AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON MAY 20, 1997
REGISTRATION NO. 333-
-----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------------------
THE TRANSLATION GROUP, LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 22-3382869
-------- ----------
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) No.)
----------------------------------
44 Tanner Street
Haddonfield, New Jersey 08033
(609) 795-8669
(Address of principal executive offices, including zip code)
The Translation Group, Ltd. 1995 Stock Option Plan
Sitomer & Rome Consulting Agreement
James W. Grau Consulting Agreement
(Full Title of the Plans)
----------------------------------
CHARLES D. CASCIO
The Translation Group, Ltd.
44 Tanner Street
Haddonfield, New Jersey 08033
(609) 795-8669
(Name, Address and telephone number of Agent for Service)
----------------------------------
Copy to:
IRVING ROTHSTEIN, ESQ Heller,
Horowitz & Feit, P.C.
292 Madison Avenue
New York, New York 10017
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Proposed Amount of
to be Registered Registered Maximum Maximum Registra-
- ------------------ ------------ offering Aggregate tion Fee
Price per Price (7) ---------
Share (6) ---------
---------
<S> <C> <C> <C> <C>
Common Stock, $0.001 335,000 $6.00 $2,010,000 $609.09
par value (1)
Common Stock, $0.001 125,000 6.00 750,000 227.27
par value (2)
Common Stock, $0.001 200,000 6.60 1,320,000 400.00
par value (3)
Common Stock, $0.001 25,000 9.625 240,625 72.92
par value(4)
Common Stock, 20,000 3.50 70,000 21.21
Purchase Warrants(4)
Common Stock, $0.001 20,000 6.00 120,000 36.36
par value (5)
TOTALS 2,565,000 $4,510,625 $1,366.85
</TABLE>
(1) Represents shares issued and issuable pursuant to exercise of stock options
granted and to be granted under The Translation Group, Ltd. 1995 Stock Option
Plan (the "Plan").
(2) Represents the resale of up to 125,000 shares of Common Stock issuable upon
the exercise of stock options granted under the Plan to persons who may be
deemed affiliates of the registrant.
(3)Represents the resale of up to 200,000 shares of Common Stock issuable upon
the exercise of stock options granted under the Plan to persons who may be
deemed affiliates of the registrant.
(4) Represents the resale of securities issued pursuant to a Consulting
Agreement.
(5) Represents shares underlying Warrants.
(6) Estimated solely for the purpose of calculating the registration fee.
(7) Proposed maximum offering price per share/warrant is estimated based upon
the closing sale price of the Company's Common Stock and Warrants on May 14,
1997.
Pursuant to Rule 416, there is also being registered such additional securities
as may become issuable pursuant to the anti-dilution provisions of the stock
options and/or the warrants.
IN ADDITION TO THE PROSPECTUS REQUIRED TO BE INCLUDED IN THIS REGISTRATION
STATEMENT ON FORM S-8, AN ADDITIONAL PROSPECTUS PREPARED IN ACCORDANCE WITH THE
REQUIREMENTS OF FORM S-3 IS FILED HEREWITH PURSUANT TO GENERAL INSTRUCTION C TO
FORM S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation Of Certain Documents By Reference
-----------------------------------------------
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Prospectus dated December 2, 1996.
(b) The Company's Quarterly Reports on Form 10-QSB for the fiscal
quarters ended September 30, 1996 and December 31, 1996 filed pursuant to
Section 13 of the Exchange Act.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, dated November 13, 1996, filed pursuant to
Section 12 of the Exchange Act.
In addition, all reports and other documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities offered hereby
then remaining unsold, shall be deemed to be incorporated by reference herein
and shall be deemed to be a part hereof from the date of the filing of each such
report or document.
Item 4. Description of Securities
-------------------------
Inapplicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
None.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Section 145 of the Delaware General Corporation Law, as amended,
authorizes the Company to indemnify any director or officer under certain
prescribed circumstances and subject to certain limitations against certain
costs and expenses, including attorneys' fees actually and reasonably incurred
in connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which such person is a party by reason of
being a director or officer of the Company if it is determined that such person
acted in accordance with the applicable standard of conduct set forth in such
statutory provisions. Article 9 of the Company's Certificate of Incorporation
contains
provisions relating to the indemnification of directors and officers and Article
9 of the Company's By-Laws extends such indemnities to the full extent permitted
by Delaware law.
The Company may also purchase and maintain insurance for the benefit of
any director or officer which may cover claims for which the Company could not
indemnify such person.
Item 7. Exemption from Registration Claimed
-----------------------------------
The securities to be reoffered and resold pursuant to this Registration
Statement were or will be issued upon exercise of stock options in transactions
that were exempt from registration pursuant to Section 4(2) of the Securities
Act. The selling shareholders are officers and/or directors of the Company with
access to all material information concerning the Company.
Item 8. Exhibits
--------
The following exhibits are filed as part of this Registration
Statement:
4.1 The Translation Group, Ltd. 1995 Stock Option Plan (incorporated by
reference from the Company's Registration Statement on Form SB-2 dated July 25,
1996, Registration No. 333-8857).
4.2 James W. Grau Consulting Agreement dated February 20, 1997.
4.3 Sitomer and Rome Consulting Agreement dated as of May 15, 1997.
5. Opinion of Counsel.
24.1 Consent of Counsel (included in the Opinion of Counsel filed as
part of Exhibit No. 5).
24.2 Consent of Votta and Company.
Item 9. Undertakings
------------
The undersigned small business issuer hereby undertakes to:
(1) For determining liability under the Securities Act of 1933, treat
each post-effective amendment as a new Registration Statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(2) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
II-1
PROSPECTUS
- ----------
350,000 SHARES OF COMMON STOCK
AND 20,000 COMMON STOCK PURCHASE WARRANTS
THE TRANSLATION GROUP, LTD.
---------------------------------
This Prospectus relates to an aggregate of 325,000 shares of the Common
Stock, par value $.001 per share (the "Common Stock"), of The Translation Group,
Ltd. (the "Company") which, following the date hereof, may be issued upon the
exercise of stock options granted to them pursuant to the Company's 1995 Stock
Option Plan (the "Plan"). This prospectus also relates to 25,000 shares of
Common Stock (the "Consulting Stock") and 20,000 Common Stock Purchase Warrants
(the "Warrants" and collectively with the Common Stock and the Consulting Stock,
the "Securities") issued to consultants of the Company pursuant to Consulting
Agreements. The Common Stock, Warrants and/or Consulting Stock may be sold by
the selling shareholders identified herein under "Selling Shareholders." The
Company will not receive any part of the proceeds from the sale of any of these
shares by the Selling Shareholders, although it will receive the exercise price
of the stock options and Warrants if they are exercised. THE SECURITIES OFFERED
HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
On May 14, 1997, the closing sale price of the Company's Common Stock,
as reported on the Bulletin Board, was $9.625.
The Selling Shareholders may be deemed to be "affiliates" of the
Company, as that term is defined under the Securities Act of 1933, as amended
(the "Act"). In connection with this offering, each of the Selling Shareholders
may be deemed to be an "underwriter" of the Company's Securities offered hereby,
as that term is defined under the Act. The Selling Shareholders intend to sell
the securities offered hereby from time to time for their own respective
accounts in the open market at the prices prevailing therein or in individually
negotiated transactions at such prices as may be agreed upon. Each Selling
Shareholder will bear all expenses with respect to the offering of shares by him
except the costs associated with registering his shares under the Act and
preparing and printing this Prospectus.
---------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------------------
The date of this Prospectus is May 20, 1997.
TABLE OF CONTENTS
PAGE NO.
--------
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . 3
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . 4
SELLING SHAREHOLDERS. . . . . . . . . . . . . . . . . . . 11
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . 12
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . 12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . 12
No person has been authorized by the Company to give any information or
to make any representations not contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
so authorized. This Prospectus does not constitute an offer of any interest in
the Shares of the Company in any state or other jurisdiction where such offer
would be unlawful. Neither the delivery of this Prospectus nor any sale
hereunder shall under any circumstances create an implication that the
information herein is correct as of any time subsequent to its date.
2
AVAILABLE INFORMATION
---------------------
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith is obligated to
file reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such Reports, proxy statements and other
information filed by the Company can be inspected at the Headquarters Office of
the Securities and Exchange Commission located at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549 and at certain of the Commission's regional offices
at the following addresses: 7 World Trade Center, 13th Floor, New York, New York
10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material may be obtained from the Public Reference Section of the
Commission, at 450 Fifth Street, N.W., Room 1024, Washington, D.C. at prescribed
rates. The Commission also maintains a Web Site that contains reports, proxy and
information statements and other information regarding the Company. This
material can be found at http://www.sec.gov.
THE COMPANY
-----------
The Translation Group, Ltd. ("TTGL") was incorporated under the laws of
Delaware on July 7, 1995. On January 17, 1996, TTGL consummated its first
acquisition when the shareholders of Bureau of Translation Services, a
Pennsylvania corporation ("BTS") exchanged their shares of BTS for shares of
TTGL (the "Stock Exchange") so that BTS became a wholly owned subsidiary of
TTGL. TTGL and BTS are sometimes referred to herein collectively as the
"Company." The offices of the Company are located at 44 Tanner Street,
Haddonfield, New Jersey 08033 and its telephone number at that location is (609)
795-8669.
TTGL translates conventional documents and software written in one
language into other languages. The Company specializes as a provider of high
tech translation and localization services in the information technology ("IT")
sector of the translation market. Localization is the art of converting from one
language to another giving careful consideration to custom of the local area.
3
RISK FACTORS
------------
THE PURCHASE OF THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK, INCLUDING, BUT NOT NECESSARILY LIMITED TO, THE RISKS DESCRIBED BELOW.
BEFORE SUBSCRIBING FOR THE SECURITIES OFFERED HEREBY, EACH PROSPECTIVE INVESTOR
SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, AS WELL AS THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS.
1. Special Risks Specific to the Company's Business. The following are
certain factors regarding the Company's business which investors in this
Offering should be aware.
- Difficulty in Maintaining High Growth; Fluctuations
in Gross Margins. While the Company experienced
significant growth in fiscal 1996 (347% increase in
operating income), no assurance can be given that
even with projected growth due to the Company's
consolidation plans and other growth through
application of the proceeds of this Offering, that
the Company will be able to maintain or even
approximate such growth in the future. Moreover, it
should be noted that due to the nature of the
Company's business, gross margins may fluctuate
significantly from quarter-to-quarter and from
year-to-year.
- Dangers of Reliance on International Trade.
Approximately 29% of the Company's sales for the
fiscal year ended March 31, 1996 were to foreign
markets of which 22% were to the Far East. Export
sales for the year ended March 31, 1995 amounted to
48% of gross revenues principally to the Far East.
For a brief period, the Company hedged the Japanese
yen by foreign currency exchange transactions.
Foreign currency fluctuations to date have had no
impact on the Company. The Company currently only
bills at agreed amounts in US Dollars. Future markets
may include areas of political instability, and/or
currency valuation fluctuation.
- Ability to Remain Current with Evolving Technology.
The Company's business is concentrated in the high
technology niche of the translation industry. Thus,
the Company is heavily dependent upon its ability to
adapt as the computer and related software industries
continue to develop new products thereby causing
current state of the art technology to quickly become
out of date. No assurance can be given that the
Company will be able to expand or even continue in
its niche.
4
- Reliance upon Software Marketing License. The Company
currently holds an exclusive marketing license in
North America to a product developed by debis
Systemhaus KSP ("debis"), a wholly-owned subsidiary
of Daimler-Benz, and a non-exclusive license
elsewhere, until 5/24/00. While the Company believes
that its relationship with debis is good, no
assurance can be given that the marketing license
will always be available to the Company or that the
product, not yet marketed in North America, will be
commercially successful.
- Plans to Make Unspecified Acquisitions with the
Proceeds Without Stockholder Approval. The Company
intends to act as a consolidator in the translation
industry and to acquire other companies in this
field. The Company currently has executed letters of
intent with respect to two acquisitions. Under
applicable law, the Company is not obligated to seek
stockholder approval or disseminate information about
target companies to its stockholders prior to
consummating any transactions and has no intention of
voluntarily doing so. Thus, since the Company intends
to expend a substantial portion of its assets for
this purpose and such acquisitions will be made
without any oversight or input from the stockholders,
a substantial portion of the Company's assets will be
used solely in management's discretion.
2. Potential Need for Additional Financing. It is possible that
significant additional funding will be required in order for the Company to
further expand the marketing of its services, to develop technology and the
licensing or sale thereof and to acquire other businesses and/or technologies.
Therefore, the Company will likely be required to raise additional funds through
alternative financing methods. There can be no assurance that the Company will
be able to obtain additional funding when needed, or that such funding, if
available, will be obtainable on terms acceptable to the Company.
3. Dependence on Key Personnel. The success of the Company depends in
part upon the continued successful performance of the Company's current
President and Chief Executive Officer and its Chairman and Chief Operating
Officer, each of whom have employment agreements until December 2000, for the
continued research, development, marketing and operation of the Company.
Although the Company has employed, and will likely employ in the future,
additional qualified employees as well as retaining consultants having
significant experience, if Ms. Theodora Landgren or Mr. Charles Cascio fail to
perform their duties for any reason, the
5
ability of the Company to market, operate and support its products may be
adversely affected. While the Company owns two year key man life insurance
policies in the face amount of $2,000,000 on the lives of each of Ms. Landgren
and Mr. C. Cascio, there can be no assurance that the insurance proceeds would
adequately compensate the Company for the loss of their lives. While the Company
is located in areas where the available pool of people is substantial, there is
significant competition for qualified personnel. Over 15 years ago, the
Company's President and Chief Executive Officer pled guilty to tax evasion and
proxy fraud. The Company does not believe this will impact his ability to lead
the Company to its objectives.
4. Competition. Although the Company believes that the services it
provides are unique in several ways, and that the processes it uses have been
developed over a period of time and are part of its "trade secrets" and
"know-how" and are considered as its intellectual properties, Berlitz and AT&T,
among others, claim to provide similar services to those provided by the
Company, and other competitive products similar to its products are currently
being marketed. Moreover, there can be no assurance that there are no products
that would compete effectively with the Company's proposed products or that
other companies, many of which have financial resources, research and
development capabilities, marketing staffs and facilities greater than those of
the Company, are not currently developing, or in the future will not develop,
products that may have advantages over the Company's proposed products or that
may undercut what the Company believes are the advantages of the Company's
products.
5. Patents and Protection of Proprietary Information. Currently, the
Company's services and work in tools (i.e., pieces of software that make the
translation quicker) are not protected by patents and/or copyrights and the
Company relies on its prior development activities that have resulted in a body
of information and processes that it has designated as "trade secrets" and
"know-how" and is considered as its intellectual property. However, the
commercial success of the Company may in the future depend, in part, upon the
ability of the Company to obtain strong patent protection. Accordingly, the
Company may file or cause to be filed on its behalf patent applications, where
appropriate, relating to new developments or improvements to technology or the
uses of products thereof. Given the importance of the proprietary information to
the Company, there are significant risks that the Company's failure to obtain
patent protection, preserve its trade secrets or operate without infringing upon
the proprietary rights of others may significantly and adversely effect the
Company. No assurance of obtaining patent protection can be given. There is also
no assurance that (i) any patents will be issued to the Company; (ii) any issued
patents will prove enforceable; or, (iii) the Company will derive any
competitive advantage therefrom. To the
6
extent that any patents can not be issued, the Company may be subject to more
competition. The issuance of patents, in some but not all aspects of a product,
may be insufficient to prevent competitors from essentially duplicating the
product by designing around the patented aspects. In addition, there is no
assurance that the Company's products or processes will not infringe patents
owned by others. In any event, the Company will continue to rely on what it
believes to be its proprietary know-how. However, there can be no assurance that
the obligation to maintain the confidentiality of such proprietary information
will not wrongfully be breached by employees, consultants, advisors, suppliers
or others, or that the proprietary know-how will not otherwise become known or
be independently developed by competitors in such a manner that the Company has
no practical recourse.
6. Dependence on Principal Customers. For the year ended March 31,
1996, two of the Company's customers accounted for approximately 37% and 15%,
respectively, of the Company's sales, and for the year ended March 31, 1995, the
same two of the Company's customers accounted for approximately 43% and 28%,
respectively. The Company's policy, since the beginning of its previous fiscal
year, has been to diversify its customer base so as to alleviate the risks
associated with depending on any one particular customer for business. The
initial success of this program is evidenced by the fact that during the five
month period ending August 31, 1996, the amount of sales from the same two
customers referred to above were even further reduced and accounted for
approximately only 26% and 3%, respectively, of the Company's sales. While two
other customers combined to provide approximately 35% of the Company's sales
during this period, they had never previously accounted for 10% or more of sales
and the Company does not expect them to be such principal customers in the
future. Management believes that the Company's prior concentration of sales will
continue to decline in the future as the Company diversifies its customer base,
especially following the start of the Company's acquisition program.
Accordingly, the Company believes that the loss of any individual customer will
not have a material adverse impact on the Company's future operating results and
financial condition.
7. Need to Increase Marketing Capability. In order to achieve continued
growth, the Company will have to expand its marketing and sales and develop a
network of marketing and sales representatives and/or acquire other companies.
There can be no assurance that the Company will be able to build such a
marketing staff or sales force, that the cost of establishing such a marketing
staff or sales force will not exceed any product revenues, or that the Company's
direct sales and marketing efforts will be successful. Similarly, there can be
no assurance that the Company will be able to acquire other companies or even if
acquired, whether such acquisitions will be beneficial to the
7
Company. Alternatively, the Company may enter into co-marketing or other
licensing arrangements. To enter into co-marketing or other licensing
arrangements, the Company must establish and maintain corporate relationships.
There can be no assurance that such corporate relationships can be established
or maintained on terms acceptable to the Company, if at all. To the extent the
Company enters into co-marketing or other licensing arrangements, any revenues
received by the Company will be dependent on the efforts of third parties, and
there can be no assurance that such efforts will be successful. Although the
Company believes that future corporate partners, if any, will have an economic
motivation to commercialize any such products, the Company may not have any
control over such partners' commercialization efforts.
8. Need of Support for International Expansion. One element of the
Company's strategy is to identify, develop and exploit opportunities in
international markets. The Company may seek to enter into an alliance with some
strategic partners to accomplish this objective and it is premature to determine
whether such alliances will eventuate, or be successful. There can be no
assurance that the Company will be able to locate strategic partners or that
such strategy ultimately will be successful. Alternatively, the Company's
international success will depend, in part, upon its own ability to provide its
international customers with technical support and customer service for its
products. The Company does not presently have the personnel to provide such
services in all locations. There can be no assurance that such services can be
provided on acceptable terms, if at all. Failure to provide such technical
support and customer services could have a material adverse effect on the
Company's ability to expand into international markets.
9. No Liability Insurance. The marketing and sale of services of the
type proposed to be sold by the Company entails a risk of product liability
claims and claims of omission by consumers and others. While the Company has a
general policy of disclaiming liability arising from its work, the Company has
no liability insurance covering these areas. In the event of a successful
liability claim against the Company, lack of insurance coverage could have a
material adverse effect on the Company.
10. Voting Control; Potential Anti-Takeover Effect; Voting Trust
Agreement. The executive officers and directors of the Company beneficially own
approximately 28.09% of the Company's outstanding Common Stock and, accordingly,
will most likely be able to elect all of the directors and, therefore, to
control totally the Company's affairs. In addition, the Company is subject to
provisions of the General Corporation Law of the State of Delaware respecting
business combinations which could, under certain circumstances, also hinder or
delay a change in control. Furthermore, Ms. Theodora Landgren, the Chairman and
Chief
8
Operating Officer of the Company has, including her own shares of Common Stock
and pursuant to the terms of a Voting Trust Agreement with certain of the
founders of TTGL, voting control until December 1, 1998 over an aggregate of
397,500 shares of Common Stock (approximately 20.56% of the current shares of
Common Stock outstanding) giving management voting control over approximately
33.89% of the outstanding Common Stock.
11. No Payment of Dividends. The Company has not paid any dividends on
its Common Stock. For the foreseeable future, the Company anticipates that all
earnings, if any, that may be generated from the Company's operations will be
used to finance the growth of the Company and that cash dividends will not be
paid to holders of the Common Stock.
12. Possible Depressive Effect of Rule 144 Sales and Shares Currently
Held by Selling Security Holders. 885,000 unregistered Shares of the Company's
Common Stock are be held by present stockholders. Under Rule 144 of the Act, all
of such Shares are expected to be able to be publicly sold beginning July 7,
1997, subject to volume restrictions (i.e. during any three month period an
amount equal to the greater of the average weekly trading volume or 1% of the
then outstanding shares, or approximately 18,000 shares assuming only the
existing shares and the shares Common Stock offered hereby are outstanding). The
holders of such 885,000 shares have agreed not to make any Rule 144 sales until
December 1, 1998 without the prior written consent of Werbel-Roth Securities,
Inc. Also, 120,500 shares of Common Stock currently held by certain security
holders are registered and will be available for sale, in blocs of one-third
every six months beginning six months after December 2, 1996. Also, 300,000
Warrants owned by certain founders of the Company along with the underlying
shares of Common Stock are registered and will be available for resale 18 months
after December 2, 1996 unless earlier permitted by Werbel-Roth Securities, Inc.
Any such sales could have a depressive effect on the market price for the Common
Stock being offered hereby.
13. Possible Issuance of Substantial Amounts of Additional Shares
Without Stockholder Approval. The Company has an aggregate of 4,985,000 shares
of Common Stock authorized but unissued and reserved for issuance pursuant to
current commitments and an additional 8,084,000 shares of Common Stock
authorized but unissued and not reserved for specific purposes. All of such
shares may be issued without any action or approval by the Company's
stockholders; however, until June 2, 1998 the approval of Werbel- Roth
Securities, Inc. is required. Although there are no other present plans,
agreements, commitments or undertakings with respect to the issuance of
additional shares, or securities convertible into any such shares by the
Company, any shares issued would further dilute the percentage ownership of the
Company held by the public stockholders and would likely have an adverse impact
on the
9
market price of the Common Stock. In addition to the above referenced shares of
Common Stock which may be issued without stockholder approval, the Company has
1,000,000 shares of authorized preferred stock. While the Company has no present
plans to issue any shares of preferred stock, the Board of Directors has the
authority, without stockholder approval, to create and issue one or more series
of preferred stock and to determine the voting, dividend and other rights of
holders of such preferred stock; however until June 2, 1998 the approval of
Werbel-Roth Securities, Inc. is required. The issuance of any preferred stock
could have an adverse effect on the rights of holders of Common Stock and could
have the effect of discouraging, or used as a defensive measure against, a
takeover candidate. The mere existence of this potential could have an adverse
impact on the market price of the Common Stock.
14. Penny Stock Regulation. Broker-dealer practices in connection with
transactions in "penny stocks" are regulated by certain penny stock rules
adopted by the Securities and Exchange Commission. Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and, if the broker dealer is the sole market-maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the market, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, broker-dealers who sell such securities to
persons other than established customers and accredited investors (generally,
those persons with assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse), the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security that becomes
subject to the penny stock rules. If the Company's securities become subject to
the penny stock rules, investors in this Offering may find it more difficult to
sell their shares and/or Warrants.
10
SELLING SHAREHOLDERS
--------------------
An aggregate of 350,000 shares of the Company's Common Stock and 20,000
Warrants is being offered pursuant to this Prospectus by the persons whose names
appear below (the "Selling Shareholders"). These shares will be issued to the
Selling Shareholders pursuant to the exercise of stock options. The shares may
be offered by the Selling Shareholders from time to time at prevailing market
prices. The following table sets forth with respect to each Selling Shareholder:
(i) the nature of any position, office or other material relationship he has
with the Company; (ii) the number of shares of Common Stock beneficially owned
by him prior to the offering, including shares of Common Stock underlying
warrants and stock options, whether or not exercisable; (iii) the amount to be
offered for his account; and (iv) the amount and percentage of the outstanding
Common Stock to be owned by him after the offering if he sells all shares
offered, and all other factors remain constant.
<TABLE>
<CAPTION>
Securities
Owned Shares Owned After
Name and Before Shares Offering
Relationship Offering Offered Amount %(1)
- ------------ -------- ------- ------ ----
<S> <C> <C> <C> <C>
Charles D. Cascio (2) 400,000 100,000 300,000 14.08
Theodora Landgren (3) 585,000 100,000 485,000 22.76
Richard J.L. Herson (4) 122,500 65,000 57,500 2.88
John Wetter (5)(6) 25,000 25,000 -0- N/A
Luis Garcia-Barrio (6)(7) 25,000 25,000 -0- N/A
Gary Schlosser (8)(9) 10,000 10,000 -0- N/A
Richard A. Sitomer 12,500 12,500 -0- N/A
Todd Rome 12,500 12,500 -0- N/A
James W. Grau (10) 20,000 20,000 -0- N/A
</TABLE>
(1) The percentages are based upon 1,931,000 shares of Common
Stock issued and outstanding as of May 14, 1997, plus the amount offered by each
person and any other currently exercisable warrants or options beneficially
owned by each person.
(2) President, Chief Executive Officer and a Director.
Includes 100,000 warrants subject to restrictions on transferability for 18
months beginning December 2, 1996 and 100,000 vested stock options.
11
(3) Chairman, Chief Operating Officer and a Director. Includes
100,000 warrants subject to restrictions on transferability for 18 months
beginning December 2, 1996 and 100,000 vested stock options.
(4) Chief Accounting Officer and a Director. Includes 65,000
stock options which vest as described in footnote 6.
(5) Vice President- Production.
(6) Consists solely of stock options which vest 20% at grant
and in 20% increments on the next four anniversaries of the grant date.
(7) Vice President- Special Projects.
(8) Director.
(9) Consists solely of fully vested stock options.
(10) Consists of 20,000 Warrants.
PLAN OF DISTRIBUTION
--------------------
The Selling Shareholders intend to sell the shares offered hereby from
time to time for their own respective accounts in the open market at the prices
prevailing therein or in individually negotiated transactions at such prices as
may be agreed upon. Each Selling Shareholder will bear all expenses with respect
to the offering of shares by him except the costs associated with registering
his shares under the Act and preparing and printing this Prospectus.
EXPERTS
-------
The financial statements incorporated in this Prospectus by reference
to the Company's Prospectus dated December 2, 1996 have been audited by Votta
and Company, independent auditors, as stated in their report with respect
thereto, and have been so included herein in reliance upon the report of such
firm given on their authority as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Prospectus dated December 2, 1996.
(b) The Company's Quarterly Reports on Form 10-QSB for the fiscal
quarters ended September 30, 1996 and December 31, 1996.
12
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, dated November 13, 1996, filed pursuant to
Section 12 of the Exchange Act.
In addition, all reports and other documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities offered hereby
then remaining unsold, shall be deemed to be incorporated by reference herein
and shall be deemed to be a part hereof from the date of the filing of each such
report or document.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any or all of
the documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information
incorporated herein by reference. Requests should be addressed to: Richard J.L.
Herson, Chief Accounting Officer, The Translation Group, Ltd., 44 Tanner Street,
Haddonfield, NJ 08033. Requests may also be made to Mr. Herson via telephone at
(609) 795-8669.
13
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement or amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Haddonfield and State of New Jersey on the 8th
day of May, 1997.
THE TRANSLATION GROUP, LTD.
By: /s/ Charles D. Cascio
-------------------------------------
Charles D. Cascio
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement or amendment has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Charles D. Cascio Chief Executive Officer, 5/8/97
- ---------------------------- President and Director
Charles D. Cascio (Principal Executive Officer)
/s/ Richard J.L. Herson Chief Financial Officer 5/8/97
- ---------------------------- Secretary, Treasurer and
Richard J.L. Herson Director (Principal
Financial and Accounting
Officer)
/s/ Theodora Landgren Chairman of the Board and 5/8/97
- ---------------------------- Chief Operating Officer
Theodora Landgren
- ----------------------------
Julius Cherny Director
/s/ Gary M. Schlosser Director 5/8/97
- ----------------------------
Gary M. Schlosser
</TABLE>
14
EXHIBIT 4.2
February 20, 1997
Mr. Charles D. Cascio
President
The Translation Group, Ltd.
44 Tanner Street
Haddonfield, New Jersey 08033
Dear Charles:
This letter will confirm our understanding whereby The
Translation Group, Ltd. ("TTGL") hereby agrees to retain and utilize the
services of James W. Grau ("Grau"), and Grau agrees to perform such services, on
the following terms and conditions:
1. Services
(a) Grau shall assist TTGL in servicing trade and customers
already in place, marketing services to new customers and
identifying new product uses.
(b) All work products shall be pre-approved in writing by TTGL
prior to distribution and use. However, Grau's mailing lists
shall remain personal to Grau and need not be pre-approved by
TTGL.
2. Compensation
(a) TTGL shall issue 20,000 warrants to Grau which warrants
shall be similar in all respects to the warrants sold in
TTGL's initial public offering.
(b) TTGL shall pay to Grau a negotiated fee to be
pre-determined for any approved new contracts arranged by
Grau. Grau will pre-register these potential parties with TTGL
to prevent any misunderstandings.
(c) If TTGL requests non-routine marketing services which will
entail additional time or expense, Grau shall not be required
to perform such work without additional
compensation as agreed upon in advance in writing by both
parties.
(d) TTGL agrees to file a Registration Statement on Form S-8
within two weeks of the date hereof to register the warrants
and the underlying shares of common stock.
3. Representations, Warranties and Agreements by TTGL
(a) TTGL shall indemnify, save and hold harmless, Grau from
any and all costs, expenses, damages or liabilities of any
kind (including reasonable attorney's fees) with respect to
any claim, demand or action against Grau by any person, firm,
corporation or other entity relating to TTGL, provided,
however, Grau shall not be entitled to any indemnification
hereunder where the costs, expenses, damages or liabilities to
Grau were caused by the gross negligence of Grau or by any
acts in violation or breach of this Agreement.
(b) TTGL acknowledges that Grau has regulated licenses which
must be recognized by TTGL's requests for services. Grau is a
high level New Jersey Casino Control Commission license
holder, and a registered Federal Lobbyist, and a consultant to
The Trump Organization and many of its companies, and
Entertainment Director at The Mar-a-Lago Club in Palm Beach,
Florida.
4. Representations and Warranties by Grau
(a) Grau can legally enter into this Agreement and this
Agreement does not violate any other agreements, arrangements
or understandings of Grau.
(b) Grau is possessed with adequate knowledge so as to
properly carry out and fulfill his responsibilities under this
Agreement.
5. Term and Termination
The term of this Agreement shall commence as of March 1, 1997 and
terminate on February 28, 1998. This Agreement may be renewed for
additional one year periods with the mutual consent of the parties.
6. Arbitration
Any dispute arising out of or in connection with this Agreement or the
interpretation thereof which is not resolved by Grau and TTGL shall be
submitted to arbitration before the American Arbitration Association in
New York, whose rules and regulations shall apply, and any decision
rendered by the
arbitrator or arbitrators may be entered as a judgment in a court of
competent jurisdiction in the State of New York.
7. Assignment
This Agreement and all rights hereunder are personal to TTGL and Grau
and neither this Agreement nor any of the obligations or the rights and
benefits of any parties hereto may be transferred or assigned except to
an affiliate.
8. Prior Agreements
This Agreement supersedes and cancels any and all contracts,
arrangements or understandings between the parties with respect to the
subject matter hereof dated or agreed to the date hereof.
9. Counterparts
This Agreement may be executed in counterparts, all of which taken
together shall be deemed one original.
10. Notices
All notices, requests, demands, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly
given when delivered personally or when mailed, if mailed by first
class mail, postage prepaid, to the address of the applicable party set
forth above on both parties letterheads.
If this letter constitutes TTGL's understanding of the Agreement
reached between TTGL and Grau, please sign (by a duly authorized
corporate representative) the enclosed copy and return such copy to
Grau, in which event this letter shall constitute the complete and
entire understanding between TTGL and Grau and may not be changed,
altered or terminated except in writing duly signed by both TTGL and
Grau.
Very truly yours,
James W. Grau
AGREED AND ACCEPTED:
The Translation Group, Ltd.
Charles D. Cascio
President
cc: Don Kanterman
EXHIBIT 4.3
CONSULTING AGREEMENT
This Agreement, entered into as of May 15, 1997, acknowledges
and confirms the terms of our corporate consulting agreement (the "Agreement")
as follows:
1. The Translation Group, Ltd., with its offices located at 44
Tanner Street, Haddonfield, New Jersey 08033 (the "Company"), hereby engages
Richard A. Sitomer and Todd Rome (the "Consultants") and the Consultants each
hereby agrees to render services to the Company as its corporate consultant.
2. During the term of this Agreement.
(a) The Consultants shall provide advice to, and
consult with, the Company concerning strategic planning, corporate organization
and structure, acquisitions, mergers and other similar business combinations and
shall review and advise the Company regarding its overall progress, needs and
financial condition. Said advice and consultation shall be provided by the
Consultants to the Company in such form, manner and place as the Company
reasonably requests except that the Consultants shall provide such services from
such places and during such hours as may be determined by the Consultants.
(b) The services of the Consultants are non-
exclusive and subject to paragraph 5 hereof, and each Consultant may render
services of the same or similar nature, as herein described, to an entity whose
business is in competition with the Company, directly or indirectly.
3. The Company shall pay to the Consultants for their
consulting services hereunder the annual sum of five thousand shares of the
Company's Common Stock for the Term (as defined herein), which aggregate amount
of twenty five thousand shall be paid in advance upon the execution hereof. The
Company will also reimburse the Consultants, promptly upon receipt of invoices
therefore, for out-of-pocket expenses incurred in connection with its services
hereunder. All expenses in excess of $25.00 shall be approved in advance by the
Company.
4. The term of this Agreement shall be for five years
commencing on the date hereof (the "Term").
5. Neither Consultant will disclose to any other person, firm,
or corporation, nor use for his own benefit, during or after the term of this
Agreement, any trade secrets or other information designated as confidential by
the Company which is acquired by the Consultants in the course of performing
services hereunder. (A trade secret is information not generally known to the
trade which gives the Company an advantage over its
competitors. Trade secrets can include, by way of example, products or services
under development, production methods and processes, sources of supply, customer
lists, marketing plans and information concerning the filing or pendency of
patent applications).
6. The Company agrees to indemnify and hold each Consultant
(collectively, the "Indemnified Persons") harmless from and against all losses,
claims, damages, liabilities, costs or expenses (including reasonable attorneys'
and accountants' fees) joint and several arising out of the performance of this
Agreement, whether or not the Consultant is a party to such dispute. This
indemnity shall not apply, however, where a court of competent jurisdiction has
made a final determination that a Consultant engaged in gross recklessness
and/or willful misconduct in the performance of its services hereunder which
gave rise to the loss, claim, damage, liability, cost or expense sought to be
recovered hereunder (but pending any such final determination, the
indemnification and reimbursement provision of this Agreement shall apply and
the Company shall perform its obligations hereunder to reimburse the Consultant
for his expenses).
The provisions of this paragraph (6) shall survive the
termination and expiration of this Agreement.
7. This Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and supersedes and cancels any
prior communications, understandings, and agreements between the parties. This
Agreement cannot be modified or changed, not can any of its provisions be
waived, except by written agreement signed by all parties.
8. This Agreement shall be governed by the laws of the State
of New York any dispute arising out of this Agreement shall be adjudicated in
the courts of the State of New York or in the federal court for the Southern
District of New York, and the Company hereby agrees that service of process upon
it by registered mail at the address shown in this Agreement shall be deemed
adequate and lawful.
9. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
2
IN WITNESS WHEREOF, the parties have executed this Agreement
as of May 15, 1997.
--------------------------
Richard A. Sitomer
--------------------------
Todd Rome
ACCEPTED AND AGREED to as of
this 15th day of May, 1997
THE TRANSLATION GROUP, LTD.
By:
--------------------------------
Name: Charles D. Cascio
Title: President
3
EXHIBIT 5
HELLER, HOROWITZ & FEIT, P.C.
ATTORNEYS AT LAW
292 MADISON AVENUE
NEW YORK, N.Y. 10017
(212) 685-7600
May 19, 1997
The Translation Group, Inc.
44 Tanner Street
Haddonfield, NJ 08033
Attention: Mr. Charles D. Cascio
President
Gentlemen:
As counsel for your Company, we have examined your certificate
of incorporation, by-laws, and such other corporate records, documents and
proceeding and such questions of law as we have deemed relevant for the purpose
of this opinion.
We have also, as such counsel, examined the Registration
Statement (the "Registration Statement") of your Company on Form S-8, covering
the registration under the Securities Act of 1933, as amended, of (i) 660,000
shares of the Company's Common Stock which are to be issued to eligible
employees of the Company pursuant to the exercise of options granted but not yet
exercised or to be granted under the 1995 Incentive and Non-Qualified Stock
Option Plan (the "1995 Plan"; such shares referred to as the "Option Shares");
(ii) 25,000 shares of Common Stock issued to a consultant of the Company (the
"Consulting Stock") and (iii) 20,000 Common Stock Purchase Warrants (the
"Warrants") and their underlying shares of Common Stock. In addition, we have
reviewed the "Reoffer Prospectus" included in the Registration Statement,
covering future sales of the Option Shares Consulting Stock and the Warrants by
grantees who are or may be affiliates of the Company. Our review has also
included the exhibits and form of disclosure statement required to be given to
employees of the Company pursuant to Part 1 of Form S-8 (the "Section 10(a)
Prospectus").
On the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly authorized and validly
existing and in good standing under the laws of the State of Delaware, with
corporate power to conduct the business which it conducts as described in the
Registration Statement.
2. The Company has an authorized capitalization of 15,000,000
Shares of Common Stock and 1,000,000 shares of Preferred Stock.
HELLER, HOROWITZ & FEIT, P.C.
The Translation Group, Ltd.
May 19, 1997
Page 2
3. The Option Shares have been duly and validly authorized,
and, upon the issuance thereof in accordance with the provisions of the 1995
Plan and the payment therefor by grantees under the plan, will be duly and
validly issued as fully paid and non-assessable shares of Common Stock of the
Company.
4. The Consulting Stock and Warrants have been duly and
validly authorized and represent fully paid and non-assessable securities of the
Company.
We hereby consent to the use of our name in the Registration
Statement and the Reoffer Prospectus under the caption "Legal Opinions" and we
also consent to the filing of this opinion as an exhibit thereto.
Very truly yours,
/s/ HELLER, HOROWITZ & FEIT, P.C.
HELLER, HOROWITZ & FEIT, P.C.
HH&F/jr
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Translation Group, Ltd. on Form S-8 of the report of Votta & Company dated
May 1, 1996 (November 1996 as to Notes 17 and 19), appearing in the Prospectus
of The Translation Group, Ltd. dated December 2, 1996 and to the reference to
Votta & Company under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ VOTTA & COMPANY
Haddonfield, New Jersey
May 15, 1997
