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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) October 8, 1999
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GLOBAL DATATEL, INC.
(Exact name of Registrant as specified in its charter)
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<CAPTION>
Nevada 000-26817 87-0067813
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(State or Other (Commission File IRS Employer
Jurisdiction of Number) Identification Number
Incorporation)
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3333 Congress Avenue, Suite 404, Delray Beach, Florida 33445
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(Address of principal executive offices)(Zip Code)
(561) 276-8260
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Registrant's telephone number, including area code)
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Item 5. Other Events
On October 8, 1999, Global DataTel, Inc. (the "Registrant") executed a
Merger Agreement and Plan of Reorganization (the "Merger Agreement") by and
among the Registrant, Surge Components, Inc., a New York corporation ("Surge")
and Global DataTel Acquisition Corporation, a Delaware corporation ("Merger
Sub"), a wholly-owned subsidiary of Global. Pursuant to the terms of the Merger
Agreement, Surge will merge (the "Merger") with Registrant by virtue of the
acquisition of Surge's securities by Registrant and a merger of Surge with and
into Merger Sub. The shareholders of Surge will be asked to approve the Merger
in an upcoming special meeting of Shareholders called for such purpose. A copy
of the Merger Agreement is included as an exhibit to this Report.
Surge 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.
The specific terms of the Merger Agreement provide that upon approval
of the Merger by Surge's shareholders, at the Effective Time (as defined in the
Merger Agreement) of the Merger, Surge's common stock, $.001 par value share
(the "Surge Common Stock") issued and outstanding at the Effective Time shall
become exchangeable for common stock, $.001 par value per share, of Registrant
(the "Registrant Common Stock") at a rate of one share of Registrant Common
Stock for every two shares of Surge Common Stock. Each unexercised Class A
Common Stock Warrant of Surge (the "Class A Warrants") outstanding at the
Effective Time, shall be converted on a one for one basis to receive a warrant
to purchase an equal number of shares of Registrant Common Stock, exercisable at
$5.00, callable at $7.00, expiring on July 31, 2003 and in all respects
identical in form and substance to the currently outstanding Class A Warrants.
At the Effective Time Registrant has agreed to assume all options issued under
Surge's 1995 Employee Stock Option Plan, as amended, and in connection
therewith, issue options on the same terms and conditions as were applicable
under such assumed Surge options, to purchase a number of shares of Registrant
Common Stock on a one for two basis, and giving effect to a corresponding
doubling of such exercise price. In addition, 5,300,000 options issued and
outstanding to certain officers and directors of Surge in connection with the
previously terminated Orbit Networks merger, will be exchanged for options to
acquire an aggregate of 600,000 shares of Registrant Common Stock at $2.00 per
share, and 1,100,000 shares of Registrant Common Stock at $5.00 per share.
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Simultaneously, upon entering into the Merger Agreement, Registrant
issued a Convertible Promissory Note (the "Note") to Surge reflecting a
$1,000,000 loan (the "Loan") made to Registrant. The Note is convertible into
shares of Registrant Common Stock at the rate of 90% of the fair market value of
Registrant Common Stock and secured by a pledge of shares of Registrant Common
Stock owned by an executive officer of Registrant. Copies of both the Note and
the Pledge Agreement are also included as exhibits to this Report. It is
contemplated that pursuant to the Merger Agreement, and at the Effective Time,
the loan underlying such Note will be discharged.
Item 7: Exhibits
Registrant hereby incorporates by reference the following exhibits
from the Form 8-K filed by Surge Components, Inc., on October 22,
1999, SEC File no. 001-14188.
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Exhibit
Number Description
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3.1 Merger Agreement and Plan of Reorganization, dated October 8,
1999, by and among Global DataTel, Inc., Global DataTel
Acquisition Corporation and Surge Components, Inc.
99.1 Subordinated Convertible Promissory Note in the Principal Amount of
$1,000,000.00 issued by Global DataTel, Inc.
99.2 Pledge Agreement, dated October 8, 1999, by and among Richard
Baker, Global DataTel, Inc., and Surge Components, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GLOBAL DATATEL, INC.
Registrant
DATED: November 2, 1999 By: /s/ RICHARD BAKER
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Richard Baker, President and
Chief Executive Officer
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