Asset Purchase Agreement with GBT Technologies to Acquire its ECS Prepaid Wireless Business and Software Platform
Plan to Cross Market SurgePays™ Network Products,
SurgePays™ Reloadable Debit Card, SurgePhone Wireless and SIM Starter Kits to the New 9,800 Retail Locations
Transaction expected to be immediately accretive to earnings
Memphis, TN, Oct. 03, 2019 (GLOBE NEWSWIRE) -- Surge Holdings, Inc. (“Surge”) (SURG), developer of the SurgePays™ Network for independent retailers, today announced it has entered into an agreement with GBT Technologies Inc. (OTC PINK: GTCH) to acquire the assets of its ECS Prepaid Business, Electronic Check Services business and the Central State Legal Services business.
Brian Cox, Chairman and CEO of Surge Holdings, commented, “This acquisition marks another major milestone for the Company, as we expect these businesses to immediately add over $48.7 million in annualized revenue, bringing our expected annualized revenue run rate to over $60.0 million. This transaction also adds over 9,800 retail customer locations to which we can now cross market our SurgePays Network products, SurgePays™ Reloadable Debit Card, SurgePhone Wireless and SIM Starter Kits. I look forward to integrating our operations with the experienced team and infrastructure at ECS, which we expect to generate significant operating synergies, including elimination of redundant expenses, to enhance profitability of the combined entities. In the meantime, we continue gaining traction in the market and are moving ahead aggressively with the rollout of the SurgePays Network through AATAC, one of the largest private trade associations, representing over 110,000 retail locations. The transaction also enhances our shareholders’ equity, which brings us another step closer to our near-term goal of listing on a national exchange. We look forward to providing further updates on this integration as well as our rollout with AATAC and other organizations.”
Surge Holdings paid $5 million in consideration - 3,333,333 shares of Surge Holdings common stock and a $4 million note. Additional details regarding the transaction were included in yesterday’s Form 8-K filing with the Securities and Exchange Commission.
About Surge Holdings, Inc:
Surge Holdings, Inc. is a retail supply chain company that provides a virtual distribution hub for retailers, as well as offer telecom services for low income customers and financial payment services for the unbanked and under-banked. Surge products are delivered through a nationwide network of convenience stores and corner markets connected to the recently launched SurgePays™ Network. (https://surgepays.com) This retail platform is designed to transform the traditional supply chain by providing local retailers seamless access to global products and to empower the corner store to select, order and fulfill delivery of wholesale goods from around the country. This platform also provides manufacturers a cost-effective and efficient platform to access local retailers. For more information on Surge Holdings and its subsidiaries, please visit: https://surgeholdings.com.
*Annualized revenue is assumed if the Company had completed the acquisition on January 1 of the current fiscal period. The $48.7M is based on the gross revenue of the acquired businesses for the fiscal year ended December 31, 2018. The Company has not completed an audit on the value and annualized revenue is not a basis in accordance with accounting principles generally accepted in the United States. Such amounts have not been audited by the Company.
Forward Looking Statements
This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking terminology such as “believes”, “expects”, “may”, “will”, “should”, “anticipates”, “plans”, or similar expressions or the negative of these terms and similar expressions are intended to identify forward-looking statements. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described by the forward-looking statements. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release.
Crescendo Communications, LLC