As filed with the Securities and Exchange Commission on September 3, 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
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
20C Commerce Way
Totowa, New Jersey 07512
(201) 890-4800
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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.
20C Commerce Way
Totowa, New Jersey 07512
(201) 890-4800
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(Name, address and telephone number of agent for service of process)
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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.
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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>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
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 1,763,236 $5.53(1) $9,750,695 $2,954.76
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value, issuable 297,648(2) $5.53(1) $1,645,993 $498.79
upon conversion of notes
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Common Stock, $.001 par value, issuable 700,000(3) $5.25(3) $3,675,000 $1,113.64
upon exercise of warrants
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Total........................................................................................... $4,567.19
==================================================================================================================================
</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 $5.53, the per share average of high and low
sales prices of the Common Stock on the Nasdaq SmallCap Market on August
29, 1997.
(2) Pursuant to Rule 416, there are also registered hereby (i) an indeterminate
number of shares of Common Stock issuable upon conversion of the
Registrant's convertible notes resulting from the fluctuating conversion
rate of such notes that is determined based upon the market price of the
Company's publicly-traded Common Stock as of the date of the applicable
conversion thereof, and (ii) an indeterminate number of shares of Common
Stock that may become issuable by reason of anti-dilution provisions of
these notes.
(3) Represents 700,000 shares of Common Stock issuable upon the exercise of
outstanding warrants at an exercise price of $5.25 per share. Pursuant to
Rule 416, there are also registered hereby an indeterminate number of
shares of Common Stock that may become issuable by reason of anti-dilution
provisions of these warrants.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PROSPECTUS
GLASGAL COMMUNICATIONS, INC.
2,760,884 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") comprised as follows: (i) 1,763,236 shares
of Common Stock were previously issued by the Company to the Selling
Stockholders, (ii) 700,000 shares of Common Stock which will be issued by the
Company to the Selling Stockholders upon the exercise of certain warrants to
purchase Common Stock, and (iii) 297,648 shares of Common Stock which will be
issued by the Company to the Selling Stockholders upon the exercise of certain
convertible notes dated February 18, 1997 (the "Notes"). This Prospectus also
relates, pursuant to Rule 416 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), to the offer and resale by certain Selling
Stockholders of (i) an indeterminate number of shares of Common Stock that may
become issuable by reason of the anti-dilution provisions of the aforementioned
warrants and Notes and (ii) an indeterminate number of shares of Common Stock
issuable upon conversion of the Notes resulting from the fluctuating conversion
rate of the Notes that is determined based upon the market price of the
Company's publicly-traded Common Stock as of the date of the applicable
conversion thereof.
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders or upon conversion of the Notes, but will receive
amounts upon the exercise of the warrants 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 August 29, 1997, the closing bid price
for the Common Stock on Nasdaq was $5.44.
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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 4 HEREOF.
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<PAGE>
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 [ ], 1997
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1997
which has been filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act").
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, 20C Commerce Way,
Totowa, New Jersey 07004, Attention: James M. Caci, telephone number (201)
890-4800.
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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
$585,000, $7,664,000 and $2,957,000 for the fiscal years ended April 30, 1995,
1996 and 1997, respectively. In addition, the Company has incurred net losses of
$2,393,000, $13,418,000 and $4,960,000 for the fiscal years ended April 30,
1995, 1996, and 1997, respectively.
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.
POSSIBLE NEED FOR ADDITIONAL FINANCING. As of April 30, 1997 the
Company had cash and cash equivalents of $1,135,000. The Company anticipates,
based on currently proposed plans and assumptions relating to its operations
that its existing capital resources will be sufficient to satisfy its
anticipated cash requirements for at least 12 months. In the event that the
Company's plans change, its assumptions change or prove to be inaccurate, the
Company will be required to seek additional financing to finance its working
capital requirements. There can be no assurance that any additional financing,
if required, will be available to the Company on acceptable terms, if at all.
The Company does not currently have availability under its line of credit. Any
inability by the Company to obtain additional financing, if required, will have
a material adverse effect on the operations of the Company.
SUBSTANTIAL INDEBTEDNESS. As of April 30, 1997, the Company had
outstanding on a consolidated basis approximately $17,526,000 of indebtedness.
The level of the Company's indebtedness could have important consequences to its
future prospects, including the following: (i) limiting the ability of the
Company to obtain any necessary financing in the future for working capital,
capital expenditures, debt service requirements or other purposes; (ii)
requiring that a substantial portion of the Company's cash flow from operations,
if any, be dedicated to the payment of principal of and interest on its
indebtedness and other obligations; (iii)
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<PAGE>
limiting its flexibility in planning for, or reacting to changes in, its
business; (iv) the Company will be more highly leveraged than some of its
competitors, which may place it at a competitive disadvantage; and (v)
increasing its vulnerability in the event of a downturn in its business.
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, or Christopher Carey, President and Chief Executive Officer of
Datatec Industries Inc. ("Datatec"), could have a material adverse effect on the
operations of the Company. The Company has employment agreements with Messrs.
Gaon, Gadd and Carey which each expire on October 31, 1999. Each of these
employment agreements may be terminated by the Company for cause or by the
employee 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. These competitors include local and national systems integrators
some of which are substantially larger and have significantly greater resources
than the Company. These markets are highly competitive and 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 20.7% of the Common Stock. DCI has pledged approximately
300,000 of the shares of Common Stock it owns in the Company as collateral for
various obligations. 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
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<PAGE>
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.
VOLATILITY OF THE COMPANY'S COMMON STOCK PRICES. The market price of
the Company's Common Stock has experienced significant volatility, with per
share closing bid prices ranging from a low of $2.75 to a high of $11.63 over
the period from May 1, 1996 to July 31, 1997. Announcements of technological
innovations for new commercial products of the Company or its competitors,
developments concerning propriety rights or governmental regulation or general
conditions in the market for the Company's services may have a significant
effect on the Company's business and on the market price of the Company's
securities. Sales of a substantial number of shares by existing security holders
could also have an adverse effect on the market price of the Company's
securities.
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 shares of Common Stock issuable upon exercise of the warrants or
conversion of the Notes or the Common Stock registered in the Registration
Statement of which this Prospectus is part will be freely tradeable without
restriction under the Securities Act upon resale by the Selling Stockholders.
The Selling Stockholders are not restricted as to the price or prices at which
they 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.
NO CASH DIVIDENDS. The Company has not paid cash dividends on its
Common Stock since its inception, other than certain distributions made to
stockholders in amounts sufficient to reimburse the Company's 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
in the business and does not anticipate paying any dividends to its stockholders
in the foreseeable future.
RIGHTS OF COMMON STOCK SUBORDINATE TO 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. There are no
shares of preferred shares currently issued and outstanding, however, if shares
of preferred stock are
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<PAGE>
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. The Company does not
have any present plans to issue any 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 Computer-Aided
Software Integration, Inc. ("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 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 acquired the
remaining 1.5% of the outstanding capital stock of Datatec pursuant to a Stock
Purchase Agreement dated August 27, 1997. 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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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, a wholly owned
subsidiary of the Company.
The Company is in the business of providing software enabled
configuration, integration and implementation networking services to Fortune
2,000 customers in the United States and Canada. The Company provides networking
services to end users and hardware/software manufacturers alike through its
twenty (20) branch offices and four (4) configuration centers in North America.
The Company's objective is to become one of the leading open systems integrators
providing complete enterprise networking solutions to national and international
organizations.
Over the past four years the Company has been reducing its dependence
on hardware distribution as a result of the continuous margin erosion and the
high working capital needs of this business. In June 1997, management of the
Company, with the consent of the Board of Directors, agreed to discontinue its
business as a distributer of data communications equipment in order to
concentrate the Company's efforts on integration, configuration and deployment
services.
Through the utilization of a suite of software tools called the
"Integrators Workbench Product Series"(TM) (IWPS) which was developed by CASI,
many labor intensive software configuration, integration and migration services
provided by the Company are being automated.
The Company's marketing efforts are focused on customers requiring more
complex solutions from a technical, geographic dispersion and/or time sensitive
deployment point of view. Fast and efficient technical deployment has become a
critical requirement for large enterprises and organizations with multiple site
locations across North America, and is a significant growth inhibitor for
technology manufacturers and software development companies. The Company
believes that this sector of the information technology industry has been
neglected and offers a significant business opportunity.
Management has identified vertical end user markets that it believes
are ideally suited to benefit from its services and competitive advantages
including the retailing, financial services, insurance, health care,
transportation, entertainment, and hospitality industries. The Company provided
its services to the following businesses, among others, in the fiscal year ended
April
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30, 1997: Lowe's Companies, Inc., Federated Department Stores, Toys "R" Us,
Inc., Starbucks Coffee Company, Ross Stores, Inc., Bell Atlantic Networks
Integration, Blockbuster Entertainment Corporation, Merrill Lynch, Coca-Cola
(Canada), and TransCanada Pipelines.
The Company's executive offices are located at 20C Commerce Way,
Totowa, New Jersey 07512. The telephone number of the Company is (201) 890-4800.
USE OF PROCEEDS
No net proceeds will be realized by the Company from the offer and
resale of the Shares offered hereby by the Selling Stockholders or upon
conversion of the Notes. The Company will receive a total of approximately
$3,675,000 in the event that all shares of Common Stock offered hereby that are
issuable upon the exercise of warrants have been issued, upon such exercise by
certain Selling Stockholders. 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 August 29, 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 No. of Shares Shares Beneficially Owned
Name at August 29, 1997 Offered After Offering (1)
- ------------------ ---------------------- ------------- -------------------------
<S> <C> <C> <C> <C>
Frank Brosens......................... 618,749 (2) 618,082 (2) 667 *
Tinicum Investors..................... 617,082 (3) 617,082 (3) 0 *
Christopher J. Carey(4)............... 3,612,036 (5) 187,953 3,424,083 14.4%
Mary Carey............................ 118,518 6,311 112,207 *
Amy Carey GRAT........................ 96,296 5,139 91,157 *
Christopher Carey GRAT................ 96,296 5,139 91,157 *
Raymond Koch.......................... 118,518 6,311 112,207 *
Ronald Frey........................... 29,631 1,578 28,053 *
Graeme Howard......................... 13,457 789 12,668 *
Plan C, LLC(6)........................ 45,000 15,000 30,000 *
Francis Frazel........................ 345,000 95,000 250,000 1.1%
Steven Grubner........................ 345,000 95,000 250,000 1.1%
Mark Herzog........................... 345,000 95,000 250,000 1.1%
George Terlizzi....................... 300,000 50,000 250,000 1.1%
Joseph Scuderi........................ 25,000 25,000 0 *
Anthony Macagna....................... 20,000 20,000 0 *
Tonar Industries, Inc................. 12,500 12,500 0 *
Ralph Glasgal (7)..................... 4,906,387(8) 160,000 4,746,387 20.0%
Direct Connect International
Inc. (9).............................. 917,306 480,000 437,306 2.1%
Simone Group International Inc........ 25,000 25,000 0 *
Eric Chauvet.......................... 50,000 50,000 0 *
481 Broadway, Inc..................... 10,000 10,000 0 *
Oracle Management Limited............. 125,000 125,000 0 *
George Koo............................ 5,000 5,000 0 *
Mason Carter.......................... 50,100 50,000 100 *
</TABLE>
- -------------------
* Less than 1%.
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(1) Assumes that all Common Stock offered by the Selling Stockholders is
sold.
(2) Includes (i) 350,000 shares of Common Stock issuable upon the exercise
of warrants to purchase Common Stock of the Company granted to Mr.
Brosens by the Company which are currently exercisable at an exercise
price of $5.25 per share, and (ii) 148,824 shares of Common Stock that
would be issuable to Mr. Brosens upon conversion of a note in the
principal amount of $600,000 held by Mr. Brosens. The number of shares
issuable to Mr. Brosens upon the conversion of such note is an
approximation which is based on the hypothetical conversion of such
note on August 29, 1997. The actual number of shares of Common Stock
that would be issuable to Mr. Brosens upon conversion of such note and
available for resale hereunder 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) Includes (i) 350,000 shares of Common Stock issuable upon the exercise
of warrants to purchase Common Stock of the Company granted to Tinicum
by the Company which are currently exercisable at an exercise price of
$5.25 per share, and (ii) 148,824 shares of Common Stock that would be
issuable to Tinicum upon conversion of a note in the principal amount
of $600,000 held by Tinicum. The number of shares issuable to Tinicum
upon the conversion of such note is an approximation which is based on
the hypothetical conversion of such note on August 29, 1997. The actual
number of shares of Common Stock that would be issuable to Tinicum upon
conversion of such note and available for resale hereunder 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.
(4) Christopher Carey is the President and Chief Executive Officer of the
Company's subsidiary, Datatec Industries, Inc. and is a director of the
Company.
(5) Includes (i) 96,296 shares held by the Amy Carey GRAT, a trust formed
for the benefit of Mr. Carey's daughter, (ii) 96,296 shares held by the
Christopher Carey GRAT, a trust formed for the benefit of Mr. Carey's
son, and (iii) 118,518 shares held by Mr. Carey's wife.
(6) Plan C, LLC is owned by Christopher Carey and his wife. Mr. Carey is an
executive officer and a director of the Company.
(7) Ralph Glasgal is the President and Chairman of the Board of the
Company.
(8) Includes (i) 146,752 shares held by Mr. Glasgal's wife and (ii) 917,306
shares of Common Stock owned by Direct Connect International, Inc.
which Ralph Glasgal has the right to vote pursuant to a voting
agreement.
(9) Joseph Salvani, a director of the Company, is also Chairman of the
Board of Direct Connect International, Inc.
There is no assurance that the Selling Stockholders which hold
convertible Notes or warrants to purchase Common Stock from the Company will
convert such Notes or exercise such warrants 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.
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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 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 2,760,884 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 or conversion of the Notes by the Selling Stockholders, but will receive
amounts upon exercise of warrants, 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.
From time to time the Selling Stockholders may pledge their Shares
pursuant to the margin provisions of customer agreements with their respective
brokers. Upon a default by the Selling Stockholders, such brokers 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
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<PAGE>
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.
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. Robert
Frome and Robert Friedman, members of Olshan Grundman Frome & Rosenzweig LLP,
hold shares of Common Stock. Mr. Friedman is also a director of the Company and
holds options to purchase additional shares of Common Stock.
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<PAGE>
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, 1995, 1996 and 1997 included in the Company's Form
10-K for the fiscal year ended April 30, 1997 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.
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.
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. 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.
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<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......................................... 3
Risk Factors........................................... 4
The Company............................................ 8
Use of Proceeds........................................ 9
Selling Stockholders................................... 10
Transfer Agent......................................... 12
Plan of Distribution................................... 12
Legal Matters.......................................... 13
Experts................................................ 14
Available Information.................................. 14
GLASGAL COMMUNICATIONS, INC.
2,760,884 SHARES OF COMMON STOCK
<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.................................. $ 4,567.19
Nasdaq listing expenses............................... 2,000.00
Legal fees and expenses (including Blue
Sky).................................................. 10,000.00
Accounting Fees and Expenses.......................... 2,000.00
Miscellaneous......................................... 1,432.80
-----------
Total........................................ $ 20,000.00
===========
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 indemnified by the
Corporation as authorized by relevant sections of the General Corporation Law of
Delaware.
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<PAGE>
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
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
II-2
<PAGE>
(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 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
II-3
<PAGE>
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 corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such
II-4
<PAGE>
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.
24.1 Power of Attorney, included on the signature page to this
Registration Statement.
II-5
<PAGE>
- ---------------------------
* 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 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.
(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
II-6
<PAGE>
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 Totowa, State of New Jersey on the 3rd day of
September, 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.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ RALPH GLASGAL
- ------------------------ Chairman of the Board
Ralph Glasgal and President September 3, 1997
/S/ ISAAC J. GAON
- ------------------------ Chief Executive Officer
Isaac J. Gaon and Director (principal September 3, 1997
executive officer)
/S/ JOSEPH SALVANI
- ------------------------ Director
Joseph M. Salvani September 3, 1997
/S/ ROBERT H. FRIEDMAN
- ------------------------ Director
Robert H. Friedman September 3, 1997
/S/ MAURICE KULIK
- ------------------------ Director
Maurice Kulik September 3, 1997
/S/ THOMAS BERRY
- ------------------------ Director September 3, 1997
Thomas Berry
- ------------------------ Director September 3, 1997
David Milch
/S/ CHRISTOPHER CAREY
- ------------------------ Director September 3, 1997
Christopher Carey
/S/ JAMES M. CACI
- ------------------------ Chief Financial Officer
James M. Caci (principal financial and September 3, 1997
accounting officer)
II-8
OLSHAN GRUNDMAN FROME & ROSENZWEIG
505 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 753-7200
September 3, 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 2,760,884
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 warrants and convertible notes.
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
September 3, 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 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 and Robert Friedman, members
of this firm hold shares of Common Stock. Mr. Friedman is also a director of the
Company and holds options to purchase additional shares of Common Stock.
Very truly yours,
/S/ OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
------------------------------------------
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
ARTHUR ANDERSEN
EXHIBIT 23.2
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 9, 1997
included in Glasgal Communications, Inc. Form 10-K for the year ended April 30,
1997 and to all references to our Firm included in this registration statement.
/S/ ARTHUR ANDERSEN LLP
-----------------------
Arthur Andersen LLP
Roseland, New Jersey
September 2, 1997
