v3.26.1
Debt (Tables)
 3 Months Ended
Mar. 31, 2026
Short-Term Debt [Line Items]  
Schedule of Loans Payable

 

Terms  EIDL SBA 
     
Issuance dates of SBA loans   May 2020 - July 2020 
Term   30 Years 
Maturity date   May 2050 - July 2050 
Interest rate   3.75%
Collateral   Unsecured 
      
Balance - December 31, 2024  $469,396 
Repayments   (11,062)
Balance - December 31, 2025   458,334 
Repayments   (2,415)
Balance - March 31, 2026  $455,919 
Summary of Notes Payable - Related Parties

The following summarizes activity in the Company’s note payable to a related party (the Chief Executive Officer):

 

Balance - December 31, 2024  $3,555,655 
Repayments   (824,859)
Balance - December 31, 2025   2,730,796 
Conversion of debt to common stock   (707,200)
Forgiveness of debt   (292,800)
Balance - March 31, 2026  $1,730,796 
Schedule of Notes Payable - Related Parties

The following is a detail of the Company’s Notes Payable - Related Party:

 

Note Payable - Related Party
Note Holder  Issue Date  Maturity Date  Interest Rate   Default Interest Rate   Collateral  March 31, 2026   December 31, 2025 
Note #1  December 31, 2023  December 31, 2026   10.00%   15.00%  Unsecured  $1,730,796   $2,730,796 
                   Short Term   1,730,796    2,730,796 
                   Long Term  $-   $- 
Schedule of Convertible Notes Payable and related Debt Discounts

The following is a summary of the Company’s Convertible Notes Payable and related Debt Discounts:

 

   December 31, 2024   Face amount of note  

Stated guaranteed

earned interest

   Common stock repurchase   Debt discounts   Amortization of debt discount   December 31, 2025  

Unamortized

Debt

Discounts

 
Convertible Notes Payable
   December 31,   Face amount  

Stated guaranteed

earned

   Common stock   Debt   Amortization of   December 31,   

Unamortized

Debt

 
Note #  2024   of note   interest   repurchase   discounts   debt discount   2025   Discounts 
Note #1  $-   $6,000,000   $-   $999,999   $(1,679,927)  $559,976   $5,880,048   $1,119,951 
Note #2   -    770,000    61,600    -    (224,900)   74,967    681,667    149,933 
Note #3   -    660,000    52,800    -    (182,720)   45,680    575,760    137,040 
Note #4   -    385,000    30,800    -    (106,780)   26,695    335,715    80,085 
Note #5   -    385,000    30,800    -    (104,580)   26,145    337,365    78,435 
Note #6   -    495,000    39,600    -    (126,500)   21,083    429,183    105,417 
Total  $-   $8,695,000   $215,600   $999,999   $(2,425,407)  $754,546   $8,239,738   $1,670,861 
                                         

 

   December 31, 2025   Face amount of note   Stated guaranteed earned interest   Common stock repurchase   Debt discounts   Amortization of debt discounts   March 31, 2026   Unamortized Debt Discounts 

Convertible Notes Payable

   December 31,   Face amount   Stated guaranteed earned   Common stock   Debt   Amortization of debt   March 31,   Unamortized Debt 
Note #  2025   of note   interest   repurchase   discounts   discounts   2026   Discounts 
Note #1  $5,880,048   $500,000   $-   $-   $-   $169,993   $6,550,041   $949,958 
Note #2   681,667    -    -    -    -    56,225    737,892    93,708 
Note #3   575,760    -    -    -    -    45,680    621,440    91,360 
Note #4   335,715    -    -    -    -    26,695    362,410    53,390 
Note #5   337,365    -    -    -    -    26,145    363,510    52,290 
Note #6   429,183    -    -    -    -    31,625    460,808    73,792 
Note #7   -    333,333    26,667    -    (142,797)   11,900    229,103    130,897 
Note #8   -    500,000    40,000    -    (236,926)   19,744    322,818    217,182 
Note #9   -    100,000    -    -    (8,823)   1,103    92,280    7,720 
Note #10   -    50,000    -    -    (2,905)   242    47,337    2,663 
Note #11   -    100,000    -    -    (7,808)   976    93,168    6,832 
Note #12   -    400,000    -    -    (35,292)   4,412    369,120    30,880 
Note #13   -    50,000    -    -    -    -    50,000    - 
Note #14   -    200,000    -    -    -    -    200,000    - 
Note #15   -    75,000    -    -    -    -    75,000    - 
Total  $8,239,738   $2,308,333   $66,667   $-   $(434,551)  $394,740   $10,574,927   $1,710,672 

 

 

SURGEPAYS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

   Warrants   Legal fees   Broker fee   Original Issue Discount   Stated Guaranteed Interest   Commitment Shares (common stock)   December 31, 2025 
Debt Discounts
       Legal   Broker   Original Issue   Stated Guaranteed   Commitment Shares (common   December 31,  
Note #  Warrants   fees   fee   Discount   Interest   stock)   2025 
Note #1  $1,084,927   $175,000   $420,000   $-   $-   $-   $1,679,927 
Note #2   -    7,500    -    70,000    61,600    85,800    224,900 
Note #3   -    2,000    -    60,000    52,800    67,920    182,720 
Note #4   -    1,500    -    35,000    30,800    39,480    106,780 
Note #5   -    -    -    35,000    30,800    38,780    104,580 
Note #6   -    2,000    -    45,000    39,600    39,900    126,500 
Total  $1,084,927   $188,000   $420,000   $245,000   $215,600   $271,880   $2,425,407 
                                    

 

   Warrants   Legal fees   Broker fee   Original Issue Discount   Stated Guaranteed Interest   Commitment Shares (common stock)   March 31, 2026 
Debt Discounts
       Legal   Broker   Original Issue   Stated Guaranteed   Commitment Shares (common   March 31,  
Note #  Warrants   fees   fee   Discount   Interest   stock)   2026 
Note #7  $73,297   $9,500   $-   $33,333   $26,667   $-   $142,797 
Note #8   141,926    5,000    -    50,000    40,000    -    236,926 
Note #9   -    -    -    -    -    8,823    8,823 
Note #10   -    -    -    -    -    2,905    2,905 
Note #11   -    -    -    -    -    7,808    7,808 
Note #12   -    -    -    -    -    35,292    35,292 
Note #13   -    -    -    -    -    -    - 
Note #14   -    -    -    -    -    -    - 
Note #15   -    -    -    -    -    -    - 
Total  $215,223   $14,500   $-   $83,333   $66,667   $54,828   $434,551 
Schedule of Convertible Notes Payable

The following is a detail of the Company’s Convertible Notes Payable:

 

Convertible Notes Payable - Net
Note Holder  Issue Date  Maturity Date  Interest Rate   Default Interest Rate   Collateral  March 31, 2026   December 31, 2025 
Note #1  May 12, 2025  November 12, 2027   15.00%   15.00%  All assets  $7,499,999   $6,999,999 
Note #2  September 29, 2025  September 29, 2026   0.00%   22.00%  Unsecured   831,600    831,600 
Note #3  October 8, 2025  October 8, 2026   0.00%   22.00%  Unsecured   712,800    712,800 
Note #4  October 7, 2025  October 7, 2026   0.00%   22.00%  Unsecured   415,800    415,800 
Note #5  October 15, 2025  October 15, 2026   0.00%   22.00%  Unsecured   415,800    415,800 
Note #6  November 17, 2025  November 17, 2026   0.00%   22.00%  Unsecured   534,600    534,600 
Note #7  March 27, 2026  March 27, 2027   8.00%   22.00%  Unsecured   360,000    - 
Note #8  March 12, 2026  March 12, 2027   8.00%   22.00%  Unsecured   540,000    - 
Note #9  January 12, 2026  January 12, 2028   14.50%   18.00%  All assets   100,000    - 
Note #10  February 18, 2026  February 18, 2028   14.50%   18.00%  All assets   50,000    - 
Note #11  January 23, 2026  January 23, 2028   14.50%   18.00%  All assets   100,000    - 
Note #12  January 12, 2026  January 12, 2028   14.50%   18.00%  All assets   400,000    - 
Note #13  March 11, 2026  March 11, 2028   14.50%   18.00%  All assets   50,000    - 
Note #14  March 6, 2026  March 6, 2028   14.50%   18.00%  All assets   200,000    - 
Note #15  March 20, 2026  March 20, 2028   14.50%   18.00%  All assets   75,000    - 
                   Gross Carrying Value   12,285,599    9,910,599 
                   Less: unamortized debt discount   (1,710,672)   (1,670,861)
                   Convertible notes payable - net   10,574,927    8,239,738 
                   Short Term   7,744,342    3,068,878 
                   Long Term  $2,830,585   $5,170,860 
Schedule of Fair Value of Warrants

The assumptions used in the Black-Scholes model were as follows:

 

Expected term (years)   5 
Expected volatility   105%
Expected dividends   0%
Risk free interest rate   4.09%
Schedule of Debt Discounts

In connection with the issuance of the Note, the Company recorded total debt discounts of $1,679,927, consisting of the following:

 

      
Fair value - warrants issued  $1,084,927 
Legal fees   175,000 
Broker fees   420,000 
Total debt discount  $1,679,927 
Schedule of Key Terms and Debt Discount Components

The following tables summarize each convertible note and their related debt discount components:

 

Convertible Notes Payable - Net

 

Year Ended December 31, 2025
   Issue  Maturity  Original   Capitalized Guaranteed   Total   Net Cash   Total Debt 
Note Holder  Date  Date  Principal   Interest   Obligation   Proceeds   Discount 
Note #1  May 12, 2025  November 12, 2027  $7,499,999   $-   $7,499,999   $5,405,000   $1,679,927 
Note #2  September 29, 2025  September 29, 2026   770,000    61,600    831,600    692,500    224,900 
Note #3  October 8, 2025  October 8, 2026   660,000    52,800    712,800    598,000    182,720 
Note #4  October 7, 2025  October 7, 2026   385,000    30,800    415,800    348,500    106,780 
Note #5  October 15, 2025  October 15, 2026   385,000    30,800    415,800    350,000    104,580 
Note #6  November 17, 2025  November 17, 2026   495,000    39,600    534,600    448,000    126,500 
Total        $10,194,999   $215,600   $10,410,599   $7,842,000   $2,425,407 
                                
Three Months Ended March 31, 2026
   Issue  Maturity  Original   Capitalized Guaranteed   Total   Net Cash   Total Debt 
Note Holder  Date  Date  Principal   Interest   Obligation   Proceeds   Discount 
Note #7  March 27, 2026  March 27, 2027  $333,333   $26,667   $360,000   $290,500   $142,797 
Note #8  March 12, 2026  March 12, 2027   500,000    40,000    540,000    445,000    236,926 
Note #9  January 12, 2026  January 12, 2028   100,000    -    100,000    100,000    8,823 
Note #10  February 18, 2026  February 18, 2028   50,000    -    50,000    50,000    2,905 
Note #11  January 23, 2026  January 23, 2028   100,000    -    100,000    100,000    7,808 
Note #12  January 12, 2026  January 12, 2028   400,000    -    400,000    400,000    35,292 
Note #13  March 11, 2026  March 11, 2028   50,000    -    50,000    50,000    - 
Note #14  March 6, 2026  March 6, 2028   200,000    -    200,000    200,000    - 
Note #15  March 20, 2026  March 20, 2028   75,000    -    75,000    75,000    - 
Total        $1,808,333   $66,667   $1,875,000   $1,710,500   $434,551 

 

Year Ended December 31, 2025 
   Original Issue   Capitalized Guaranteed   Warrants   Common Stock   Grant Date   Fair Value of Shares   Professional   Total Debt 
Note Holder  Discount   Interest   Issued   Issued   Price   Issued   Fees   Discount 
Note #1  $-   $-   $1,084,927    -   $-   $-   $595,000   $1,679,927 
Note #2   70,000    61,600    -    30,000   $2.86    85,800    7,500    224,900 
Note #3   60,000    52,800    -    24,000   $2.83    67,920    2,000    182,720 
Note #4   35,000    30,800    -    14,000   $2.82    39,480    1,500    106,780 
Note #5   35,000    30,800    -    14,000   $2.77    38,780    -    104,580 
Note #6   45,000    39,600    -    21,000   $1.90    39,900    2,000    126,500 
   $245,000   $215,600   $1,084,927   $103,000        $271,880   $608,000   $2,425,407 
                                         
Three Months Ended March 31, 2026 
   Original Issue   Capitalized Guaranteed   Warrants    Common Stock   Grant Date   Fair Value of Shares   Professional   Total Debt 
   Discount   Interest   Issued    Issued   Price   Issued   Fees   Discount 
Note #7  $33,333   $26,667   $73,297 A   -   $-   $-   $9,500   $142,797 
Note #8   50,000    40,000    141,926 A   -   $-    -    5,000    236,926 
Note #9   -    -    -     4,325   $2.04    8,823    -    8,823 
Note #10   -    -    -     3,500   $0.83    2,905    -    2,905 
Note #11   -    -    -     6,400   $1.22    7,808    -    7,808 
Note #12   -    -    -     17,300   $2.04    35,292    -    35,292 
Note #13   -    -    -     -   $-    -    -    - 
Note #14   -    -    -     -   $-    -    -    - 
Note #15   -    -    -     -   $-    -    -    - 
Total  $83,333   $66,667   $215,223    $31,525        $54,828   $14,500   $434,551 

 

A- The Warrants Issued for Notes #7 and #8 are classified as derivative liabilities under ASC 815-40-25; see Note 6, Derivative Liabilities, for further information.
 
Schedule of Note Payments

These convertible notes are repayable in either monthly or quarterly installments inclusive of the capitalized guaranteed interest, with any unpaid amounts due and payable as part of the final installment, as follows:

 

   Monthly   Quarterly                
Note Holder  Installment   Installment   Payment 1  Payment 2  Payment 3  Payment 4  Payment 5
Note #1   N/A    N/A   N/A  N/A  N/A  N/A  N/A
Note #2  $166,320        May 25, 2026  June 25, 2026  July 25, 2026  August 25, 2026  September 25, 2026
Note #3  $142,560        May 31, 2026  June 30, 2026  July 31, 2026  August 31, 2026  October 8, 2026
Note #4  $83,160        June 7, 2026  July 7, 2026  August 7, 2026  September 7, 2026  October 7, 2026
Note #5  $83,160        June 15, 2026  July 15, 2026  August 15, 2026  September 15, 2026  October 15, 2026
Note #6  $106,920        July 17, 2026  August 17, 2026  September 17, 2026  October 17, 2026  November 17, 2026
Note #7  $72,000        November 27, 2026  December 28, 2026  January 27, 2027  February 26, 2027  March 27, 2027
Note #8  $106,920        November 12, 2026  December 12, 2026  January 12, 2027  February 12, 2027  March 12, 2027
Note #9       $25,000   January 12, 2027  April 12, 2027  July 12, 2027  October 12, 2027  N/A
Note #10       $12,500   February 18, 2027  May 18, 2027  August 18, 2027  November 18, 2027  N/A
Note #11       $25,000   January 23, 2027  April 23, 2027  July 23, 2027  October 23, 2027  N/A
Note #12       $100,000   January 12, 2027  April 12, 2027  July 12, 2027  October 12, 2027  N/A
Note #13       $12,500   March 11, 2027  June 11, 2027  September 11, 2027  December 11, 2027  N/A
Note #14       $50,000   March 6, 2027  June 6, 2027  September 6, 2027  December 6, 2027  N/A
Note #15       $18,750   March 20, 2027  June 20, 2027  September 20, 2027  December 20, 2027  N/A
Schedule of Notes Payable

The following is a summary of the Company’s Notes Payable:

 

   Note #1   Note #2   Total 
Balance - December 31, 2024  $-   $-   $- 
Proceeds from issuance of note   1,000,000    5,628,811    6,628,811 
Repayments   -    (4,751,765)   (4,751,765)
Debt discount   (48,418)   -    (48,418)
Amortization of debt discount   5,380    -    5,380 
Balance - December 31, 2025  $956,962   $877,046   $1,834,008 
                
Unamortized debt discount  $43,038   $-   $43,038 
                
Balance - December 31, 2025  $956,962   $877,046   $1,834,008 
Proceeds   -    954,272    954,272 
Repayments   -    (347,983)   (347,983)
Amortization of debt discount   43,038    -    43,038 
Balance - March 31, 2026  $1,000,000   $1,483,335   $2,483,335 

 

The following is a detail of the Company’s Notes Payable:

 

Notes Payable - Net
Note Holder  Issue Date  Maturity Date  In-Default  Interest Rate   Default Interest Rate   Collateral 

March 31,

2026

  

December 31,

2025

 
Note #1  September 9, 2025  March 9, 2026  Yes   19.00%   6.00%  Unsecured  $1,000,000   $1,000,000 
Note #2  September 9, 2025  September 9, 2026  No   0.00%   0.00%  Accounts receivable   1,483,335    877,046 
                      Less: unamortized debt discount   -    (43,038)
                      Notes payable - net   2,483,335    1,834,008 
                      Short Term   2,483,335    1,834,008 
                      Long Term  $-   $- 
Schedule of 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:

 

For the Year Ended December 31,  Note Payable - Related Party   Convertible Notes Payable   Notes Payable   Notes Payable - SBA Government   Total 
                     
2026  $1,730,796   $6,840,440   $2,483,335   $11,727   $11,066,298 
2027   -    5,445,159    -    11,902    5,457,061 
2028   -    -    -    12,308    12,308 
2029   -    -    -    12,820    12,820 
2030   -    -    -    13,313    13,313 
Thereafter   -    -    -    393,849    393,849 
Total   1,730,796    12,285,599    2,483,335    455,919    16,955,649 
Less: unamortized debt discount   -    1,710,672    -    -    1,710,672 
Debt - net  $1,730,796   $10,574,927   $2,483,335   $455,919   $15,244,977 
Senior Secured Note [Member]  
Short-Term Debt [Line Items]  
Schedule of Fair Value of Warrants

The fair value of the warrants was determined using the Black-Scholes model with the following assumptions:

 

Expected term (years)   3 
Expected volatility   90%
Expected dividends   0%
Risk free interest rate   3.48%