Surge Components Closes Asset Purchase of Global Datatel/e-Hola
Business Editors
DEER PARK, N.Y.--(BUSINESS WIRE)--Dec. 10, 1999--Surge
Components, Inc. (NASDAQ: SRGE; BSE: SRG) announced today that it has
closed the purchase of all assets of Global Datatel (OTCBB: GDIS)
including its wholly owned subsidiary e-Hola.com. and all other
subsidiaries. The purchase price (as described below) is to be held in
escrow until completion of final audits, fairness opinions, regulatory
and any other required approvals. Upon regulatory approval, Global
Datatel will cease trading within 5 business days from this Agreement.
Global Datatel/e-Hola ("Global") shall operate as a wholly owned
subsidiary of the parent corporation, Surge Components, Inc.,
("Surge") Ira Levy, president of Surge Components, Inc, made the
announcement and Equilink, LLC acted as the investment banker on the
transaction.
Global (www.globaldatatel.com) is a leader in Latin America in
medium to large Web integration projects. Global is a First Tier IBM
Business Partner, Microsoft Solution provider, Lotus Premier Team
Provider and a distributor for JBA International E.R.P. Company.
Global also distributes hardware for Compaq, Dell, Hewlett-Packard and
Cisco Systems.
"Latin America offers tremendous potential for those companies
positioned to capture this market. My board and I believe in Global's
plan and we believe that Global can, through its many business
partners and clients, complement and expand our current business,"
stated Mr. Ira Levy. Mr. Levy further added that, "Global offers our
shareholders much in addition to this exciting solid Web integration
business. The acquisition of the assets of Global Datatel, Inc. brings
with it, e-Hola.com, a leading South American Internet Service Portal
with Spanish and Portuguese language Web content. Our board is very
proud to present this opportunity to our shareholders."
As reported to Surge, e-Hola.com, a wholly owned subsidiary of
Global, is an Internet Service Portal well as Content Provider
specializing in the Latin American marketplace. As previously
announced on August 11, 1999, e-HOLA.com signed a collaboration
agreement with IBM whereby e-Hola.com, effective Oct. 1, 1999, is
pre-loaded in all of IBM Aptiva's shipped to Latin America. The
multilingual portal recently unveiled its new Web page (www.ehola.com)
which features 18 different categories of information in both Spanish
and Portuguese. Its Twelve category anchors include IBM, Wall Street
Journal, Interactivo, eduverse, Latino TV, elBUZZ, VCOM.com,
AutoWorld, Arte Realidad, WWF (World Wrestling Federation),
LatinMD.com and EFE News Agency. e-Hola provides a central starting
point for finding a variety of information on the Internet. In
addition to e-Hola.com, the subsidiary's properties include
eTiendas.com, an online shopping channel, and eSubasta.com, the
multilingual auction site.
e-HOLA.com offers integrated Internet access in English, Spanish
and Portuguese to individuals and businesses in North, Central and
South America. E-HOLA.com Online Service Network (www.ehola.com)
provides individual and corporate dial-up and dedicated Internet
access in over 350 cities throughout Argentina, Bolivia, Brazil,
Chile, Colombia, Ecuador, El Salvador, Guatemala, Mexico, Paraguay,
Peru, United States, Uruguay, and Venezuela.
Global's primary focus will remain on Latin America for both
Global's web integration and e-HOLA businesses, Richard Baker,
President and CEO of Global stated, "Surge arms Global with an
infrastructure to target the very appealing U.S. Latin market."
Surge's current executives, including Ira Levy and Steve Lubman, shall
continue to head the U. S. parent.
Surge Components, Inc. is a supplier of high quality electronic
components. Its product mix includes a large selection of
high-performance discrete semiconductors, capacitors and discrete
components. Its factories are ISO 9000 quality certified. Surge sells
directly to manufacturers of such products as computer modems, video
boards, power supplies, audio and many others. Surge announced its
revenues for the third quarter ended August 31, 1999 net sales were
$3,341,149 which reflected a 60% increase over the same period last
year. Its net income for the third quarter ending August 31, 1999 was
$143,263 compared with a loss of $100,992 for the same period last
year.
Terms of the Acquisition
In full consideration for the sale, transfer, conveyance,
assignment and delivery of the Assets by the Seller (GLOBAL) to the
Buyer (SURGE) and in reliance upon the representations and warranties
made by the Seller and for other consideration, the Buyer has paid to
the Seller 239,000 shares of Surge's Series A Redeemable Convertible
Preferred Stock, $.001 par value. The Surge stock is being held in
escrow pending completion of final audits, fairness opinions,
regulatory and any other required approvals. Following approval of
Surge's and Global's stockholders, each share of Surge's Series A
Redeemable Convertible Preferred Stock will automatically convert into
and shall vote on a converted basis of 100 shares of Surge's Class B
Common Stock.
Surge's existing Common Stock, which trades under the Nasdaq
symbol of SRGE, $.001 par value, shall be redesignated as " Class A
Common Stock". The Class A Common Stock shall have the same rights and
preferences and otherwise be the same as the existing Common Stock,
except that the holders of each two (2) shares of Class A Common Stock
issued and outstanding at the Effective Date of Shareholder approval
and Nasdaq listing of the Class B Common Stock, shall have the right
to receive and become exchangeable for one (1) share of Class B Common
Stock.
Surge's existing Class A Common Stock Warrants, which trade under
the symbol of SRGEW, shall, upon shareholder approval and Nasdaq
listing of the Class B Common Stock, be redesignated as " Class B
Common Stock Warrants". Upon Shareholder approval and Nasdaq listing
of the Class B Common Stock, each existing Warrant shall have the
right to purchase one (1) share of Class B Common Stock at an exercise
price of $5.00 per share, callable when the Class B Common Stock
trades at or above $7.00 per share and expiring on July 31, 2003.
This press release contains forward-looking statements regarding
Surge's and Globe's business strategies and future plans of
operations. Forward-looking statements involve known and unknown risks
and uncertainties. The Companies' risks and uncertainties include,
their ability to complete the merger, including but not limited to
obtaining necessary shareholder approvals, the combined entities'
ability to work together and grow the companies, periodic downturns in
their industries, dependence on the Internet, timely acceptance of new
products and intense price competition in their industries. These and
other important factors, including those mentioned in various filings
with the Securities and Exchange Commission made periodically by the
Companies (available at www.sec.gov.), may cause the actual results
and performance to differ materially from the future results expressed
in or implied by such forward-looking statements. The forward-looking
statements contained in this press release speak only as of the date
hereof and the Companies disclaim any obligation to provide public
updates, revisions or amendments to any forward-looking statements
made herein to reflect changes in the Companies' expectations or
future events.
--30--lp/ny*
CONTACT: Surge's contact:
Surge Components, Inc.
Marie Gonzalez, 631/595-1818
or
Global's contact:
Martin Janis & Company
Beverly Jedynak, 312/943-1100
e-mail: bevj@ehola.com
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