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): November 6, 2002
SURF GROUP INC.
(Exact name of registrant as specified in its charter)
New York 0-33513 11-3579554
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
57 Main Street, East Hampton, New York 11937
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (631) 329-9100
n/a
(Former name or address, if changed since last report)
Item 5. Other Events
On November 6, 2002, Surf Group Inc. (the "Company") issued a press release
reporting that Jeffrey R. Esposito, Surf Group's President and principal
shareholder, and a majority of the shareholders of the Company, have entered
into an agreement (the "Purchase Agreement") to sell an aggregate of 4,760,250
shares, or 96%, of the Company's common stock to a group of five individual
purchasers from the United Kingdom, for an aggregate purchase price of $250,000.
The closing of the stock sales is expected to take place within approximately 10
days, pending the satisfaction of certain closing conditions. A copy of each of
the Company's press release and the Purchase Agreement are attached hereto as
Exhibits 99.1 and 99.2, respectively, and are incorporated by reference into
this Report.
At the closing under the Purchase Agreement (the "Closing"), the Company's
current officers and Board of Directors will resign and four persons designated
by the purchasers will be elected as the new officers and directors of the
Company (this group is sometimes referred to herein as the "New Management
Group").
As part of the Purchase Agreement, certain shareholders of the Company
(other than the selling shareholders) have agreed to grant to the purchasers or
their assignees, on the date of the Closing, an option to purchase an aggregate
of 130,000 additional shares of common stock (the "Option"). Under the terms of
the Option, the purchasers will be entitled to purchase: (1) an aggregate of up
to 45,000 shares for $.30 per share for a period of three months from the
Closing; (2) an aggregate of up to 40,000 shares for $.50 per share for a period
of six months from the Closing; and (3) an aggregate of up to 45,000 shares for
$.625 per share for a period of nine months from the Closing.
As a condition to the consummation of the Purchase Agreement, certain
shareholders holding an aggregate of 40,000 shares of common stock have agreed
to enter into a lock-up agreement with the Company pursuant to which such
shareholders will agree not to sell, collectively, more than 9,000 shares of
common stock of the Company in any calendar month during the six (6) months
commencing from the date of the Closing and that any such sales will be made
over the OTC Bulletin Board or any successor market. A copy of the lock-up
agreement is attached hereto as Exhibit 99.3 and is incorporated by reference
into this Report.
Following the consummation of the transactions contemplated by the Purchase
Agreement, it is contemplated that TDS (Telemedicine) Inc., a privately held
Delaware company controlled by the New Management Group, will merge with and
survive as, a subsidiary of the Company (the "Proposed Merger"). As a result of
the Proposed Merger, the stockholders of TDS (Telemedicine) Inc., a majority of
which consists of the New Management Group, will own approximately 85.5% of the
Company.
In connection with the Purchase Agreement and the Proposed Merger, it is
contemplated that the assets and liabilities of the retail surf clothing
business in which the Company has historically been engaged, will be sold to an
entity owned by Jeffrey R. Esposito and the other selling shareholders of the
Company. The purchase price for the sale of these assets is expected to be
nominal. As a result of this anticipated sale of the Company's retail business,
following the Proposed Merger, the Company will be engaged solely in the
business of TDS (Telemedicine) Inc.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Press Release dated November 6, 2002.
99.2 Stock Purchase Agreement
99.3 Lock-Up Agreement
99.4 Stock Option Agreement
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 hereunto duly authorized.
SURF GROUP INC.
By: /s/ Jeffrey R. Esposito
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Name: Jeffrey R. Esposito
Title: President
Dated as of November 6, 2002
EXHIBIT INDEX
Exhibit No. Exhibit
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99.1 Press Release dated November 6, 2002.
99.2 Stock Purchase Agreement
99.3 Lock-Up Agreement
99.4 Stock Option Agreement