Surgepays Inc (SURG) 2022 Q1 法說會逐字稿

Greetings. Welcome to SurgePays, Inc. First Quarter 2022 Financial Results Call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to Brian Prenoveau, IR. Thank you. You may begin.

問候。歡迎參加 SurgePays, Inc. 2022 年第一季財務業績電話會議。 （操作員說明）請注意，本次會議正在錄製中。我現在將會議交給IR Brian Prenoveau。謝謝。你可以開始了。

Thank you, operator, and good morning, everyone. Welcome to the SurgePays First Quarter 2022 Earnings Webcast and Conference Call. Today's date is May 16, 2022, and on the call today from SurgePays are Brian Cox, President and Chief Executive Officer; and Tony Evers, Chief Financial Officer.

謝謝接線員，大家早安。歡迎參加 SurgePays 2022 年第一季財報網路廣播和電話會議。今天的日期是 2022 年 5 月 16 日，SurgePays 總裁兼執行長 Brian Cox 今天接聽了電話；和財務長托尼·埃弗斯。

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.

在我們開始之前，我想提醒大家，本次電話會議可能包含根據1995 年《私人證券訴訟改革法案》定義的前瞻性陳述。這些陳述受到某些風險和不確定性的影響，可能導致實際結果與實際結果有所不同。實質上來自於前瞻性陳述中所表達的內容。有關此類風險和不確定性的討論，請參閱 SurgePays 最近向 SEC 提交的文件。今天發表的所有前瞻性聲明僅反映我們目前的預期，我們沒有義務更新任何聲明以反映本次電話會議後發生的事件。

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 morning. Copies of today's press release are accessible on SurgePays' Investor Relations website, ir.surgepays.com. In addition, SurgePays' Form 10-Q for the quarter ended March 31, 2022, will also be available on the SurgePays Investor Relations website.

此外，在今天的電話會議期間，該公司還將討論一項或多項非公認會計準則財務指標。我們今天早上發布的新聞稿中包含了這些非公認會計原則財務指標與最直接可比較的公認會計原則指標的調節表。今天新聞稿的副本可在 SurgePays 的投資者關係網站 ir.surgepays.com 上取得。此外，SurgePays 截至 2022 年 3 月 31 日的季度的 10-Q 表格也將在 SurgePays 投資者關係網站上提供。

And now I'd like to turn the call over to President and Chief Executive Officer, Brian Cox.

現在我想將電話轉給總裁兼執行長布萊恩考克斯。

Thanks, Brian, and good morning and thanks to everyone who is joining our call today.

謝謝布萊恩，早安，感謝今天加入我們電話會議的所有人。

We're really excited to be able to demonstrate the success of the mobile broadband subscriber business with the financial results that are more fully reflecting the trajectory of the company. Revenue growth accelerated in a meaningful way in the first quarter of this year. As expected, net loss and EBITDA [lost nodes] considerably in the quarter when compared to the first quarter of last year.

我們非常高興能夠透過更全面反映公司發展軌蹟的財務業績來展示行動寬頻用戶業務的成功。今年第一季營收成長顯著加速。正如預期的那樣，與去年第一季相比，本季的淨虧損和 EBITDA [損失節點]大幅增加。

The Affordable Connectivity Program, or ACP, which started off as the temporary emergency broadband benefit program, is now a permanent part of the government budget. Just last week, as many of you noticed, the White House made formal public remarks about this program for the first time. I was excited to see this underserved market that I've worked in for almost 20 years being brought into the mainstream.

平價連接計劃（ACP）最初是臨時緊急寬頻福利計劃，現在已成為政府預算的永久組成部分。就在上週，正如你們許多人注意到的那樣，白宮首次就該計劃發表了正式的公開評論。我很高興看到這個我工作了近 20 年的服務不足的市場被納入主流。

For SurgePays to ultimately achieve favor in the stock market, I believe we must be considered a relevant provider of important products to a large group of people who not only want our products, but need and depend on them. I've been asked several questions over the last week regarding the mention of large companies in the White House speech. I think it's important to note that these companies have always had the ability to provide subsidized telecom services to the underbanked going back to 1985. The fact is it's not economically enticing for these companies to provide services to this market or the literal definition of our market would not be called the underserved.

為了讓 SurgePays 最終在股票市場上獲得青睞，我相信我們必須被視為重要產品的相關提供者，為一大群人提供重要產品，這些人不僅想要我們的產品，而且需要並依賴我們的產品。上週有人問我幾個關於白宮演講中提到大公司的問題。我認為值得注意的是，自1985 年以來，這些公司一直有能力向銀行服務不足的人群提供補貼電信服務。事實上，這些公司向這個市場或我們市場的字面定義提供服務在經濟上並不具有吸引力。不會被稱為服務不足的人。

The ACP program is intended to bridge the digital divide for low-income households who previously did not have reasonable or affordable access to high-speed mobile broadband or Internet. While most of us on this call probably take quality Internet service for granted, lower-income households do not. In the age of COVID with closed schools or limited access to health care professionals, those without reliable broadband access were at a disadvantage. It was harder for school-age children to attend Zoom or online classes. It was harder for sick people to get access to telemedicine.

ACP 計劃旨在彌合以前無法合理或負擔得起高速行動寬頻或網路存取的低收入家庭的數位落差。雖然參加這次電話會議的大多數人可能認為優質的網路服務是理所當然的，但低收入家庭卻不這麼認為。在新冠疫情時代，學校關閉或接觸醫療保健專業人員的機會有限，那些沒有可靠寬頻存取的人處於不利地位。對於學齡兒童來說，參加 Zoom 或線上課程更加困難。病人更難獲得遠距醫療。

With inflation as high as it's been in nearly 40 years, paychecks often can't cover the rising cost of housing, food, utilities, including Internet or phone service. The ACP is set up to help millions of households across the country and allow them to stay connected and maintain online access to have access to education, employment and health care. In addition to the fund, to reach these individuals and families, it was reported that the FCC is prepared to spend $100 million on ACP outreach programs over the next 5 years. We're excited that the market of the underbanked and underserved are no longer in the shadows.

由於通貨膨脹達到近 40 年來的最高水平，工資往往無法支付不斷上漲的住房、食品、公用事業（包括網路或電話服務）成本。 ACP 的成立是為了幫助全國數百萬家庭，讓他們保持聯繫並保持在線訪問，以獲得教育、就業和醫療保健。據報道，除了該基金外，為了接觸這些個人和家庭，FCC 還準備在未來 5 年內斥資 1 億美元用於 ACP 外展計劃。我們很高興看到銀行服務不足和服務不足的市場不再處於陰影之中。

Initially, SurgePhone Wireless was licensed to offer this program in 14 states. As we grew our enrollment from 0 customers in August of last year to over 100,000 in those 14 states, each subscriber provides $30 of monthly reoccurring revenue. This includes the cost of equipment and commissions paid to sales. Our gross margin is approximately 40% per subscriber.

最初，SurgePhone Wireless 獲得在 14 個州提供該計劃的許可。隨著我們在這 14 個州的註冊人數從去年 8 月的 0 名客戶增加到超過 100,000 名，每個訂閱者每月可提供 30 美元的經常性收入。這包括設備成本和銷售佣金。我們的每位訂戶毛利率約為 40%。

Last month, with our announcement of the acquisition of Torch Wireless, we are now licensed to offer this program in all 50 states. We were especially excited that we're able to complete this acquisition without diluting shareholders. I believe this acquisition will also provide us the ability to initiate our online enrollment effort nationwide using a broad scope, which should drive subscriber acquisition costs lower and increase subscribers per day.

上個月，隨著我們宣布收購 Torch Wireless，我們現在獲得了在所有 50 個州提供該計劃的許可。我們特別興奮的是，我們能夠在不稀釋股東權益的情況下完成這項收購。我相信，此次收購還將使我們能夠在全國範圍內廣泛開展線上註冊工作，這將降低訂閱者獲取成本並增加每日訂閱者數量。

We've developed a bot that communicates with people through Facebook and Instagram Messenger. After someone clicks on one of our ads, the bot communicates with them through Messenger and asks some questions while their answers are securely used to populate an ACP application. This happens automatically. We've achieved over 1,000 successful compliant enrollments online during our testing and expect to ramp this up immediately.

我們開發了一款透過 Facebook 和 Instagram Messenger 與人們交流的機器人。當有人點擊我們的廣告之一後，機器人會透過 Messenger 與他們進行通信並提出一些問題，而他們的答案將被安全地用於填充 ACP 應用程式。這是自動發生的。在測試期間，我們已經實現了 1,000 多個成功的線上合規註冊，並預計會立即增加這一數量。

Today, our biggest challenge is managing cash flow and growth. We are expanding our sales force into these new markets while the sales teams that started with us last year are growing just as quickly. We have ramped up the ordering of phones and tablets.

今天，我們最大的挑戰是管理現金流和成長。我們正在將我們的銷售團隊擴展到這些新市場，而去年與我們一起組建的銷售團隊也在快速成長。我們增加了手機和平板電腦的訂單。

The hyper growth that we're going through has 2 primary challenges that I want to quickly discuss. One, a new subscriber is cash flow-negative for the first 2 months after signing up. We need to purchase the tablet and pay a sales commission, all before we begin receiving the subsidy payment from the government. So we are actively managing the cash flow from the business and reinvesting in order to buy new tablets and phones while getting those in the hands of our sales team to sign up customers and subscribers. As an example, we have 35,000 tablets currently in the hands of our sales teams nationwide.

我們正在經歷的高速成長有兩個主要挑戰，我想快速討論一下。第一，新訂戶在註冊後的前兩個月內現金流為負值。在我們開始收到政府的補貼之前，我們需要購買平板電腦並支付銷售佣金。因此，我們正在積極管理業務現金流並進行再投資，以便購買新的平板電腦和手機，同時將這些產品交到我們的銷售團隊手中以吸引客戶和訂戶。例如，我們全國銷售團隊目前擁有 35,000 台平板電腦。

Challenge number two is managing and predicting EBITDA. Faster growth today means lower EBITDA today but higher EBITDA later, along with higher long-term shareholder value. The upfront costs depress EBITDA in the near term because of the 2-month negative carry, but will level out and accelerate positive as the subscriber base continues to increase and reoccurring revenue stair steps monthly.

第二個挑戰是管理和預測 EBITDA。今天更快的成長意味著今天的 EBITDA 較低，但隨後的 EBITDA 會更高，同時長期股東價值也會更高。由於兩個月的負利差，前期成本在短期內會壓低 EBITDA，但隨著用戶群的持續增加以及每月重複收入的階梯式增長，前期成本將趨於平穩並加速正向增長。

Our philosophy is to maximize the growth opportunity while we have it. I'm not going to shortchange the sales team's potential by limiting their ability to sign up new subscribers simply to show better EBITDA in the short term. We do believe that given our higher subscriber base reoccurring revenue and growth rates, we should show positive EBITDA in the second quarter.

我們的理念是在擁有成長機會的同時最大限度地利用它。我不會僅僅為了在短期內展示更好的 EBITDA，而限制銷售團隊註冊新訂戶的能力，從而損害銷售團隊的潛力。我們確實相信，鑑於我們較高的用戶基礎、經常性收入和成長率，我們應該在第二季顯示出正的 EBITDA。

We believe we are uniquely positioned to take advantage of this once-in-a-lifetime opportunity. Our company was uniquely poised to best serve this market through the grassroots approach I've utilized for over 20 years. To be successful in reaching this customer group, you must have boots on the ground in the neighborhoods and communities, and this is done by having relationships with local store owners.

我們相信，我們處於獨特的地位，可以利用這個千載難逢的機會。我們公司擁有獨特的優勢，能夠透過我使用了 20 多年的草根方法來最好地服務這個市場。為了成功地接觸到這個客戶群，您必須深入鄰里和社區，而這是透過與當地商店老闆建立關係來實現的。

The true influencers for this underserved market don't originate from Silicon Valley. However, they're the people standing behind the counter at the corner store, which is normally visited 5 to 7 times a week by lower-income consumers.

這個服務不足的市場的真正影響者並非來自矽谷。然而，他們是站在街角商店櫃檯後面的人，低收入消費者通常每週會光臨 5 到 7 次。

Being a licensed provider of mobile broadband is a perfect complement to our existing business of providing financial services to the underbanked and underserved communities. Our suite of financial and prepaid products essentially converts corner stores and bodegas into tech-hubs for the underbanked neighborhoods. These corner stores, bodegas and local convenience stores are profit partners that provide prepaid debit card, wireless minutes top-ups and cash-to-digital currency conversions as well as capture data and build a loyal customer base.

成為獲得許可的行動寬頻提供者是對我們向銀行服務不足和服務不足的社區提供金融服務的現有業務的完美補充。我們的金融和預付費產品套件基本上將街角商店和雜貨店轉變為銀行服務不足的社區的技術中心。這些街角商店、雜貨店和當地便利商店是利潤合作夥伴，提供預付借記卡、無線分鐘充值和現金到數位貨幣的兌換，以及捕獲數據和建立忠實的客戶群。

You might think that the variety of these store interactions wouldn't happen at the corner store, but they do. Corner stores, convenience stores, bodegas, whatever name that you -- or they go by are all integral parts of this community. They provide necessary goods to the community. They're sometimes the only option for fresh food, and as we discussed, provide financial services that people often can't access either because they don't have a checking or savings account or bank branches aren't located in their neighborhoods.

您可能認為這些商店互動的多樣性不會發生在街角商店，但事實確實如此。街角商店、便利商店、雜貨店，無論您或他們使用的名稱是什麼，都是這個社區不可或缺的一部分。他們為社區提供必要的物品。有時，它們是新鮮食品的唯一選擇，正如我們所討論的，它們提供人們通常無法獲得的金融服務，因為他們沒有支票或儲蓄帳戶，或者銀行分行不在他們的社區。

Even the CDC has published research about the importance of bodegas to local communities. To quote from a recent CDC research report published a few years ago and I quote, "Owners agree the role of the corner store was to provide for the local community. Most store owners explained their main priority was to provide whatever goods their surrounding community needed and wanted. As one owner stated, well, it's a convenience store. It's a convenience for the neighborhood that they have everything close and accessible. They emphasize the importance of variety and of providing goods that would otherwise be difficult for this community to find."

甚至疾病預防控制中心也發表了關於酒窖對當地社區重要性的研究。引用幾年前發布的 CDC 研究報告，「業主們一致認為街角商店的作用是為當地社區提供服務。大多數商店業主解釋說，他們的首要任務是提供週邊社區所需的任何商品和想要的。正如一位業主所說，嗯，這是一家便利商店。這為社區提供了便利，因為他們擁有一切近在咫尺且觸手可及的東西。他們強調多樣性的重要性以及提供該社區難以找到的商品的重要性。 ”

We feel this fits our model perfectly. As I've said earlier, we believe we are uniquely positioned to best offer these products and services to the underbanked and underserved because, for so long, these communities have been overlooked by larger corporations. We still have a goal to reach $1 billion in annual sales with profitable growth and in communities that haven't been adequately addressed. We are now operating a business that has the ability to grow organically and through accretive acquisitions while simultaneously making money across our core revenue channels.

我們覺得這非常適合我們的模型。正如我之前所說，我們相信我們處於獨特的地位，可以最好地為銀行服務不足和服務不足的人群提供這些產品和服務，因為長期以來，這些社區一直被大公司忽視。我們的目標仍然是年銷售額達到 10 億美元，並實現獲利成長，並在尚未充分解決的社區中實現這一目標。我們現在經營的業務有能力透過增值收購實現有機成長，同時透過我們的核心收入管道賺錢。

I'll turn the call over to Tony to provide a brief review of our financial results before summarizing today's call. Tony?

在總結今天的電話會議之前，我會將電話轉給托尼，簡要回顧我們的財務表現。托尼？

Thank you, Brian, and good morning, everyone. I will begin my overview of the first quarter's financial results. For the quarter, we reported revenues of $21.1 million compared to $9.9 million in the first quarter of 2021, representing an increase of 92%. This was primarily attributable to subscriber growth and our mobile broadband business.

謝謝你，布萊恩，大家早安。我將開始概述第一季的財務表現。我們報告的本季營收為 2,110 萬美元，與 2021 年第一季的 990 萬美元相比，成長了 92%。這主要歸功於用戶成長和我們的行動寬頻業務。

Gross profit increased 133% in the first quarter to $2.6 million compared to $1.1 million in the year ago period. SG&A expenses increased 14% in the first quarter compared to the first quarter of last year. The increase in the quarter was primarily driven by higher compensation paid to management in the first quarter, along with the higher call center costs related to the subscribers in the ACP program.

第一季毛利成長 133%，達到 260 萬美元，去年同期為 110 萬美元。與去年第一季相比，第一季的 SG&A 費用增加了 14%。本季成長的主要原因是第一季支付給管理階層的薪資增加，以及與 ACP 計畫中的用戶相關的呼叫中心成本增加。

Loss from operations narrowed considerably to a loss of $1.1 million from $2.1 million in last year's first quarter. Net loss for the first quarter was $1.2 million or a loss of $0.10 per share compared to a net loss of $4.8 million or a loss of $1.85 per share first quarter of 2022 (sic) [2021].

營運虧損從去年第一季的 210 萬美元大幅收窄至 110 萬美元。第一季淨虧損為 120 萬美元，即每股虧損 0.10 美元，而 2022 年第一季淨虧損為 480 萬美元，即每股虧損 1.85 美元（原文如此）[2021]。

As we discussed on our year-end call in March, we believe EBITDA is a useful measure of the performance of the ongoing business that excludes many nonrecurring items. EBITDA improved to a loss of $873,000 in Q1 '22 compared to an EBITDA loss of $4 million in Q1 '21.

正如我們在 3 月的年終電話會議上討論的那樣，我們認為 EBITDA 是衡量持續業務績效的有用指標，其中不包括許多非經常性項目。 22 年第一季的 EBITDA 虧損為 873,000 美元，而 21 年第一季的 EBITDA 虧損為 400 萬美元。

As Brian mentioned earlier, while the growth in revenue and profitability from higher-margin customers and products, we would anticipate becoming EBITDA-positive by the second quarter of this year and generate at least $15 million in 2022 for the year.

正如布萊恩之前提到的，雖然收入和盈利能力的增長來自於利潤率較高的客戶和產品，但我們預計到今年第二季將實現EBITDA 為正值，並在2022 年創造至少1500 萬美元的收入。

Turning to the balance sheet, liquidity and cash flow. Our cash balance as of March 31 was $3.4 million compared to $6.3 million at the end of 2021. Accounts receivable has increased almost 74% as wireless subscriber growth increases. The 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.

轉向資產負債表、流動性和現金流。截至 3 月 31 日，我們的現金餘額為 340 萬美元，而 2021 年底為 630 萬美元。隨著無線用戶的成長，應收帳款增加了近 74%。應收帳款來自美國政府的行動寬頻補貼。付款通常在新客戶經過驗證並註冊後約 30 至 60 天發生。

Inventory continues to be an area of investment as we push the hyper growth of our mobile broadband business. We have minimal debt to unrelated parties of just over $1 million as we spent much of 2021 cleaning up the balance sheet to position us for growth and improved performance. Given our strengthened financial position and capital structure, our cash allocation priorities now focus on investing in the business and maintaining ample liquidity for future growth.

隨著我們推動行動寬頻業務的高速成長，庫存仍然是一個投資領域。我們對無關方的債務最低，略高於 100 萬美元，因為我們在 2021 年的大部分時間裡都在清理資產負債表，以便為成長和改善績效做好準備。鑑於我們的財務狀況和資本結構得到加強，我們的現金分配重點現在集中在業務投資和為未來成長保持充足的流動性。

I will now pass the call back to Brian for some closing remarks. Brian?

現在我將把電話轉給布萊恩，讓他做一些結束語。布萊恩？

Thanks, Tony. I spent a lot of time over the past 6 to 8 months talking with investors, analysts and various stakeholders about the opportunity in the mobile broadband business and how the Affordable Connectivity Program works and provides SurgePays with a substantial growth avenue.

謝謝，托尼。在過去的 6 到 8 個月裡，我花了很多時間與投資者、分析師和各種利益相關者討論行動寬頻業務的機會，以及平價連接計劃如何運作並為 SurgePays 提供實質成長途徑。

As we've completed the first quarter, we started to see those results reflected in the financial statements. Whereas before, we were talking mostly about cleaning up the balance sheet and what would happen in the future, we're now able to demonstrate the progress, and it shows in the financial statements. I believe everyone and every company has a plan or a goal, but I'm excited to show how our team differentiates itself by being a real company built by folks who execute daily and understand how to scale a company.

當我們完成第一季時，我們開始看到這些結果反映在財務報表中。以前，我們主要討論的是清理資產負債表以及未來會發生什麼，現在我們能夠展示進展情況，並在財務報表中顯示出來。我相信每個人、每家公司都有一個計劃或目標，但我很高興向大家展示我們的團隊如何透過成為一家真正的公司而脫穎而出，這些公司是由每天執行並了解如何擴展公司規模的人們建立的。

I expect this double-digit growth to continue with accelerated progress and improvements in our financial statements. I want to stress again: I will not throttle our big picture growth plans for a short-term financial report. We are laser-focused on this underbanked land rush. Our team has worked tirelessly building a foundation for this type of growth, and it's starting to bear fruit.

我預計隨著我們財務報表的加速進步和改善，這種兩位數的成長將持續下去。我想再次強調：我不會因為短期財務報告而扼殺我們的大局成長計畫。我們高度關注這資金不足的土地熱潮。我們的團隊不懈地努力為這種成長奠定了基礎，並且已經開始結出果實。

The underbanked and the underserved have been overlooked for far too long. Our goal is to provide access to mobile broadband and essential financial services to these households and communities. We believe we are cornering the underbanked market, both at home and where these consumers shop. And we will continue to make moves to add to our ability to scale and increase our competitive advantages. We couldn't be more excited about the opportunities ahead, and we look forward to sharing our progress with our shareholders, employees and partners.

銀行服務不足和服務不足的人群長期以來一直被忽視。我們的目標是為這些家庭和社區提供行動寬頻和基本金融服務。我們相信，我們正在壟斷銀行服務不足的市場，無論是在國內還是在這些消費者購物的地方。我們將繼續採取行動，增強我們的規模化能力並增強我們的競爭優勢。我們對未來的機會感到非常興奮，我們期待與股東、員工和合作夥伴分享我們的進步。

I would like to thank all the employees on the SurgePays team. Lastly, I greatly appreciate the support and interest of our shareholders as we continue this journey of growth.

我要感謝 SurgePays 團隊的所有員工。最後，我非常感謝股東在我們繼續這趟成長之旅時的支持和興趣。

We will now open up the call to questions. Operator?

我們現在開始接受提問。操作員？

(Operator Instructions) Our first question is from Michael Diana with Maxim Group.

（操作員說明）我們的第一個問題來自 Maxim Group 的 Michael Diana。

So based on what you said about your -- the larger companies, I take it that you don't really regard them as competition for what you're doing, that they just aren't as focused. Is that correct?

因此，根據你對大公司的看法，我認為你並沒有真正將它們視為你正在做的事情的競爭對手，他們只是不那麼專注。那是對的嗎？

Yes, Michael, that's a good question. I think over the years, I've seen and actually discussed with representative of these companies. The challenge, it's really twofold. On one hand, if you consider that this is 1/3 of the market out there, this lower income, then you've got to assume that this market is living in lower-income housing, which is usually going to be older and have, in many cases, requirements for wiring updates.

是的，邁克爾，這是個好問題。我想多年來，我見過這些公司的代表並與他們進行了實際討論。挑戰確實是雙重的。一方面，如果你認為這是市場的 1/3，收入較低，那麼你就必須假設這個市場居住在低收入住房中，這些住房通常會比較舊並且有在許多情況下，需要進行佈線更新。

And the big companies would have to roll a truck out. They've got to update the wiring to the network interface device outside the residents. The consumer is responsible for the wiring into their residents to a jack to be able to now put a modem in. And the question is who's going to now pay for the modem and the other components that would be associated with the IT customer support for providing WiFi inside the customer's house in a fix to our situation. That's one of the economical challenges for a larger company.

大公司將不得不推出一輛卡車。他們必須更新居民外部網路介面設備的接線。消費者負責將其住戶連接到插孔，以便現在能夠插入調製解調器。問題是現在誰將支付調製解調器以及與 IT 客戶支援相關的其他組件的費用，以提供客戶家中的 WiFi 解決了我們的情況。這是大公司面臨的經濟挑戰之一。

The second is that most of these companies, as they've told us, are not geared for the prepaid upsell. And what I mean is they're geared for the combination -- combo products that would be set up on autopay for consumers like us on this call and where there's always an upsell potential of other products add-ons. And it's all based on just simply adding things to your credit card. They're not positioned for a prepaid transaction, which, again, would need to be paid in cash at a local corner store or some place of convenience to this consumer group.

第二個是，正如他們告訴我們的那樣，大多數這些公司並不適合預付追加銷售。我的意思是，它們是為組合而設計的——組合產品將在這次電話會議上為像我們這樣的消費者設置自動付款，並且其他產品附加組件總是有追加銷售的潛力。這一切都只是簡單地將一些東西添加到您的信用卡上。他們不適合預付費交易，同樣，預付費交易需要在當地的街角商店或該消費者群體方便的地方以現金支付。

So again, the mere definition of underserved does qualify in this situation. And one of the reasons why the government has always put on, let's call it, awareness programs and incentivize these larger companies to hold -- to create that awareness amongst people who are without access to telecommunications is simply because these companies don't push it. They don't create awareness because it's not an economically sound product for them.

再次強調，服務不足的定義確實符合這種情況。政府總是推出意識計劃並激勵這些大公司在無法使用電信的人們中建立這種意識的原因之一就是因為這些公司不推動它。他們不會提高意識，因為這對他們來說不是一個經濟上合理的產品。

Okay. Great. Let me ask you about one other thing. As you mentioned, you have a cash flow negative situation for 2 months. So that raises the possibility that maybe borrowing for short term to cover this cash flow negativity makes sense. Is that something you're considering?

好的。偉大的。讓我問你另一件事。正如您所提到的，您的現金流量為負值已有兩個月。因此，這就提出了一種可能性，即透過短期借款來彌補現金流量的負面影響也許是有意義的。這是你正在考慮的事情嗎？

Yes, it is. And what's really interesting is once the receivable from the FCC or USAC, which is the division of the FCC who actually funds this program, once that receivable achieved -- or eclipsed, better said, $5 million a month, it's like night and day. It became now we have a $5 million receivable ongoing from the government.

是的。真正有趣的是，一旦從FCC 或USAC（實際上為該計劃提供資金的FCC 部門）收到應收帳款，一旦該應收帳款實現——或者說超過，更好地說，每月500萬美元，那就就像白天和黑夜一樣。現在我們有 500 萬美元來自政府的應收帳款。

So that asset is what we're going to leverage, and what we're in the process of leveraging to get lines of credit to where we can continue to kind of bust through that ceiling of -- there's the rule of numbers. You buy the tablet, pay the commission, receive the compensation 45 days later. We want to be able to accelerate that and kind of pop up a couple of levels by gaining access to capital through those lines of credit.

因此，該資產就是我們將要利用的資產，也是我們正在利用的資產，以獲得信貸額度，使我們能夠繼續突破這一上限——這是數字規則。您購買平板電腦，支付佣金，45 天後收到補償。我們希望能夠加速這一進程，並透過這些信貸額度獲得資本，從而提升幾個等級。

So that is something we're going to do to take advantage of now being able to deploy people nationwide, but also -- and maybe to use your question to expound on what I mean by lowering our cost of acquisition. The numbers that were coming in, that we're seeing online is a cost of about $20 to $25 compared to a $45 commission in the field. So we're hoping that continues and we're able to look at more of a blended cost per acquisition somewhere in the $30 to $35 range, which, as you know, would significantly enhance almost a 25% drop in our cost per acquisition by being able to go direct online.

因此，這就是我們要做的事情，以利用現在能夠在全國範圍內部署人員的優勢，也許可以利用您的問題來闡述我所說的降低我們的採購成本的意思。我們在網路上看到的數位成本約為 20 至 25 美元，而現場佣金為 45 美元。因此，我們希望這種情況能夠持續下去，我們能夠將每次收購的混合成本控制在30 至35 美元之間，如您所知，這將顯著提高我們的每次收購成本下降近25% 的水平。能夠直接上網。

Our next question is from Ed Woo with Ascendiant Capital.

我們的下一個問題來自 Ascendiant Capital 的 Ed Woo。

Yes. I was wondering, has there been any issues with churn, with customers leaving this program after they sign up with you?

是的。我想知道，客戶在與您註冊後離開該計劃時是否有客戶流失的問題？

I'm not going to say there's an issue. There's always a component of churn or attrition when factoring -- when you're building your pro forma or your business model. And this goes all the way back to, I mean, long-distance dial tone, the early days of wireless all the way till now. I mean that's a component of the business.

我不會說有問題。當您建立準備考試或商業模式時，保理過程中總是會存在流失或流失的因素。我的意思是，這可以追溯到長途撥號音、無線技術的早期直到現在。我的意思是這是業務的一個組成部分。

One of the unique things that I like about this specific program, the ACP, is that customers are limited to one tablet per year reimbursement. So that means that if you enroll for Torch Wireless today, you can't just go enroll with another company and get another tablet in 4 months. So you are with us. So that's why when people hear me say land rush, you do want to get to that consumer first. It is very important at that grassroots level to be that place where you secure that community.

我喜歡這個特定計劃（ACP）的獨特之處之一是，客戶每年只能報銷一台平板電腦。因此，這意味著如果您今天註冊 Torch Wireless，您就不能再註冊另一家公司並在 4 個月內購買另一台平板電腦。所以你和我們在一起。這就是為什麼當人們聽到我說「土地搶購」時，你確實想先接觸到那個消費者。在基層，成為保護社區安全的地方非常重要。

The second part of that is your ability to provide service in rural areas will decrease attrition, which is why we're really excited that we've now gotten fully integrated with the AT&T network because there's not a lot of competition out there on the AT&T network. Most of the competition is in the urban areas and it runs over the T-Mobile network.

第二部分是您在農村地區提供服務的能力將減少人員流失，這就是為什麼我們非常高興我們現在已經與 AT&T 網路完全集成，因為 AT&T 上沒有太多競爭網路。大部分比賽都在城市地區進行，並透過 T-Mobile 網路進行。

I expect attrition to be ballpark 8% to 10% ongoing, which is also why once you start hitting that rule of large numbers, once you have a large subscriber base, you have to continue to grow higher numbers per month to see your overall customer base continue to increase, which is why the access to capital using a line of credit based on our receivables is very important.

我預計持續流失率約為 8% 到 10%，這也是為什麼一旦你開始達到大數量規則，一旦你擁有龐大的訂戶群，你就必須繼續每月增加更高的數量才能看到你的整體客戶基數繼續增加，這就是為什麼使用基於我們的應收帳款的信用額度來獲得資本非常重要。

Great. And then my next question is, have you had any issues with supply chain either to get these tablets? Or have you had any impact from inflation on rising costs or labor shortages to get salespeople?

偉大的。我的下一個問題是，您在獲取這些平板電腦時是否遇到過供應鏈問題？還是您受到通貨膨脹對成本上升或招募銷售人員的勞動力短缺的影響？

Ed, that's a really good question and I get that often. And I don't have a magic -- I don't have the crystal ball to know why it has not, but it really hasn't. I've got -- or I should say we've got great relationships with folks that bring these devices into the country. And as it sits right now, we're one of the "first come, first served" folks to get called.

艾德，這是一個非常好的問題，我常常收到這樣的問題。我沒有魔法——我沒有水晶球來知道為什麼它沒有，但它確實沒有。我已經——或者我應該說我們與將這些設備引入該國的人們建立了良好的關係。就目前情況而言，我們是「先到先得」的人之一。

And we're also looking at manufacturing our own so that, like I said -- stated earlier, we've got 35,000 devices already out in the field right now that will be activated we expect in the next couple of weeks. Well, maintaining that supply is very important because the salesperson cannot run out of tablets or they will bounce to another competitor.

我們也在考慮製造我們自己的設備，所以，就像我之前所說的那樣，我們現在已經有 35,000 台設備投入使用，預計將在未來幾週內啟動。嗯，維持供應非常重要，因為銷售人員不能用完平板電腦，否則他們會跳到另一個競爭對手那裡。

So to be able to do that 30,000, 40,000, 50,000 a month, you really need an excess of 20,000 tablets. So one of the things that Tony and our sales directors are doing is actively every week modeling this out and making sure that we have plenty of devices out there and we never get throttled.

因此，為了每月能夠做到 30,000、40,000、50,000 片，您確實需要超過 20,000 片。因此，托尼和我們的銷售總監正在做的事情之一就是每週積極地對此進行建模，並確保我們有足夠的設備並且永遠不會受到限制。

So if we see something coming down the pipe in 30 days, maybe a little bit, hey, these guys are only going to be able to supply us with X tablets, then we've got somebody that we can call and get back up and make sure we'll fulfill that number and we'll be fine.

因此，如果我們看到 30 天內有東西出現，也許是一點點，嘿，這些人只能向我們提供 X 片劑，那麼我們就可以打電話給某人，然後回來，然後確保我們能夠完成這個數字，我們就會沒事的。

But no, we have not seen the price increase substantially. It's like a fish market, prices go up and down a couple of bucks but nothing more than a couple of dollars. We're still looking in that $83 range per device. We don't -- and we really haven't been throttled. The only time that we've had to throttle is when we've had a huge sales burst.

但沒有，我們沒有看到價格大幅上漲。就像魚市一樣，價格漲跌幾塊錢，但最多就幾塊錢。我們仍在考慮每台設備 83 美元的價格範圍。我們沒有——而且我們確實沒有受到限制。唯一一次我們不得不節流的時候是當我們的銷售量大幅增加的時候。

And I'll give you an example. Let's say that there's great weather coast to coast and sales just explode. For example, last week, we had a day where we did over 2,000 enrollments in 1 day. If you have a couple of those days in a row, then it's more the cash flow challenge to get those devices than it is supply chain or inflation.

我給你舉個例子。假設全國各地氣候宜人，銷售量激增。例如，上週，我們有一天在 1 天內完成了 2,000 多個註冊。如果你連續幾天都遇到這樣的情況，那麼獲得這些設備的現金流挑戰就更大了，而不是供應鏈或通貨膨脹。

(Operator Instructions) Our next question is from Adam Waldo with Lismore Partners.

（操作員說明）我們的下一個問題來自 Lismore Partners 的 Adam Waldo。

I hope you can hear me okay.

我希望你能聽到我的聲音。

Yes.

是的。

Before my 3 topics, I just quickly want to clarify something you said, Brian, in response to the prior questioner. You talked about 8% to 10% attrition, so 90% to 92% retention. And that's an annual rate, right? You'd expect 8% to 10% annual subscriber attrition in the ACP business. So 90% to 92% annual retention. Is that correct?

在我的 3 個主題之前，我想快速澄清一下你在回答前一個提問者時所說的話。您談到了 8% 到 10% 的流失率，因此保留率為 90% 到 92%。這是年利率，對嗎？您預計 ACP 業務的年訂閱用戶流失率為 8% 到 10%。因此年保留率為 90% 到 92%。那是對的嗎？

That's based off traditional -- I shouldn't say traditional, but historical in this market. It's usually what we've seen is 8% to 10%. With us only having to wait 6, 7 months under our belt, it's ballpark probably what it's going to be. I normally like to have a year, a full year under our belt to see because there's also -- again, there's a couple of different factors that you've got to incorporate.

這是基於傳統——我不應該說傳統，而是這個市場的歷史。通常我們看到的是8%到10%。我們只需要等待 6、7 個月，大概就會發生這樣的事情。我通常喜歡花一年、一整年的時間來觀察，因為還有──再說一次，你必須考慮一些不同的因素。

Again, in rural, you see less churn. Online -- and this is opposite from what most people think. An online customer normally lasts about 1.5x longer than a customer who went to a physical location and enrolled. It's a little backwards than what you think. And you also have an increased engagement because if you signed up online, for example, using our bot, we know your Facebook profile. So we have the ability to communicate directly with you through Messenger, which as we're finding out is a lot more effective than e-mail for this market base.

同樣，在鄉村，客戶流失較少。在線——這與大多數人的想法相反。線上客戶的持續時間通常比前往實體店註冊的客戶長約 1.5 倍。這比你想像的有點落後。而且您的參與度也有所提高，因為如果您在線上註冊（例如使用我們的機器人），我們就會知道您的 Facebook 個人資料。因此，我們能夠透過 Messenger 直接與您溝通，我們發現對於這個市場基礎來說，這比電子郵件更有效。

So with us just launching online and just rolling out in the more rural areas, I really need at least another 90 or 120 days to give you a more accurate -- in my opinion, a more accurate, long-term attrition rate.

因此，隨著我們剛剛在網上推出並在更多的農村地區推出，我真的至少還需要 90 或 120 天才能為您提供更準確的——在我看來，更準確的長期流失率。

No. That's fair. So we'll check back on the second quarter call in August.

不，那是公平的。因此，我們將在八月回顧第二季的電話會議。

In terms of 3 topics I'd want to cover, first is sort of financing of the negative float, right, in working capital from the tablets, which you touched on in your prepared remarks and prior question. But I want to take that conversation in a slightly different way. And the second is to get an update on the LogicsIQ pending tax-free dividend spin-off to existing shareholders.

就我想討論的三個主題而言，第一個是負流通量的融資，對吧，平板電腦的營運資金，您在準備好的評論和之前的問題中談到了這一點。但我想以稍微不同的方式進行這場對話。第二個是取得 LogicsIQ 即將向現有股東分拆免稅股利的最新資訊。

So on the working capital side, Brian, in a couple of conferences you've hinted at looking at vendor financing as one option. They're obviously on the call today. Tony and you talked about looking at, I presume, some sort of either AR securitization or factoring facility, right, as another way to address the issue.

因此，在營運資金方面，布萊恩，您在幾次會議上暗示將供應商融資視為一種選擇。他們今天顯然正在打電話。我認為托尼和你談到了考慮某種 AR 證券化或保理設施，對吧，作為解決問題的另一種方式。

So can you talk a little bit more specifically about whether we're talking about vendor financing, AR factoring or some combination of the 2 for financing that, call it, 45 days negative working capital flow?

那麼，您能否更具體地談談我們是在談論供應商融資、應收帳款保理還是兩者的某種組合進行融資，稱之為 45 天負營運資金流？

Sure. No, it's a good question. It's both. It's a combination. The vendors that we have are great folks. We have a personal relationship with them. We meet them in person, talk to them constantly. They're definitely profit partners who are incentivized for us to move devices especially in a crazy time right now. If we're calling, you pick up the phone because we're ordering by the tens of thousands. So that -- needless to say, that's a good relationship for us.

當然。不，這是一個好問題。兩者都是。這是一個組合。我們的供應商都是很棒的人。我們與他們有私人關係。我們親自見到他們，不斷地與他們交談。他們絕對是利潤合作夥伴，他們會激勵我們行動設備，尤其是在現在的瘋狂時期。如果我們打電話，你就拿起電話，因為我們的訂單有數以萬計。因此，不用說，這對我們來說是良好的關係。

The second part of your question, which is a combination, it's not so much a factoring approach. I've never been a huge fan of factoring just by way of the -- really the flow of the money in factoring. I like controlling our cash. I do not ever like -- let me rephrase it. I have never given up the reins to any of our cash ever.

你問題的第二部分是一個組合，與其說是一種因式分解方法。我從來都不是保理業務的忠實粉絲——實際上是保理業務中的資金流動。我喜歡控制我們的現金。我從來不喜歡──讓我重新表達。我從來沒有放棄過對我們任何現金的控制。

So I don't see me ever allowing us -- our money to go into someone else's lockbox and hope and pray they do the right thing and that money ends up in our account the next day. I'm just not a factoring guy. It is what it is. We are where we are.

所以我不認為我曾經允許我們——我們的錢進入別人的密碼箱，並希望並祈禱他們做正確的事情，而錢第二天就會進入我們的帳戶。我只是不是一個因式分解的人。就是這樣。我們就在我們所在的地方。

But using the receivable as an asset for more traditional bankability and also keeping in mind, too, this time last year I'm trying to -- we're trying to raise money on the OTC. We're completely upside down. We're burning capital. We were a different company.

但是，使用應收帳款作為更傳統的銀行可融資性的資產，同時也要記住，去年的這個時候我正在努力——我們正在嘗試在場外交易中籌集資金。我們完全顛倒了。我們正在燒錢。我們是一家不同的公司。

Now we can clearly show our cash flows, what we're doing, we've got this receivable, $5 million-plus, from the government. So we're far more bankable and -- which is one of the reasons why Tony has done a great job scouring different types of instruments, institutions and ways for us to gain access to capital to grow without diluting ourselves by having warrants and stock and coupons and other components like that of a normal public company access to capital. We're going traditional banking to really keep the same type.

現在我們可以清楚地展示我們的現金流，我們正在做什麼，我們從政府那裡得到了超過 500 萬美元的應收帳款。因此，我們的融資能力要強得多——這就是為什麼托尼在尋找不同類型的工具、機構和方式方面做得很好的原因之一，讓我們能夠獲得資本來實現增長，而不會因為擁有認股權證和股票而稀釋自己的實力。優惠券和其他組件類似於普通上市公司獲得資本的方式。我們將採用傳統銀行業務來真正保持同一類型。

Okay. That's really helpful. And clearly, obviously, with the trajectory of the business on the growth curve it's on and the AR being top quality from Uncle Sam, it sounds so accessing the bank market for financing receivables, so it looks very promising.

好的。這真的很有幫助。顯然，顯然，隨著業務的成長曲線上的軌跡以及山姆大叔的高品質 AR，聽起來很容易進入銀行市場進行應收帳款融資，因此看起來非常有前途。

And then finally, I guess, with respect to LogicsIQ. So on the first quarter conference call on March 24, you all confirmed publicly, I believe, for the first time that, that business has a run rate -- or an expected 2022 revenue in the low $20 millions with EBITDA margins in the mid- to high teens, so call it $3 million to $4 million annual EBITDA.

最後，我想，關於 LogicsIQ。因此，在3 月24 日的第一季電話會議上，我相信，你們都首次公開確認，該業務的運行率——或者說2022 年的預期收入將在2000 萬美元以下，而EBITDA 利潤率將在中期——對於十幾歲的青少年來說，我們稱之為 300 萬至 400 萬美元的年度 EBITDA。

Is that business still on track to deliver that performance? And then where do you feel you stand in terms of the time line previously communicated as a probable time line of being able to complete that dividend tax free spin-off to existing shareholders sometime during the second half of this year.

該業務是否仍有望實現此業績？然後，就先前傳達的可能的時間表（可能在今年下半年某個時間向現有股東完成股利免稅分拆的時間表）而言，您認為自己處於什麼位置。

Sure. No, I can elaborate on that. We do feel the -- let me back up. The Logics business cycle is a unique calendar cycle based off of the mass tort lawsuits and which suits are coming to fruition and the ramp-up and amp-up prior to that.

當然。不，我可以詳細說明這一點。我們確實感覺到了——讓我支持一下。 Logics 業務週期是一個獨特的日曆週期，基於大規模侵權訴訟以及即將取得成果的訴訟以及在此之前的加速和擴大。

We do see where there's quite a few big hits that are coming this summer. And by hits, I mean, very positive. Even since the posting of the quarter, last month was a phenomenal month for Logics.

我們確實看到今年夏天將會有許多大熱門。我的意思是，點擊量非常正面。即使自該季度發布以來，上個月對 Logics 來說也是非凡的一個月。

So one of the things that we're working on right now with the management team at Logics, which by the way we have reorganized, as we talked about on the last call. Anthony Nuzzo was the -- was running -- the CEO of Logics. And with his untimely passing, we've had to restructure some things, promote folks, reorganize the team.

因此，我們現在正在與 Logics 的管理團隊合作做一件事，順便說一句，正如我們在上次電話會議中談到的那樣，我們已經對其進行了重組。安東尼·努佐 (Anthony Nuzzo) 是 Logics 的執行長（當時正在競選）。隨著他的英年早逝，我們不得不重組一些事情，提拔員工，重組團隊。

Once that was accomplished, we do feel like the trajectory of the business will end up, by the end of the year, meeting the projections that we put in place. So we're pretty excited about that.

一旦完成，我們確實認為到今年年底，業務發展軌跡將最終達到我們所製定的預測。所以我們對此感到非常興奮。

We're working with the management team right now to also, how would I say this, not reduce the dependency on the ups and downs but create more consistent cash flow through ancillary products, through some of their software development products they're providing and then also not only depend on law firms for those signed retainer cases, which can be dependent on what big case is upcoming. For example, last year, Roundup was a huge case that really drove a tremendous amount of capital and revenue to the company. Being able to provide things on a more consistent level and achieve that cash flow breakeven. And then everything they do in the mass tort business would just be icing on the cake. Instead of, hey, we made some, we lost some, we made some, we lost some; hey, we made a lot; hey, we made less; hey, we made a lot. That up and down curve can happen above sea level.

我們現在正在與管理團隊合作，我怎麼說呢，不是減少對起伏的依賴，而是透過輔助產品、透過他們提供的一些軟體開發產品和那麼也不僅僅依賴律師事務所來處理那些簽署的保留案件，這可能取決於即將發生什麼大案件。例如，去年的農達（Roundup）就是一個巨大的案例，確實為公司帶來了大量的資金和收入。能夠以更一致的水平提供服務並實現現金流收支平衡。那麼他們在大規模侵權業務中所做的一切就只是錦上添花。而不是，嘿，我們做了一些，我們失去了一些，我們做了一些，我們失去了一些；嘿，我們做了很多；嘿，我們賺得少了；嘿，我們做了很多。上下曲線可能發生在海平面以上。

As far as the IPO, the spin-off that we've talked about, we have discussed that publicly and put that out there, we've had good developments back and forth with the SEC. I'm obviously kind of -- those filings are not public yet but very, very positive comment. We're very pleased with the turn of -- the most recent turn of the S-1 document.

至於首次公開募股，我們已經討論過的分拆，我們已經公開討論過並將其公開，我們與 SEC 的來回進展良好。我顯然是——這些文件尚未公開，但評論非常非常積極。我們對 S-1 文件的最新轉變感到非常高興。

The comments that we got back were now under 10 comments. Most of those are accounting and other items in the filing that we knew we would get comments on, for example, who's going to be your CEO, who's your independent Board, those types of clarifications.

我們收到的評論現在已不到 10 則。其中大部分是我們知道我們會收到評論的文件中的會計和其他項目，例如，誰將成為您的首席執行官，誰是您的獨立董事會，這些類型的澄清。

So we -- everything is on track. We're very excited. We're very pleased. We're really looking forward as well to the market understanding that if you are a shareholder of SurgePays, you're going to get a dividend of stock from this spin-out IPO. That's a really -- it's an up-and-coming company that should have a pretty tight float and ready to make it run itself.

所以我們——一切都步入正軌。我們非常興奮。我們非常高興。我們也非常期待市場了解，如果您是 SurgePays 的股東，您將從這次分拆 IPO 中獲得股票股利。這確實是一家嶄露頭角的公司，應該擁有相當嚴格的流通量，並準備好自行營運。

So we're looking forward to once we're able to really get that out there more publicly. And yes, so Adam, that was a good question, but everything is -- has progressed exactly as we had hoped when we talked last time.

因此，我們期待著一旦能夠真正更公開地公開這一點。是的，亞當，這是一個很好的問題，但一切的進展都正如我們上次談話時所希望的那樣。

No. That's great news. Obviously, that type of business in the public market typically trades at 2 to 3x revenue given the margin profile. And obviously, the variability is based on the growth prospects, which look pretty solid here. So I mean, obviously, you have that asset being probably valued in the public market in excess of where the whole company is valued in the public market today. So we look forward to that in the second half of the year.

不，這是個好消息。顯然，考慮到利潤狀況，此類業務在公開市場上的交易價格通常是收入的 2 至 3 倍。顯然，這種變化是基於成長前景的，這裡看起來相當穩健。所以我的意思是，顯然，該資產在公開市場上的估值可能超過了整個公司在今天公開市場上的估值。所以我們期待下半年的情況。

We have reached the end of the question-and-answer session, and this will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

我們的問答環節已經結束，今天的會議也將結束。此時您可以斷開線路，感謝您的參與。