SurgePays Inc.
(NASDAQ:SURG) shares jumped 61.15% to $0.67 in after-hours trading on Wednesday, after the Tennessee-based wireless and fintech company amended its agreement with a Tier 1 wholesale wireless network provider.
Amended Wireless Pact Erases Liability The deal restructures wholesale pricing and eliminates a prior $50 million minimum purchase commitment over three years, wiping the related contingent liability from SurgePays' balance sheet.
According to the company, the provider also adjusted previously invoiced non-usage charges, a move expected to cut accounts payable by roughly $10.3 million and generate an $8.5 million gain relating to expenses previously reported for the three months ended Mar. 31.
Margins Set to Expand, Executives Say Chief Financial Officer Chelsea Pullano said the amendment "removes a significant contingent liability from our balance sheet while improving the economics of every subscriber we add going forward." CEO Brian Cox said the company expects to "lower our cost of goods sold and expand margins across our subscriber base." Trading Metrics, Technical Analysis SurgePays has a market capitalization of $10.45 million.
