As filed with the Securities and Exchange Commission on June 5, 1996
Registration No. 33-93470
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
ON FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GLASGAL COMMUNICATIONS, INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of
Incorporation or organization)
94-2914253
(I.R.S. Employer
Identification Number)
151 Veterans Drive
Northvale, New Jersey 07647
(201) 768-8082
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(Address, including zip code, and telephone
number, including area code, of Registrant's
principal executive offices)
Isaac J. Gaon
Chief Executive Officer
Glasgal Communications, Inc.
151 Veterans Drive
Northvale, New Jersey 07647
(201) 768-8082
(Name, address and telephone number of agent for service of process)
------------------------------------
Copies to:
Robert H. Friedman, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<PAGE>
PROSPECTUS
GLASGAL COMMUNICATIONS, INC.
1,983,750 SHARES OF COMMON STOCK
This Prospectus relates to 1,983,750 shares (the "Shares") of common
stock, $.001 par value per share (the "Common Stock") of Glasgal Communications,
Inc., a Delaware corporation (the "Company"). The Shares of Common Stock are
issuable by the Company upon the exercise of 1,983,750 redeemable warrants (the
"Redeemable Warrants"). The Redeemable Warrants are exercisable at any time
prior to September 21, 1999 at an initial exercise price of $3.75 per share,
subject to adjustment and are redeemable by the Company at a redemption price of
five cents ($.05) per Redeemable Warrant commencing September 21, 1996 on 30
days prior written notice, provided that the average closing bid price of Common
Stock equals or exceeds $5.625 for any 20 trading days within a period of 30
consecutive trading days ending within the fifth day immediately prior to the
notice of redemption.
The Company's Common Stock is traded on the Nasdaq SmallCap Market
("Nasdaq") under the symbol ("GLAS"). On June 4, 1996, the closing bid price for
the Common Stock on Nasdaq was $10-11/16.
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AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS,"
LOCATED AT PAGE 3.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES 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 JUNE __, 1996
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents which have been filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934
(the "Exchange Act"): (i) the Company's Annual Report on Form 10-K for the
fiscal year ended April 30, 1995, (ii) the Company's Quarterly Reports on Form
10-Q for the quarters ended July 31, 1995, October 31, 1995 and January 31, 1996
and (iii) the Company's Current Report on Form 8-K dated October 30, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents.
The Company's Application for registration of its Common Stock under
Section 12(b) of the Exchange Act filed with the Securities and Exchange
Commission on May 2, 1996, is incorporated by reference into this Prospectus and
shall be deemed to be a part thereof.
Any person receiving a copy of this Prospectus may obtain without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(unless such exhibits are specifically incorporated by reference in such
documents). Such requests should be directed to the Company, 151 Veterans Drive,
Northvale, New Jersey 07647, Attention: James M. Caci, telephone number (201)
768-8082.
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RISK FACTORS
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. EACH
PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS
INHERENT IN, AND AFFECTING THE BUSINESS OF, THE COMPANY BEFORE MAKING AN
INVESTMENT DECISION.
WORKING CAPITAL DEFICIENCIES; HISTORY OF LOSSES. The Company has a
history of limited working capital and had working capital deficiencies in the
years ended December 31, 1992 and 1993, the four months ended April 30, 1994,
and the fiscal year ended April 30, 1995 of $1,953,000, $1,648,000, $1,967,000,
and $3,756,000, respectively. In addition, although the Company had net income
of $43,000 for the year ended December 31, 1992, it incurred net losses of
$147,000, $2,145,000 and $1,643,000 for the year ended December 31, 1993, the
four months ended April 30, 1994 and the fiscal year ended April 30, 1995. There
can be no assurance that the Company will generate sufficient revenues to meet
expenses or to operate profitably in the future.
REVOLVING CREDIT FACILITY; PAST DEFAULTS UNDER REVOLVING CREDIT
FACILITY. The Company's revolving credit facility expired on May 31, 1996. The
Company has extended this facility through August 31, 1996. There can be no
assurance that the Company will be able to further extend its revolving credit
agreement or refinance the amount outstanding under such agreement. If the
Company is unable to extend its revolving credit agreement or refinance the
amount outstanding under such agreement or if the bank accelerates the amount
due thereunder, the Company's business will be materially adversely affected.
The Company has in the past been in violation of certain of the financial
covenants contained in the revolving credit facility. At May 31, 1996,
$2,495,000 was outstanding under such agreement.
DEPENDENCE ON KEY PERSONNEL. The Company's future success depends in
large part on the continued service of its key personnel. In particular, the
loss of the services of Isaac Gaon, Chief Executive Officer, Robert Gadd, Vice
President - Federal and Enterprise Systems, David Tobey, President of Computer
Aided Software Integration, Inc. ("CASI"), of which the Company owns 80% of the
issued and outstanding shares or Maurice Kulik, President of Signatel Ltd., the
Company's wholly-owned Canadian subsidiary, could have a material adverse effect
on the operations of the Company. The Company has key-man life insurance on the
lives of each of Messrs. Gaon and Gadd in the amount of $1,000,000,
respectively, with the Company named as the sole beneficiary. The Company has an
employment agreement with Mr. Gaon which expires on December 31, 1996 and which
may be terminated by Mr. Gaon upon six months prior written notice to the
Company. The Company has an employment agreement with Mr. Tobey which expires on
April 30, 2001, which may be terminated by the Company for cause or by Mr. Tobey
for good reason. The Company has an employment agreement
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with Mr. Gadd which expires on December 31, 1996 and which may be terminated by
Mr. Gadd upon six months prior written notice to the Company. The Company has an
employment agreement with Mr. Kulik which may be terminated by Mr. Kulik upon
six months' notice and which may be terminated by the Company for cause. The
Company's future success and growth also depends on its ability to continue to
attract, motivate and retain highly qualified employees, including those with
the technical expertise necessary to operate the business of the Company. There
can be no assurance that the Company will be able to attract, motivate and
retain such persons.
COMPETITION. The Company competes with other companies involved in the
installation and servicing of local and wide area networks, the provision of
software tools to systems integrations and the distribution of data
communications equipment. These competitors include computer manufacturers,
software vendors, telephone companies and distribution companies. These markets
are highly competitive, and some companies with which the Company competes are
substantially larger and have significantly greater resources than the Company.
There can be no assurance that the Company will be able to compete successfully
in the future.
EXPORT SALES; ADVERSE EFFECT OF INABILITY TO COLLECT ALL EXPORT
RECEIVABLES. For the year ended December 31, 1993, the four months ended April
30, 1994, the fiscal year ended April 30, 1995, and the nine months ended
January 31, 1996 the Company had export sales which were approximately 8.9%,
8.7%, 11.7% and 8.8%, respectively, of net sales. While the Company attempts to
obtain payment on export sales prior to shipment or to obtain letters of credit,
it is not always able to do so. The collection of receivables pertaining to
export sales is generally more difficult than the collection of receivables
arising from domestic sales. There can be no assurance that the Company will be
successful in its efforts to collect all of such receivables. The inability of
the Company to collect all of such receivables could have an adverse effect on
the Company's cash flows and revenues. Of net accounts receivable at January 31,
1996, approximately $1,000,000 (18.0%) were attributable to export sales. In
addition, the Company's international business is subject to various risks
common to international activities, including political instability, economic
instability and recessions, the inherent difficulty of administering business
abroad and the need to comply with a wide variety of foreign import and U.S.
export laws, tariffs and other regulatory requirements. The Company's
competitiveness in overseas markets generally may be negatively impacted when
there is a significant increase in the value of the dollar against European
currencies or the currencies of other countries where the Company does business.
The Company also expects to continue to face heightened competition from
manufacturers and distributors in the European market.
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CONTROL BY PRINCIPAL SHAREHOLDER. Ralph Glasgal, the Chairman of the
Board and President of the Company, through his beneficial ownership and through
a voting agreement with Direct Connect International Inc. ("DCI") has the power
to vote approximately 35% of the Common Stock. DCI has pledged 2,000,000 of the
shares of Common Stock it owns in the Company as collateral for a loan. If the
pledgee were to become the owner of such shares, Mr. Glasgal would no longer
have the power to vote such shares.
EXTENDED LEAD TIMES FOR REALIZATION OF REVENUE. Due to the nature and
size of orders that the Company is now pursuing there is a longer lead time
between the initiation of prospective business and the consummation of a
transaction, if any. Consequently, significantly more resources are required to
manage this process. As such, there is likely to be substantial fluctuations in
sales volume on a month-to-month and quarter-to-quarter basis. The pursuit of
this type of business increases the Company's risk of failure, especially given
its present level of working capital. As a result, if the Company experiences
lower than expected sales volume for an extended period of time, there will be a
material adverse effect on the Company.
UNCERTAINTY OF REVENUES FROM RECENT CONTRACT. While the Company
recently entered into a contract with Telos Corporation ("Telos") to act as a
subcontractor under Telos' contract with the Immigration and Naturalization
Service (the "INS"), the contract is an "open" contract, which may be cancelled
by the INS at any time without penalty. While the Company has made sales of
approximately $6,437,000 under this contract as of January 31, 1996, there can
be no assurance that any future sales will result or that any such sales will
result in profits for the Company. In addition, due to the United States
government budget impasse, sales to date under this contract have been lower
than expected. No assurance can be given as to when the budget impasse will be
resolved.
SHARES ELIGIBLE FOR FUTURE SALE. The sale, or availability for sale, of
substantial amounts of Common Stock in the public market pursuant to Rule 144 or
otherwise could adversely affect the market price of the Common Stock and could
impair the Company's ability to raise additional capital through the sale of its
equity securities.
The Redeemable Warrants and the shares of Common Stock underlying such
Redeemable Warrants, upon exercise thereof, will be freely tradeable without
restriction under the Securities Act, except for any Redeemable Warrants or
shares of Common Stock purchased by an "affiliate" of the Company, which will be
subject to the resale limitations of Rule 144 under the Securities Act. Also, an
additional 950,000 redeemable warrants and the shares of Common Stock underlying
such redeemable warrants are registered under the Securities Act. Holders of
such redeemable warrants have agreed not to Transfer such redeemable warrants,
or the underlying
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shares of Common Stock, prior to March 21, 1997, without the prior written
consent of Joseph Stevens & Company and the Company.
In addition, without the consent of Joseph Stevens & Company, the
Company has agreed not to sell or offer for sale any of its securities prior to
March 21, 1997, except pursuant to outstanding options and warrants and pursuant
to the Company's existing option plan and no option shall have an exercise price
that is less than the fair market value per share of Common Stock on the date of
grant.
NO DIVIDENDS. The Company has not paid dividends on its Common Stock
since its inception, other than distributions made by the Predecessor (as
hereinafter defined) to shareholders of the Predecessor in amounts sufficient to
reimburse the Predecessor's shareholders for federal (and some state) income tax
liabilities arising from the Predecessor's former status as an "S" corporation.
The Company currently intends to retain earnings, if any, for use in the
business and does not anticipate paying any dividends to its shareholders in the
foreseeable future. Each of the Company's loan agreements with the Company's
bank includes a restriction on the payment of dividends.
POSSIBLE ACQUISITIONS. It is currently anticipated that a portion of
the Company's future growth will result from acquisitions of other similar or
complementary businesses. In October 1994, the Company consummated the
acquisition of Signatel. In addition, on April 24, 1996 the Company acquired 80%
of the issued and outstanding capital stock of CASI, a provider of software
tools and services to systems integrators and independent software vendors which
simplify the design, installation, integration and support of information
systems. The Company has no other current plan or agreement to acquire any other
business. There can be no assurance that any other transaction will be
consummated or that they will result in increased levels of profit for the
Company. In addition, there can be no assurance that the Company will be able to
integrate or manage successfully other acquired businesses.
CERTAIN ANTI-TAKEOVER CHARTER PROVISIONS. Shares of preferred stock may
be issued in the future by the Company without further shareholder approval and
upon such terms and conditions, and having such rights, privileges and
preferences, as the Board of Directors of the Company may determine. The rights
of the holders of the Company's Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the future. The issuance of preferred stock could have the effect
of making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of the outstanding voting stock of the
Company. The Company does not have any present plans to issue any shares of
preferred stock.
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<PAGE>
THE COMPANY
In May 1994, Glasgal Communications, Inc., a New Jersey corporation
incorporated in 1975 (the "Predecessor") merged with and into Sellectek
Incorporated, a California corporation incorporated in 1983 ("Sellectek") (the
"Merger"). The surviving entity, Sellectek, changed its name to Glasgal
Communications, Inc. following the Merger and continued its existence under the
laws of the State of California. The Merger provided the Company with an
immediate infusion of approximately $750,000 in cash contributed by Sellectek
and created a publicly-traded vehicle to finance the future growth of the
Company's operations. Prior to the Merger, Sellectek was a publicly-traded
company whose common stock was listed on Nasdaq under the symbol ("SLTK")
without any on-going business operations. The Company's sole business is the
business of the Predecessor, and while Sellectek was the survivor of the Merger,
for accounting purposes, the Merger is treated as a reverse acquisition with the
Predecessor as the acquiror. On January 29, 1996, the Company reincorporated
into the State of Delaware. Glasgal Communications, Inc., a California
corporation, merged with and into Glasgal Communications, Inc., a Delaware
corporation, which corporation was incorporated in January 1996. As used in this
Prospectus, the term "Company" refers collectively to Glasgal Communications,
Inc., the Predecessor, Signatel Ltd., a wholly owned subsidiary of the Company
and Computer-Aided Software, Inc., of which the Company ownes 80% of the issued
and outstanding shares.
The Company is an open systems integrator that designs, installs and
services local and wide area networks which incorporate a broad range of
computer hardware, networking systems and software products and provides
software tools and services which simplify the integration of systems. The
Company also distributes data communications equipment. Networks are used to
distribute information which can be in the form of data, voice, images, video
and facsimile to multiple users. A local area network ("LAN") allows for the
transmission and sharing of data within one location. A wide area network
("WAN") allows for the transmission and sharing of data among many locations.
The Company's strength as an open systems integrator lies in its WAN expertise,
as well as its capabilities in connecting disparate computing systems thereby
facilitating virtually seamless communication among organizations. As an open
systems integrator, the Company provides consulting and design services,
hardware, software, premises wiring, phone lines, installation and after- sales
service.
Although the Company was founded in 1975 as a distributor of data
communications equipment and services, beginning in 1991 the Company began
redirecting its efforts to become an open systems integrator providing complete
computer network systems and integration services. The Company believes that the
integration
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service sales will account for an increasingly larger percentage of the
Company's sales in future periods.
The Company is a single source supplier of equipment and telephone line
services from a variety of providers. The Company is an authorized reseller of
products for over 100 manufacturers and distributors, including Novell Inc., SCO
Unix (Santa Cruz Operations, Inc.), Intel Corporation, Hewlett-Packard Co., Bay
Networks, Inc., Sun Microsystems Computer Corporation, Micom Communications,
Inc., Microcom Inc., Cisco Systems Inc., RAD Data Communications, Inc. and
Racal-Datacom Inc. In addition, the Company resells telephone line services from
major companies, including LDDS WorldCom, Inc., Metropolitan Fiber Systems, Inc.
and Qwest Communications, Inc.
The Company has 15 sales and service offices throughout the United
States and five offices in Canada. The Company's export sales amounted to
approximately 11.7% and 8.8% of net sales for the fiscal year ended April 30,
1995 and the nine months ended January 31, 1996, respectively. These sales are
for hardware only, which are sold to over fifty international agents around the
world.
The Company's objective is to become one of the leading open systems
integrators providing complete enterprise networking solutions to national and
international organizations. To achieve its objective, the Company will continue
to supplement its core competency in data communications with its expertise in
all aspects of networking and connectivity.
On October 28, 1994, the Company consummated the acquisition of all of
the voting capital stock of Signatel, a Canadian distributor of data
communications equipment and services for 875,000 shares of Common Stock. The
acquisition was accounted for as a pooling of interests. In addition, on April
24, 1996, the Company acquired 80% of the issued and outstanding capital stock
of CASI for a purchase price of $500,000 cash and 44,260 shares of the Company's
Common Stock. CASI is a provider of software tools and services to systems
integrators, independent software vendors and corporate information system
departments which simplify the design, installation, integration and support of
information systems. These tools utilize a proprietary Application Definition
Language to load information system configuration and messaging parameters into
a common repository. This repository is used by each tool comprising the
Integrator's Workbench Product Series ("IWPS") to automate the administration of
and information exchange among heterogeneous system environments. CASI also
provides services which assist customers in using IWPS, or which use IWPS to
distribute fully integrated systems in support of customer contracts.
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The Company's executive offices are located at 151 Veterans Drive,
Northvale, New Jersey 07647. The telephone number of the Company is (201)
768-8082.
USE OF PROCEEDS
If the Redeemable Warrants are exercised in full at $3.75 per share,
the Company would receive net proceeds of approximately $7,067,000, however,
there is no assurance that all or any portion of the Redeemable Warrants will be
exercised or will be exercised at $3.75 per share. The funds raised by exercise
of the Redeemable Warrants will be retained and used for working capital and
other general corporate purposes.
DILUTION
At January 31, 1996, the net tangible book value of the Company was
$6,058,000 or $.42 per share of Common Stock based on the 14,422,390 shares of
Common Stock outstanding. Net tangible book value per share represents the
amount of the Company's total assets less intangible assets and total
liabilities, divided by the number of shares of Common Stock outstanding. After
giving effect to the receipt of net proceeds (estimated to be approximately
$7,067,000) from the exercise of all of the Redeemable Warrants hereby, the pro
forma net tangible book value of the Company at January 31, 1996 would have been
$13,125,000 or $.80 per share of Common Stock, representing immediate dilution
of approximately 79% or $2.95 per share of Common Stock to investors upon the
exercise of Redeemable Warrants. The following table illustrates the per share
dilution:
Warrant Exercise price per share of Common Stock ........... $ 3.75
Net tangible book value per share of Common
Stock at January 31, 1996 .................................. $ .42
Increase attributable to exercise of Redeemable
Warrants ................................................... $ .38
Pro Forma net tangible book value per share of
Common Stock after exercise of Redeemable
Warrants ................................................... $ .80
--------
Dilution to investors upon exercise of ..................... $ 2.95
Redeemable Warrants ========
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TRANSFER AGENT, WARRANT AGENT AND REGISTRAR
The transfer agent, warrant agent and registrar for the Common Stock
and Redeemable Warrants is Continental Stock Transfer & Trust Company, New York,
New York.
PLAN OF DISTRIBUTION
This offering is self-underwritten; the Company has not employed an
underwriter for the issuance of the Common Stock upon the exercise of the
Redeemable Warrants and will bear all expenses of the offering. The Company has
previously agreed to pay to Joseph Stevens & Company, an underwriter in the
Company's public offering completed in September 1995, a commission equal to 5%
of the exercise price of the Redeemable Warrants.
The Redeemable Warrants may be exercised, at the discretion of the
holder, by the delivery to Continental Stock Transfer & Trust Company (the
"Warrant Agent") at 2 Broadway, New York, New York 10004 of the Redeemable
Warrant certificate (the "Warrant Certificate") accompanied by an election of
exercise and payment of the warrant exercise price for each share of Common
Stock purchased in accordance with the terms of such warrant. Payment must be
made in the form of cash or a cashier's or certified check payable to the order
of the Company. Delivery of the certificates representing the Redeemable Warrant
Shares will be made upon receipt of a certificate representing the underlying
stock purchase rights, duly executed for transfer together with payment for the
exercise price thereof. If fewer than all Redeemable Warrants are exercised, a
new Warrant Certificate evidencing the Redeemable Warrants remaining unexercised
will be issued to the Warrantholder.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed upon for the
Company by Olshan Grundman Frome & Rosenzweig LLP, New York, New York. A member
of Olshan Grundman Frome & Rosenzweig LLP holds options to purchase 38,293
shares of Common Stock. Robert H. Friedman, a member of Olshan Grundman Frome &
Rosenzweig LLP, is a director of the Company and holds options to purchase
63,146 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company as of April 30,
1994 and 1995, and for the years ended December 31, 1992 and 1993, the four
months ended April 30, 1994 and the year ended April 30, 1995, included in the
Company's Form 10-K for the fiscal year ended April 30, 1995, which is
incorporated herein by reference, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
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thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
The financial statements of the Company's wholly-owned subsidiary,
Signatel Ltd., for the year ended November 30, 1992 included in the Company's
Form 10-K for the fiscal year ended April 30, 1995, which is incorporated herein
by reference, have been audited by Mintz & Partners, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
reports. Signatel Ltd.'s financial statements for the year ended November 30,
1993 included in the Company's Form 10-K for the fiscal year ended April 30,
1995, which is incorporated herein by reference, have been audited by Deloitte &
Touche, independent public accountants, as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said reports.
To the extent that a firm of independent public accountants audits and
reports on the financial statements of the Company issued at future dates, and
consents to the use of their report thereon, such financial statements also will
be incorporated by reference herein in reliance upon their report and said
authority.
CHANGE OF ACCOUNTANTS
In June 1994, the Company determined to change accountants to Arthur
Andersen LLP. The Company's prior auditors, KPMG Peat Marwick resigned. On the
same date, the Company engaged Arthur Andersen LLP to audit its financial
statements. The decision to change accountants was made with the approval of the
Company's Board of Directors.
The Company believes, and has been advised by KPMG Peat Marwick that it
concurs in such belief, that, during the fiscal year ended December 31, 1993 and
subsequent thereto, the Company and KPMG Peat Marwick did not have any
disagreement on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of KPMG Peat Marwick, would have caused it to make
reference in connection with its report on the Company's financial statements to
the subject matter of the disagreement.
No report of KPMG Peat Marwick on the Company's financial statements
for either of the past two fiscal years contained an adverse opinion, a
disclaimer or opinion or a qualification or was modified as to uncertainty,
audit scope or accounting principles. During such fiscal periods, there were no
"reportable events" within the meaning of Item 304(a)(1) of Regulation S-K
promulgated under the Securities Act.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
regional offices: 7 World Trade Center, Suite 1300, New York, New York 10048,
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 upon payment of
the fees prescribed by the Commission. In addition, reports, proxy statements
and other information concerning the Company (symbol: GLAS) can be inspected and
copied at the offices of the Nasdaq Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006, on which the Common Stock of the Company is listed.
The Company has also filed with the Commission a Post- Effective
Amendment No. 1 to Form S-1 on Form S-3 Registration Statement (together with
all amendments and exhibits thereto, the "Registration Statement") under the
Securities Act with respect to the Shares offered hereby. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement, copies of which may be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the fees prescribed by the
Commission.
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No dealer, salesman or any other person is authorized to give any information or
to make any representations in connection with this offering not contained in
this Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any other person.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the Securities offered by this Prospectus
or an offer by any person in any jurisdiction where such an offer or
solicitation is not authorized or is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that information herein is correct as of any time subsequent to
its date.
TABLE OF CONTENTS
Page
Incorporation of Certain Documents
By Reference ............................................................ 2
Risk Factors .............................................................. 3
The Company ............................................................... 7
Use of Proceeds ........................................................... 9
Dilution .................................................................. 9
Transfer Agent, Warrant Agent and Register ................................ 9
Plan of Distribution ...................................................... 9
Legal Matters ............................................................. 10
Experts ................................................................... 10
Change of Accountants ..................................................... 10
Available Information ..................................................... 11
GLASGAL COMMUNICATIONS, INC.
1,983,750 SHARES OF COMMON STOCK
PROSPECTUS
June ___, 1996
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses (other than
underwriting discounts and commissions) which will be paid by the Registrant in
connection with the issuance and distribution of the securities being
registered. With the exception of the SEC registration fee and the NASD filing
fee, all amounts shown are estimates.
SEC registration fee .................................. $ 7,990.10*
NASD filing fee ....................................... 2,817.13*
Nasdaq listing expenses ............................... 10,000.00*
Blue Sky fees and expenses (including
legal and filing fees ................................. 45,000.00*
Printing expenses (other than stock
certificates) ......................................... 50,000.00*
Printing and engraving of stock ....................... 2,000.00*
certificates
Transfer and Warrant Agent and Registrar
fees and expenses ..................................... 2,500.00*
Accounting fees and expenses .......................... 50,000.00*
Legal fees and expenses (other than Blue
Sky) .................................................. 150,000.00*
Miscellaneous expenses ................................ 31,692.77*
--------------
Total ................................................. $ 352,000.00*
==============
- --------------------
* Estimated expenses as previously set forth in the earlier effective
registration statement for the same offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 6 of the Company's By-laws authorize indemnification of
directors and officers as follows:
The corporation shall, to the fullest extent permitted by Section 145
of the General Corporation Law of Delaware, as that Section may be amended and
supplemented from time to time, indemnify any director, officer or trustee which
it shall have power to indemnify under the Section against any expenses,
liabilities or other matters referred to in or covered by that Section. The
indemnification provided for in this Article (i) shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under any by-law,
agreement or vote on stockholders or disinterested directors or otherwise, both
as to action in their official capacities and as to action in another capacity
while holding such office, (ii) shall continue as to a person who has ceased to
be a director, officer or trustee and (iii) shall inure to the benefit of the
heirs, executors and administrators of such a person. The corporation's
obligation to provide indemnification under this Article shall be offset to the
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<PAGE>
extent of any other source of indemnification or any otherwise applicable
insurance coverage under a policy maintained by the corporation or any other
person.
Expenses incurred by a director of the Corporation in defending a civil
or criminal action, suit or proceeding by reason of the fact that he is or was a
director of the Corporation (or was serving at the Corporation's request as a
director or officer of another corporation) shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized by relevant sections of the General Corporation Law of
Delaware.
To assure indemnification under this Article of all such persons who
are determined by the corporation or otherwise to be or to have been
"fiduciaries" of any employee benefit plan of the corporation which may exist
from time to time, such Section 145 shall, for the purposes of this Article, be
interpreted as follows: an "other enterprise" shall be deemed to include such an
employee benefit plan, including, without limitation, any plan of the
corporation which is governed by the Act of Congress entitled "Employee
Retirement Income Security Act of 1974," as amended from time to time; the
corporation shall be deemed to have requested a person to serve an employee
benefit plan where the performance by such person of his duties to the
corporation also imposes duties on, or otherwise involves services by, such
person to the plan or participants or beneficiaries of the plan; excise taxes
assessed on a person with respect to an employee benefit plan pursuant to such
Act of Congress shall be deemed "fines"; and action taken or omitted by a person
with respect to an employee benefit plan in the performance of such person's
duties for a purpose reasonably believed by such person to be in the interest of
the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the corporation.
Section 145 of the Delaware General Corporation Law provides as
follows:
(a) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than action by or in the right
of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to
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<PAGE>
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea
of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery
or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of
a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of
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<PAGE>
disinterested directors so directs, by independent legal counsel in a
written opinion or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending a
civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses incurred by
other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him
against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence
had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who
is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this section with respect to
the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person
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<PAGE>
with respect to any employee benefit plan; and references to "serving
at the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee,
or agent with respect to any employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner
he reasonably believed to be in the interest of the participant and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
The Company maintains a directors and officers insurance and company
reimbursement policy. The policy insures directors and officers against
unindemnified loss arising from certain wrongful acts in their capacities and
reimburses the Company for such loss for which the Company has lawfully
indemnified the directors and officers. The policy contains various exclusions,
none of which relate to the offering hereunder.
The Company has entered into indemnity agreements with each officer and
director of the Company. The contracts provide for indemnification of such
persons against expenses, liabilities and losses.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
EXHIBIT NO.
- -----------
1.1 Form of Underwriting Agreement by and among the
Company, Maurice Kulik, Robert Engleberg and Joseph
Stevens & Company, L.P. as Representative of the
several Underwriters.
**4.1 Specimen Certificate of the Company's Common Stock.
5.1 Opinion of Olshan Grundman Frome & Rosenzweig LLP
with respect to legality of the Common Stock.
23.1 Consent of Olshan Grundman Frome & Rosenzweig LLP,
included in Exhibit No. 5.
*23.2 Consent of Arthur Andersen LLP, independent public
accountants.
*23.3 Consent of Deloitte and Touche, independent public
accountants.
*23.4 Consent of Mintz & Partners, independent public
accountants.
*24.1 Power of Attorney, included on the signature page to
this Registration Statement.
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<PAGE>
- ---------------------
* Filed herewith
** Incorporated by reference to the Company's Registration Statement on
Form S-3, filed with the Commission on April 8, 1996 (Commission File
No. 333-03414)
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of an action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post- effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to
be part of this Registration Statement as of the time it was declared effective.
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<PAGE>
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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<PAGE>
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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Northvale, State of New Jersey on the 5th day of
June, 1996.
GLASGAL COMMUNICATIONS, INC.
By: /s/ Isaac J. Gaon
-----------------
Isaac J. Gaon
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints RALPH GLASGAL and ISAAC J. GAON, his true
and lawful attorney-in-fact, each acting alone, with full power of substitution
and resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments, including post-effective amendments,
to this registration statement, and to file the same, with exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact or
their substitutes, each acting along, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Ralph Glasgal Chairman of the Board
- ------------------------ and President June 3, 1996
Ralph Glasgal
/s/ Isaac J. Gaon Chief Executive Officer June 3, 1996
- ------------------------ and Director (principal
Isaac J. Gaon executive officer)
/s/ Joseph M. Salvani Director June 5, 1996
- ------------------------
Joseph M. Salvani
/s/ Robert H. Friedman Director June 5, 1996
- ------------------------
Robert H. Friedman
/s/ Maurice Kulik Director June 5, 1996
- ------------------------
Maurice Kulik
/s/ Thomas Berry Director June 5, 1996
- ------------------------
Thomas Berry
/s/ James M. Caci Chief Financial Officer June 5, 1996
- ------------------------ (principal financial and
James M. Caci accounting officer)
II-8
MINTZ & PARTNERS
Chartered Accounts
------------------
NEXIA
INTERNATIONAL
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our Auditors' Report on the
statement of operations and statement of changes in financial position of
Signatel Ltd. for the year ended November 30, 1992 dated January 14, 1993
included in Glasgal Communications, Inc. Form S-3 Registration Statement and to
all references to our Firm included in the Registration Statement.
/s/Mintz & Partners
-------------------
North York, Canada Chartered Accountants
June 4, 1996
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
As independent public accountants, we consent to the use, in this Form S-3
Registration Statement dated June 5, 1996 of Glasgal Communications, Inc., of
our reported dated January 14, 1994 on the November 30, 1993 financial
statements of Signatel Ltd. It should be noted that we have not audited any
financial statements of the company subsequent to November 30, 1993 nor
performed any audit procedures subsequent to the date of our report.
Toronto, Canada /s/Delitte & Touche
June 4, 1996 -------------------
Chartered Accountants
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
To Glasgal Communications, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated July 27, 1995 in
Glasgal Communications, Inc. Form 10-K for the year ended April 30, 1995 and to
all references to our Firm included in this registration statement.
Roseland, New Jersey /s/Arthur Anderson LLP
June 4, 1996
