Item 1.01 Entry into a Material Definitive Agreement.
On
Pursuant to the Agreement, the Seller has agreed to purchase and then sell to
Purchaser new and refurbished cellular devices (the "Devices") for distribution
through the Purchaser's distribution network to Affordable Connectivity Program
(the "ACP") (run by the
Under the terms of the Agreement, the Purchaser will issue purchase orders for
Devices to suppliers mutually approved by the Purchaser and the Seller. The
Seller will purchase the Devices and bill the Purchaser the cost of the purchase
order plus a 9.85% fee (the "Profit Margin") with the total amount to be paid in
nine (9) equal monthly installments. Starting on
The Seller shall make available to Purchaser up to
The initial amount of credit extended by Seller at closing was
The amounts owed by Purchaser to Seller are secured by a first priority security interest in Purchaser's assets.
The Agreement contains customary representations, warranties and indemnification provisions. The Agreement also contains negative and affirmative covenants with respect to the Company and affirmative financials covenants with respect to the Purchaser. These affirmative financials covenants are with respect to the number of Purchaser's monthly ACP and California Lifeline subscribers, Purchaser's minimum liquidity, the ratio of the Purchaser Adjusted EBITDA (as defined in the Agreement) to the Purchaser's monthly payments to Seller, and the ratio of the Purchaser's liabilities (including amounts owed to Seller) to the Purchaser Adjusted EBITDA.
In connection with the entrance into the Agreement, on
The foregoing description of the Agreement and the Agent Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement and the Agent Agreement which are filed as, respectively, Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated by reference herein.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The applicable information regarding the Agreement set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
Item 8.01. Other Events.
On
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description 10.1 Installment Sale Agreement, by and among,SurgePays, Inc. ,SurgePhone Wireless LLC ,Torch Wireless , andAffordable Connectivity Financing V Limited Liability Company , datedNovember 17, 2022 10.2 Paying Agent Agreement, by and among,SurgePhone Wireless LLC ,Torch Wireless ,Affordable Connectivity Financing V Limited Liability Company , andIvy Dallas Funding, LLC , datedNovember 17, 2022 99.1 Press Release datedNovember 18, 2022 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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