dual listing on Upstream allows us to reach a global investor base outside the U.S. that can trade using USD, credit, debit,
PayPal, and USDC digital currency. This move is aimed at increasing liquidity and improving price discovery in SurgePays.
Upstream
is operated as a fully regulated and licensed integrated securities exchange, clearing system and depository for digital and non-digital
securities. Upstream/MERJ is an affiliate of the World Federation of Exchanges (WFE), recognized by HM Revenue and Customs UK as a ‘Recognised
Stock Exchange’, a full member of the Association of National Numbering Agencies (ANNA) where MERJ is responsible for assigning
and registering ISIN and CFI identifiers to users, a Qualifying Foreign Exchange for OTC Markets in the US, and a member of the Sustainable
Stock Exchanges Initiative. MERJ is regulated in the Seychelles by the Financial Services Authority Seychelles, an associate member of
the International Organization of Securities Commissions (IOSCO). In addition, the Seychelles is a full member of the Eastern and
Southern African Anti-Money Laundering Group (ESAAMLG) and is in good standing with the ESAAMLG and is a participating jurisdiction recognized
by the US Treasury under the Foreign Account Tax Compliance Act (FATCA). As such, Foreign Financial Institutions (FFIs) in Seychelles
are not subject to the 30% withholding tax on US source income.
Upstream
and MERJ have not registered with the SEC as a broker or dealer, national securities exchange and/or clearing agency because they do
not solicit U.S. based customers and do not allow U.S. based individuals to open trading accounts on Upstream. The Upstream policy, terms,
and conditions clearly state that if you are a U.S.
or Canadian based investor, either a Canadian citizen, U.S. citizen or permanent resident, you will not be able to deposit, buy, or sell
securities previously purchased from an issuer, stockbroker or stock exchange that has subsequently dual-listed on Upstream without being
introduced by a licensed broker-dealer that has a direct contractual relationship with MERJ Exchange relating to the introduction
of customers. Boustead Securities, LLC (“Boustead Securities”) has an introducing agreement with MERJ whereby customers of
Boustead Securities are directly introduced to MERJ and Boustead Securities acts as an agent for such customers. Customers that have
been onboarded by an introducing broker, such as Boustead Securities, (i) must satisfy the introducing broker’s KYC, AML and CIP
policies, (ii) must have given the introducing broker prior approval to be introduced to MERJ, and (iii) are granted access to open and
activate the trading account on Upstream directly from the introducing broker. Customers onboarded through an introducing broker may
conduct trades directly on Upstream; however, all activities, including, but not limited to, deposits and withdrawals of cash and securities,
orders entered, executed and not filled, will be reviewed and monitored by the introducing broker. Securities deposited with Upstream
are digitally reflected as MDIs pursuant to the MERJ Depository Securities Facility Rules and Directive on Depository Interests (the
“MERJ Rules”). All MDIs are held in a segregated account of the shareholder that is linked to and administered through the
Upstream app. Note that U.S. or Canadian-based investors include those U.S. or Canadian citizens who may be domiciled overseas. All
orders for sale are non-solicited by Upstream and users’ decision to trade securities must be based on their own investment judgement.
Any
outstanding shares of Common Stock that have a restrictive legend are not available to be deposited on Upstream. Only shares of Common
Stock that have been registered with the SEC or have had any restrictive legend removed via an exemption from registration (such as Rule
144 promulgated pursuant to the Securities Act of 1933, as amended (the “Securities Act”)) have been approved to be deposited
on Upstream. Shareholders may elect to hold their shares in book entry with the Company’s transfer agent, in a brokerage account
in the name of Cede & Co. (the nominee of the Depository Trust Company (“DTC”)), or in the name of MERJ Nominees Ltd.
(“MERJ Nominees”) (the nominee of MERJ Depository and Registry Limited (“MERJ Dep.”)). MERJ Nominees is
a special purpose company whose only purpose is limited to holding securities of companies listed on a MERJ market (i.e. Upstream). MERJ
Nominees is prohibited from having any other assets or liabilities or engaging in any other activity other than holding securities of
companies listed on a MERJ market on trust pursuant to its constitutional objects. MERJ Dep. is also obligated by contractual agreement
between the parties to cover all financial obligations and human resources requirements of MERJ Nominees.
The
MDIs represented on Upstream are a digital representation of securities (Common Stock) that have been issued and previously registered
on a registration statement filed with and declared effective by the SEC, or has had any restrictive legend removed via an exemption
from registration (such as Rule 144). A digital security (MDI) is a 1:1 representation of the Common Stock that acts as a receipt for
the deposit or purchase and ownership the securities on the Upstream platform. The digital recording of ownership is handled in the same
manner as a database of shares issued to shareholders and, on Upstream, certifies registered ownership of shares of the Company from
a particular date. “Share Tokens” refers to the unit of beneficial ownership in the securities that are held in the name
of MERJ Nominees. The Share Tokens are a form of MDIs.
There
are no tokenized shares or new securities created on Upstream. Rather, when a shareholder makes a deposit of Common Stock on
Upstream, an MDI (a Share Token), is created and the same class of Common Stock still exists, unchanged. MDIs (Share Tokens)
received with respect to the exchange for the Common Stock in connection with a shareholder depositing those shares on Upstream
resemble depository receipts, and are negotiable certificates issued by a bank representing shares in a foreign company traded on a local
stock exchange. The shares of Common Stock, once deposited, are referred to as MDIs and are held by the Upstream nominee company,
MERJ Nominees. After a deposit is made on Upstream, the Company’s transfer agent will make an entry in its records by moving
and vesting title in the Common Stock to be held in the name of MERJ Nominees.
Any
shareholder wishing to deposit Common Stock with Upstream will follow the prompts on the Upstream app to initiate and approve the deposit.
When a deposit of Common Stock is made on Upstream, the MDIs are recorded by MERJ Nominees and Share Tokens that represent the shares
of Common Stock are issued and can be traded. The transfer agent will then make an entry in the register it maintains to give effect
to the deposit by moving and vesting title in the securities in the name of MERJ Nominees. The transfer agent will also notify MERJ Nominees
or its appointed agent, which will then make the MDIs available for trading as Share Tokens on Upstream pursuant to the MERJ Rules.
MDIs,
or Share Tokens, are simply beneficial interests
in the same class of Common Stock that the shareholder owns represented by the MDIs traded on Upstream. Holders of MDIs are entitled
to all direct economic benefits and any other entitlements in relation to securities held by MERJ Nominees This is functionally similar
to holders of shares of U.S. listed companies on any national securities exchange, who hold indirect interests in shares registered in
the name of Cede & Co. The MDIs are tradable on Upstream.
MERJ
Nominees maintains the MERJ Subregister of MDIs pursuant to the MERJ Rules and shareholders using Upstream are able
to use the facilities provided by MERJ Dep. pursuant to the terms of the agreement entered into between such shareholder and Upstream.
Applicable law and the governing jurisdiction of all agreements, rules, regulations and activities relating to Upstream are the laws
of Seychelles.
MERJ
Rules 1 to 15 govern MDIs (or Share Tokens), which are beneficial interests in the class of securities represented by the MDIs traded
on Upstream. This creates a relationship between the holders MDIs and MERJ Dep. functionally similar to that of shareholders of companies
listed on U.S. based exchanges holding indirect interests in shares registered in the name of Cede & Co.
Holders of MDIs are entitled to all direct economic benefits, and any other entitlements, in relation to the securities
held in MERJ Nominees. This is functionally similar to book entry representations of securities in DTCC (discussed below).
Generally,
shareholders have the ability to choose how to hold their securities. For example, securities can be issued as certificated shares with
physical stock certificates, held directly at the transfer agent in book entry with DTCC, or in a brokerage account in the name of Cede
& Co. Shareholders using Upstream can also elect to hold their shares as MDIs (digital representations of the actual security owned)
on Upstream in the name of MERJ Nominees. When shares are held in book entry, the transfer agent is responsible for maintaining the records
of ownership of the issuer’s shares, including certificated shares. The transfer agent also keeps track of any changes in the ownership
of the shares, such as stock splits or dividends, and issues new certificates or updates existing records accordingly. Regardless of
how a shareholder holds its shares, even if held as MDIs, all shareholders of the issuer are entitled to the rights and protections granted
by, and the issuer is bound by, all applicable state and federal laws, rules and regulations, including the right vote shares (either
directly or by proxy) and the requirement to receive notices and solicitation materials for stockholder meetings.
The
MDIs are tradeable on Upstream and MERJ Dep. is appointed by the Company to maintain the MERJ Subregister of the MDIs pursuant to the
MERJ Rules. The Company’s transfer agent may request a copy of the MERJ Subregister at any time, but is not involved in the process
of reflecting changes in the MERJ Subregister resulting from trading on Upstream. The securities underlying MDIs (e.g. common stock)
deposited with MERJ Nominees and reflected on the MERJ Subregister are held by MERJ Nominees on trust pursuant to Rule 4.1 of the MERJ
Rules. Section 28(2)(c) of the Seychelles Insolvency Act, 2013 states that “property held by the bankrupt on trust for any other
person” shall not be included in the estate of the bankrupt party. In the event of a liquidation or dissolution of MERJ Dep., the
MDIs held on the MERJ Subregister in trust by MERJ Nominees will be transferred directly to the Company’s transfer agent to be
held in book entry in the name of the shareholder, maintaining all the rights and protections afforded to all shareholders of the Company.
Voting
related matters are covered in detail in Rule 10 of the MERJ Rules. Pursuant to MERJ Rule 10.2, the Company is obligated
to send notice of any meetings to be convened to each holder of MDIs at the same time as all other holders of the same class of
securities (i.e. Common Stock). This is performed electronically by email and through the Upstream app. Holders of MDIs
have the option to appoint MERJ Nominees or another person as their proxy or to attend the meeting and vote directly. The owners of
the Common Stock held as MDIs are entitled to vote their shares held by MERJ Nominees at stockholder meetings and to receive notices
and solicitation materials for stockholder meetings. These shareholders can vote because, following the setting of a record date for
a shareholders’ meeting, MERJ Nominees provides the Company with a list of beneficial owners and their addresses.
The
equivalent of a lost certificate could occur
on Upstream if a shareholder loses its smartphone or access to the Upstream app. Upon notification of the loss of
access to the Upstream app (and it’s corresponding blockchain keys), Upstream provides the MDI and shareholder
identifying to the Company’s transfer agent. The MERJ Rules provide that a shareholder may at any time direct the Company’s
or its transfer agent to transmute the MDIs from the MERJ Subregister to the register maintained by the transfer agent, whereby the Common
Stock would thereafter be reflected in the name of the shareholder on the books and records of the transfer agent.
As such, the shareholder can instruct the transfer agent, which then instructs Upstream, to withdraw the Common Stock Upstream
(removing the MDIs from the MERJ Subregister), resulting in the shareholder’s Common Stock being solely reflected on the
books and records of the transfer agent. This process allows for recovery of the “lost shares.” In this process,
the MDI, or share count, maintained MERJ Nominees decreases by the number of shares recovered. It is up to the individual
shareholder to inform the transfer agent on whether they wish to leave their shares in book entry, deposit the share for secondary
trading at Upstream again, or deposit the shares for secondary trading at a U.S. brokerage.
All
MDIs (Share Tokens) held by each shareholder are held by MERJ Nominees in a segregated account of the shareholder which
is linked to and administered through the Upstream app. The MDIs are digitally represented by token-allocations on a blockchain,
where the Common Stock shown in the Upstream app as token-allocations, one for one, with the Common Stock held in street-name
on behalf of the depositing shareholder. When a shareholder deposits Common Stock on Upstream, the Company’s transfer agent
notifies Upstream, and its street-name nominee MERJ Nominees, of the shareholder’s name and the amount of shares of Common Stock
held. The transfer agent will then reduce the book-entry share count of this shareholder and increase the share count, one for one, of
the Upstream exchange’s street name, MERJ Nominees, on the transfer agent’s books and records. The street-name tally is how
the total shares of Common Stock deposited for secondary trading on Upstream are shown in the books and records of the transfer agent,
exactly the same as shares of Common Stock represented in DTCC street-name that are deposited for secondary trading on a listed exchange.
For the avoidance of any doubt, if a shareholder deposits all of its shares for secondary trading on Upstream, their individual book
entry share count balance at the transfer agent will be zero. The share count balance of street-name MERJ Depository would be the total
number of the shareholder’s shares deposited on Upstream for secondary trading.
The
initial allocation of the Common Stock for those Company shareholders who deposit their shares with Upstream is made by the
Company’s transfer agent notifying Upstream, and MERJ Nominees, of the shareholder’s name and share count. The transfer
agent will then decrease its the book-entry share count of this shareholder and increment the share count of MERJ Nominees on
the transfer agent’s books and records. Therefore, a tally of shares held by MERJ Nominees is how the total shares deposited
for secondary trading on Upstream are shown in the books and records of the transfer agent, exactly the same as they are for Cede
& Co. when shares are deposited for secondary trading on a U.S. public market. For the avoidance of any doubt, if a shareholder
deposits all of their shares for secondary trading on Upstream, their individual book entry share count balance at the transfer
agent will be zero. The share count balance of street-name MERJ Nominees is the sum of all shareholders’ shares deposited on
Upstream for secondary trading.
All
resales of Share Tokens on Upstream are governed by the MERJ Rules and are reflected only on the MERJ Subregister. Title to the securities
reflected as MDIs will be held in the name of MERJ Nominees on the books of the transfer agent. All subsequent resales of the MDIs are
conducted in accordance with the MERJ Rules and are reflected only on the MERJ Subregister. A withdrawal of securities results in the
underlying securities being removed from the MERJ Subregister and reflected on the records maintained by the transfer agent. The transfer
agent may request a copy of the MERJ Subregister at any time, but is not involved in the process of reflecting changes in the MERJ Subregister
resulting from trades happening on Upstream. The transfer agent maintains only the number of shares of Common Stock deposited for
secondary trading at Upstream (Share Tokens). The transfer agent does not receive individual trade notifications from Upstream, just
as secondary trades on a listed exchange are not communicated to the transfer agent.
Shareholders
with shares of Common Stock dual listed on a foreign stock exchange, such as the London Stock Exchange and the MERJ Exchange, have the
same rights as all shareholders of the Company as discussed above. Shareholders retain the same rights, and are afforded the same protections,
because they still own the same securities conferring such rights, the only difference being the securities are represented digitally
on the Upstream app as MDIs. In addition, shareholders using Upstream have the right to receive confirmations, proxy statements and other
documents and notices required to be provided by the Company under applicable U.S. state and federal laws, rules and regulations. There
are no restrictions, limitations, or other losses of rights when Common Stock is deposited for secondary trading on Upstream. Some differences
between the London Stock Exchange and MERJ Exchange are the MERJ Exchange settles transactions instantly rather than T+2 settlement on
the London Stock Exchange, there is no short selling on Upstrean, and there are no market makers on Upstream, investors using Upstream
connect directly with each other through an open order book. Additionally, all trades on Upstream are immutable and transparent on the
Ethereum blockchain, accurately disclosing true trading volume rather than double and triple reporting of transactions that occur on
other exchanges.
Trade
Price Discrepancies between the Nasdaq Capital Market and Upstream
Investors
are encouraged to take note that as in all dual listed securities that are traded on multiple marketplaces, there can be differences
in pricing as a result of different liquidity, price discovery and otherwise. Trading on foreign exchanges can expose investors to various
risks, including currency fluctuations and differences in trading rules and regulations. For more information, please see “Risk
Factors” on page 8.
Information
on Trading Activity
Upstream
is accessible via the preferred app stores. Interested parties may download the application and will have access to review all of the
securities that trade on Upstream including trading activity, regulatory disclosures, and other corporate information. Furthermore, there
is a direct link to the Company’s website at https://upstream.exchange/surgepays. All information is available prior to any shareholder
opening an account. This includes a listing particulars document, which is a required disclosure as part of the requirements of MERJ
Exchange Limited as defined by the Seychelles Securities Act, 2007.
Investors
may choose to open an account and deposit their securities. Investors who elect to transfer their shares to Upstream may withdraw their
shares from Upstream back to the transfer agent if they choose to trade via their U.S. broker at any time.
Dividend
Policy
We
are not currently planning to offer digital dividends to our shareholders. If and when a digital dividend or coupon/reward is contemplated
to be issued, all shareholders of record of the Company will be entitled to the dividend or coupon/reward. Such notice and information
will be made available through the release of press releases, filing of a Form 8-K, and any required Nasdaq filings.
Nasdaq
Compliance
On
January 11, 2023, we filed a Form 8-K regarding a notification letter we received from the Listing Qualifications Staff of The Nasdaq
Stock Market LLC (“Nasdaq”) indicating that, since the Company had not yet held an annual meeting of shareholders within
twelve months of the end of its December 31, 2021 fiscal year, it was out of compliance with the Nasdaq rules for continued listing (Listing
Rules 5620(a) and 5810(c)(2)(G)). On March 13, 2023, we filed a Form 8-K indicating that our proxy materials were distributed on January
19, 2023, and our annual meeting of shareholders was held on March 7, 2023. Accordingly, on March 15, 2023, the Qualifications Staff
of Nasdaq determined that the Company is in compliance with the rules and the matter has been closed.
Employees,
Affiliates and Exclusive Partners
As
of August 30, 2023, our human capital resources consist of approximately twenty (20) SurgePays employees, a dedicated team of
over forty (40) logistics, activation, and fulfilment personnel, and over two hundred (200) sales, customer service and back-office personnel
in our near shore operations center.
We
believe that our future success will depend in part on our continued ability to attract, hire and retain qualified personnel and work
strategically utilizing exclusive partners and affiliates to maximize cash flow. Our human capital resources objectives include, as applicable,
identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. The principal
purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based
compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform
to the best of their abilities and achieve our objectives.
Reverse
Stock Split
On
November 1, 2021, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation, as amended, with the
Secretary of State of the State of Nevada in connection with a 1-for-50 reverse stock split of the Company’s issued and outstanding
shares of Common Stock (the “Reverse Split”). The Reverse Split became effective on November 2, 2021.
All
references in this prospectus to our Common Stock, share data, per share data and related information has been adjusted to reflect the
Reverse Split.
Corporate
Information
We
were previously known as North American Energy Resources, Inc. and KSIX Media Holdings, Inc. Prior to April 27, 2015, we operated solely
as an independent oil and natural gas company engaged in the acquisition, exploration and development of oil and natural gas properties
and the production of oil and natural gas through its wholly owned subsidiary, NAER. On April 27, 2015, NAER entered into a Share Exchange
Agreement with KSIX Media whereby KSIX Media became a wholly-owned subsidiary of NAER and which resulted in the shareholders of KSIX
Media owning approximately 90% of the voting stock of the surviving entity. While we continued the oil and gas operations of NAER following
this transaction, on August 4, 2015, we changed its name to KSIX Media Holdings, Inc. On December 21, 2017, we changed its name to Surge
Holdings, Inc. to better reflect the diversity of its business operations. We changed its name to SurgePays, Inc. on October 29, 2020.
Historically,
we operated through these direct and indirect subsidiaries: (i) KSIX Media, Inc., incorporated in Nevada on November 5, 2014; (ii) KSIX,
LLC, a Nevada limited liability company that was formed on September 14, 2011; (iii) Surge Blockchain, LLC, formerly Blvd. Media Group,
LLC, a Nevada limited liability company that was formed on January 29, 2009; (iv) DigitizeIQ, LLC an Illinois limited liability company
that was formed on July 23, 2014; (v) Surge Cryptocurrency Mining, Inc., formerly North American Exploration, Inc., a Nevada corporation
that was incorporated on August 18, 2006 (this has been a dormant entity that does not own any assets since January 1, 2019); (vi) LogicsIQ,
Inc., a Nevada corporation that was formed on October 2, 2018; (vii) True Wireless, Inc., an Oklahoma corporation (formerly True Wireless,
LLC); (viii) Surge Payments, LLC, a Nevada limited liability company; (ix) Surgephone Wireless, LLC, a Nevada limited liability company;
and (x) SurgePays Fintech, Inc., a Nevada limited liability company. On January 22, 2021, the issued and outstanding equity securities
of DigitizeIQ, LLC and KSIX, LLC were transferred to LogicsIQ and became wholly-owned subsidiaries of LogicsIQ.
On May
7, 2021, the Company disposed of its subsidiary True Wireless, Inc., however we retained $1,097,659 in liabilities which consisted of
$1,077,659 in accounts payable and accrued expenses as well as $20,000 in related party loans. The balance at December 31, 2022 was $668,649.
In connection with the sale, the Company received an unsecured note receivable for $176,851, bearing interest at 0.6%, with a default
interest rate of 10%. Starting in June 2023, the Company was scheduled to receive what will ultimately be 25 payments of principal and
accrued interest of $7,461 per month. However, as of August 30, 2023, the Company has not received any payments.
On January
30, 2020, the Company acquired ECS Prepaid, LLC, a Missouri limited liability company, Electronic Check Services, Inc., a Missouri corporation,
and Central States Legal Services, Inc., a Missouri corporation.
On January
1, 2022, the Company acquired 100% of Torch Wireless, LLC resulting in Torch becoming a wholly-owned subsidiary, in a transaction accounted
for as a business combination. The Company paid $800,000 and agreed to pay the Sellers monthly residual payments for customers enrolled
by the Company through December 31, 2022 of either $2 or $3 per customer. This amount totaled $1,679,723.
Our executive
offices are located at 3124 Brother Blvd, Suite 410, Bartlett, TN 38133, and our telephone number is (800) 760-9689. Our website is www.surgepays.com.
Our website and the information contained in, or accessible through, our website will not be deemed to be incorporated by reference into
this prospectus and does not constitute part of this prospectus.
RISK
FACTORS
Investment
in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. You should carefully consider
the risk factors incorporated by reference to our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form
10-Q or Current Reports on Form 8-K we file after the date of this prospectus, and all other information contained or incorporated by
reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information
contained in the applicable prospectus supplement before acquiring any of such securities. The occurrence of any of these risks might
cause you to lose all or part of your investment in the offered securities.
In
addition to the risk factors discussed in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q
or Current Reports on Form 8-K we file after the date of this prospectus, you should be aware of the following risk factor:
There are risks associated with, and certain
restrictions on, U.S. based investors that may complicate and make the trading process more expensive.
The
Upstream policy, terms, and conditions state that if you are a U.S. or Canadian based investor, either a Canadian citizen, U.S. citizen
or permanent resident, you will not be able to directly deposit, buy, or sell securities previously purchased from an issuer, stockbroker
or stock exchange that has subsequently dual-listed on Upstream, unless via an introducing broker, such as Boustead Securities, LLC.
Beginning
in June 2023, Upstream entered into an introducing broker agreement with Boustead Securities, whereby Boustead Securities acts as an
agent to introduce their customers to MERJ in compliance with the exemptions from registration provided by Rule 15a-6 under the Exchange
Act.
Shares
of our common stock that are deposited to Upstream are held by MERJ Dep., which holds a financial securities license, in exchange for
the issuance of the digital securities representing those shares that are tradable on Upstream. The beneficial owners of shares of common
stock held by the Upstream nominee company, MERJ Nominees, would be entitled to vote their shares held by the nominee at stockholder
meetings, to receive notices and solicitation materials for stockholder meetings, to receive the same dividends and all other rights
conferred by our Company under state and federal laws. They are afforded these rights since they have not surrendered or otherwise disposed
of their common stock and the applicable laws are the same. The shares are the same class of stock, they are just represented digitally
on a smartphone app.
In
addition, shareholders on Upstream have the right to receive confirmations, proxy statements and other documents as distributed by the
issuer pursuant to applicable laws, rules and regulations. There are no restrictions, limitations, or other losses of rights when common
stock is deposited for secondary trading on Upstream.
Investors
are encouraged to take note that, as with all dual listed securities that are traded on multiple marketplaces, there can be differences
in pricing due to factors, such as differences in liquidity, price discovery and otherwise. Trading on foreign exchanges can expose investors
to various risks, including currency fluctuations and differences in trading rules and regulations. The following risks are some of the
most common risks associated with trading on foreign exchanges like Upstream:
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1. |
Regulatory
Risk: Different countries have different rules and regulations governing securities trading, and investors who trade on foreign
exchanges may be subject to unfamiliar or complex regulations. In some cases, foreign regulators may have different reporting requirements
or different standards for disclosure than US regulators, which can make it difficult for investors to make informed decisions. In
addition, these rules and regulations may be imposed on regulated companies in an unpredictable manner and adversely affect the trading
environment on the particular exchange. |
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2. |
Market
Risk: Non-US markets may be subject to different economic, political, or social conditions than US markets of which we are not
aware, and which could negatively affect the performance of securities traded in those markets. Investors who trade on non-US exchanges
may be exposed to higher levels of volatility and uncertainty than they would be if they traded solely on US exchanges. |
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3. |
Liquidity
Risk: Dual listed securities traded on non-US exchanges may have lower liquidity than comparable securities traded on US exchanges,
which can make it more difficult for investors to buy or sell those securities at the desired price. |
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4. |
Operational
Risk: Trading on overseas exchanges may expose investors to operational risks, such as delays or errors in the settlement of
trades, difficulties in accessing trading platforms, or losing securities resulting from a failure of the exchange’s transfer
operations. |
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5. |
Media
Risk: Negative news reported in the media concerning events reported with respect to the market for our securities on a foreign
exchange or international markets generally could hurt the market for our Company’s stock. If our stockholders choose to have
their SurgePays common stock traded in MDI form on Upstream and experience like trading difficulties, low trading prices due to foreign
market conditions, or losses due to market conditions or exchange operational issues, media reports on these issues negatively impact
the price of our securities traded on Nasdaq. This could harm our reputation, as well as adversely affect the prices of our securities
trading on U.S. markets. |
The
process of depositing and withdrawing securities involves “transmutation”, a process which is different and more complicated
than processing a common stock transfer on a US-based exchange.
Common
stock deposited with Upstream (i.e. via MERJ Dep.) are reflected as MDIs (or Share Tokens) pursuant to the MERJ Rules.
The
MERJ Rules set out the rules governing MERJ Depository Interests. Specifically, MERJ Rules 1 to 15 apply.
The
process of depositing and withdrawing securities involves a “transmutation” process whereby the securities deposited on Upstream
are transmuted to MERJ Depository interests and vice versa for “withdrawals.” Common stock deposited with Upstream results
in title to the common stock being vested in the MERJ Nominees on the books and records of the transfer agent and a new holding of MERJ
Depository Interests for the shareholder being reflected in the MERJ Subregister. A withdrawal of securities results in the underlying
securities being removed from the MERJ Subregister and included back on the register maintained by the issuer’s transfer agent.
The
deposit and withdrawal process can be initiated by the shareholder using the prompts provided in the Upstream app. If shareholders lose
access to the Upstream app, have a lost or stolen smartphone, or face situations similar to a “lost certificate” or MERJ
Depository bankruptcy scenario, they can contact the issuer or its transfer agent to facilitate the process. MERJ Depository is appointed
to maintain the MERJ Subregister of the Share Tokens pursuant to the MERJ Depository Securities Facility Rules and Directive on Depository
Interests.
MERJ
Nominees maintains the MERJ Subregister pursuant to the MERJ Rules. Participants of Upstream are able to use the facilities provided
by MERJ Nominees pursuant to the terms of the agreement entered into between each participant and Upstream. Applicable law and the governing
jurisdiction of all agreements, rules and activities relating to Upstream is the laws of Seychelles.
MERJ
Nominees is a special purpose company whose only purpose is limited to holding securities of companies listed on a MERJ market (i.e.
Upstream). MERJ Dep. is prohibited from having any other assets or liabilities or engaging in any other activity other than holding securities
of companies listed on a MERJ market on trust pursuant to its constitutional objects. MERJ Dep. is also obligated by contractual agreement
between the parties to cover all financial obligations and human resources requirements of MERJ Nominees.
Underlying
securities (e.g. common stock) held by MERJ Nominees is held on trust pursuant to Rule 4.1 of the MERJ Rules for the holders of Share
Tokens. Section 28(2)(c) of the Seychelles Insolvency Act, 2013 states that “property held by the bankrupt on trust for any other
person” shall not be included in the estate of the bankrupt party.
Holders
of Share Tokens are entitled to all direct economic benefits and any other entitlements in relation to securities vested in MERJ Nominees.
Voting
related matters are covered in detail in Rule 10 of the MERJ Rules. Pursuant to Rule 10.2 the issuer is obligated to send a notice of
any meetings to be convened to each holder of Share Tokens at the same time as all other holders of the same class of securities (e.g.
the common stock). This is performed electronically by email and through the Upstream app. Share Token holders have the option to appoint
MERJ Nominees or another person as their proxy or to attend the meeting and vote directly.
Shareholders
face risks related to potential discrepancies that could occur between the trading prices of our common stock on Nasdaq and the tokenized
equities on Upstream.
We
are dual listed on Nasdaq and Upstream. Generally, the price of a dual-listed security is the same (adjusting for currency differences)
on both exchanges where it is listed. However, the price of our securities on Nasdaq and Upstream may be different at times. Dual listing
on two stock exchanges has the risk of the potential discrepancies that could occur between the trading prices of our common stock traded
on Nasdaq and the Share Token traded on Upstream. Dual listing may increase the exposure of the Company to market risks, including currency
fluctuations and geopolitical events, as each exchange can have different economic conditions and political environments, which could
potentially lead to greater volatility in the trading price of the Company’s securities.
Dual
listing on Nasdaq and Upstream may lead to additional stock price volatility and heightened regulation.
Dual
listing on two stock exchanges has the risk of the additional regulatory and compliance requirements that come with operating on multiple
exchanges. We will need to comply with the rules and regulations of both Nasdaq and Upstream, which may include different reporting requirements,
disclosure obligations, and accounting standards. Dual listing may increase the exposure of the Company to market risks, including currency
fluctuations and geopolitical events, as it may be subject to different economic conditions and political environments with respect to
each exchange, which could potentially lead to greater volatility in the trading price of the Company’s securities and may negatively
impact investor sentiment. Another risk is that the additional scrutiny and regulatory requirements associated with dual listing may
discourage some investors from investing in the Company, or make it more difficult for the Company to attract new investors. This could
potentially limit the Company’s access to capital and its ability to fund its growth and expansion plans.
SPECIAL
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Risk
Factors.” All statements other than statements of historical fact contained in this prospectus, including statements regarding
future events, our future financial performance, business strategy and plans and objectives of management for future operations, are
forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,”
“believes,” “can,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “should,”
or “will” or the negative of these terms or other comparable terminology. Although we do not make forward looking statements
unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions
and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or
elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements.
Forward-looking
statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the
times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available
at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject
to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed in or suggested
by the forward-looking statements.
Forward-looking
statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no
obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting
forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking
statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
USE
OF PROCEEDS
We
intend to use the net proceeds from the sale of the securities as set forth in the applicable prospectus supplement.
DESCRIPTION
OF CAPITAL STOCK
The
following description of our capital stock is not complete and may not contain all the information you should consider before investing
in our capital stock. This description is summarized from, and qualified in its entirety by reference to, our Articles of Incorporation,
as amended and Bylaws, as amended which have been publicly filed with the SEC. See “Where You Can Find More Information; Incorporation
by Reference.”
Description
of Common Stock
The Company is authorized to
issue 600,000,000 shares of capital stock, par value $0.001 per share, of which 500,000,000 are shares of Common Stock and 100,000,000
are shares of “blank check” preferred stock. As of August 30, 2023, there were 14,228,202 shares of Common
Stock issued and outstanding. There were no shares of Preferred Stock issued and outstanding as of August 30, 2023.
Each
share of our Common Stock entitles its holder to one vote in the election of each director and on all other matters voted on generally
by our stockholders, other than any matter that (1) solely relates to the terms of any outstanding series of preferred stock or the number
of shares of that series and (2) does not affect the number of authorized shares of preferred stock or the powers, privileges and rights
pertaining to the Common Stock. No share of our Common Stock affords any cumulative voting rights. This means that the holders of a majority
of the voting power of the shares voting for the election of directors can elect all directors to be elected if they choose to do so.
Holders
of our Common Stock will be entitled to dividends in such amounts and at such times as our Board of Directors in its discretion may declare
out of funds legally available for the payment of dividends. We currently intend to retain our entire available discretionary cash flow
to finance the growth, development and expansion of our business and do not anticipate paying any cash dividends on the Common Stock
in the foreseeable future. Any future dividends will be paid at the discretion of our Board of Directors.
If
we liquidate or dissolve our business, the holders of our Common Stock will share ratably in all our assets that are available for distribution
to our stockholders after our creditors are paid in full and the holders of all series of our outstanding preferred stock, if any, receive
their liquidation preferences in full.
Our
Common Stock has no preemptive rights and is not convertible or redeemable or entitled to the benefits of any sinking or repurchase fund.
The
Common Stock is listed on the Nasdaq Capital Market under the trading symbol “SURG.”
The
Company’s transfer agent is VStock Transfer, LLC with an address of 18 Lafayette Place, Woodmere, NY 11598 and a phone number of
(212) 828-8436.
Description
of Tradeable Warrants
Overview.
The following summary of certain terms and provisions of the Tradeable Warrants is not complete and is subject to, and qualified in its
entirety by, the provisions of the warrant agency agreement between us and VStock Transfer, LLC (the “Warrant Agent”), and
the form of warrant, incorporated by reference as Exhibit 4.3 to the Annual Report on Form 10-K incorporated by reference in this prospectus.
As of August 30, 2023,
there were 5,616,892 warrants issued and outstanding, consisting of 5,246,086 Tradeable Warrants and 370,806 other warrants.
The Tradeable Warrants entitle
the registered holder to purchase Common Stock at a price equal to $4.73 per share, subject to adjustment as discussed below, immediately
following the issuance of such Tradeable Warrant and terminating at 5:00 p.m., New York City time, on November 4, 2024. The other warrants
entitle the registered holder to purchase Common Stock at prices between $4.73 and $75.00 per share and have expiration dates between
November 2023 and November 2025.
The exercise price and number
of shares of Common Stock issuable upon exercise of the Tradeable Warrants may be adjusted in certain circumstances, including in the
event of a stock dividend or recapitalization, reorganization, merger or consolidation. However, the Tradeable Warrants will not be adjusted
for issuances of Common Stock at prices below its exercise price.
Exercisability. The Tradeable
Warrants are exercisable at any time after their original issuance and at any time up to the date that is three (3) years after their
original issuance. The Tradeable Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date
at the offices of the Warrant Agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated,
accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of Tradeable Warrants
being exercised. Under the terms of the warrant agency agreement, we must use our best efforts to maintain the effectiveness of the registration
statement and current prospectus relating to the Common Stock issuable upon exercise of the Tradeable Warrants until the expiration of
the Tradeable Warrants. If we fail to maintain the effectiveness of the registration statement and current prospectus relating to the
Common Stock issuable upon exercise of the Tradeable Warrants, the holders of the Tradeable Warrants shall have the right to exercise
the Tradeable Warrants solely via a cashless exercise feature provided for in the Tradeable Warrants, until such time as there is an effective
registration statement and current prospectus.
Exercise
Limitation. A holder may not exercise any portion of a Tradeable Warrant to the extent that the holder, together with its affiliates
and any other person or entity acting as a group, would own more than 4.99% of the outstanding Common Stock after exercise, as such percentage
ownership is determined in accordance with the terms of the Tradeable Warrants, except that upon prior notice from the holder to us,
the holder may waive such limitation up to a percentage not in excess of 9.99%.
Exercise
Price. The exercise price per whole share of Common Stock purchasable upon exercise of the Tradeable Warrants is $4.73. The exercise
price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations,
reclassifications or similar events affecting our Common Stock and also upon any distributions of assets, including cash, stock or other
property to our stockholders.
Fractional
Shares. No fractional shares of Common Stock will be issued upon exercise of the Tradeable Warrants. As to any fraction of a share
of Common Stock which the holder would otherwise be entitled to purchase upon such exercise, the Company will round up or down, as applicable,
to the nearest whole share of Common Stock.
Transferability.
Subject to applicable laws, the Tradeable Warrants may be offered for sale, sold, transferred or assigned without our consent.
Warrant
Agent; Global Certificate. The Tradeable Warrants were issued in registered form under a warrant agency agreement between the Warrant
Agent and us. The Tradeable Warrants shall initially be represented only by one or more global warrants deposited with the Warrant Agent,
as custodian on behalf of The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., a nominee of
DTC, or as otherwise directed by DTC.
Fundamental
Transactions. In the event of a fundamental transaction, as described in the Tradeable Warrants and generally including any reorganization,
recapitalization or reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our
properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common
Stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the
holders of the Tradeable Warrants will be entitled to receive the kind and amount of securities, cash or other property that the holders
would have received had they exercised the Tradeable Warrants immediately prior to such fundamental transaction.
Rights
as a Stockholder. The Tradeable Warrant holders do not have the rights or privileges of holders of Common Stock or any voting rights
until they exercise their Tradeable Warrants and receive Common Stock. After the issuance Common Stock upon exercise of the Tradeable
Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
Governing
Law. The Tradeable Warrants and the warrant agency agreement are governed by New York law.
Exchange.
The Tradeable Warrants are listed on the Nasdaq Capital Market under the trading symbol “SURGW.”
Anti-takeover
Effects of Our Articles of Incorporation and By-laws
The
holders of our Common Stock do not have cumulative voting rights in the election of our directors, which makes it more difficult for
minority stockholders to be represented on the Board. Our articles of incorporation allow our Board to issue additional shares of our
Common Stock and new series of preferred stock without further approval of our stockholders. The existence of authorized but unissued
shares of Common Stock and preferred stock could render more difficult or discourage an attempt to obtain control of our company by means
of a proxy contest, tender offer, merger, or otherwise.
Anti-Takeover
Provisions
Business
Combinations
The
“business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS, generally
prohibit a Nevada corporation with at least 200 stockholders of record, a “resident domestic corporation,” from engaging
in various “combination” transactions with any “interested stockholder” unless certain conditions are met or
the corporation has elected in its articles of incorporation to not be subject to these provisions. We have not elected to opt out of
these provisions and if we meet the definition of resident domestic corporation, now or in the future, our company will be subject to
these provisions.
A
“combination” is generally defined to include (a) a merger or consolidation of the resident domestic corporation or any subsidiary
of the resident domestic corporation with the interested stockholder or affiliate or associate of the interested stockholder; (b) any
sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, by the resident
domestic corporation or any subsidiary of the resident domestic corporation to or with the interested stockholder or affiliate or associate
of the interested stockholder having: (i) an aggregate market value equal to 5% or more of the aggregate market value of the assets of
the resident domestic corporation, (ii) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding
shares of the resident domestic corporation, or (iii) 10% or more of the earning power or net income of the resident domestic corporation;
(c) the issuance or transfer in one transaction or series of transactions of shares of the resident domestic corporation or any subsidiary
of the resident domestic corporation having an aggregate market value equal to 5% or more of the resident domestic corporation to the
interested stockholder or affiliate or associate of the interested stockholder; and (d) certain other transactions with an interested
stockholder or affiliate or associate of the interested stockholder.
An
“interested stockholder” is generally defined as a person who, together with affiliates and associates, owns (or within two
years, did own) 10% or more of a corporation’s voting stock. An “affiliate” of the interested stockholder is any person
that directly or indirectly through one or more intermediaries is controlled by or is under common control with the interested stockholder.
An “associate” of an interested stockholder is any (a) corporation or organization of which the interested stockholder is
an officer or partner or is directly or indirectly the beneficial owner of 10% or more of any class of voting shares of such corporation
or organization; (b) trust or other estate in which the interested stockholder has a substantial beneficial interest or as to which the
interested stockholder serves as trustee or in a similar fiduciary capacity; or (c) relative or spouse of the interested stockholder,
or any relative of the spouse of the interested stockholder, who has the same home as the interested stockholder.
If
applicable, the prohibition is for a period of two years after the date of the transaction in which the person became an interested stockholder,
unless such transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or the
combination is approved by the board of directors and thereafter is approved at a meeting of the stockholders by the affirmative vote
of stockholders representing at least 60% of the outstanding voting power held by disinterested stockholders; and extends beyond the
expiration of the two-year period, unless (a) the combination was approved by the board of directors prior to the person becoming an
interested stockholder; (b) the transaction by which the person first became an interested stockholder was approved by the board of directors
before the person became an interested stockholder; (c) the transaction is approved by the affirmative vote of a majority of the voting
power held by disinterested stockholders at a meeting called for that purpose no earlier than two years after the date the person first
became an interested stockholder; or (d) if the consideration to be paid to all stockholders other than the interested stockholder is,
generally, at least equal to the highest of: (i) the highest price per share paid by the interested stockholder within the three years
immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder,
whichever is higher, plus compounded interest and less dividends paid, (ii) the market value per share of common shares on the date of
announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, plus compounded interest
and less dividends paid, or (iii) for holders of preferred stock, the highest liquidation value of the preferred stock, plus accrued
dividends, if not included in the liquidation value. With respect to (i) and (ii) above, the interest is compounded at the rate for one-year
United States Treasury obligations from time to time in effect.
Applicability
of the Nevada business combination statute would discourage parties interested in taking control of our company if they cannot obtain
the approval of our Board. These provisions could prohibit or delay a merger or other takeover or change in control attempt and, accordingly,
may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their
stock at a price above the prevailing market price.
Control
Share Acquisitions
The
“control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS, apply to “issuing corporations”
that are Nevada corporations with at least 200 stockholders of record, including at least 100 stockholders of record who are Nevada residents,
and that conduct business directly or indirectly in Nevada, unless the corporation has elected to not be subject to these provisions.
The
control share statute prohibits an acquirer of shares of an issuing corporation, under certain circumstances, from voting its shares
of a corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target
corporation’s disinterested stockholders. The statute specifies three thresholds: (a) one-fifth or more but less than one-third,
(b) one-third but less than a majority, and (c) a majority or more, of the outstanding voting power. Generally, once a person acquires
shares in excess of any of the thresholds, those shares and any additional shares acquired within 90 days thereof become “control
shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions
also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting
power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment
for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.
A
corporation may elect to not be governed by, or “opt out” of, the control shares provisions by making an election in its
articles of incorporation or bylaws, provided that the opt-out election must be in place on the 10th day following the date an acquiring
person has acquired a controlling interest, that is, crossing any of the three thresholds described above. We have not opted out of these
provisions and will be subject to the control share provisions of the NRS if we meet the definition of an issuing corporation upon an
acquiring person acquiring a controlling interest unless we later opt out of these provisions and the opt out is in effect on the 10th
day following such occurrence.
The
effect of the Nevada control share statute is that the acquiring person, and those acting in association with the acquiring person, will
obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders at an annual or special meeting.
The Nevada control share law, if applicable, could have the effect of discouraging takeovers of our company.
DESCRIPTION
OF DEBT SECURITIES
General
The
debt securities that we may offer by this prospectus consist of notes, debentures, or other evidences of indebtedness. The debt securities
may constitute either senior or subordinated debt securities, and in either case may be either secured or unsecured. Any debt securities
that we offer and sell will be our direct obligations. Debt securities may be issued in one or more series. All debt securities of any
one series need not be issued at the same time, and unless otherwise provided, a series of debt securities may be reopened, with the
required consent of the holders of outstanding debt securities, for issuance of additional debt securities of that series or to establish
additional terms of that series of debt securities (with such additional terms applicable only to unissued or additional debt securities
of that series). The form of indenture has been filed as an exhibit to the registration statement of which this prospectus is a part
and is subject to any amendments or supplements that we may enter into with the trustee(s), however, we may issue debt securities not
subject to the indenture provided such terms of debt securities are not otherwise required to be set forth in the indenture. The material
terms of the indenture are summarized below and we refer you to the indenture for a detailed description of these material terms. Additional
or different provisions that are applicable to a particular series of debt securities will, if material, be described in a prospectus
supplement relating to the offering of debt securities of that series. These provisions may include, among other things and to the extent
applicable, the following:
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the
title of the debt securities, including, as applicable, whether the debt securities will be issued as senior debt securities, senior
subordinated debt securities or subordinated debt securities, any subordination provisions particular to the series of debt securities; |
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any
limit on the aggregate principal amount of the debt securities; |
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whether
the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if any; |
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whether
the debt securities will be secured or unsecured; |
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if
other than 100% of the aggregate principal amount, the percentage of the aggregate principal amount at which we will sell the debt
securities, such as an original issuance discount; |
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the
date or dates, whether fixed or extendable, on which the principal of the debt securities will be payable; |
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the
rate or rates, which may be fixed or variable, at which the debt securities will bear interest, if any, the date or dates from which
any such interest will accrue, the interest payment dates on which we will pay any such interest, the basis upon which interest will
be calculated if other than that of a 360-day year consisting of twelve 30-day months, and, in the case of registered securities,
the record dates for the determination of holders to whom interest is payable; |
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the
place or places where the principal of and any premium or interest on the debt securities will be payable and where the debt securities
may be surrendered for conversion or exchange; |
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whether
we may, at our option, redeem the debt securities, and if so, the price or prices at which, the period or periods within which, and
the terms and conditions upon which, we may redeem the debt securities, in whole or in part, pursuant to any sinking fund or otherwise; |
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if
other than 100% of the aggregate principal amount thereof, the portion of the principal amount of the debt securities which will
be payable upon declaration of acceleration of the maturity date thereof or provable in bankruptcy, or, if applicable, which is convertible
or exchangeable; |
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any
obligation we may have to redeem, purchase or repay the debt securities pursuant to any sinking fund or analogous provisions or at
the option of a holder of debt securities, and the price or prices at which, the currency in which and the period or periods within
which, and the terms and conditions upon which, the debt securities will be redeemed, purchased or repaid, in whole or in part, pursuant
to any such obligation, and any provision for the remarketing of the debt securities; |
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the
issuance of debt securities as registered securities or unregistered securities or both, and the rights of the holders of the debt
securities to exchange unregistered securities for registered securities, or vice versa, and the circumstances under which any such
exchanges, if permitted, may be made; |
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the
denominations, which may be in United States Dollars or in any foreign currency, in which the debt securities will be issued, if
other than denominations of $1,000 and any integral multiple thereof; |
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whether
the debt securities will be issued in the form of certificated debt securities, and if so, the form of the debt securities (or forms
thereof if unregistered and registered securities are issuable in that series), including the legends required by law or as we deem
necessary or appropriate, the form of any coupons or temporary global security which may be issued and the forms of any other certificates
which may be required under the indenture or which we may require in connection with the offering, sale, delivery or exchange of
the debt securities; |
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if
other than United States Dollars, the currency or currencies in which payments of principal, interest and other amounts payable with
respect to the debt securities will be denominated, payable, redeemable or repurchasable, as the case may be; |
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whether
the debt securities may be issuable in tranches; |
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the
obligations, if any, we may have to permit the conversion or exchange of the debt securities into Common Stock, preferred stock or
other capital stock or property, or a combination thereof, and the terms and conditions upon which such conversion or exchange will
be effected (including conversion price or exchange ratio), and any limitations on the ownership or transferability of the securities
or property into which the debt securities may be converted or exchanged; |
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if
other than the trustee under the indenture, any trustees, authenticating or paying agents, transfer agents or registrars or any other
agents with respect to the debt securities; |
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any
deletions from, modifications of or additions to the events of default with respect to the debt securities or the right of the Trustee
or the holders of the debt securities in connection with events of default; |
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any
deletions from, modifications of or additions to the covenants with respect to the debt securities; |
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if
the amount of payments of principal of, and make-whole amount, if any, and interest on the debt securities may be determined with
reference to an index, the manner in which such amount will be determined; |
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whether
the debt securities will be issued in whole or in part in the global form of one or more debt securities and, if so, the depositary
for such debt securities, the circumstances under which any such debt security may be exchanged for debt securities registered in
the name of, and under which any transfer of debt securities may be registered in the name of, any person other than such depositary
or its nominee, and any other provisions regarding such debt securities; |
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whether,
under what circumstances and the currency in which, we will pay additional amounts on the debt securities to any holder of the debt
securities who is not a United States person in respect of any tax, assessment or governmental charge and, if so, whether we will
have the option to redeem such debt securities rather than pay such additional amounts, and the terms of any such option; |
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whether
the debt securities will be secured by any collateral and, if so, a general description of the collateral and the terms of any related
security, pledge or other agreements; |
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the
persons to whom any interest on the debt securities will be payable, if other than the registered holders thereof on the regular
record date therefor; and |
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any
other material terms or conditions upon which the debt securities will be issued. |
Unless
otherwise indicated in the applicable prospectus supplement, we will issue debt securities in fully registered form without coupons and
in denominations of $1,000 and in integral multiples of $1,000, and interest will be computed on the basis of a 360-day year of twelve
30-day months. If any interest payment date or the maturity date falls on a day that is not a business day, then the payment will be
made on the next business day without additional interest and with the same effect as if it were made on the originally scheduled date.
“Business day” means any calendar day that is not a Saturday, Sunday or legal holiday in New York, New York, and on which
the trustee and commercial banks are open for business in New York, New York.
Unless
we inform you otherwise in a prospectus supplement, each series of our senior debt securities will rank equally in right of payment with
all of our other unsubordinated debt. The subordinated debt securities will rank junior in right of payment and be subordinate to all
of our unsubordinated debt.
Unless
otherwise indicated in the applicable prospectus supplement, the trustee will act as paying agent and registrar for the debt securities
under the indenture. We may act as paying agent under the indenture.
The
prospectus supplement will contain a description of United States federal income tax consequences relating to the debt securities, to
the extent applicable.
Covenants
The
applicable prospectus supplement will describe any covenants, such as restrictive covenants restricting us or our subsidiaries, if any,
from incurring, issuing, assuming or guarantying any indebtedness or restricting us or our subsidiaries, if any, from paying dividends
or acquiring any of our or its capital stock.
Consolidation,
Merger and Transfer of Assets
The
indenture permits a consolidation or merger between us and another entity and/or the sale, conveyance or lease by us of all or substantially
all of our property and assets, provided that:
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the
resulting or acquiring entity, if other than us, is organized and existing under the laws of a United States jurisdiction and assumes
all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the debt securities
and performance of the covenants in the indenture; |
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immediately
after the transaction, and giving effect to the transaction, no event of default under the indenture exists; and |
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we
have delivered to the trustee an officers’ certificate stating that the transaction and, if a supplemental indenture is required
in connection with the transaction, the supplemental indenture comply with the indenture and that all conditions precedent to the
transaction contained in the indenture have been satisfied. |
If
we consolidate or merge with or into any other entity, or sell or lease all or substantially all of our assets in compliance with the
terms and conditions of the indenture, the resulting or acquiring entity will be substituted for us in the indenture and the debt securities
with the same effect as if it had been an original party to the indenture and the debt securities. As a result, such successor entity
may exercise our rights and powers under the indenture and the debt securities, in our name and, except in the case of a lease, we will
be released from all our liabilities and obligations under the indenture and under the debt securities.
Notwithstanding
the foregoing, we may transfer all of our property and assets to another entity if, immediately after giving effect to the transfer,
such entity is our wholly owned subsidiary. The term “wholly owned subsidiary” means any subsidiary in which we and/or our
other wholly owned subsidiaries, if any, own all of the outstanding capital stock.
Modification
and Waiver
Under
the indenture, some of our rights and obligations and some of the rights of the holders of the debt securities may be modified or amended
with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding debt securities affected
by the modification or amendment. However, the following modifications and amendments will not be effective against any holder without
its consent:
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a
change in the stated maturity date of any payment of principal or interest; |
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a
reduction in the principal amount of or interest on any debt securities; |
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an
alteration or impairment of any right to convert at the rate or upon the terms provided in the indenture; |
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a
change in the currency in which any payment on the debt securities is payable; |
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an
impairment of a holder’s right to sue us for the enforcement of payments due on the debt securities; or |
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a
reduction in the percentage of outstanding debt securities required to consent to a modification or amendment of the indenture or
required to consent to a waiver of compliance with certain provisions of the indenture or certain defaults under the indenture. |
Under
the indenture, the holders of not less than a majority in aggregate principal amount of the outstanding debt securities may, on behalf
of all holders of the debt securities:
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waive
compliance by us with certain restrictive provisions of the indenture; and |
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waive
any past default under the indenture in accordance with the applicable provisions of the indenture, except a default in the payment
of the principal of or interest on any series of debt securities. |
Events
of Default
Unless
we indicate otherwise in the applicable prospectus supplement, “event of default” under the indenture will mean, with respect
to any series of debt securities, any of the following:
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failure
to pay interest on any debt security for 30 days after the payment is due; |
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failure
to pay the principal of any debt security when due, either at maturity, upon redemption, by declaration or otherwise; |
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failure
on our part to observe or perform any other covenant or agreement in the indenture that applies to the debt securities for 90 days
after we have received written notice of the failure to perform in the manner specified in the indenture; and |
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certain
events of bankruptcy, insolvency or reorganization. |
Remedies
Upon an Event of Default
If
an event of default occurs and continues, the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding
debt securities of such series may declare the entire principal of all the debt securities to be due and payable immediately, except
that, if the event of default is caused by certain events in bankruptcy, insolvency or reorganization, the entire principal of all of
the debt securities of such series will become due and payable immediately without any act on the part of the trustee or holders of the
debt securities. If such a declaration occurs, the holders of a majority of the aggregate principal amount of the outstanding debt securities
of such series can, subject to conditions, rescind the declaration.
The
indenture requires us to furnish to the trustee not less often than annually, a certificate from our principal executive officer, principal
financial officer or principal accounting officer, as the case may be, as to such officer’s knowledge of our compliance with all
conditions and covenants under the indenture. The trustee may withhold notice to the holders of debt securities of any default, except
defaults in the payment of principal of or interest on any debt securities if the trustee in good faith determines that the withholding
of notice is in the best interests of the holders. For purposes of this paragraph, “default” means any event which is, or
after notice or lapse of time or both would become, an event of default under the indenture.
The
trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any holders
of debt securities, unless the holders offer the trustee satisfactory security or indemnity. If satisfactory security or indemnity is
provided, then, subject to other rights of the trustee, the holders of a majority in aggregate principal amount of the outstanding debt
securities may direct the time, method and place of:
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conducting
any proceeding for any remedy available to the trustee; or |
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exercising
any trust or power conferred upon the trustee. |
The
holder of a debt security will have the right to begin any proceeding with respect to the indenture or for any remedy only if:
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the
holder has previously given the trustee written notice of a continuing event of default; |
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the
holders of not less than a majority in aggregate principal amount of the outstanding debt securities have made a written request
of, and offered reasonable indemnity to, the trustee to begin such proceeding; |
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the
trustee has not started such proceeding within 60 days after receiving the request; and |
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no
direction inconsistent with such written request has been given to the trustee under the indenture. |
However,
the holder of any debt security will have an absolute right to receive payment of principal of and interest on the debt security when
due and to institute suit to enforce this payment.
Satisfaction
and Discharge; Defeasance
Satisfaction
and Discharge of Indenture. Unless otherwise indicated in the applicable prospectus supplement, if at any time:
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we
have paid the principal of and interest on all the debt securities of any series, except for debt securities which have been destroyed,
lost or stolen and which have been replaced or paid in accordance with the indenture, as and when the same shall have become due
and payable; or |
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we
have delivered to the trustee for cancellation all debt securities of any series theretofore authenticated, except for debt securities
of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in the indenture;
or |
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all
the debt securities of such series not theretofore delivered to the trustee for cancellation have become due and payable, or are
by their terms are to become due and payable within one year or are to be called for redemption within one year, and we have deposited
with the trustee, in trust, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest
and any other sums due on the debt securities, on the dates the payments are due or become due under the indenture and the terms
of the debt securities, |
then
the indenture shall cease to be of further effect with respect to the debt securities of such series, except for:
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rights
of registration of transfer and exchange, and our right of optional redemption; |
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substitution
of mutilated, defaced, destroyed, lost or stolen debt securities; |
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rights
of holders to receive payments of principal thereof and interest thereon upon the original stated due dates therefor (but not upon
acceleration) and remaining rights of the holders to receive mandatory sinking fund payments, if any; |
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the
rights, obligations and immunities of the trustee under the indenture; and |
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the
rights of the holders of such series of debt securities as beneficiaries thereof with respect to the property so deposited with the
trustee payable to all or any of them. |
Defeasance
and Covenant Defeasance. Unless otherwise indicated in the applicable prospectus supplement, we may elect with respect to any debt
securities of any series either:
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to
defease and be discharged from all of our obligations with respect to such debt securities (“defeasance”), with certain
exceptions described below; or |
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to
be released from our obligations with respect to such debt securities under such covenants as may be specified in the applicable
prospectus supplement, and any omission to comply with those obligations will not constitute a default or an event of default with
respect to such debt securities (“covenant defeasance”). |
We
must comply with the following conditions before the defeasance or covenant defeasance can be effected:
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we
must irrevocably deposit with the indenture trustee or other qualifying trustee, under the terms of an irrevocable trust agreement
in form and substance satisfactory to the trustee, trust funds in trust solely for the benefit of the holders of such debt securities,
sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any other sums on the
due dates for those payments; and |
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we
must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income,
gain or loss for federal income tax purposes as a result of defeasance or covenant defeasance, as the case may be, to be effected
with respect to such debt securities and will be subject to federal income tax on the same amount, in the same manner and at the
same times as would be the case if such defeasance or covenant defeasance, as the case may be, had not occurred. |
In
connection with defeasance, any irrevocable trust agreement contemplated by the indenture must include, among other things, provision
for:
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payment
of the principal of and interest on such debt securities, if any, appertaining thereto when due (by redemption, sinking fund payments
or otherwise); |
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the
payment of the expenses of the trustee incurred or to be incurred in connection with carrying out such trust provisions; |
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rights
of registration, transfer, substitution and exchange of such debt securities in accordance with the terms stated in the indenture;
and |
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continuation
of the rights, obligations and immunities of the trustee as against the holders of such debt securities as stated in the indenture. |
The
accompanying prospectus supplement may further describe any provisions permitting or restricting defeasance or covenant defeasance with
respect to the debt securities of a particular series.
Global
Securities
Unless
otherwise indicated in the applicable prospectus supplement, each debt security offered by this prospectus will be issued in the form
of one or more global debt securities representing all or part of that series of debt securities. This means that we will not issue certificates
for that series of debt securities to the holders. Instead, a global debt security representing that series will be deposited with, or
on behalf of, a securities depositary and registered in the name of the depositary or a nominee of the depositary. Any such depositary
must be a clearing agency registered under the Exchange Act. We will describe the specific terms of the depositary arrangement with respect
to a series of debt securities to be represented by a global security in the applicable prospectus supplement.
Notices
We
will give notices to holders of the debt securities by mail at the addresses listed in the security register. In the case of notice in
respect of unregistered securities or coupon securities, we may give notice by publication in a newspaper of general circulation in New
York, New York.
Governing
Law
The
particular terms of a series of debt securities will be described in a prospectus supplement relating to such series of debt securities.
Any indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended, and may be supplemented or amended from
time to time following their execution. Unless otherwise stated in the applicable prospectus supplement, we will not be limited in the
amount of debt securities that we may issue, and neither the senior debt securities nor the subordinated debt securities will be secured
by any of our property or assets. Thus, by owning debt securities, you are one of our unsecured creditors.
Regarding
the Trustee
From
time to time, we may maintain deposit accounts and conduct other banking transactions with the trustee to be appointed under the indenture
or its affiliates in the ordinary course of business.
DESCRIPTION
OF WARRANTS
We
may offer to sell warrants from time to time. If we do so, we will describe the specific terms of the warrants in a prospectus supplement.
In particular, we may issue warrants for the purchase of Common Stock, preferred stock and/or debt securities in one or more series.
We may also issue warrants independently or together with other securities and the warrants may be attached to or separate from those
securities.
We
will evidence each series of warrants by warrant certificates that we will issue under a separate agreement. We will enter into the warrant
agreement with a warrant agent. We will indicate the name and address of the warrant agent in the applicable prospectus supplement relating
to a particular series of warrants.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
| ● |
the
offering price and aggregate number of warrants offered; |
| |
|
| ● |
the
currency for which the warrants may be purchased; |
| |
|
| ● |
if
applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with
each such security or each principal amount of such security; |
| |
|
| ● |
if
applicable, the date on and after which the warrants and the related securities will be separately transferable; |
| |
|
| ● |
in
the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant
and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise; |
| |
|
| ● |
in
the case of warrants to purchase Common Stock or preferred stock, the number of shares of Common Stock or preferred stock, as the
case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; |
| |
|
| ● |
the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
| |
|
| ● |
the
terms of any rights to redeem or call the warrants; |
| |
|
| ● |
any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; |
| |
|
| ● |
the
dates on which the right to exercise the warrants will commence and expire; |
| |
|
| ● |
the
manner in which the warrant agreement and warrants may be modified; |
| |
|
| ● |
certain
United States federal income tax consequences of holding or exercising the warrants; |
| |
|
| ● |
the
terms of the securities issuable upon exercise of the warrants; and |
| |
|
| ● |
any
other specific material terms, preferences, rights or limitations of or restrictions on the warrants. |
Holders
may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with other requested
information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus
supplement. We will set forth in the applicable prospectus supplement the information that the holder of the warrant will be required
to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the office of the warrant agent or
any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise.
If a holder exercises fewer than all of the warrants represented by the warrant certificate, then we will issue a new warrant certificate
for the remaining amount of warrants.
Holder
will not have any of the rights of the holders of the securities purchasable upon the exercise of warrants until you exercise them. Accordingly,
holder will not be entitled to, among other things, vote or receive dividend payments or similar distributions on the securities you
can purchase upon exercise of the warrants.
The
information provided above is only a summary of the terms under which we may offer warrants for sale. Accordingly, investors must carefully
review the applicable warrant agreement for more information about the specific terms and conditions of these warrants before investing
in us. In addition, please carefully review the information provided in the applicable prospectus supplement, which contains additional
information that is important for you to consider in evaluating an investment in our securities.
DESCRIPTION
OF RIGHTS
We
may issue rights to our stockholders to purchase shares of our Common Stock or preferred stock described in this prospectus. We may offer
rights separately or together with one or more additional rights, preferred stock, Common Stock, warrants or any combination of those
securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be issued under a separate
rights agreement to be entered into between us and a bank or trust company, as rights agent. The rights agent for any rights we offer
will be set forth in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the certificates
relating to the rights of the series of certificates and will not assume any obligation or relationship of agency or trust for or with
any holders of rights certificates or beneficial owners of rights. The following description sets forth certain general terms and provisions
of the rights to which any prospectus supplement may relate. The particular terms of the rights to which any prospectus supplement may
relate and the extent, if any, to which the general provisions may apply to the rights so offered will be described in the applicable
prospectus supplement. To the extent that any particular terms of the rights, rights agreement or rights certificates described in a
prospectus supplement differ from any of the terms described below, then the terms described below will be deemed to have been superseded
by that prospectus supplement. We encourage you to read the applicable rights agreement and rights certificate for additional information
before you decide whether to purchase any of our rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other
matters:
| ● |
the
date of determining the stockholders entitled to the rights distribution; |
| |
|
| ● |
the
aggregate number of shares of Common Stock, preferred stock or other securities purchasable upon exercise of the rights; |
| |
|
| ● |
the
exercise price; |
| |
|
| ● |
the
aggregate number of rights issued; |
| |
|
| ● |
whether
the rights are transferrable and the date, if any, on and after which the rights may be separately transferred; |
| |
|
| ● |
the
date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will expire; |
| |
|
| ● |
the
method by which holders of rights will be entitled to exercise; |
| |
|
| ● |
the
conditions to the completion of the offering; |
| |
|
| ● |
the
withdrawal, termination and cancellation rights; |
| |
|
| ● |
whether
there are any backstop or standby purchaser or purchasers and the terms of their commitment; |
| |
|
| ● |
whether
stockholders are entitled to oversubscription right; |
| |
|
| ● |
any
U.S. federal income tax considerations; and |
| |
|
| ● |
any
other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise of the
rights. |
If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons
other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to
standby arrangements, as described in the applicable prospectus supplement. In connection with any rights offering, we may enter into
a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other
persons would purchase any offered securities remaining unsubscribed for after such rights offering.
DESCRIPTION
OF UNITS
We
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series. We
may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements
with a unit agent. We will indicate the name and address of the unit agent in the applicable prospectus supplement relating to a particular
series of units.
The
following description, together with the additional information included in any applicable prospectus supplement, summarizes the general
features of the units that we may offer under this prospectus. You should read any prospectus supplement and any free writing prospectus
that we may authorize to be provided to you related to the series of units being offered, as well as the complete unit agreements that
contain the terms of the units. Specific unit agreements will contain additional important terms and provisions and we will file as an
exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from another report that we
file with the SEC, the form of each unit agreement relating to units offered under this prospectus.
If
we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including, without
limitation, the following, as applicable:
| ● |
the
title of the series of units; |
| |
|
| ● |
identification
and description of the separate constituent securities comprising the units; |
| |
|
| ● |
the
price or prices at which the units will be issued; |
| |
|
| ● |
the
date, if any, on and after which the constituent securities comprising the units will be separately transferable; |
| |
|
| ● |
a
discussion of certain United States federal income tax considerations applicable to the units; and |
| |
|
| ● |
any
other terms of the units and their constituent securities. |
PLAN
OF DISTRIBUTION
We
may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination
of these methods or through underwriters or dealers, through agents and/or directly to one or more purchasers. The securities may be
distributed from time to time in one or more transactions:
| ● |
at
a fixed price or prices, which may be changed; |
| |
|
| ● |
at
market prices prevailing at the time of sale; |
| |
|
| ● |
at
prices related to such prevailing market prices; or |
| |
|
| ● |
at
negotiated prices. |
Each
time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe the
method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price of the
securities and the proceeds to us, if applicable.
Offers
to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit offers
to purchase the securities from time to time. Any agent involved in the offer or sale of our securities will be identified in a prospectus
supplement.
If
a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer, as principal.
The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
If
an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed
with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement that the underwriter
will use to make resales of the securities to the public. In connection with the sale of the securities, we or the purchasers of securities
for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter
may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for which they may act as agent. Unless otherwise indicated in a prospectus
supplement, an agent will be acting on a best efforts basis and a dealer will purchase securities as a principal, and may then resell
the securities at varying prices to be determined by the dealer.
Any
compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers will be provided in the applicable prospectus supplement. Underwriters,
dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities
Act of 1933, as amended, and any discounts and commissions received by them and any profit realized by them on resale of the securities
may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents
against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make
in respect thereof and to reimburse those persons for certain expenses.
Any
Common Stock will be listed on the Nasdaq Capital Market, but any other securities may or may not be listed on a national securities
exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve
the sale by persons participating in the offering of more securities than were sold to them. In these circumstances, these persons would
cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if
any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the
open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed
if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to
stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These
transactions may be discontinued at any time.
We
may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act.
In
addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties
in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives, the
third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions.
If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related
open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings
of stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be named in
the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge securities to a financial
institution or other third party that in turn may sell the securities short using this prospectus and an applicable prospectus supplement.
Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection
with a concurrent offering of other securities.
We
do not make any representation or prediction as to the direction or magnitude of any effect that the transactions described above might
have on the price of the securities. In addition, we do not make any representation that underwriters will engage in such transactions
or that such transactions, once commenced, will not be discontinued without notice.
The
specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
To
comply with applicable state securities laws, the securities offered by this prospectus will be sold, if necessary, in such jurisdictions
only through registered or licensed brokers or dealers. In addition, securities may not be sold in some states unless they have been
registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available
and is complied with.
The
underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business for
which they receive compensation.
LEGAL
MATTERS
Lucosky
Brookman LLP will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf of SurgePays,
Inc. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable
prospectus supplement.
EXPERTS
Our
consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of operations, stockholders’
equity (deficit), and cash flows for each of those two years have been audited by Rodefer Moss & Co, PLLC, an independent registered
public accounting firm, as set forth in its report incorporated by reference and are included in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with the securities
being registered hereby.
| SEC
registration fee |
|
$ |
11,020 |
|
| FINRA
filing fee |
|
|
15,500 |
|
| Printing
expenses |
|
|
* |
|
| Legal
fees and expenses |
|
|
* |
|
| Accounting
fees and expenses |
|
|
* |
|
| Blue
Sky, qualification fees and expenses |
|
|
* |
|
| Transfer
agent fees and expenses |
|
|
* |
|
| Trustee
fees and expenses |
|
|
* |
|
| Warrant
agent fees and expenses |
|
|
* |
|
| Miscellaneous |
|
|
* |
|
| Total |
|
$ |
* |
|
| * |
These
fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time. |
Item
15. Indemnification of Directors and Officers
Our
bylaws implement the indemnification provisions permitted by Chapter 78 of the NRS by providing that we shall indemnify our directors
and officers to the fullest extent permitted by the NRS against expense, liability, and loss reasonably incurred or suffered by them
in connection with their service as an officer or director. Our bylaws provide shall advance costs and expenses incurred with respect
to any proceeding to which a person is made a party as a result of being a director or officer in advance of final disposition of such
proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it is ultimately determined
that such person is not entitled to indemnification. We may purchase and maintain liability insurance, or make other arrangements for
such obligations or otherwise, to the extent permitted by the NRS.
At
the present time, there is no pending litigation or proceeding involving a director, officer, employee, or other agent of ours in which
indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding that may result in a claim
for such indemnification. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
Item
16. Exhibits
(a)
Exhibits
A
list of exhibits filed with this registration statement on Form S-3 is set forth on the Exhibit Index below.
| * |
Previously Filed. |
| |
|
| ** |
Filed
Herewith |
Item
17. Undertakings
The
undersigned registrant hereby undertakes:
| (1) |
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| |
(ii) |
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| |
(iii) |
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement. |
| (2) |
That
for the purpose of determining any liability under the Securities Act of 1933 each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
| (3) |
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering. |
| (4) |
That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other
than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of
the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior
to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such date of first use. |
| (5) |
That,
for the purpose of determining liability of the registrant under the Securities Act of 1933
to any purchaser in the initial distribution of the securities:
The
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold
to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and
will be considered to offer or sell such securities to such purchaser: |
| |
(i) |
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424; |
| |
(ii) |
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant; |
| |
(iii) |
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and |
| |
(iv) |
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (6) |
The
undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates
in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. |
| (7) |
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described in Item 14 above, or otherwise, the Registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue. |
| (8) |
The
undersigned Registrant hereby undertakes: |
| |
(1) |
That
for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the
time it was declared effective. |
| |
(2) |
That
for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Bartlett, TN on September 6, 2023.
| SurgePays,
Inc. |
|
| |
|
|
| By: |
/s/
Kevin Brian Cox |
|
| Name: |
Kevin
Brian Cox |
|
| Title: |
Chief
Executive Officer |
|
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities
and on the dates indicated:
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Kevin Brian Cox |
|
Chief
Executive Officer |
|
September 6, 2023 |
| Kevin
Brian Cox |
|
(Principal
Executive Officer) |
|
|
| |
|
|
|
|
| /s/
Anthony Evers |
|
Chief
Financial Officer |
|
September 6, 2023 |
| Anthony
Evers |
|
(Principal
Financial and Accounting Officer) |
|
|
| |
|
|
|
|
| * |
|
Director |
|
September 6, 2023 |
| David
N. Keys |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
September 6, 2023 |
| David
May |
|
|
|
|
| |
|
|
|
|
| * |
|
Director |
|
September 6, 2023 |
| Laurie
Weisberg |
|
|
|
|
| |
|
|
|
|
| * |
|
|
|
|
| Richard
Schurfeld |
|
Director |
|
September 6, 2023 |
| *By: |
/s/
Anthony Evers |
|
| |
Anthony
Evers |
|
| |
Attorney-in-Fact |
|
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
hereby consent to the incorporation by reference in the Form S-3 Registration Statement filed by SurgePays, Inc. & Subsidiaries (“the
Company”), on September 6, 2023, of our report dated March 30, 2023, on the Company’s consolidated balance sheets as of December
31, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years
in the two-year period ended December 31, 2022 and the related notes. We also consent to the reference to our firm under the heading
“Experts” in the Registration Statement.
Very
truly yours,
Rodefer
Moss & Co, PLLC
September 6, 2023
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