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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 29, 1998
SURGE COMPONENTS, INC.
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(Exact name of Registrant as specified in its charter)
New York 0-14188 11-2602030
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(State or Other Jurisdiction (Commission File IRS Employer
of Incorporation) Number) Identification Number)
1016 Grand Boulevard, Deer Park, New York 11729
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(Address of principal executive offices)(Zip Code)
(516) 595-1818
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(Registrant's telephone number, including area code)
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Item 5. Other Events
On December 29, 1998, Surge Components, Inc., a New York corporation
(the "Registrant"), entered into a letter of intent to acquire Orbit Network,
Inc.("Orbit"). Under the letter of intent, the shareholders of Orbit would
exchange their shares of Orbit for 25 million shares (76% of the then
outstanding shares) of Common Stock of the Registrant, and Orbit would be merged
into the Registrant or a wholly owned subsidiary. See Exhibit A attached hereto,
a press release dated December 29,1998.
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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.
Surge Components, Inc.
Registrant
Dated: January 13, 1999 By: /s/ Ira Levy
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Ira Levy, President and Chief
Executive Officer
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EXHIBIT A
Tuesday December 29, 1998
Company Press Release
Surge Components, Inc. Signs Letter of Intent to Acquire
Orbit Network Inc., an e-commerce Internet and travel
technology company.
Deer Park, NY, December 29, 1998/PR Newswire/--Surge Components, Inc.,(NASDAQ:
SRGE-news) today announced that the Company has signed a letter of intent to
acquire Orbit Network Inc. Orbit provides leisure and international travel
suppliers and resellers the ability to market and distribute their products
electronically to consumers, corporations and travel agents worldwide through
one distribution vendor. Orbit is the only e-commerce company that provides
proprietary connections to not just the Internet (World Wide Web), but also
America Online, Inc. (AOL), and all the major airline reservation systems-
AMADEUS, Galileo International, SABRE, and WORLDSPAN.
A selection of Orbit's global clients include: Eurostar UK Ltd., Air Jamaica,
Anheiser Busch Theme Parks, Palace Resorts, Rocky Mountains Railtours, Orlando
Convention & Visitor Bureau, Las Vegas Convention & Visitor Bureau and Monaco
Ministry of Tourism. Orbit operates its own branded World Wide Web Sites
(www.orbitnetwork.com and www.travelfile.com), one of the first travel services
on America Online, Inc. (AOL) (AOL keyword: travelfile), and sites for key
travel marketing partners such as the American Society of Travel Agents (ASTA)
(www.astanet.com) and the Caribbean Tourism Organization (CTO)
(www.caribtourism.com). Orbit currently generates annual gross revenues in
excess of $2.3 million and is projecting over $12 million in revenue for 1999.
Under the letter of intent, the shareholders of Orbit would exchange their
shares of Orbit for 25 million shares (76% of the then outstanding shares) of
Common Stock of Surge, and Orbit would be merged into Surge or a wholly owned
subsidiary.
The merger is dependent upon, among other thing, the completion of appropriate
due diligence, the receipt of a fairness opinion from an independent investment
banker, approval of the Surge shareholders and the completion of definitive
merger documents.
The acquisition supports Surge's strategy to enter the rapidly growing
e-commerce industry. "We believe this is an opportunity that will give Surge
access to e-commerce and maximize shareholder value," said Ira Levy, President
and CEO of Surge. "There is significant growth opportunity in the less automated
leisure and international travel niches, with other e-commerce vendors primarily
focused on booking air, hotel, and car, remarked F. William Guerin, President of
Orbit Network Inc." With leisure travel accounting for about
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50% of the annual $3.6 trillion dollars in worldwide travel spending, there is
considerable market opportunity and potential for substantial long term growth.
Robert DePalo, a senior partner at Equilink, LLC of New York, acted as
investment banker to the parties for the transaction.
This press release contains forward looking statements regarding the Company's
business strategy and future plans of operation. Forward looking statements
involve known and unknown risks and uncertainties. These and other important
factors, including those mentioned in various filings with the Securities and
Exchange Commission made periodically by the Company ( available to the public
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 Company disclaims any
obligation to provide public updates, revisions or amendments to any forward
looking statements made herein to reflect changes in the Company's expectations
or future events.
