As filed with the Securities and Exchange Commission on February 24, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
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 94-2914253
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
23 Madison Road
Fairfield, New Jersey 07004
(201) 808-4000
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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.
23 Madison Road
Fairfield, New Jersey 07004
(201) 808-4000
(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>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed
Maximum Proposed
Amount to Offering Maximum
Title of Each Class of be Price Aggregate Amount of Registration
Securities to be Registered Registered Per Share Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 525,423 $5.44(1) $2,858,302(1) $866.15
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Common Stock, $.001 par value, issuable 276,297(2) $4.88(3) $1,348,330(3) $408.59
upon exercise of options and warrants
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Total........................................................................................... $1,275.74
==================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended (the
"Securities Act"), based upon $5.44, the per share average of high and low
sales prices of the Common Stock on the Nasdaq SmallCap Market on February
19, 1997.
(2) Pursuant to Rule 416 under the Securities Act, this Registration Statement
also relates to an indeterminate number of additional shares that may be
issued as result of anti-dilution provisions of the Options and Warrants.
(3) Represents 276,297 shares of Common Stock issuable upon the exercise of
outstanding options and warrants at an average exercise price of $4.88 per
share.
-1-
<PAGE>
PROSPECTUS
GLASGAL COMMUNICATIONS, INC.
801,720 SHARES OF COMMON STOCK
This Prospectus relates to the reoffer and resale by certain selling
stockholders (the "Selling Stockholders") of shares (the "Shares") of the Common
Stock, $.001 par value (the "Common Stock"), of Glasgal Communications, Inc., a
Delaware corporation (the "Company") that were (i) previously issued by the
Company to the Selling Stockholders, (ii) will be issued by the Company to the
Selling Stockholders upon the exercise of certain options to purchase Common
Stock or (iii) will be transferred by Ralph Glasgal to the Selling Stockholders
upon the exercise of certain options to purchase Common Stock which were granted
to such stockholders by Mr. Glasgal.
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders, but will receive amounts upon the exercise of options
which amounts will be used for working capital and other corporate purposes. The
Company has agreed to bear certain expenses (other than selling commissions and
fees and expenses of counsel and other advisors to the Selling Stockholders) in
connection with the registration and sale of the Shares being offered by the
Selling Stockholders. See "Use of Proceeds."
The Selling Stockholders have advised the Company that the resale of their
Shares may be effected from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions or otherwise at market
prices prevailing at the time of the sale or at prices otherwise negotiated. The
Selling Stockholders may effect such transactions by selling the Shares to or
through broker-dealers who may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agent or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer may
be in excess of customary commissions). Any broker-dealer acquiring the Shares
from the Selling Stockholders may sell such securities in its normal market
making activities, through other brokers on a principal or agency basis, in
negotiated transactions, to its customers or through a combination of such
methods. See "Plan of Distribution."
The Company's Common Stock is traded on the Nasdaq SmallCap Market
("Nasdaq") under the symbol ("GLAS"). On February 19, 1997, the closing bid
price for the Common Stock on Nasdaq was $5.25.
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AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES
A HIGH DEGREE OF RISK AND SHOULD ONLY BE MADE BY INVESTORS
WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
SEE "RISK FACTORS" AT PAGE 3 HEREOF.
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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.
CERTAIN MATTERS DISCUSSED IN THIS REGISTRATION STATEMENT ARE FORWARD-LOOKING
STATEMENTS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED.
THE DATE OF THIS PROSPECTUS IS FEBRUARY ____, 1997
<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, 1996, (ii) the Company's Quarterly Report on Form
10-Q for the quarters ended July 31, 1996 and October 31, 1996 and (iii) the
Company's Current Reports on Form 8-K and Form 8-K/A dated July 31, 1996, on
Form 8-K dated September 30, 1996 and on Form 8-K and Form 8-K/A dated October
31, 1996.
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 hereof.
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, 23 Madison Road,
Fairfield, New Jersey 07004, Attention: James M. Caci, telephone number (201)
808-4000.
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<PAGE>
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 has had working capital deficiencies of
$2,679,000, $10,223,000 and $3,910,000 for the fiscal years ended April 30, 1995
and 1996, and the six months ended October 31, 1996, respectively. In addition,
although the Company had net income of $1,426,000 for the six months ended
October 31, 1996, it incurred net losses of $2,392,000 and $13,418,000 for the
fiscal years ended April 30, 1995 and 1996.
There can be no assurance that the Company will generate sufficient
revenues to meet expenses or to operate profitably in the future. If the Company
is unable to generate sufficient cash flow from its operations it would have to
seek additional borrowings, effect debt or equity offerings or otherwise raise
capital. There can be no assurance that any such financing will be available to
the Company, or if available, that the terms will be acceptable to the Company.
In addition, the ability to raise other capital might be restricted by financial
covenants contained in currently existing borrowing agreements.
REVOLVING CREDIT FACILITY. The Company's primary revolving credit
facility expired on September 30, 1996. The Company's subsidiary, Datatec
Industries Inc. ("Datatec"), is a party to a revolving credit facility which
expires on March 31, 1997. Datatec has in the past been in violation of certain
of the financial covenants contained in its credit facility. At October 31,
1996, $9,400,000 was outstanding under such agreement. There can be no assurance
that the Company will be able to enter into a new revolving credit agreement. If
the Company is unable to enter into a new revolving credit agreement, the
Company's business may be materially adversely affected. On February 12, 1997,
the Company received a commitment from Finova Capital Corporation for a
revolving line of credit and term loan facility in the aggregate amount of $17
million. There can be no assurance, however, that the Company will consummate
such loan arrangement.
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 Christopher Carey, President and Chief
Executive Officer of Datatec, of which the Company owns approximately 98.5% of
the issued and outstanding
-3-
<PAGE>
shares, could have a material adverse effect on the operations of the Company.
The Company has an employment agreement with Mr. Gaon which expires on October
31, 1999, which may be terminated by the Company for cause or by Mr. Gaon for
good reason. 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 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. Carey which expires on October 31, 1999, which may
be terminated by the Company for cause or by Mr. Carey for good reason. 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
design, installation, integration, deployment 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 local
and national systems integrators, 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.
CONTROL BY PRINCIPAL STOCKHOLDERS. 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 24% of the Common Stock. DCI has pledged 1,175,000 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. In addition, Mr. Carey, President and Chief
Executive Officer of Datatec has the power to vote approximately 17% of the
Common Stock.
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
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<PAGE>
volume for an extended period of time, there will be a material adverse effect
on the Company.
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 shares of Common Stock, prior to March 21, 1997, without the
prior written consent of Joseph Stevens & Company and the Company.
The shares of Common Stock issuable upon conversion of the Company's
Series A Convertible Preferred Stock (the "Series A Preferred"), the Series B
Convertible Preferred Stock (the "Series B Preferred") and the Series C
Convertible Preferred Stock (the "Series C Preferred" and together with the
Series A Preferred and Series B Preferred, the "Preferred Stock") will be freely
tradeable without restriction under the Securities Act. As of the date hereof,
approximately 800,091 shares of Common Stock would be issuable by the Company
upon the conversion of the currently outstanding shares of Preferred Stock. Such
number of shares of Common Stock may increase based upon the market price of the
Company's Common Stock at the time of the conversion of the Preferred Stock.
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 certain distributions to stockholders in amounts
sufficient to reimburse such stockholders for income tax liabilities arising
from the Company's former status as an "S" corporation. The Company currently
intends to retain earnings, if any, for use
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<PAGE>
in the business and does not anticipate paying any dividends to its stockholders
in the foreseeable future.
RIGHTS OF COMMON STOCK SUBORDINATE TO EXISTING AND FUTURE PREFERRED
STOCK. The Certificate of Incorporation of the Company authorizes the issuance
of a maximum of 4,000,000 shares of preferred stock, par value $.001 per share.
The Company currently has outstanding 50,000 shares of Series A Preferred,
25,000 shares of Series B Preferred and 75,000 of Series C Preferred. The
holders of the Preferred Stock are entitled to receive dividends in an amount of
6% per annum and are entitled to a preferential distribution on liquidation of
the Company. In addition, the Company may be required to redeem the Preferred
Stock under certain circumstances. The shares of Preferred Stock are convertible
into Common Stock in accordance with their respective Certificates of
Designation. Holders of the Preferred Stock are not entitled to vote on any
matter submitted to the stockholders, provided, however, that the affirmative
vote of the holders of a majority of the outstanding Preferred Stock, is
required as to those matters which (i) alter or change adversely the powers,
preferences or rights given to the Preferred Stock or (ii) authorize or create
any class of stock ranking as to dividends or distribution of assets upon a
liquidation senior to, prior to or PARI PASSU with the Preferred Stock. If
additional shares of preferred stock are issued in the future, the terms of a
series of preferred stock may be set by the Company's Board of Directors without
approval by the holders of the Common Stock of the Company. Such terms could
include, among others, preferences as to dividends and distributions on
liquidation as well as separate class voting rights. 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.
CERTAIN ANTI-TAKEOVER CHARTER PROVISIONS. The future issuance of
preferred stock by the Company 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. Other than the
Preferred Stock described herein, the Company does not have any present plans to
issue any additional shares of preferred stock.
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, Ltd. ("Signatel"). 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. On July 31, 1996, the Company acquired 100% of the issued and
outstanding capital stock of HH Communications, Inc. ("HH"), which resells
computer networking equipment and provides value-added
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<PAGE>
services in connection with such equipment. On October 31, 1996, the Company
acquired approximately 98.5% of the issued and outstanding capital stock of
Datatec, a network integrator. 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.
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<PAGE>
THE COMPANY
As used in this Prospectus, the term "Company" refers collectively to
Glasgal Communications, Inc., a Delaware corporation and its subsidiaries (i)
Signatel, a wholly owned subsidiary of the Company, (ii) CASI, a subsidiary of
which the Company owns 80% of the issued and outstanding shares, (iii) HH, a
wholly owned subsidiary of the Company, and (iv) Datatec, of which the Company
owns approximately 98.5% of the issued and outstanding shares. The Company is an
open systems integrator that designs, stages, integrates, deploys, 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 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 17 sales and service offices throughout the United
States and five offices in Canada.
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<PAGE>
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.
The Company's executive offices are located at 23 Madison Road,
Fairfield, New Jersey 07004. The telephone number of the Company is (201)
808-4000.
RECENT DEVELOPMENTS
On July 31, 1996, the Company acquired 100% of the Common Stock of HH
in exchange for 1,500,000 shares of the Company's Common Stock. HH resells
computer networking equipment and provides value-added services in connection
with such equipment.
On September 30, 1996, October 29, 1996, and November 15, 1996, the
Company consummated three separate financings with Southbrook International
Investments, Ltd. (the "Southbrook Placements") pursuant to which it issued
250,000 shares of Series A Preferred, 25,000 shares of Series B Preferred, and
75,000 shares of Series C Preferred, respectively. The net proceeds of the
Southbrook Placements aggregating approximately $6,590,000 are being used to
fund the working capital needs of the Company and Datatec.
On October 31, 1996, the Company acquired approximately 98.5% of the
Common Stock of Datatec in exchange for 4,000,000 shares of the Company's Common
Stock. Datatec is a network integrator which
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<PAGE>
provides full integration and deployment services to a wide range of customers
concentrated in the retail market. Datatec has fifteen offices throughout the
United States and one office in Canada, and has approximately 300 employees.
USE OF PROCEEDS
No net proceeds will be realized by the Company from the sale of the
Shares offered hereby by the Selling Stockholders. The Company will receive the
exercise price of options held by certain Selling Stockholders, if and when
exercised. Such proceeds will be used by the Company for working capital and
other corporate purposes.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth (i) the number of shares of Common Stock
beneficially owned by each Selling Stockholder as of February 19, 1997, (ii) the
number of Shares of Common Stock to be offered for resale by each Selling
Stockholder and (iii) the number and percentage of shares of Common Stock to be
beneficially owned by each Selling Stockholder after completion of the offering.
Except as set forth below, none of the Selling Stockholders has had a material
relationship with the Company during the past three years.
<TABLE>
<CAPTION>
No. of Shares of
Common Stock
Beneficially Owned
at February 19, No. of Shares Shares Beneficially Owned
Name 1997 Offered After Offering
- ------------------ ---------------------- -------- ----------------------------------
(1)
<S> <C> <C> <C> <C>
Southbrook International
Investments, Ltd. 1,025,091(2) 175,000(3) 850,091 3.9%
RAD Data Communications, Ltd. 132,470 132,470(4) 0 *
Christopher J. Carey(5) 3,718,518(6) 323,450 3,395,068 16.9%
Mary Carey 118,518 10,863 107,655 *
Amy Carey GRAT 96,296 8,808 87,488 *
Christopher Carey GRAT 96,296 8,808 87,488 *
Raymond Koch 118,518 10,863 107,655 *
Ronald Frey 29,631 2,716 26,915 *
Graeme Howard 14,815 1,358 13,457 *
James Wilson 58,000 58,000(7) 0 *
Lee Correll 1,667(8) 1,667(8) 0 *
Gregg Chahalis 4,802(8) 4,404(9) 0 *
Kevin McGillycuddy 4,076(8) 7,226(9) 0 *
Amtech Associates 26,087 26,087 0 *
Wharton Capital International
Corporation 15,000 15,000(10) 0 *
State Capital Market Group,
Ltd. 15,000 15,000(10) 0 *
</TABLE>
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* Less than 1%
(1) Assumes that all Common Stock offered by the Selling Stockholders is sold.
(2) Approximation based on the hypothetical conversion of 50,000 shares of
Series A Preferred, 25,000 shares of Series B Preferred, and 75,000 shares
of Series C Preferred on February 19, 1997. The actual number of shares of
Common Stock that would be issuable to the Selling Stockholder upon
conversion of the Preferred Stock is determined by a conversion formula
which is based, in part, on the market price of the Common Stock determined
as of the date of conversion and, therefore, can not be determined on the
date hereof.
(3) Consists solely of options to purchase Common Stock of the Company granted
to the Selling Stockholder by the Company which are currently exercisable
at an exercise price of $5.25 per share.
(4) Consists solely of shares of Common Stock presently outstanding and being
held in escrow, the release therefrom being subject to the payment of
certain accounts receivable by the Company.
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<PAGE>
(5) Christopher Carey is the President and Chief Executive Officer of the
Company's subsidiary, Datatec Industries, Inc. and is a director of the
Company.
(6) Includes (i) 96,296 shares held by the Amy Carey GRAT, a trust formed for
the benefit of Mr. Carey's daughter, and (ii) 96,296 shares held by the
Christopher Carey GRAT, a trust formed for the benefit of Mr. Carey's son.
(7) Consists solely of currently exercisable options to purchase Common Stock
of the Company granted to the Selling Stockholder by the Company at an
exercise price of $3.14 per share.
(8) Represents options exercisable within sixty (60) days to purchase Common
Stock of the Company granted to the Selling Stockholder by Ralph Glasgal at
an exercise price of $2.775 per share.
(9) Consists solely of options to purchase Common Stock of the Company granted
to the Selling Stockholder by Ralph Glasgal which are exercisable 1/3 on
July 17, 1996 at an exercise price of $2.775 per share, 1/3 on July 17,
1997 at an exercise price of $3.50 per share and 1/3 on July 17, 1998 at an
exercise price of $4.50 per share.
(10) Represents options exercisable within sixty (60) days to purchase 10,000
shares of Common Stock of the Company granted to the Selling Stockholder by
the Company at an exercise price of $7.15 per share and 5,000 shares of
Common Stock of the Company granted to the Selling Stockholder by the
Company at an exercise price of $5.78 per share.
There is no assurance that the Selling Stockholders which hold options
to purchase Common Stock from the Company or Ralph Glasgal will exercise such
options or that such Selling Stockholder or any other Selling Stockholder will
otherwise opt to sell any of the Shares offered hereby. To the extent required,
the specific Shares to be sold, the names of the Selling Stockholders, other
additional shares of Common Stock beneficially owned by such Selling
Stockholders, the public offering price of the Shares to be sold, the names of
any agent, dealer or underwriter employed by such Selling Stockholders in
connection with such sale, and any applicable commission or discount with
respect to a particular offer will be set forth in an accompanying Prospectus
Supplement.
The Shares covered by this Prospectus may be sold from time to time so
long as this Prospectus remains in effect; provided, however, that the Selling
Stockholders are first required to contact the Company's Corporate Secretary to
confirm that this Prospectus is in effect. The Company intends to distribute to
each Selling Stockholder a letter setting forth the procedures whereby such
Selling Stockholder may use the Prospectus to sell the shares and under what
conditions the Prospectus may not be used. The Selling Stockholders expect to
sell the Shares at prices then attainable, less ordinary brokers' commissions
and dealers' discounts as applicable.
The Selling Stockholders and any broker or dealer to or through whom
any of the Shares are sold may be deemed to be underwriters within the meaning
of the Securities Act with respect to the Common Stock offered hereby, and any
profits realized by the Selling Stockholders or such brokers or dealers may be
deemed to be underwriting commissions. Brokers' commissions and dealers'
discounts, taxes and other selling expenses to be borne by the Selling
Stockholders are not expected to exceed normal selling expenses for sales
over-the-counter or otherwise, as the case may be. The registration of the
Shares under the Securities Act shall not be deemed an admission by the Selling
Stockholders or the Company that
-12-
<PAGE>
the Selling Stockholders are underwriters for purposes of the Securities Act of
any Shares offered under this Prospectus.
TRANSFER AGENT
The transfer agent, warrant agent and registrar for the Common Stock is
Continental Stock Transfer & Trust Company, New York, New York.
PLAN OF DISTRIBUTION
This Prospectus covers 801,720 shares of the Company's Common Stock.
All of the Shares offered hereby are being sold by the Selling Stockholders. The
securities covered by this Prospectus may be sold under Rule 144 instead of
under this Prospectus. The Company will realize no proceeds from the sale of the
Shares by the Selling Stockholders, but will receive amounts upon exercise of
options, which amounts will be used for working capital and general corporate
purposes.
The distribution of the Shares by the Selling Stockholders is not
subject to any underwriting agreement. The Selling Stockholders may sell the
Shares offered hereby from time to time in transactions on one or more
exchanges, in the over-the-counter market, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices relating to prevailing
market prices or at negotiated prices. In addition, from time to time the
Selling Stockholders may engage in short sales, short sales against the box,
puts and calls and other transactions in securities of the Company or
derivatives thereof, and may sell and deliver the shares in connection
therewith.
From time to time the Selling Stockholders may pledge their Shares
pursuant to the margin provisions of its customer agreements with its brokers.
Upon a default by the Selling Stockholders, the broker may offer and sell the
pledged Shares.
Such transactions may be effected by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of the customary commissions). The Selling
Stockholders and any broker-dealers that participate with the Selling
Stockholders in the distribution of the Shares may be deemed to be underwriters
within the meaning of Section 2(11) of the Securities Act and any commissions
received by them and any profit on the resale of the Shares may be deemed to be
underwriting commissions or discounts under the Securities Act. The Selling
Stockholders will pay any transaction costs associated with effecting any sales
that occur.
-13-
<PAGE>
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with by the Company and the Selling
Stockholders.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Shares may not simultaneously engage
in market-making activities with respect to the Company's Common Stock for a
period of two business days prior to the commencement of such distribution. In
addition and without limiting the foregoing, the Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation, Rules 10b-6, 10b-6A and
10b-7, which provisions may limit the timing of the purchases and sales of
shares of Common Stock by the Selling Stockholders.
The Selling Stockholders are not restricted as to the price or prices
at which it may sell their Shares. Sales of such Shares may have an adverse
effect on the market price of the Common Stock. Moreover, the Selling
Stockholders are not restricted as to the number of Shares that may be sold at
any time, and it is possible that a significant number of Shares could be sold
at the same time which may also have an adverse effect on the market price of
the Company's Common Stock.
The Company has agreed to pay all fees and expenses incident to the
registration of the Shares, except selling commissions and fees and expenses of
counsel or any other professionals or other advisors, if any, to the Selling
Stockholders.
This Prospectus also may be used, with the Company's consent, by donees
or other transferees of the Selling Stockholders, or by other persons acquiring
the Common Stock under circumstances requiring or making desirable the use of
this Prospectus for the offer and sale of such shares.
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
87,146 shares of Common Stock.
EXPERTS
The consolidated financial statements and schedules of the Company
incorporated by reference in this prospectus and elsewhere in this Registration
Statement as of April 30, 1994, 1995, and 1996 and
-14-
<PAGE>
for the year ended December 31, 1993, and the four months ended April 30, 1994
included in the Company's Form 10-K for the fiscal year ended April 30, 1996
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect 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, 1993 included in the Company's
Form 10-K for the fiscal year ended April 30, 1996, 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.
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
-15-
<PAGE>
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. Such material may also be accessed electronically by means of the
Commission's home page on the internet at http//www.sec.gov.
The Company has also filed with the Commission a 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.
-16-
<PAGE>
================================================================================
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.......................... 8
Recent Developments.................. 9
Use of Proceeds...................... 10
Selling Stockholders................. 11
Transfer Agent....................... 13
Plan of Distribution................. 13
Legal Matters........................ 14
Experts.............................. 14
Change of Accountants................ 15
Available Information................ 15
GLASGAL COMMUNICATIONS, INC.
801,720 SHARES OF COMMON STOCK
PROSPECTUS
[ ], 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses which will be paid
by the Company in connection with the securities being registered. With the
exception of the SEC registration fee, all amounts shown are estimates.
SEC registration fee.................................... $1,275.74
Nasdaq listing expenses................................. 2,000.00
Printing expenses....................................... 5,000.00
Legal fees and expenses (including Blue
Sky).................................................... 10,000.00
Accounting Fees and Expenses............................ 2,000.00
Miscellaneous........................................... 724.26
----------
Total.......................................... $ 21,000.00
===========
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
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
II-1
<PAGE>
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 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
II-2
<PAGE>
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 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
II-3
<PAGE>
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 with
respect to any employee benefit plan; and references to "serving at the
request of the
II-4
<PAGE>
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.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
corporation's obligation to advance expenses (including attorneys'
fees)."
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.
*4 Specimen Certificate of the Company's Common Stock.
5 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.
II-5
<PAGE>
23.3 Consent of Deloitte and Touche, independent public
accountants.
24.1 Power of Attorney, included on the signature page to
this Registration Statement.
- -------------------
* 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.
II-6
<PAGE>
(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.
(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.
II-7
<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 Fairfield, State of New Jersey on the 24th day of
February, 1997.
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ RALPH GLASGAL Chairman of the Board
- -------------------------------- and President February 24, 1997
Ralph Glasgal
/S/ ISAAC J. GAON Chief Executive Officer
- -------------------------------- and Director (principal February 24, 1997
Isaac J. Gaon executive officer)
/S/ JOSEPH M. SALVANI Director
- --------------------------------
Joseph M. Salvani February 24, 1997
/S/ ROBERT H. FRIEDMAN Director
- --------------------------------
Robert H. Friedman February 24, 1997
/S/ MAURICE KULIK Director
- --------------------------------
Maurice Kulik February 24, 1997
/S/ THOMAS BERRY Director February 24, 1997
- --------------------------------
Thomas Berry
- -------------------------------- Director February 24, 1997
David Milch
/S/ CHRISTOPHER CAREY Director February 24, 1997
- --------------------------------
Christopher Carey
/S/ JAMES M. CACI Chief Financial Officer
- -------------------------------- (principal financial and February 24, 1997
James M. Caci accounting officer)
</TABLE>
II-8
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 PARK AVENUE, NEW YORK, NEW YORK 10022
(212) 753-7200
February 24, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Glasgal Communications, Inc.-
Registration Statement On Form S-3
----------------------------------
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-3
dated the date hereof (the "Registration Statement"), filed with the Securities
and Exchange Commission by Glasgal Communications, Inc., a Delaware corporation
(the "Company"). The Registration Statement relates to an aggregate of 801,720
shares (the "Shares") of common stock, par value $.001 per share (the "Common
Stock"). The Shares were (i) previously issued by the Company to the Selling
Shareholders named in the Registration Statement or (ii) will be issued by the
Company to the Selling Shareholders named in the Registration Statement upon the
exercise of outstanding options and warrants.
We advise you that we have examined, among other things,
originals or copies certified or otherwise identified to our satisfaction of the
Certificate of Incorporation and By-laws of the Company, minutes of meetings of
the Board of Directors and stockholders of the Company and such other documents,
instruments and certificates of officers and representatives of the Company and
public officials, and we have made such examination of the law, as we have
deemed appropriate as the basis for the opinion hereinafter expressed. In making
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of documents submitted to us as certified or photostatic
copies.
<PAGE>
Securities and Exchange Commission
February 24, 1997
Page -2-
Based upon the foregoing, we are of the opinion that the
Shares have been duly authorized and either (i) are validly issued, fully paid
and non-assessable or (ii) will be validly issued, fully paid and non-assessable
upon the exercise of the options and warrants, subject, however, to receipt by
the Company of the exercise price for the options and warrants in accordance
with their respective terms.
We hereby consent to use of this opinion in the Registration
Statement and Prospectus, and to the use of our name in the Prospectus under the
caption "Legal Matters".
We advise you that Robert Frome is a member of this firm and
holds options to purchase 38,293 shares of Common Stock of the Company. In
addition, Robert Friedman, a member of this firm, is a director of the Company
and holds options to purchase 87,146 shares of Common Stock of the Company.
Very truly yours,
/s/ OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
------------------------------------------
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Glasgal Communications, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 2, 1996 in
Glasgal Communications, Inc. Form 10-K for the year ended April 30, 1996 and to
all references to our Firm included in this registration Statement.
/s/ Arthur Andersen LLP
Roseland, New Jersey
February 12, 1997
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we consent to the use, in this Form S-3
Registration Statement dated February 24, 1997 of Glasgal Communications, Inc.,
of our report 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.
/s/ Deloitte & Touche
Toronto, Canada
February 12, 1997 Chartered Accountants
