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Surge Holdings Announces Asset Purchase Resulting in the Addition of 9,800 Retail Locations and an Expected $48.7 Million of Annualized Revenue*

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 – October 3, 2019 – Surge Holdings, Inc. (“Surge”) (OTCQB: 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.

*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.

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