Good afternoon, everyone, and welcome to today's SurgePays Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants will be in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Also, today's call is being recorded, and I will be standing by should anyone need any assistance. And now at this time, I'll turn things over to Mr. Quinn Callanan, Investor Relations. Quinn, please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to the SurgePays' fourth quarter and full year 2023 earnings webcast and conference call. Today's date is March 12, 2024. And on the call today from SurgePays are Brian Cox, President and Chief Executive Officer; Tony Evers, Chief Financial Officer. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a discussion of such risks and uncertainties, please see SurgePays' most recent filings with the SEC. All forward-looking statements made today reflect our current expectations only and we undertake no obligation to update any statement to reflect the events that occur after this call. Also during the course of today's call, the company will be discussing one or more non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in the press release we issued this afternoon. Copies of today's press release are accessible on SurgePays' Investor Relations website, ir.surgepays.com. In addition to -- SurgePays' Form 10-K for the year ended December 31, 2023, will also be available on SurgePays' Investor Relations website. And now, I'd like to turn the call over to President and Chief Executive Officer, Brian Cox.

Thanks, Quinn. I want to start off by thanking all of our shareholders, especially our long-term shareholders and recent investors for your patience while watching our business model evolve. I believe our management team has done an outstanding job executing our growth strategy and delivering record financial results. Simultaneously, our stock has been pushing record highs recently, and we want that trend to continue. We're in the best financial position ever with over $40 million in cash, and I'll explain more about that later. Now for our results. Our core mission is to provide financial technology and prepaid wireless services to the underbanked and underserved populations at the grassroots level where they live and shop. Studies have shown that the underbanked do most of their financial transactions at the trusted local convenience store closest to their home. We believe we are making tremendous strides on this front and I think the numbers primarily speak for themselves. 2023 was the most profitable year in the company's history, delivering our highest ever net income of $20.6 million, EBITDA of $22.3 million. Revenue for the year was $137.1 million, the highest we've seen as a company. Gross profit increased to $35.6 million, the highest we've seen as a company. Our cash flow from operations is in the black for the first time. Profitability was a focus for the company with the most significant catalyst being the increase in our ACP subscribers and the reduced enrollment cost paid on NC -- excuse me, ACP subscribers as we move transactions away from the tent and into brick-and-mortar stores. Early in 2023, we pulled down about $19 million from an inventory line of credit. As we forecasted, we utilized internally generated cash flows to pay off the line by year's end. Looking a bit more deeply…

Thank you, Brian, and good afternoon, everyone. I'll begin my overview of the fourth quarter and full year 2023 financial results. For the year, we reported revenues of $137.1 million compared to $121.5 million in 2022, representing an increase of 11%. The increase was primarily due to revenues related to providing mobile broadband and wireless service to low-income subscribers through the ACP, which increased 34% to $118.6 million in 2023. Revenue for the quarter totaled $32.3 million compared to $36.2 million in the fourth quarter of 2022. Gross profit increased 165% in the year to $35.6 million compared to $21.6 million in the year-ago period. During the fourth quarter of 2023, gross profit increased 14% to $7.4 million compared to $6.5 million in the year-ago period. Fourth quarter gross margin also showed improvement up to 23.0% versus 18.1% in the fourth quarter of last year. SG&A expenses increased by 30.7% year-over-year. The increase was primarily driven by compensation expenses, as Brian has talked about the additional hires we had in 2023, and contractor and consultant fees over the course of the year. Income from operations was positive for the year at $18.9 million compared to a gain of $0.6 million in the year-ago period. Net income for the year was $20.6 million or $1.39 per share compared to a net loss of $0.7 million or a loss of $0.05 per share in 2022. Of the $20.6 million in net income, the year included much lower interest expense than the year-ago period and included a $110,000 gain on investment in CenterCom. Turning to the balance sheet, liquidity and cash flow. Our cash balance as of December 31 was $14.6 million compared to $7 million a year-ago -- year-end 2022. Accounts receivable have increased by $306,000 from year-end 2022 to $9.5 million. Receivable is from the U.S. government for the mobile broadband subsidy; payment usually occurs approximately 30 to 60 days after a new customer is verified and signed up. Subsequent to the year-end, our secondary offering raised approximately $15 million in cash and $8.6 million came in from exercising of warrants since January 1. Given our strengthened financial position, cash balance and capital structure, our cash allocation priorities focused on investing in the business and maintaining ample liquidity for future growth. I'll now pass the call back to Brian for closing remarks. Brian?

Thanks, Tony. We believe SurgePays is now on solid financial footing with a significant cash balance, consistent earnings and growth. This disposition contrasted by some economic uncertainty in our market and country has made SurgePays an attractive destination for some of the best sales talent in the industry. We are adding in-house and indirect sales people monthly. These folks bring networks of sales opportunities and relationships with them. We believe we are poised to create one of the country's largest direct distribution networks of underbank products and services, and a vast market with tremendous opportunity and growth awaits. I look to increase revenue growth through organic sales key hires, and as opportunities arise, complementary acquisitions that are synergistic and accretive to our business model. Our track record shows we maximize management effective ratios and can make difficult decisions that produce results and deliver positive cash flow. Our interests are aligned with our shareholders. Thank you so much for your time today. We will now open up the call to questions.

Thank you, Mr. Cox. [Operator Instructions] We'll go first this afternoon to Curtis Shauger of Water Tower Research.

Yeah. Hi, guys. Thanks for taking my call. First of all, great finish to the year. Some interesting points there. It looks like the wireless business finished at $30 million for the quarter, which is -- it's trending down I guess in light of the ACP. It seems like a pretty good controlled trajectory there. In light of the stop taking new customers, what can you say about the Clearline Mobile launch that could give investors some encouragement that we can see a smooth transition from ACP to the more traditional wireless business in the event that ACP delays or we continue to see funding issues with the government?

Hi, Curtis. Thanks for the question. Yeah, those are things that my team meets daily and goes over. We definitely have an all-hands-on-deck approach right now as -- when you don't know what your lineup is going to be for game time in respect to ACP, you have to have contingencies and audibles on hand. So, we definitely have all of these factored in. One of the things that we've been focused heavily on, as we've spoken of before, it was Linkup Mobile and utilizing our buying power because of what ACP has allowed us to achieve to offer a [indiscernible] brand through the convenience store where folks are shopping and closest to where they live that would be significantly lower than any of the other competition out there. And the reason is because of our ability to take payments for ourself, essentially. Every other wireless company utilizes a third party to process payments. We're one of the only companies out there that we know of. Actually, we're the only company that is a wireless company and is a fintech transaction company. So, where Clearline comes in, Clearline, the customer-facing tablets at the register, point of sale register, just imagine that 8-inches full color moving ads constantly promoting our products. So, when you have the volume of foot traffic in convenience stores, and nine times out of 10, every customer that comes in these targeted community convenience stores are going to be prepaid wireless customers. Again, there's over 100 million of them out there. That opportunity to offer people a chance to save money on their wireless bills and then offering that store owner, it's usually owner operator behind the register, an opportunity to make transactional profit off of that customer coming back in every month is pretty astounding. So,…

Excellent. Thank you.

Thanks for the question.

Thank you. We go next now to Ed Woo of Ascendiant Capital.

Yeah, congratulations on your performance in 2023. My question is more on the macro issues. Like you said, it seems like the economy is really rough at the lower end of the economic ladder. How is that helping or hurting your business and your customers those stores that have to touch bases with these customers?

Yeah, Ed, thank you for the question. I'm going to answer your question and use a little bit different words than what you use. It's motivating to us because we know that our market doesn't necessarily benefit from upturns, but takes a little bit of a beating in downturns. And some of the most receptive times that people are to making a change for their wireless provider or changing any habits they may have as they normally would just go through the same rut every day when things are fine. There's an awareness and there's an openness, both subconsciously and consciously now because people are struggling a little bit. So, if we offer products and services to this community, this group, that's almost a third of our country now, where they can save money, and not only save money, but it's convenient for them to pay, whether it's the closest store to their home, they don't have to go out of their way or go to a bill payment center, if you will. We look to check all the boxes for the reasons, number one, where we can obtain the customer, and then number two, how we can secure them as a long-term customer. And it's usually a couple of things. Number one is price. Number two is proximity for payment. And then, number three, support. And as we've talked about before, I take a tremendous amount of pride in our support center. Over 120 people working there to make sure that we offer first-class support to our customers. So, I think when you look at it from that perspective and now let me throw in a little bit of a curveball, it's not just our customer base, the target customer base. Remember, we have a unique business model where…

Very well. Thank you for answering my questions, and I wish you guys good luck. Thank you.

Thanks for the question, Ed.

[Operator Instructions] We'll go next now to [Andrew Scott with SLS Group] (ph).

Hey, Brian, congratulations to you and your team on a great year. You guys have come a long way. I'm watching the stock trading in the aftermarket. It's a little bit of a head scratcher, but I guess everybody's got something to do. Can you just go over again, I think I heard the number right, how much cash do you guys carry right now? And what -- do you have any ideas on what you plan on doing with it? It sounds like you have a lot of options with that much cash.

Hey, Andrew. Thanks for the question. Yeah, we do have options because of the cash and that cash is cumulative of us compounding profit month over month in addition to the -- again the raise that we talked about that we did with Titan in January. And then, we've had just shy of $2 million warrants from our 2021 raise to get to NASDAQ. We've had just $2 million shy warrants exercised over the past couple of months. So that's ultimately led us having over $40 million cash in the bank. And really from a strategic standpoint right now, I'm never going to say that we're sitting on the sidelines, but we're in a little bit of -- we're watching what's going on in Washington as Congress -- the funding for ACP has gotten stuck behind a lot of, I guess, you call it more important global items that the folks in Washington are debating. Our consultants and our legal folks up in that neck of the woods are all giving us a good vibes' thumbs up. But I don't want to fully take a step in a direction assuming anything. So, we obviously have our contingency plans put together, and maybe let's just touch on a couple of those. ACP gets funded like we hope and expect. We're going to push pretty hard in the ACP arena and utilize the profits from that to really focus on growing our core business model, the fintech platform and convenience stores, and pushing out our MVNO prepaid wireless company Linkup. So that's really -- it's pretty simple high level. If it doesn't, we know that there's profitable accretive businesses out there that we could take and plug them into our distribution mechanism and definitely get a lot more output from some of…

Great job. Yeah, you got a lot of options. Great job to you and your team. Thank you, Brian.

Thanks for the question, Andrew.

Thank you. And ladies and gentlemen, that is all the time we have for questions this afternoon. So that will bring us to the conclusion of today's conference call. Again, we'd like to thank you all so much for joining us this afternoon and wish you all a great evening. Goodbye.