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Debt | 9 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
Debt | Note 6 – Debt The following represents a summary of the Company’s notes payable – SBA government, notes payable – related parties, and notes payable, key terms, and outstanding balances at September 30, 2024 and December 31, 2023, respectively: Notes Payable – SBA government Economic Injury Disaster Loan (“EIDL”) During 2020, this program was made available to eligible borrowers in light of the impact of the COVID-19 pandemic and the negative economic impact on the Company’s business. Proceeds from the EIDL were used for working capital purposes. Installment payments, including principal and interest, are due monthly (beginning twelve (12) months from the date of the promissory note) in amounts ranging from $74 - $731/month. The balance of principal and interest is payable over the next thirty (30) years from the date of the promissory note. There are no penalties for prepayment. The EIDL Loan was not required to be refinanced by the PPP loan. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2024 Schedule of Notes Payable
|  | EIDL |  |  | EIDL |  |  |  |
Terms |  | SBA |  |  | SBA |  |  | Total |
Issuance dates of SBA loans |  |  | May 2020 |  |  |  | July 2020 |  |  |  |  |
Term |  |  | 30 Years |  |  |  | 30 Years |  |  |  |  |
Maturity date |  |  | May 2050 |  |  |  | July 2050 |  |  |  |  |
Interest rate |  |  | 3.75% |  |  |  | 3.75% |  |  |  |  |
Collateral |  |  | Unsecured |  |  |  | Unsecured |  |  |  |  |
Balance - December 31, 2022 |  | $ | 145,922 |  |  | $ | 328,924 |  |  | $ | 474,846 |
Repayments |  |  | (3,928 | ) |  |  | (10,395 | ) |  |  | (14,323 | )
Balance - December 31, 2023 |  |  | 141,994 |  |  |  | 318,529 |  |  |  | 460,523 |
Interest expense adjustment - SBA loans |  |  | 5,487 |  |  |  | 14,263 |  |  |  | 19,750 |
Repayments |  |  | (2,676 | ) |  |  | (5,462 | ) |  |  | (8,138 | )
Balance - September 30, 2024 |  | $ | 144,805 |  |  | $ | 327,330 |  |  | $ | 472,135 |
Notes Payable – Related Parties Schedule of Notes - Payable Related Parties The following is a summary of the Company’s Notes Payable - Related Parties:
|  | 1 |  |  | 1 |  |  | 2 |  |  | Total |
Balance - December 31, 2022 |  | $ | - |  |  | $ | 5,134,563 |  |  | $ | 467,385 |  |  | $ | 5,601,948 |
Repayments |  |  | - |  |  |  | (550,000 | ) |  |  | (467,385 | ) |  |  | (1,017,385 | )
Balance - December 31, 2023 |  |  | - |  |  |  | 4,584,563 |  |  |  | - |  |  |  | 4,584,563 |
Reclassification of principal into one single note |  |  | 4,584,563 |  |  |  | (4,584,563 | ) |  |  | - |  |  |  | - |
Reclassification of accrued interest payable into one single note |  |  | 498,991 |  |  |  | - |  |  |  | - |  |  |  | 498,991 |
Repayments |  |  | (1,132,074 | ) |  |  | - |  |  |  | - |  |  |  | (1,132,074 | )
Balance - September 30, 2024 |  | $ | 3,951,480 |  |  | $ | - |  |  | $ | - |  |  | $ | 3,951,480 |
1 | Activity is with the Company’s Chief Executive Officer and Board Member (Kevin Brian Cox).
At December 31, 2023, of the total $4,584,563 due, the Company owed $558,150 that had not been repaid (due December 31, 2023), the balance of $4,026,413 was due December 31, 2024. The Chief Executive Officer waived any events of default as of December 31, 2023. On March 12, 2024, as approved by the Audit Committee, the Company consolidated all remaining outstanding principal ($4,584,563) and accrued interest payable ($498,991) into one note totaling $5,083,554. This note bears interest at 10% (with a default interest rate of 15%) and will be repaid ratably over a period of 36 months aggregating $5,905,427 in total payments to be made (inclusive of interest). Each monthly payment will be $164,039. The note is unsecured. The Note is expected to be repaid in full by December 2026. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2024
2 | Activity was with David May, who is a Board Member. The note of $467,385 and related accrued interest of $63,641 (aggregate $531,026) was repaid in 2023. The note bore interest at 10% and was unsecured.
The following is a detail of the Company’s Notes Payable - Related Parties: Schedule of Notes Payable - Related Parties
Notes Payable - Related Parties
Note Holder |  | Issue Date |  | Maturity Date |  | Interest Rate |  |  | Default Interest Rate |  |  | Collateral |  | September 30, 2024 |  |  | December 31, 2023 |
Note #1 |  | December 31, 2023 |  | December 31, 2026 |  |  | 10.00 | % |  |  | 15.00 | % |  | None |  | $ | 3,951,480 |  |  | $ | - |
Note #2 |  | December 31, 2022 |  | December 31, 2023 |  |  | 10.00 | % |  |  | 0.00 | % |  | None |  |  | - |  |  |  | 4,584,563 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,951,480 |  |  |  | 4,584,563 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Short Term |  |  | 1,647,491 |  |  |  | 4,584,563 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Long Term |  | $ | 2,303,989 |  |  | $ | - |
Notes Payable Schedule of Notes Payable
|  | 1 |  |  | 2 |  |  | 3 |  |  |  |
Terms |  | Notes Payable |  |  | Notes Payable |  |  | Note Payable |  |  | Total |
Issuance dates of notes |  |  | April/May 2022 |  |  |  | March 2022 |  |  |  | 2022 |  |  |  |  |
Maturity date |  |  | October/November 2022 |  |  |  | March 2023 |  |  |  | 2025 |  |  |  |  |
Interest rate |  |  | 19 | % |  |  | 19 | % |  |  | 1 | % |  |  |  |
Default interest rate |  |  | 26 | % |  |  | 26 | % |  |  | 0 | % |  |  |  |
Collateral |  |  | Unsecured |  |  |  | Unsecured |  |  |  | Unsecured |  |  |  |  |
Warrants issued as debt discount/issue costs |  |  | 36,000 |  |  |  | 15,000 |  |  |  | N/A |  |  |  |  |
Balance - December 31, 2022 |  |  | 1,100,000 |  |  |  | 400,000 |  |  |  | 95,167 |  |  |  | 1,595,167 |
Repayments |  |  | (1,100,000 | ) |  |  | (400,000 | ) |  |  | (95,167 | ) |  |  | (1,595,167 | )
Balance - December 31, 2023 |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
1- | These notes were issued with 36,000, three (3) year warrants, which were previously reflected as debt issue costs and were amortized over the life of the debt. These notes were fully repaid in 2023.
2- | These notes were issued with 15,000, three (3) year warrants, which were previously reflected as debt issue costs and were amortized over the life of the debt. Additionally, in 2022, the Company issued an additional 12,000, three (3) year warrants, which were treated as interest expense in connection with extending the maturity date for notes totaling $400,000 to March 2023. In 2023, the Company repaid $400,000 in notes and related accrued interest of $36,204 (aggregate $436,204).
SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2024
3– | This loan, originally a PPP loan, was refinanced in 2022 and was extended from October 2021 to March 2025. Monthly payments were $3,566 per month. In 2023, the remaining balance of the note was repaid in full.
Debt Maturities The following represents the maturities of the Company’s various debt arrangements for each of the five (5) succeeding years and thereafter as follows: Schedule of Debt Maturities
For the Year Ended December 31, |  | Notes Payable - Related Parties |  |  | Notes Payable - SBA Government |  |  | Total |
2024 (3 Months) |  | $ | 395,825 |  |  | $ | 2,660 |  |  | $ | 398,485 |
2025 |  |  | 1,689,367 |  |  |  | 11,043 |  |  |  | 1,700,410 |
2026 |  |  | 1,866,288 |  |  |  | 11,461 |  |  |  | 1,877,749 |
2027 |  |  | - |  |  |  | 11,902 |  |  |  | 11,902 |
2028 |  |  | - |  |  |  | 12,308 |  |  |  | 12,308 |
Thereafter |  |  | - |  |  |  | 422,761 |  |  |  | 422,761 |
Total |  | $ | 3,951,480 |  |  | $ | 472,135 |  |  | $ | 4,423,615 |

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