As filed with the Securities and Exchange Commission on October 5, 2000
Registration No. 333-44132
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GLOBALNET FINANCIAL.COM, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 06-1489574
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(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
7284 W. Palmetto Park Road, Suite 210, Boca Raton, Florida 33433
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(Address of Principal Executive Offices)(Zip Code)
Michael S. Jacobs
7284 W. Palmetto Park Road, Suite 210
Boca Raton, Florida 33433
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(Name and address of agent for service)
(561) 417-8053
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(Telephone number, including area code, of agent for service)
Copies to:
Leonard H. Bloom, P.A.
Broad and Cassel
201 South Biscayne Boulevard
Miami Center, Suite 3000
Miami, Florida 33131
(305) 373-9400
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, 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 of 1933, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
<PAGE>
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 of 1933
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed maximum Proposed maximum
Title of securities to be Amount to be offering price per aggregate offering Amount of
registered registered share price registration fee
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 1,164,987 $ 12.78 $14,888,534(1) $ 3,931
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Common Stock,
$.001 par value, $ 14.25 $ 3,562,500(2) $ 941
underlying warrants 250,000
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Common Stock,
$.001 par value, $ 15.50 $ 5,425,000(2) $ 1,432
underlying warrants 350,000
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Common Stock,
$.001 par value, $ 15.62 $ 976,000(2) $ 258
underlying warrants 62,500
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Common Stock,
$.001 par value, $ 17.25 $ 4,743,750(2) $ 1,252
underlying warrants 275,000
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Common Stock,
$.001 par value, $ 23.25 $ 3,487,500(2) $ 921
underlying warrants 150,000
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Total Registration Fee $ 8,735(3)
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</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c), promulgated under the Securities Act
of 1933.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(g), promulgated under the Securities Act
of 1933.
(3) Previously paid.
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 Securities and Commission, acting pursuant to
Section 8(a), may determine.
<PAGE>
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state in which the offer
or sale is not permitted.
--------------------------------------------------------------------------------
PROSPECTUS
SUBJECT TO COMPLETION, OCTOBER 5, 2000
2,252,487 Shares of Common Stock
GLOBALNET FINANCIAL.COM, INC.
Certain of our stockholders are offering a total of 2,252,487 shares of
our common stock, pursuant to this prospectus, consisting of 1,164,987 shares of
common stock and 1,087,500 shares of common stock issuable upon the exercise of
warrants.
The selling stockholders may sell their shares in one or more transactions
in the over-the-counter market, on The Nasdaq National Market or on any other
exchange on which our common stock may be listed. They may also sell in
privately negotiated transactions or a combination of such methods of sale, at
market prices prevailing at the time of sale or prices related to such
prevailing market prices or at negotiated prices. The selling stockholders may
sell their shares to or through broker-dealers, and such broker-dealers may
receive compensation from the selling stockholders and/or purchasers of the
shares for whom they may act as agent (which compensation may be in excess of
customary commissions). The selling stockholders and any participating
broker-dealers may be deemed to be "underwriters" as defined in the Securities
Act of 1933. We cannot estimate at the present time the amount of commissions or
discounts, if any, that will be paid by the selling stockholders on account of
their sales of the shares from time to time. We will indemnify the selling
stockholders against certain liabilities, including certain liabilities under
the Securities Act of 1933. See "How the Shares May be Distributed."
We will not receive any proceeds from the sale of these shares but may
receive up to $18,195,000 upon exercise of the warrants. Our common stock is
quoted on The Nasdaq National Market under the symbol "GLBN".
The securities offered hereby involve a high degree of risk and should be
considered only by such persons capable of bearing the economic risk of such
investment. You should carefully consider the "Risks of Investing in Our Shares"
section beginning on page 4 of this prospectus.
You should rely on the information contained in this prospectus. No dealer,
salesperson or other person is authorized to give any information that is not
contained in this prospectus. This prospectus is not an offer to sell nor is it
seeking an offer to buy these shares in any jurisdiction where the offer or sale
is not permitted. The information contained in this prospectus is correct only
as of the date of this prospectus, regardless of the time of the delivery of
this prospectus or any sale of these shares.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is October __, 2000.
<PAGE>
TABLE OF CONTENTS
Page
Prospectus Summary........................................................... 1
About GlobalNet Financial.com, Inc. ......................................... 1
Risks of Investing in Our Shares............................................. 3
Proceeds from the Sale of Shares.............................................11
Selling Stockholders.........................................................12
How the Shares May Be Distributed............................................13
Legal Opinion................................................................14
Experts......................................................................14
Where You Can Find More Information..........................................15
Incorporation of Certain Information by Reference............................15
As used in this Prospectus, the terms "we," "us," "our," and "the Company" mean
GlobalNet Financial.com, Inc. (unless the context indicates a different meaning)
and the term "common stock" means GlobalNet Financial.com, Inc.'s common stock,
$.001 par value per share.
<PAGE>
PROSPECTUS SUMMARY
This is only a summary and does not contain all of the information that
may be important to you. You should read the more detailed information contained
in this prospectus and all other information, including the financial
information and statements with notes, referred to in this prospectus as
discussed in the "Where You Can Find More Information" section of this
prospectus.
About GlobalNet
We are a rapidly expanding international financial portal providing
online financial news, investment tools, and transaction services. We are
developing a global network of country-centric financial content websites in
local market languages as well as a network of transaction execution platforms
in order to position ourselves as an international financial services provider.
Our business plan is to generate traffic for our financial content sites by
partnering with leading Internet players and then to drive visitors from our
highly trafficked financial content websites to our network of transaction
execution platforms in which we maintain substantial ownership interests. In
this manner, we seek to reduce our user and account acquisition costs.
We conduct our financial content operations predominantly as the
exclusive provider of financial content and in certain cases the exclusive
provider of financial services for leading Internet Service Providers and
portals. These services are provided by us as the "Money Channel" for the
Internet Service Providers or portals. As a result, when a user clicks on the
"Money Channel" button on a host Internet Service Provider's or portal's home
page, the user is linked to our website. We provide Money Channel services to
Freeserve plc, the United Kingdom's leading Internet Service Provider, World
Online, the largest pan-European Internet Service Provider and portal and
Scandinavia OnLine, the dominant consumer Internet portal across Scandinavia. We
currently operate, directly or through joint ventures, financial content
websites focusing on the financial markets of the United Kingdom, the United
States, Italy, Canada, France, Germany, Spain, Scandinavia, Denmark and Holland.
We also provide financial news, content and e-finance commerce platforms,
including online trading, to British Telecommunication's network of Wireless
Application Protocol mobile phone users.
Our websites are designed to generate online trading of securities and
other investment products. We are creating an international network of online
transaction businesses in which we maintain substantial equity ownership
interests, including online trading for North American and European stocks,
foreign exchange, and other financial services such as insurance. We have
launched www.GlobalNeTrader.com, our platform for the online trading of United
States securities, www.StockAcademy.com, our platform for the online trading of
United Kingdom securities, www.Matchbookfx.com for global foreign exchange
trading and www.InsuranceWide.com, offering a full spectrum of insurance
products in the United Kingdom. Management is currently developing additional
websites and online trading platforms.
We also seek to participate in the dramatic growth in the Internet and
Technology industries, and, to this end, we have made investments in Internet
and technology companies as well as Internet and technology funds. In most cases
these investments are in conjunction with joint ventures and business
relationships. We recently formed a digital commerce and
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knowledge-based industries investment and operating vehicle, GlobalEuroNet
Group, Inc., in which we invested $3.2 million, for a 24% equity interest.
GlobalEuroNet Group, Inc. subsequently raised approximately $43.2 million in
investment capital from other sources.
Our historical business model focused on revenues from online trading
platforms as well as from advertising in e-commerce and participating in the
earnings of other transaction execution platforms in which we maintain ownership
interest. Under an expanded business model, we will seek to derive significant
increased revenues and pretax profits through brokerage services for which
commissions are payable. We believe that we will be able to integrate our global
financial content and execution platforms for both US and non-US investors with
a traditional broker dealer business.
To that end, we recently acquired Dalton Kent Securities Group, Inc., a
full service broker dealer offering stocks, bonds and mutual funds to domestic
and international investors. The prime objective of this acquisition is to allow
us to branch into traditional brokerage services. In connection with the
acquisition, we issued an aggregate of 1,450,000 shares of our common stock to
the stockholders of Dalton Kent Securities Group, Inc.
Our business model also includes seeking to create stockholder and
balance sheet value from the creation of joint ventures with, and/or investments
in, companies which have the ability to become public or to be sold over a short
term. Management believes that the opportunities open to us are driven by the
following principal factors:
o an anticipated continued rapid growth in usage of the Internet
nationally and internationally
o an increasing acceptance of the Internet as a secure medium through
which to conduct e-commerce
o an increasing world-wide demand for financial news, information and
investment tools
o positioning ourselves to capitalize upon the anticipated growth in the
number of online financial transactions in the United Kingdom and
continental Europe
Our principal corporate office is located at 7284 W. Palmetto Park
Road, Suite 210, Boca Raton, Florida 33433, and our telephone number is (561)
417-8053.
2
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The Offering
Common Stock offered by the
selling stockholders ........................ 2,252,487 shares
Common Stock outstanding .................... 19,360,362 shares of Common Stock
which includes 16,237,875 shares
of Common Stock and 34,224,874
shares of Class A Common Stock
(each 10 shares of Class A Common
Stock have the voting, dividend
and equity rights equivalent to 1
share of Common Stock)
Use of Proceeds ............................. We will not receive any of the
proceeds from the sale of
these shares of common stock,
but we may receive funds upon
the exercise of the warrants.
Any such funds will be used by
us for working capital. See
"Proceeds from the Sale of Shares"
and "Selling Stockholders."
RISKS OF INVESTING IN OUR SHARES
You should carefully consider the following risks before making an
investment decision. The trading price of our common stock could decline due to
any of these risks, and you could lose all or part of your investment. You also
should refer to the other information set forth in this prospectus, including
our combined financial statements and the related notes thereto incorporated by
reference from our filings with the Securities and Exchange Commission. These
are not the only risks and uncertainties that we face. Additional risks and
uncertainties that we do not currently know about or that we currently believe
are immaterial may also harm our business operations. If any of these risks or
uncertainties actually occur, our business, results of operations, financial
condition, or prospects could be materially adversely affected. In such case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.
We have incurred substantial losses and anticipate significant losses for the
foreseeable future.
We have incurred net losses and negative cash flow from operations
since inception, and as of June 30, 2000 had an accumulated deficit of
$46,447,693. We intend to continue to invest heavily in the areas of tactical
acquisitions, sales and marketing, and administration. As a result, we expect to
continue to incur substantial operating losses for the foreseeable future, and
we may not achieve or sustain profitability.
For the foreseeable future, we expect to incur significant expenses
for:
o tactical acquisitions;
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o retaining and recruiting experienced management;
o developing additional infrastructure; and
o operating costs related to the Company's rapidly expanding financial
Internet content and transaction execution businesses.
We cannot be certain that we can achieve sufficient revenues in relation to our
expenses to ever become profitable. If we do achieve profitability, we cannot be
certain that we can sustain or increase profitability on a quarterly or annual
basis in the future.
We have a limited operating history in the area of online financial services.
We have been engaged in the current Internet business since October
1998. Many of our investments in international joint ventures are in a
preliminary stage of development. We have a limited operating history in the
Internet business upon which our performance and prospects can be evaluated. We
face the risks frequently encountered by expanding companies. These risks
include the potential inability to compete with more established firms and to
retain and maintain key personnel, as well as uncertainty as to which areas to
target for growth and expansion and as to the source of funding for operations
and expansion.
We have a limited operating history in the area of online trading.
We anticipate deriving a significant portion of our revenues from
online transaction executions. We have only recently introduced online trading
in foreign exchanges and domestic securities and we plan to offer online trading
in non-United States securities. In addition, we plan to offer other investment
and financial products online. Lack of international online trading and
transaction execution operating history and the risks inherent in any new
business area make it impossible to accurately predict the extent of revenues
that may be generated from these activities, or whenever such activities will
ultimately be profitable.
Advertising revenues and sponsorships are uncertain.
We anticipate deriving revenues from the sale of domestic and
international Internet-based advertising. None of our senior management team has
any significant experience in selling advertising on the Internet or any other
medium. If we are unable to attract and retain paying advertising customers or
if we are forced to offer lower than anticipated advertising rates in order to
attract and/or retain advertising customers, our anticipated level of
advertising revenue will be adversely affected.
Use of the Internet by overseas consumers is at an early stage of
development and international market acceptance of the Internet as a medium for
information, commerce and advertising is still subject to a degree of
uncertainty. In order for us to generate advertising revenues, European
advertisers and advertising agencies must direct a portion of their budgets to
the Internet as a whole, and specifically to our Internet sites. Our management
believes that most international and specifically, European advertisers and
advertising agencies, have limited
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<PAGE>
experience with the Internet as an advertising medium and international and
specifically, European advertisers have not devoted a significant portion of
their advertising budgets to Internet-related advertising to date. Our
management cannot assure investors that international and specifically, European
advertisers or advertising agencies, will be persuaded, or able, to allocate or
continue to allocate portions of their budgets to Internet-based advertising,
that they will find Internet-based advertising to be more effective than
advertising in traditional media, or that they will decide to advertise on our
Internet sites.
We are dependent on third parties for user access.
Management believes that the ability to advertise our Internet sites
and online transaction capabilities on other Internet sites and the willingness
of the owners and operators of such sites to direct users to our Internet sites
through hypertext links are critical to the success of our Internet operations.
Other Internet sites, particularly search/index guides and other companies with
the strategic ability to direct user traffic, significantly affect traffic to
our domestic and international Internet sites. While we believe that these other
sites will direct traffic to our Internet sites, no assurance can be given that
we can establish or maintain such arrangements in the future.
In particular, we are dependent on our ongoing relationships with
Freeserve plc, World Online International and Scandinavia Online, three
prominent international providers of Internet access to consumers. The
termination of any of these relationship could have a material adverse effect on
our business and prospects.
We are dependent on third parties for content development.
Our ability to develop original and compelling Internet-based products
and services is also dependent on maintaining relationships with, and using
content and products provided by, third-party vendors. These third party vendors
include, among others, Telescan, Inc. and Stockpoint, Inc. Developing and
maintaining satisfactory relationships with third parties could become more
difficult and more expensive as competition increases among Internet sites. If
we are unable to develop and maintain satisfactory relationships with such third
parties on terms acceptable to them, or if any competitors are better able to
leverage such relationships, our business will be harmed.
Acquisitions and joint ventures may disrupt or otherwise have a negative impact
on our business.
We intend to enter into new business opportunities and ventures as part
of our business plan. Typically, such opportunities require extended
negotiations, the investment of a substantial amount of capital, and substantial
burdens on our management personnel and our financial and operational systems.
We cannot assure investors that such acquisitions or ventures will ever achieve
profitability.
We are subject to technological changes.
The market for Internet-based products and services is characterized by
rapid technological developments and frequent Internet product introductions.
The emerging character
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of these products and services and their rapid evolution will require that we
continually improve the performance, features and reliability of our
Internet-based products and services. We cannot assure investors that we will be
successful in responding quickly, cost effectively and sufficiently to these
developments.
In addition, the widespread adoption of new Internet technologies or
standards could require us to make substantial expenditures and to modify or
adapt our Internet sites and services. New or modified Internet-based products,
services or enhancements offered by us may contain design flaws or other defects
that could require costly modifications or result in a loss of consumer
confidence, either of which could harm our business.
We may experience system interruptions.
The satisfactory performance, reliability, and availability of our
Internet sites and our computer network infrastructure are critical to
attracting Internet users. System interruptions which result in the
unavailability of our Internet sites or slower response times for users reduce
the attractiveness of our Internet sites to users and could harm our business.
Our intellectual property rights may be challenged.
We are developing proprietary Internet software and have filed
applications for certain trademarks, trade names, service marks, domain names
and other proprietary rights which we either currently have or may have in the
future and which we believe to be important to our Internet business. Even
though we have registered some domain names, given the uncertain application of
existing copyright and trademark laws to the Internet, we cannot assure
investors that existing laws will provide adequate protection for our
technologies, sites or registered domain names. Policing unauthorized use of our
technologies, content and other intellectual property rights entails significant
expenses and could otherwise be difficult or impossible to do, given, among
other things, the global nature of the Internet. In addition, from time to time,
we may be subject to legal proceedings and claims in the ordinary course of
business, including claims of alleged infringement of the trademarks and other
intellectual property of third parties by us or our licensees. Such claims, even
if not meritorious, could result in the expenditure of significant financial and
managerial resources.
We are subject to continuing currency exchange risks.
A significant proportion of our revenues are, and will be, received in
non-United States currencies. We anticipate that in the future an increasing
proportion of our revenues will be received in Euro dollars. This may give rise
to an exchange risk against United States dollars.
The introduction of the Euro dollar may have a wide range of
macro-economic effects, resulting, among other things, in interest rates, levels
of economic activity, and asset values being different from what they would
otherwise have been. We are unable to predict these macro-economic effects or
their impact on the demand for our services or on our revenues or costs.
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There are substantial risks in foreign markets.
We have entered into agreements with joint venture partners to conduct
our Internet business outside of the United States. Our inability to find
additional joint venture partners could slow down our anticipated overseas
growth. If we cannot find a suitable joint venture partner in a given foreign
market, we may not enter that market. Conducting business outside the United
States will require us to become familiar with and to comply with foreign laws,
rules, regulations and customs. We cannot be certain that our failure to comply
with foreign laws, rules and regulations of which we are not aware will not harm
our business.
Further risks are inherent in international operations, including the
following:
o differing levels of Internet use in other countries;
o customers' agreements may be difficult to enforce and receivables
difficult to collect through a foreign country's legal system;
o foreign countries may impose additional withholding taxes or otherwise
tax the Company's foreign income, impose tariffs or adopt other
restrictions on foreign trade or investment;
o intellectual property rights may be more difficult to enforce in
foreign countries;
o general economic conditions in the countries in which we operate could
have an adverse effect on our earnings from operations in those
countries;
o unexpected changes in foreign laws or regulatory requirements may
occur; and
o compliance with a variety of foreign laws and regulations and the
overlap of different tax structures may be costly and time consuming.
We are subject to evolving internet regulations.
New laws, guidelines and regulations may be adopted covering areas such
as access, content, taxation, encryption, communications and pricing and quality
of Internet products, services and online trading. As a provider of Internet
products and services, we may be subject to the provisions of existing and
future laws, guidelines and regulations that could be applied to our operations.
Such laws, guidelines and regulations could limit the growth of the Internet and
harm our business.
Expansion of our business model may have a material adverse effect.
We are, through our recent acquisition of Dalton Kent Securities Group,
Inc., in the process of expanding our business model from being primarily an
international financial portal providing financial news, investment tools and
transaction services, to being part of, and controlling, a company that is a
full service broker dealer offering stocks, bonds, options and mutual funds to
domestic and international investors. We have limited experience in the full
service broker dealer industry and we will be relying extensively upon the
experience of the management of Dalton Kent Securities Group, Inc. We have not
previously worked with Dalton Kent Securities Group, Inc. management, and
therefore, the integration of our management teams may create administrative and
policy problems, which, if not satisfactorily addressed, could have a material
adverse effect on our operations.
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<PAGE>
The decision to expand our business model also means that we must
develop and depend upon a different operational infrastructure than the one
which supported our current business model, and substantially modify our
approaches to service development and sales and marketing. Our infrastructure
must be changed to support three separate kinds of businesses (development of
online trading of securities, traditional brokerage services and providing
financial information) that need to be seamlessly integrated. This will require
substantial changes in information technology and databases, mechanisms and
methods of delivery of products and services, administrative functions, and use
of personnel resources. There are substantial risks that we will fail, to some
degree, to sufficiently recast our infrastructure and integrate the three key
components of the new business model and/or to re-focus service development and
sales and marketing on the expanded business model. Such failures, if and to the
extent they occur, are likely to have material adverse effects upon our
business, financial condition, results of operations and prospects.
The transition to our expanded business model may adversely effect our operating
results.
Our transition to the expanded business model has placed, and will
continue to place, a significant strain on our management and operations. Our
future operating results will depend, in part, on our ability to continue to
broaden our senior and middle management groups and administrative
infrastructure, and our ability to attract, hire and retain skilled employees,
particularly in product development, marketing and sales, web site design and
information technology.
Because the expanded business model is novel for the Company, our
attempts to anticipate revenues and costs, to prepare budgets which organize the
implementation of our transition to the expanded business model, and to make
decisions regarding obtaining third-party financing that may be required, will
generally be based upon theoretical assumptions. Future events and results may
differ drastically from those planned or anticipated, which, if negative, could
result in a material adverse effect on our business, financial condition,
results of operations and prospects.
The substantial risks discussed above are magnified by the rapid pace
at which we are attempting to complete the transition to the expanded business
model. This rapid pace increases the likelihood of mistakes and failures and
increases the risks of the likelihood of resulting material adverse effects that
could damage our business, financial condition, results of operations and
prospects.
We may not integrate our services effectively in order to compete in the
marketplace.
The markets for (i) online brokerage services, (ii) internet financial
news content and transaction services, client software and Internet-based
trading tools and (iii) traditional brokerage services are intensely competitive
and rapidly evolving, and we believe that substantial consolidation of those
three products and services will occur in the industry. The expanded business
model embraces this evolution and consolidation. However, we believe that due to
the current and anticipated rapid growth of the market for our consolidated
services, competition, as well as consolidation, will substantially increase and
intensify in the future. We believe our ability to compete will depend upon many
factors both within and outside our
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control. These include: the timing and market acceptance of new services and
enhancements developed by us and our competitors; our ability to integrate the
respective businesses in an orderly, efficient and otherwise successful manner;
the operation and support of efficient, materially error-free Internet-based
systems; product and service functionality; data availability; ease of use;
pricing; reliability; customer service and support; and sales and marketing
efforts.
We face risks associated with fluctuations in the securities and financial
markets.
Our current and planned products and services are, and will be marketed
to, customers who invest or trade in the securities and financial markets. To
the extent that interest in investing or trading decreases due to volatility in
the securities or financial markets, tax law changes, recession, depression, or
otherwise, our business, financial condition, results of operations and
prospects could be materially adversely affected. It is also possible, if not
likely, that increased losses by customers that occur as a result of any such
recession, depression or other negative event will increase the quantity and
size of legal claims made against us.
We are subject to ongoing securities regulation in the United States and
overseas.
The securities industry in the United States and other countries is
subject to extensive regulation under both federal and state laws. In the United
States, the Securities and Exchange Commission, state securities commissions,
the National Association of Securities Dealers, Inc. and other self-regulatory
organizations such as the various stock exchanges, require strict compliance
with their rules and regulations. Broker-dealers are subject to regulations
covering all aspects of the securities business, including sales methods, trade
practices among broker-dealers, use and safekeeping of clients' funds and
securities, capital structure, recordkeeping, the conduct of directors, officers
and employees and the maintenance of certain levels of capital. We will also be
subject to regulation by foreign governments of any foreign broker-dealers
associated with us and will be subject to the foreign rules and regulations
pertaining to the trading of foreign equity in overseas markets. Failure to
comply with any of these laws, rules or regulations could result in censure,
fine, the issuance of cease-and-desist orders, suspension or expulsion, any of
which could harm our business.
We are dependent on key personnel.
Our business depends upon the services of our executives and certain
key personnel, including Stanley Hollander, Chairman of the Board of Directors;
W. Thomas Hodgson, President and Chief Executive Officer; Alan L. Jacobs,
Executive Vice President; Michael S. Jacobs, Chief Strategy Officer; Richard
Guest, Chief Financial Officer, Ron R. Goldie, General Counsel and Richard
Hefter, Editor-in-Chief. We cannot be certain that such officers and directors
will remain our employees in any particular capacity. We cannot be certain that
we will be able to successfully attract and retain key personnel. The loss of
the services of any one or more of such key personnel or the inability to
attract such key personnel could harm our business. Currently we do not maintain
key man life insurance on any of our executives or key personnel.
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There are risks associated with the securities industry.
The securities business is volatile and is directly affected by the
following factors, among others, many of which are beyond our control:
o national and international political and economical conditions
o broad trends in business and finance
o fluctuations in volume and price levels of securities transactions
o client default on commitments (such as margin obligations)
o litigation
o employee's misconduct, errors and omissions
o regulation at federal and state levels
o the emergence of numerous discount brokers
o increased use of technology
o a steady decrease in the commissions charged to clients of discount
brokerage services
Losses associated with these risks could harm our business and have a
material adverse effect on our business and results of operations.
Risks relating to forward looking statements.
Certain statements contained in this prospectus, including, without
limitation, statements containing the words "believes," anticipates," "may,"
"intends," "expects" and words of similar import, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements (or industry results, performance or achievements), expressed or
implied by these forward-looking statements, to be substantially different from
those predicted. The factors that could affect our actual results include the
following:
o general economic and business conditions, both nationally and
internationally
o competition in the Internet industry, both nationally and
internationally
o changes in business strategy or development plans
o technological, evolving industry standards, or other problems that
could delay the sale of our services or products
o our inability to protect our trade secrets, operate without infringing
upon the proprietary rights of others, or prevent others from
infringing on our proprietary rights
o our inability to obtain sufficient financing to continue to expand
operations
o problems associated with the acquisition of other businesses, including
the integration of management.
10
<PAGE>
Certain of these factors are discussed in more detail elsewhere in this
prospectus, including under the caption "Risks of Investing in Our Shares." You
should consider carefully the risks described in this prospectus or detailed
from time to time in our filings with the Securities and Exchange Commission.
We do not undertake any obligation to publicly update or revise any
forward-looking statements contained in this prospectus or incorporated by
reference, whether as a result of new information, future events or otherwise.
Because of these risks and uncertainties, the forward-looking events and
circumstances discussed in this prospectus might not transpire.
PROCEEDS FROM SALE OF SHARES
We will not receive any proceeds from the sale of the shares of common
stock being offered. However, we may receive up to $18,195,000 upon exercise of
the warrants. Any such proceeds will be used for working capital and other
corporate purposes.
We expect to incur expenses of approximately $35,000 in connection with
the registration of the shares.
11
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
ownership of our common stock by selling stockholders as of the date of this
prospectus.
<TABLE>
<CAPTION>
Beneficial Beneficial
Ownership of Common Ownership of Common
Stock Before Offering(1) Number of Shares Stock After Offering(4)
------------------------ Being -----------------------
Selling Stockholders Number Percentage(2) Offered(3) Number Percentage(2)
-------------------------------- ------ ------------- ----------------- ------ -------------
<S> <C> <C> <C> <C> <C>
David Avidon 199,538 1.01 61,926 137,612 *
Martin Banbury 20,156 * 20,156 0 *
Glenn Beyer 199,538 1.01 61,926 137,612 *
Thorbjorn Brevik 8,320 * 8,320 0 *
Doyne Investments Limited 43,770 * 43,770 0 *
Camden Commercial Services 72,795(5) * 72,795 0 *
Christopher Thomas Edge and
James Hay Pension Trustees
Limited 8,665 * 8,665 0 *
Steven Chananya 119,728 * 37,157 82,571 *
Edgeport Nominees Limited 2,500 * 2,500 0 *
Jon DeMichiel 13,305 * 4,129 9,176 *
Ned Dubofsky 66,517 * 20,640 45,877 *
Alan Elkes 199,538 1.01 61,926 137,612 *
Justyn Feldman 199,538 1.01 61,926 137,612 *
S. Gostick 1,829 * 1,829 0 *
Selwyn Herring 67,190 * 67,190 0 *
Knut Aune Jonassen 4,316 * 4,316 0 *
Clifford Lockyer 134,368 * 134,368 0 *
Molia Holding AS 35,560 * 35,560 0 *
Scott Lustig 26,611 * 8,259 18,352 *
Momento SOL AS 16,813 * 16,813 0 *
Online PLC 33,000 * 33,000 0 *
David Mugrabi 199,538 1.01 61,926 137,612 *
R. Posner 2,741 * 2,741 0 *
S. Rashid 4,117 * 4,117 0 *
David Reimer 199,538 1.01 61,926 137,612 *
Scandinavia Online A/S (Denmark) 23,915 * 23,915 0 *
Scandinavia Online AB (Sweden) 71,745 * 71,745 0 *
Schibsted Multimedia AS 19,006 * 19,006 0 *
Daniel Schapiro 26,611 * 8,259 18,352 *
SOL AS (Norway) 135,514 * 135,514 0 *
SoloSearch 3,334 * 3,334 0 *
TradinGear 35,000 * 35,000 0 *
Elvind Trondsen 3,677 * 3,677 0 *
Gavin Whichello 9,000 * 9,000 0 *
Twice International, S.A 250,000(6) 1.27 250,000 0 *
Brian White 20,156 * 20,156 0 *
Del Mar Consulting Group, Inc. 425,000(7) 2.16% 350,000 75,000 *
Fontonelle LLC 308,000(8) 1.57% 150,000 158,000 *
National Bank Financial Corp. 627,588(9) 3.19% 275,000 352,588 1.8%
</TABLE>
---------------
* Represents less than 1%.
12
<PAGE>
(1) Represents shares beneficially owned by the named individual, including
shares of common stock that the person has the right to acquire within
60 days of the date of this prospectus. Unless otherwise noted, all
persons listed have sole voting and sole investment power.
(2) Based on 19,660,362 shares, which includes 16,237,875 shares of common
stock issued and outstanding as of the date of this prospectus and
34,224,874 shares of Class A common stock issued and outstanding. Each
10 shares of Class A common stock has the voting equivalent of 1 share
of Common Stock.
(3) Does not constitute a commitment to sell any or all of the stated
number of shares of common stock. The number of shares of common stock
offered shall be determined from time to time by each selling
stockholder in his or her sole discretion.
(4) Assumes all the shares of common stock are sold pursuant to this
prospectus and that no other shares of common stock are acquired or
disposed of by the selling stockholders prior to the termination of
this prospectus.
(5) Includes 62,500 shares of common stock issuable upon the exercise of
certain warrants at an exercise price of $15.62 per share.
(6) Represents 250,000 shares of common stock issuable upon the exercise of
certain warrants at an exercise price of $14.25 per share.
(7) Includes 350,000 shares of common stock issuable upon the exercise of
certain warrants at an exercise price of $15.50 per share.
(8) Includes 150,000 of common stock issuable upon the exercise of certain
warrants at an exercise price of $23.25 per share.
(9) Includes 275,000 shares of common stock issuable upon the exercise of
certain warrants at an exercise price of $17.25 per share.
HOW THE SHARES MAY BE DISTRIBUTED
The selling stockholders have advised us that they may from time to
time sell all or a portion of the shares offered in one or more transactions in
the over-the-counter market, on The Nasdaq National Market, or on an exchange on
which the common stock may then be listed, in privately negotiated transactions
or otherwise, or a combination of such methods of sale, at market prices
prevailing at the time of sale or prices related to such prevailing market
prices or at negotiated prices. The selling stockholders may effect such
transactions by selling the shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling stockholders and/or purchasers of
the shares for whom they may act as agent (which compensation may be in excess
of customary commissions). The selling stockholders and any participating
broker-dealers may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act of 1933. Neither we nor the selling stockholders can
estimate at the present time the amount of
13
<PAGE>
commissions or discounts, if any, that will be paid by the selling stockholders
on account of their sales of the shares from time to time.
Because the selling stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act of 1933, the selling
stockholders will be subject to prospectus delivery requirements under the
Securities Act of 1933. Furthermore, in the event of a "distribution" of
securities, the selling stockholders, any selling broker-dealer, and any
"affiliated purchasers" may be subject to Regulation M under the Securities
Exchange Act of 1934, which prohibits certain activities for the purpose of
pegging, fixing or stabilizing the price of securities in connection with an
offering.
Under the securities laws of certain states, the shares may be sold
only through registered or licensed broker-dealers or pursuant to available
exemptions from such requirements.
We will pay certain expenses in connection with this offering,
estimated to be approximately $35,000, but we will not pay for any underwriting
commissions and discounts, if any, or counsel fees or other expenses of the
selling stockholders. We have agreed to indemnify the selling stockholders,
their directors, officers, agents and representatives, and any underwriters,
against certain liabilities, including certain liabilities under the Securities
Act of 1933. The selling stockholders have also agreed to indemnify us, our
directors, officers, agents and representatives against certain liabilities,
including certain liabilities under the Securities Act of 1933.
LEGAL OPINION
Broad and Cassel, a partnership including professional associations,
201 South Biscayne Boulevard, Suite 3000, Miami, Florida 33131, is giving an
opinion regarding the validity of the offered shares of common stock.
EXPERTS
The financial statements included in our annual report on Form 10-KSB
for the year ended December 31, 1999, incorporated by reference in this
prospectus have been audited by Richard A. Eisner & Company, LLP, independent
certified public accountants, to the extent and for the periods set forth in
their report incorporated herein by reference, and are incorporated herein in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
14
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the Securities
and Exchange Commission in connection with this offering. This prospectus does
not contain all of the information set forth in the registration statement, as
permitted by the Rules and Regulations of the Securities and Exchange
Commission. Whenever reference is made in this prospectus to any contract or
other document of ours, the reference may not be complete and you should refer
to the exhibits that are part of the registration statement for a copy of the
contract or document.
We also file annual, quarterly and current reports and other
information with the Securities and Exchange Commission. You may read and copy
any report or document we file, and the registration statement, including the
exhibits, may be inspected at the Securities and Exchange Commission's public
reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the public reference rooms. Our Securities and Exchange
Commission filings are also available to the public from the SEC's website at:
http://www.sec.gov.
Quotations for the prices of our common stock appear on The Nasdaq
National Market, and reports, proxy statements and other information about us
can also be inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
Prospectus, and later information that we file with the Securities and Exchange
Commission will automatically update and supersede this information.
We incorporate by reference the following filings and any future
filings made with the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
o The description of the common stock contained in our
registration statement on Form 8-A, filed on May 12, 1999,
including the information incorporated therein by reference
and including any amendment or reports filed for the purpose
of updating such description;
o Our Annual Report on Form 10-KSB for the year ended December
31, 1999, filed on March 30, 2000;
o Our Quarterly Reports on Form 10-QSB for the quarterly periods
ended March 31, 2000 and June 30, 2000, filed on May 15, 2000
and August 11, 2000 respectively;
o Our Current Report on Form 8-K filed on August 15, 2000;
15
<PAGE>
o Our Current Report on Form 8-K filed on August 17, 2000;
o Our Current Report on Form 8-K filed on September 27, 2000;
o Our Current Report on Form 8-K/A filed on October 2, 2000; and
o Our Current Report on Form 8-K/A filed on October 4, 2000.
We have filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, with
respect to the common stock covered by this prospectus. This prospectus, which
is a part of the Registration Statement, does not contain all the information
set forth in, or annexed as exhibits to, the Registration Statement, as
permitted by the Securities and Exchange Commission's rules and regulations. For
further information with respect to us and the common stock offered under this
prospectus, please refer to the Registration Statement, including the exhibits,
copies of which may be obtained from the locations described above. Statements
concerning any document filed as an exhibit are not necessarily complete and, in
each instance, we refer you to the copy of the document filed as an exhibit to
the Registration Statement.
You may request, at no cost, a copy of any or all of the information
incorporated by reference by writing or telephoning us at:
GlobalNetFinancial.com, Inc.
7284 W. Palmetto Park Road
Suite 210
Boca Raton, Florida 33433
(561) 417-8053
Attention: Corporate Secretary
You should only rely on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. Our common stock is not being
offered in any state where the offer is not permitted. You should not assume
that the information in this prospectus or any supplement is accurate as of any
date other than the date on the front of those documents.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Certificate of Incorporation provides for indemnification rights
of officers, directors, and others and limits the personal liability of
directors for monetary damages to the extent permitted by Delaware Law.
We maintain a directors and officers' liability policy providing
insurance on behalf of any person who is or was our director or officer against
any liability incurred by such person in any such capacity or arising out of
such person's status as such. This two-year policy has a $25.0 million coverage
limit per occurrence and a $25.0 million limit in the aggregate. The policy
contains various reporting requirements and is subject to certain exclusions and
limitations.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, may be permitted to our directors, officers, and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable.
16
<PAGE>
PART II
INFORMATION REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
GlobalNetFinancial, Inc. (the "Company") estimates that its expenses in
connection with this registration statement will be as follows:
Securities and Exchange Commission registration fee $ 8,735
Legal fees and expenses 20,000
Accounting fees and expenses 5,000
Miscellaneous 1,265
---------
Total $ 35,000
=========
Item 15. Indemnification of Directors and Officers.
Our Certificate of Incorporation provides for indemnification rights
of officers, directors, and others and limits the personal liability of
directors for monetary damages to the extent permitted by Delaware Law.
We maintain a directors and officers' liability policy providing
insurance on behalf of any person who is or was our director or officer against
any liability incurred by such person in any such capacity or arising out of
such person's status as such. This two-year policy has a $25.0 million coverage
limit per occurrence and a $25.0 million limit in the aggregate. The policy
contains various reporting requirements and is subject to certain exclusions and
limitations.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, may be permitted to our directors, officers, and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable.
Item 16. Exhibits.
5.1 Opinion of Broad and Cassel
23.1 Consent of Broad and Cassel (contained in its opinion filed as
Exhibit 5.1 to this Registration Statement)
23.2 Consent of Richard A. Eisner & Company, LLP
24.1 Power of Attorney (included in the signature page of this
Registration Statement)
17
<PAGE>
Item 17. Undertakings.
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:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement; and
(c) To include any additional or changed material information
on the plan of distribution;
provided, however, that paragraphs (1)(a) and (1)(b) shall not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to 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.
18
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, 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 Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933, as amended, 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 any 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 Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Boca Raton, State of Florida on this 4th day of
October, 2000.
GLOBALNET FINANCIAL.COM, INC.
By: /S/ W. THOMAS HODGSON
----------------------------------
W. Thomas Hodgson
President and Chief
Executive Officer
20
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Richard Guest and Stanley Hollander as his or her true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution
for him or her and in his or her name, place and stead in any and all capacities
to execute in the name of each such person who is then an officer or director of
the Registrant any and all amendments (including post-effective amendments) to
this Registration Statement, and any registration statement relating to the
offering hereunder pursuant to Rule 462 under the Securities Act of 1933, as
amended, and to file the same with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents and each of them full power and authority to
do and perform each and every act and thing required or necessary to be done in
and about the premises as fully as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ W. THOMAS HODGSON Director, President, October 4, 2000
------------------------------------- Chief Executive Officer
W. Thomas Hodgson (Principal Executive Officer)
/S/ STANLEY HOLLANDER Chairman of the Board October 4, 2000
-------------------------------------
Stanley Hollander
/S/ ALAN L. JACOBS Executive Vice President and Director October 4, 2000
-------------------------------------
Alan L. Jacobs
/S/ RICHARD GUEST Chief Financial Officer October 4, 2000
-------------------------------------
Richard Guest
/S/ MONIQUE MACLAREN Secretary October 4, 2000
-------------------------------------
Monique Maclaren
/S/ THERESA KIRCHMIER Treasurer October 4, 2000
-------------------------------------
Theresa Kirchmier
/S/ RONALD B. KOENIG Director October 4, 2000
-------------------------------------
Ronald B. Koenig
/S/ KYM ANTHONY Director October 4, 2000
-------------------------------------
Kym Anthony
/S/ CHRISTOPHER JENNINGS Director October 4, 2000
-------------------------------------
Christopher Jennings
/S/ N. BULENT GULTEKIN Director October 4, 2000
-------------------------------------
N. Bulent Gultekin
/S/ MICHAEL WHITAKER Director October 4, 2000
-------------------------------------
Michael Whitaker
/S/ NICHOLAS BACKHOUSE Director October 4, 2000
-------------------------------------
Nicholas Backhouse
</TABLE>
21
<PAGE>
EXHIBIT INDEX (1)
EXHIBIT DESCRIPTION
------- -----------
5.1 Opinion of Broad and Cassel
23.1 Consent of Broad and Cassel (included in Exhibit 5.1)
23.2 Consent of Richard A. Eisner & Company, LLP
24.1 Power of Attorney (included in the signature page of this
Registration Statement)
------------------------
(1) All other exhibits listed in Item 8 of Part II of this Registration
Statement have been incorporated by reference herein, as indicated in
Item 8.
22
