GLOBALINK, INC.
2,469,408 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale by certain persons (the
"Selling Securityholders") of up to 2,469,408 shares of Common Stock (the
"Common Stock") of Globalink, Inc. (the "Company"). The Common Stock was offered
in two distinct private placements completed in January 1997 and March 1997,
respectively. The Shares may be offered by Securityholders of the Company or by
pledges, donees, transferees or other successors in interest that receive such
shares as a gift, partnership distribution or other non-sale related transfer
from time to time in transactions on the American Stock Exchange, Inc. (the
"AMEX"), in privately negotiated transactions, or by a combination of such
methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Company received proceeds of $3,912,078.50
in the private placements, but will not receive any of the proceeds of the sale
of such shares of Common Stock in this Offering. The Company will receive
proceeds of up to $2,665,835 from the exercise of the 639,158 Common Stock
purchase warrants by the Selling Securityholders. The Company has agreed to
indemnify the Selling Securityholders against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or to contribute to
payments which these Selling Securityholders may be required to make in respect
thereof. See "Selling Securityholders and Plan of Distribution" and "Description
of Securities."
SEE "RISK FACTORS" FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT
IN THESE SECURITIES.
The shares of Common Stock of the issuer are listed on the American Stock
Exchange under the symbol "GNK."
The Company has agreed to pay all of the expenses in connection with
the registration and sale of the Common Stock being offered by the Selling
Securityholders (other than brokerage commissions and fees).
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK AND SHOULD NOT BE PURCHASED BY INVESTORS
WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Price Discounts Proceeds
to and to
Public Commissions Company (1)
- --------------------------------------------------------------------------------
Per Share $3.34375 $ .09 $1,446,079
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Per Share $3.678125 $ - $ 240,064
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Per Share $3.44 $ .21 $2,322,000
- --------------------------------------------------------------------------------
Per Share $4.18 $ - $2,125,823
- --------------------------------------------------------------------------------
Per Share $4.30 $ - $ 453,942
- --------------------------------------------------------------------------------
Per Share $3.44 $ - $ 86,069
- --------------------------------------------------------------------------------
Total $6,454,977 $219,000 $6,673,977
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(1) Before deducting expenses estimated at $146,000 (approximately $.06 per
share sold by the Company).
The Common Stock was offered by the Company on a best efforts basis,
pursuant to the exemption from registration provided by the Securities Act of
1933, as amended, and Rule 506 as promulgated thereunder.
The date of this Prospectus is May 6, 1997
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AVAILABLE INFORMATION
The small business issuer is a reporting company under Section 13 of
the Securities and Exchange Act of 1934 (the "Exchange Act").
The reports and other information filed by the small business issuer
may be inspected and copied at the public reference facilities of the Commission
at 450 Fifth Street, N.W. in Washington, D.C. 20549. Copies may be obtained at
the prescribed rates from the Public Reference Section of the SEC at its
principal office in Washington, D.C. Statements contained in this Prospectus as
to the contents of any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the registration
statement, each such statement being qualified in all respects by such
reference.
The securities of the issuer are listed on the American Stock Exchange
under the symbol "GNK." The reports and other information concerning the issuer
can be inspected at the American Stock Exchange, Inc. at 86 Trinity Place, New
York, NY 10006-1881 under conditions and at rates prescribed by the American
Stock Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission and
the American Stock Exchange are incorporated herein by reference.
(a) Annual Report on Form 10-KSB for the fiscal year ended December
31, 1995;
(b) Current Report on Form 8-K as filed on March 28, 1996;
(c) Quarterly Report on Form 10-QSB for the quarter ended March 31,
1996;
(d) Quarterly Report on Form 10-QSB for the quarter ended June 30,
1996;
(e) Proxy Statement on Schedule 14A as filed on October 30, 1996;
(f) Quarterly Report on Form 10-QSB for the quarter ended September
30, 1996;
(g) Annual Report on Form 10-KSB for year ended December 31, 1996;
(h) Current Report on Form 8-K as filed on March 21, 1997;
(i) Current Report on Form 8-K as filed on April 7, 1997;
(j) The description of the Company's Common Stock as contained in
the Company's Form 8-A dated July 19, 1993.
All reports and other documents filed by the Company pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Securities Act"), subsequent to the date of this Prospectus and
prior to the termination of the offering made by the Prospectus shall be deemed
to be incorporated by reference herein. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company undertakes to provide without charge to each person to whom
a Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the information incorporated by reference in this Prospectus,
other than exhibits to such information. Requests for such copies should be
directed to John S. Stoppelman, The Stoppelman Law Firm, 1749 Old Meadow Road,
Suite 610, McLean, VA 22102-4310 (telephone: 703-827-7450).
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS OR INCORPORATED BY REFERENCE THEREIN. EACH
PROSPECTIVE INVESTOR IS URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY. UNLESS
OTHERWISE INDICATED ALL PER SHARE DATA AND INFORMATION IN THIS PROSPECTUS
RELATING TO THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING ASSUMES NO EXERCISE
OF THE OUTSTANDING OPTIONS TO PURCHASE AN AGGREGATE OF 971,016 SHARES OF COMMON
STOCK.
THE COMPANY
Globalink, Inc. ("GLOBALINK" or "THE COMPANY") is a leading provider of products
and services that help businesses and individuals overcome language barriers.
The Company designs, develops, publishes, markets, and supports translation and
language learning software; and provides professional translation services
through the Globalink Translation Services Division and the Globalink
Translation Alliance. With an extensive range of software and service offerings,
Globalink helps corporations, government agencies, large organizations,
students, educators and small businesses solve language problems. The Company
currently markets bi-directional software for creating draft translations
between English and French, German, Italian, Portuguese and Spanish, as well as
language learning software for English, French, German and Spanish. The Company
continues to develop new generations of its core translation technology while
also bringing new applications of that technology and related technologies to
market, providing advanced and affordable translation software and language
learning software for its customers.
The Company also offers professional translation services through its worldwide
network of preferred translators. Some of the materials routinely translated
include: Web Sites, software user guides, technical manuals, proposals, legal
contracts, business correspondence, advertising and marketing materials,
newsletters, employee handbooks, and more. These services focus on translating
documents in a time sensitive production environment designed to meet the needs
of the Company's domestic and international client base.
BACKGROUND
As the global economy has continued to expand, so too has the need to share
information. As post-industrial economies are transforming into information
economies, data is increasingly a key asset. Timely access to pertinent
information is essential for the "knowledge workers" of these new economies. The
growth of the Internet has played a significant role in this new wave of
information processing. E-mail messages, Web sites, and HTML and word processing
documents are rapidly becoming international in the audience they address, as
they are disseminated over the Internet. While the Internet enables the flow of
information across national and cultural boundaries, communication still
requires overcoming the language barrier. As a leading provider of machine
translation technology, the Company sees growth opportunities in providing tools
to enable communication. Machine translation, also known as "MT," is the process
of converting text from one language to another with a computer. Today, most
translations are still performed by humans. However, demand for translations is
already beginning to outpace supply, and as more information is digitally
created and transmitted, alternative translation methods will play a larger
role.
The introduction of powerful new personal computers and workstations has helped
this trend, by allowing the development of PC-based MT functions that had
previously been mainframe dependent. The widespread acceptance of these powerful
new personal computers, and their increasing use as communication devices, has
rapidly increased demand for low-cost, PC-based MT software.
MACHINE TRANSLATION (MT) TECHNOLOGY
MT is an early application of natural-language processing research. Unlike
software that merely looks up words in a dictionary, MT applications
grammatically analyze the original language text (the Source Language) and
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automatically generate corresponding text in the Target Language (the translated
text). The input to the software application is the text of the Source Language.
The output is the text of the Target Language which may be displayed on-screen,
printed (with or without the corresponding Source Language text), e-mailed,
posted on a Web site, etc.
GLOBALINK'S PRODUCTS -- CORE TECHNOLOGY
Globalink translation software products (THE GLOBALINK LANGUAGE ASSISTANT
SERIES(TM), GLOBALINK POWER TRANSLATOR(R), POWER TRANSLATOR(R) PRO AND GLOBALINK
WEB TRANSLATOR(TM)) provide high-speed, computer-assisted draft translations for
a wide range of applications. When used with customized Subject Dictionaries,
Globalink translation software will create acceptable draft translations of
scientific, technical, or commercial texts. The texts must be clearly written in
the Source Language and use grammatically correct, declarative sentences. The
Company's software is not intended for use in translating literary works or
poetry.
The Globalink approach is based fundamentally on linguistic and machine
translation algorithms. The language the user is translating from is the Source
Language. The language the user is translating into is the Target Language. For
example, if one has a German text to be translated into English, German would be
the Source Language and English the TARGET Language.
The translation dictionaries are lexical databases, or "lexicons." They list
terms in the Source Language with their appropriate translation in the Target
Language.
The translation program translates the original text into the selected language,
utilizing the machine translation dictionaries as lexical databases. Users can
translate entire documents with a single command, or translate selections from
the document or single sentences. Documents can be created using the built-in
editor of the program, or can be imported from most popular word processors,
using import filters that retain formatting. In addition, THE LANGUAGE ASSISTANT
SERIES, POWER TRANSLATOR (VERSION 6) AND POWER TRANSLATOR PRO allow you to use
the program from within your word processor (Word for Windows). Similarly, WEB
TRANSLATOR lets you translate Web pages from within the browser as you surf the
Internet. In addition, with the Translation Utility (a feature of Power
Translator 6 and Power Translator Pro), it's easy to translate e-mail messages
in popular e-mail packages (such as Microsoft Mail).
All Globalink translation programs are designed to be user-friendly and to
generate quality draft translations. End users can add new terms to the
dictionaries or modify existing terms. They can also create special Subject
Dictionaries or purchase them from Globalink. The texts are displayed in a split
screen, facilitating review of the source text and the target text. The built in
editor, with special features for accented and foreign character entry, make it
easy to edit translations on-screen. During the editing process, end users have
access to alternative translations for terms that have been translated or access
to synonyms for terms in the Source Language that would result in more accurate
translations.
Special Translation Algorithms will perform multiple translations of a word in a
sentence based on parts of speech (noun, verb, adjective). Other translation
features include: component analysis of German compound nouns, the
disambiguation of terms with multiple parts of speech, automatic inflection of
semantic units, and other automatic grammatical functions.
The software products also contain a special reference component that will
display parts of speech, translations and other grammatical information for any
term in the dictionary.
MARKET STRATEGY
Globalink's objective is to become the world's leading provider of translation
and language solutions. The Company's target market areas are professional,
governmental, educational, industry, and consumer mass markets. Globalink
translation software products are designed to emphasize quality translation,
adaptability to the end user, integration with market-leading applications (such
as Web browsers, e-mail packages and word processors) and affordability, thus
creating mass marketing potential.
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Current Globalink products and others under development are available on a wide
variety of computer platforms including IBM PCs and compatibles under Windows
and Macintosh(R) operating systems. The products are designed for high
productivity translation or for rapid draft translations. The Company's products
are priced for high-end professional users as well as for general consumers. The
Company plans to continue to broaden its product offerings with more language
pairs and enhancements to its existing products.
The Company sells its products and services primarily through worldwide
non-exclusive distributor/dealer channels. All distributors have agreed to
purchase inventory of products upon execution of their respective distributor
agreements. The Company is broadening its distribution through expansion of its
distribution/dealer channels, direct sales efforts nationally, original
equipment manufacturer agreements (OEM) and extensive promotional programs.
PRODUCTS
CURRENT PRODUCTS
GLOBALINK POWER TRANSLATOR(R) 6.0 - Globalink Power Translator 6.0 is
the Company's newest product for US and Canadian markets. The product
creates draft translations of documents, e-mail, Web pages and more.
With four languages in one box--Spanish, French, German and Italian--it
is easy to translate text to and from English. Globalink Power
Translator 6 customers can create new documents, import files from
other applications, or install it to work within Microsoft Word.
Globalink Power Translator 6 also includes: a utility for translating
within e-mail applications, a special version of Globalink Web
Translator(TM) (see below), and a Conversation utility. Advanced
features allow the user to create, prioritize and modify dictionaries;
edit documents interactively; and look up or inflect words. Globalink
Power Translator 6 is based on Globalink Barcelona(TM) technology and
runs on Windows 95 or NT systems.
GLOBALINK POWER TRANSLATOR 5.1 - Is a similar product to Globalink
Power Translator 6.0 (above), but is for Windows 3.1 systems. The
product includes three language pairs--English to and from French,
German and Italian.
GLOBALINK WEB TRANSLATOR(TM) - The only browser add-on for translating
French, German and Spanish Web sites into English. Users can research
companies and markets, plan a vacation, broaden their horizons, or just
have fun. The product applies the Company's core MT technology to
business tasks such as finding and understanding information from news
bureaus, resorts, embassies, libraries, museums, and more. Translations
are draft-quality, providing an understandable translation of the
foreign language site. Translated pages maintain all hotlinks,
graphics, and formatting of the original pages. Globalink Web
Translator works with Netscape Navigator 2.0 and Microsoft Internet
Explorer 3.0 and translates while on-line so users do not have to exit
their browser. Versions for Italian to and from English and Portuguese
(Brazilian) to and from English are also available. Runs on Windows
3.1, Windows 95 or Windows NT.
GLOBALINK LANGUAGE ASSISTANT - This product is targeted at consumers
purchasing software through traditional (e.g. superstores) and emerging
(such as mass merchants) retail outlets. The low price point and
appealing feature set make the product perfect for students, travelers,
pen pals, and home computer users. Globalink Language Assistant is
useful to translate letters, articles, recipes, travel brochures,
bulletins and more. A complete suite of reference tools gives users
instant help when writing, studying, or translating. Globalink Language
Assistant products have extensive grammar help, including an on-line
grammar "reference book" to help users get better translation quality.
There are also bilingual dictionaries which can easily be customized by
adding new words and phrases, or by modifying existing entries.
Finally, for writing in a foreign language or entering new foreign
words to dictionaries, the program contains an accented character
utility. And with the Deluxe CD-ROM editions, users can play back
sentences, paragraphs, or entire documents in either language supported
by each Globalink Language Assistant. Languages available are English
to and from French, German, Italian or Spanish. Runs on Windows 3.1,
Windows 95, Windows NT or Macintosh.
GLOBALINK TALK TO ME(TM) - In response to market demand and customer
requests for language learning titles,
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Globalink released Talk to Me. Just as MT software helps customers to
overcome language barriers by producing draft translations, language
learning software helps users bridge the language gap by developing
foreign language skills. Globalink Talk to Me is published in
conjunction with Auralog, a privately held French company. The program
was developed in conjunction with leading educational institutions in
Europe, including the Sorbonne, the University of Bristol and the
Goethe Institute.
Speaking a foreign language like a native is one thing. Understanding
what native speakers are saying is quite another. Globalink Talk to Me
is the one interactive language learning program that does both:
teaches users how to listen and to talk. Using unique speech
recognition technology, Globalink Talk to Me lets users actually see
voiceprints of native speakers, then record a voiceprint of their own
pronunciation. Through imitation, repetition and comparison, users can
perfect their pronunciation. At the same time, the program helps to
train the ear to hear subtle nuances and differences in the
pronunciation of phrases, words and even syllables. Globalink Talk to
Me includes adjustable self-paced challenge levels, interactive
dialogues involving real-life situations, and language learning games
that help reinforce vocabulary, spelling and listening skills.
Languages available: English, French, German, and Spanish. Runs on
Windows 3.1 and Windows 95.
For the Macintosh platform, Globalink offers versions of several of its
product lines, including Language Assistant, Power Translator and Power
Translator Professional.
TRANSLATE DIRECT MANAGEMENT SYSTEM - The Company has introduced
TRANSLATE DIRECT MANAGEMENT SYSTEM which will give corporations and
other organizations the ability to manage their own translation bureau
for maximum efficiency. Using a dedicated on-site server and Globalink
software, they can manage their own translation bureau through direct
on-line access to their translators and gain unprecedented control over
all translation activities.
NEW PRODUCTS
During 1997, Globalink has scheduled an array of new products
and services for both the general market as well as specific market
areas. Products under development for release in 1997 currently
include:
GLOBALINK POWER TRANSLATOR PRO - Power Translator Pro will be quite
similar to Power Translator 6.0 (above), but will be localized for
international markets in Europe and Latin America. The product will
also contain the functionality of the Power Translator 5.1 domestic
product, thereby offering a single solution for customers regardless of
Windows version (Windows 3.1, Windows 95 or Windows NT). Power
Translator Pro will be available in localized versions in French,
German, Italian, Spanish and Portuguese.
GLOBALINK WEB TRANSLATOR PORTUGUESE - This product is the newest
addition to the Globalink Web Translator family and will be marketed
heavily in Brazil and Portugal. The product is based on Globalink's
Barcelona technology and runs on Windows 95 and Windows NT.
NEW LANGUAGE PAIRS - The Company sees a significant market opportunity
in producing new language pairs for its products, such as a version of
Globalink Power Translator Pro that translates French text to and from
German. In 1997 the Company plans to devote significant resources to
capitalizing on the investment made in its Barcelona technology for
such new language pair development.
More than two years in development, BARCELONA marks a breakthrough in
translation software. This open system allows linguists and translators
to add to the rule sets without any knowledge of software programming.
The result is a new degree of precision previously unattainable in
machine translation software systems. The technology also makes it a
good platform for future growth, allowing for development to improve on
a rapid basis in coming years.
SALES, MARKETING AND DISTRIBUTION
The Company markets and sells its software products in much the same fashion as
other PC software manufacturers who rely on the retail channel for the majority
of their business. This includes sales to distributors who in turn
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provide products to retailers or value added resellers (VARs) who sell to end
users or the public. In order to accomplish this channel sales process the
Company employs not only an experienced internal retail and distribution sales
team but the services of merchandising representatives who call on retail
establishments. The Company also participates in trade shows and invests in
advertising and other promotional activities.
Promotional cost is the single largest expense of software product marketing.
Furthermore, product promotion is a continuing business activity and increases
proportionally with increases in revenue. Consequently, the success of the
Company's promotional programs are directly related to the success of the
Company.
PROMOTION AND ADVERTISING
The Company's success to date has been a result of careful expenditures on
advertising and promotion controlled by limited budgets. With the successful
IPO, subsequent warrant redemption, and recent private equity placements, the
Company has been able to continue investing in aggressive advertising campaigns
and promotions. This has included expanded public relations programs, extended
advertising in general business publications, as well as known trade journals,
and increased use of free or general news coverage publicity.
Currently, the Company's promotion and advertising programs include the
following:
ADVERTISING - Product advertising appears at different times in
different media, as the Company performs targeted marketing. For
example, campaigns have run where ads appear in trade magazines, such as
PC Magazine, as well as several cross industry publications. Regional
promotions use advertising vehicles such as The Miami Herald, while
campaigns focusing on business travelers run in airline publications.
Promotions targeting specific demographic sectors are also run, such as
an infomercial on Spanish language television (Telemundo and others).
Catalog advertising continues at a high rate in known industry and trade
catalogs.
DIRECT MAIL - The Company is investing more in direct mail programs to
increase sales and exposure for the product lines. This includes
programs by industry and by demographic profiles of known buyers.
EXHIBITS - CeBIT and other European trade shows highlight the company's
participation in several local, national and international trade shows.
In addition to Company expenditures, many of the distributors and agents
employed by the Company participate in local exhibits.
PUBLIC RELATIONS - The Company continues to expand its international
public relations programs to educate the general marketplace. These
include the employment of free lance public relations agents or
specialized companies throughout the world.
DISTRIBUTORS
The Company currently has a number of worldwide distributors who are major
players typical of the type engaged by the world's significant software
manufacturers. These include the larger international distributors such as
Ingram Micro, Merisel and TechData. In less developed parts of the world the
Company uses regional or local distributors. In parts of Europe and South
America the Company uses agents to represent its interests.
PRODUCT DEVELOPMENT
Since inception, the Company has made substantial investments in product
development. To date, the Company's products have been developed by its internal
product development staff and independent contractors. The Company believes that
timely development of new products and enhancements to existing products is
essential to maintaining a competitive position in the market.
The Company currently has a staff of seventeen (17) development personnel
located in the Research and Development facility in San Diego, California. The
Company is focusing its development efforts in two areas: first, in the
development of algorithms to improve the translation quality and second, in the
development of new language pairs to expand current markets or enter new
markets.
COMPETITION
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Competition in the PC software industry in general is intense and includes not
only competition between similar product companies but all PC software companies
for retail shelf space in general. Thus the Company's competitors include not
only other companies who produce and market machine translation products but
virtually all software companies who compete for shelf space in computer
software retailers.
Within the software industry, several manufacturers have made public statements
of their intent to produce or market machine translation products. These
companies include Microsoft, Novell and IBM. Among direct PC software
competitors there are a dozen or more companies who market machine translation
software products that compete either in the mini computer marketplace or in the
PC marketplace on a limited language basis (i.e. Spanish-English only).
Globalink holds the dominant position in the retail marketplace for machine
translation software. The Company believes it has successfully pioneered and
dominated an emerging software industry segment to date and can continue to do
so as long as it continues to generate new and advanced products. In order to be
successful in the future, the Company must continue to respond promptly and
effectively to all challenges of technological and marketing capabilities any
competitor may offer. The Company's performance will continue to depend on its
ability to innovate, as well as maintain and solicit quality people in
technical, sales and management positions. The Company will continue to seek out
and recruit the most capable and experienced staff in order to maintain its
competitive superiority.
INTELLECTUAL PROPERTY, PROPRIETARY RIGHTS, LICENSES AND SOFTWARE PROTECTION
The Company regards certain features of its internal operations, software and
documentation as proprietary, and relies on a combination of contract,
copyright, trademark and trade secret laws and other measures to protect this
proprietary information. The Company has no patents, and existing copyright laws
afford only limited protection. The Company believes that, because of the rapid
pace of technological change in the computer software industry, trade secret and
copyright protection are less significant than factors such as the knowledge,
ability and experience of the Company's employees, frequent product enhancements
and the timeliness and quality of support services.
The Company provides its products to end users under non-exclusive, perpetual
term licenses, which generally are nontransferable. The Company generally
licenses its products solely for the customer's internal operations and only on
designated computers. In certain circumstances, the Company makes available
enterprise-wide licenses. The Company does not make source code available as
this may increase the likelihood of misappropriation or other misuse of the
Company's intellectual property.
The Company has registered its "GLOBALINK" service mark and trademark in the
United States for language translation services and computer software for
foreign language translation, respectively. The Company has also registered its
"POWER TRANSLATOR" trademark in the United States for computer software for
foreign language translation and its "GLOBALINK THE TRANSLATION COMPANY" mark,
together with its oval logo, in the United States for computer hardware and
software for language translation. The Company has applications pending for
federal registration of the marks "TELEGRAPH", "TRANSLATE DIRECT" and "WEB
TRANSLATOR". The Company is in the process of registering the mark "GLOBALINK",
together with its flag logo, in addition to the mark "WEB TRANSLATOR", in the
United States, Canada, the European Community and other major international
markets in Asia and South America, for language translation services rendered
via electronic means and computer software for foreign language translation.
Applications for "INTERNET TRANSLATOR" and "WEB TRANSLATOR" have been filed as
Community Trademarks applications for the European Union countries (Australia,
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
Netherlands, Portugal, Spain, Sweden and the United Kingdom). The use and
registration rights of a trademark holder do not ensure that such holder has
superior rights to others that may have registered or used identical related
marks on related goods or services.
The Company believes that copyright protection, which generally applies whether
or not a license agreement exists, is sufficient to protect the Company's rights
regarding its products.
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EMPLOYEES
As of December 31, 1996, the Company had seventy-four (74) full-time and
part-time employees including seventeen (17) in product development, nineteen
(19) in marketing and sales, twenty-three (23) in finance, administration and
shipping, four (4) in customer support, and eleven (11) in language services.
The Company's future success will depend on, in part, its ability to continue to
attract, retain and motivate highly qualified technical, marketing and
management personnel. The Company's employees are not represented by any
collective bargaining agreements, and the Company has never experienced a work
stoppage. The Company believes that it has a satisfactory relationship with its
employees.
PROPERTIES
The Company leases approximately 21,100 square feet of office space in Fairfax,
Virginia, pursuant to a lease that expires on August 31, 1999. This space, which
allows some room for expansion, is used as the Company's headquarters and
includes marketing, sales, customer support, and administrative offices. The
Company also leases approximately 7,200 square feet of office space in San
Diego, California, pursuant to a lease that expires on September 6, 1997. This
space is primarily utilized as the Research and Development center.
Certain considerations are relevant to an investment in these
securities. See "Risk Factors" for a description of the significant risks
associated with the purchase of these securities.
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THE OFFERING
Securities Offered 2,469,408 shares of Common Stock, par value $.01
per share. See "Description of Securities."
Common Stock to be
Outstanding after
the Offering(1)(2) 7,508,480 shares
Use of Proceeds The securities registered herein were sold by the
Company in private placements pursuant to the
Securities Act of 1933, as amended, and Rule 506 as
promulgated thereunder. The net proceeds of these
private placements are being applied to research
and development ($1,100,000), enhanced marketing of
new products ($1,300,000), and general working
capital ($1,145,000). Because the securities
registered herein have been issued previously by
the Company, all proceeds from any sale of the
securities registered therein will accrue to the
current holders of such securities. The Company
will not receive any further proceeds from any such
sale, but will receive proceeds of the exercise of
the 639,158 Common Stock purchase warrants by the
Selling Securityholders.
Risk Factors The securities offered hereby are speculative and
involve a high degree of risk and should not be
purchased by investors who cannot afford the loss
of their entire investment. See "Risk Factors."
American Stock
Exchange Symbol Common Stock - GNK
- ----------
(1) Includes approximately (i) 488,570 shares of Common Stock issuable upon
conversion of Series A-2 Preferred Stock; (ii) 229,300 shares of Common
Stock issuable upon conversion of Series A-2 Preferred Stock dividend; and
(iii) 1,112,380 shares of Common Stock issuable upon conversion of Series
A-3 Preferred Stock.
(2) Does not include (i) 508,570 shares of Common Stock issuable upon exercise
of Common Stock Purchase Warrants at $4.18 per share (ii) 25,020 shares of
Common Stock issuable upon exercise of Common Stock Purchase Warrants at
$3.44 per share; (iii) 105,568 shares of Common Stock issuable upon
exercise of Common Stock Purchase Warrants at $4.30; and (iv) 971,016
shares of Common Stock issuable upon the exercise of stock options held by
employees and directors.
10
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following selected financial data as of December 31, 1996 and
December 31, 1995 and the periods then ended is derived from the Company's
audited financial statements. The following data should be read in conjunction
with the financial statements of the Company, including the notes thereto.
STATEMENT OF OPERATIONS DATA:
In thousands
- ------------
Year Ended Year Ended
December 31, December 31,
1996 1995
------------ ------------
Net Revenue......................... $ 13,976,034 $ 17,605,501
Costs and expenses................... 16,188,526 18,807,361
Interest income (expense)............ (32,393) 108,190
Net earnings (loss).................. (2,244,885) (1,093,670)
Net earnings (loss) per share........ $ (.42) $ (.21)
Weighted average number of shares.... 5,333,852 5,293,197
BALANCE SHEET DATA:
December 31, 1996
-----------------
Actual
------
Cash and marketable securities........................... $ 1,606,088
Total assets............................................. 13,398,059
Total liabilities ....................................... 4,382,012
Stockholders' equity ................................... 9,016,047
11
<PAGE>
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR
ENTIRE INVESTMENT. EACH PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS INHERENT IN AND AFFECTING THE BUSINESS OF THE COMPANY AND
THIS OFFERING BEFORE MAKING AN INVESTMENT DECISION.
RISKS RELATED TO THE COMPANY
LIMITED OPERATING HISTORY; SIGNIFICANT LOSSES
Globalink has experienced significant net operating losses to date
including losses of $2,245,000, $1,094,000, and $7,611,000 for the years ended
December 31, 1996, December 31, 1995, and December 31, 1994, respectively. There
is no assurance that the Company will be able to become profitable on a
quarterly or annual basis in the future.
POSSIBLE NEED FOR ADDITIONAL FINANCING
The Company intends to meet its working capital needs from a portion of the
proceeds of the two private placements completed in 1997 and from funds
generated from operations. Although the management of the Company believes that
following the successful completion of the private placements, the Company will
have sufficient funds to meet its working capital needs for at least the next
twelve months, the Company could be required to seek additional financing sooner
than currently anticipated or could be required to curtail its activities. There
can be no assurance that any additional financing will be available to the
Company on terms acceptable to the Company, or at all.
COMPETITION
There is intense competition in the software industry in general.
Competition in the machine language translation software segment can best be
described as fragmented. There are a number of small companies in the field. No
single company has a dominant position in any particular language pair or any
hardware platform. The Company expects that competition will increase both as
the market matures and as other companies develop products in the machine
translation software field. It is likely that as the market for machine assisted
translations increases, companies with greater financial, technical and
marketing resources may attempt to offer computer-based translation products. If
so, there can be no assurance that the Company will be able to compete
successfully with existing and new competitors. A combination of external and
internal factors could adversely affect the Company's ability to compete. These
include the relative functionality, performance and reliability of the products
offered by the Company and its competitors, the success and timing of new
product development efforts, and the Company's success in attracting and
retaining highly qualified employees. Although the Company believes its products
are competitive with those of its competitors in functionality, performance and
reliability, the Company has no quantitative data, other than the satisfaction
of its customers and distributors, to substantiate such belief. If such
competition was to result in significant price declines, the Company's results
of operations could be adversely affected.
LIMITATIONS OF TRANSLATION SOFTWARE
Computer-assisted translation software is a useful tool and aid to translation,
not a fully automated process replacing human translators. The Company's
translation software has the potential to produce useful draft quality
translations. However, in order to produce such translations, the source text
must be spelled properly, grammatically correct and in declarative sentences.
The software cannot translate, with an acceptable degree of accuracy, literary
works, poetry, or documents with unclear or ambiguous statements included
therein.
POTENTIAL ADVERSE EFFECTS OF NEW PRODUCTS AND TECHNOLOGICAL CHANGE
The market for software is characterized by rapid change and improvement in
computer hardware and software technology. Globalink's success will depend upon
its ability to enhance its current products, and to introduce new products which
address technological and market developments and satisfy the increasingly
sophisticated needs of customers. Globalink's existing software is Windows
based.
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<PAGE>
DEPENDENCE ON SUBCONTRACTORS AND SUPPLIERS
The Company uses three vendors to supply most of its inventory. Although,
it is not dependent upon any supplier, as none of the suppliers provide an
unusual or specialized service that is unavailable elsewhere in the marketplace,
there can be no assurance that inventory will be available on a large-scale
basis on commercially reasonable forms, or at all. In addition, there are,
quality control risks associated with reliance on outside manufacturers. The
Company is substantially dependent on the ability of third-party manufacturers
and suppliers to, among other things, meet the Company's quality specifications.
Failure by the Company's third-party manufacturers and suppliers to comply with
these and other requirements could have a material adverse effect on the
Company. There can be no assurance that the Company's third-party manufacturers
and suppliers will dedicate sufficient production capacity to meet the Company's
scheduled delivery requirements or that the Company's suppliers or manufacturers
will have sufficient production capacity to satisfy the Company's requirements
during any period of sustained demand.
DEPENDENCE ON KEY PERSONNEL
The Company depends upon its senior management: Harry E. Hagerty, Jr.,
Chief Executive Officer and President, Ronald W. Johnston, Chief Operating
Officer, Philippe J. Kuperman, Executive Vice-President of Sales and Marketing,
and upon the support of several technical staff. Globalink believes that its
future success will depend in large part upon its ability to attract and retain
highly-skilled technical, managerial and marketing personnel. Competition for
software industry personnel can be intense and the availability of capable
linguists and translators may be limited; thus, their services could be
difficult to obtain or replace. There can be no assurance that the Company will
be successful in attracting and retaining the personnel it requires to develop
and market new and enhanced products and conduct its operations successfully.
Inability to attract and retain such personnel could have a material adverse
effect on the Company's business and prospects.
DEPENDENCE ON SOFTWARE TECHNOLOGY; LACK OF PATENT PROTECTION
The Company's business and business development is heavily dependent upon
its software technology. The Company relies on one or more of contractual
rights, technical measures, trade secrets, and copyright and trademark laws to
establish or protect its proprietary rights in each of the countries in which it
does business. However, the Company does not possess any patents and existing
copyright laws afford only limited protection. There can be no assurance that
the steps taken by the Company to protect its rights will be adequate to deter
misappropriation, or that an independent third party will not develop
functionally equivalent technology. Although the Company believes that its
patent and trademarks and the Company's products do not and will not infringe
patents or trademarks or violate the proprietary rights of others, it is
possible that the Company's existing patent or trademark rights may not be valid
or that infringement of existing or future patents, trademarks or proprietary
rights may occur. In the event the Company's products infringe patents or
proprietary rights of others, the Company may be required to modify the design
of its products, change the name of its products or obtain a license for certain
technology. There can be no assurance that the Company will be able to do in a
timely manner, upon acceptable terms and conditions, or at all. Failure to do
any of the foregoing could have a material adverse effect upon the Company. In
addition, there can be no assurance that the Company will have the financial or
other resources necessary to enforce or defend a patent infringement or
proprietary rights violation action which may be brought against it. Moreover,
if the Company's products infringe patents, trademarks or proprietary rights of
others, the Company could, under certain circumstances, become liable for
damages, which also could have a material adverse effect on the Company.
The Company also relies on confidentiality agreements with its directors,
employees, consultants and manufacturers and employs various methods to protect
the source codes, concepts, ideas, proprietary know-how and documentation of its
proprietary technology. However, such methods may not afford complete protection
and there can be no assurance that others will not independently develop similar
know-how or obtain access to the Company's know-how or software codes, concepts,
ideas and documentation. Furthermore, although the Company has and expects to
continue to have confidentiality agreements with its directors, employees,
consultants, manufacturers and appropriate vendors, there can be no assurance
that such arrangements will adequately protect the Company's trade secrets.
13
<PAGE>
EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS
Certain provisions of the Company's Certificate of Incorporation and Bylaws
that are in effect could delay the removal of incumbent directors and could make
more difficult a merger, tender offer or proxy contest involving the Company,
even if such events would be beneficial to the interests of the stockholders.
RISKS RELATED TO THE OFFERING
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this Offering (assuming sale of all Common Stock
registered hereby which is issuable upon conversion of Preferred Stock and
exercise of Warrants), the Company will have outstanding 7,604,870 shares of
Common Stock. Of these shares, the 2,469,408 shares sold in this Offering and
the approximately 3,831,063 shares previously registered will be freely
tradable. All of the remaining outstanding shares ("Restricted Shares") were
issued by the Company in reliance upon exemptions from the registration
requirements of the 1933 Act and may not be sold unless they are so registered
thereunder or are sold pursuant to an applicable exemption from registration
including Rule 144 which governs the shares of restricted securities.
Under Rule 144 a stockholder who has beneficially owned Restricted Shares
for at least two (2) years (including persons who may be deemed to be
"affiliates" of the Company under Rule 144) may sell within any three (3) month
period a number of shares that does not exceed the greater of: a) one percent
(1%) of the then outstanding shares of the Company's Common Stock, or b) the
average weekly volume on the NASDAQ during the four (4) calendar weeks preceding
such sale and may only sell such shares through unsolicited brokers'
transactions. A stockholder who is not deemed to have been an "affiliate" of the
Company for at least ninety (90) days and who has beneficially owned his shares
for at least three (3) years would be entitled to sell such shares under Rule
144 without regard to the volume limitations described above.
The Company's common stock is listed on the American Stock Exchange
("AMEX") under the symbol "GNK." Sales of substantial amounts of shares of
Common Stock, pursuant to Rule 144 or otherwise could adversely affect the
market price of the Common Stock and make it more difficult for the Company to
sell equity securities in the future at a time and price which the Company deems
appropriate.
AMEX MAINTENANCE REQUIREMENTS; POSSIBLE DELISTING OF SECURITIES FROM AMEX; RISKS
OF LOW-PRICED STOCKS
If the Company is unable to satisfy AMEX's maintenance criteria in the
future, its securities will be subject to being delisted, and trading, if any,
would thereafter be conducted in the over-the-counter market in the so-called
"pink sheets" or the "Electronic Bulletin Board" of the National Association of
Securities Dealers, Inc. ("NASD"). As a consequence of such delisting, an
investor could find it more difficult to dispose of, or to obtain accurate
quotations as to the price of, the Company's securities.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure, relating to the market for penny stocks, in connection
with trades in any stock defined as a penny stock. The SEC recently adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
Such exceptions include any equity security listed on AMEX and any equity
security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three (3) years,
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average annual revenue
of at least $6,000,000 if such issuer has been in continuous operation for less
than three years. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated therewith.
In addition, if the Company's securities are not quoted on, AMEX, or the
Company does not have $2,000,000 in net tangible assets, trading in the Common
Stock would be covered by Rule 15c2-6 promulgated under the Securities Exchange
Act of 1934, as amended, (the "Exchange Act") for non-NASDAQ and non-exchange
listed securities. Under such rule, broker/dealers who recommend such securities
to persons other than established customers and accredited
14
<PAGE>
investors must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a transaction prior
to sale. Securities also are exempt from this rule if the market price is at
least $5.00 per share.
Although the Company's Common Stock will, as of the date of this
Prospectus, be outside the definitional scope of a penny stock, as it will be
listed on AMEX, in the event the Common Stock were subsequently to become
characterized as a penny stock, the market liquidity for the Company's
securities could be severely affected. In such an event, the regulations on
penny stocks could limit the ability of broker/dealers to sell the Company's
securities and thus the ability of purchasers of the Company's securities to
sell their securities in the secondary market.
CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO EXERCISE WARRANTS
Although the Common Stock registered herein will not knowingly be sold to
purchasers in jurisdictions in which they are not registered or otherwise
qualified for sale, purchasers may buy Common Stock in the aftermarket or may
move to jurisdictions in which the shares of Common Stock issuable upon exercise
of the Warrants are not so registered or qualified during the period that the
Warrants are exercisable. In this event, the Company would be unable to issue
shares to those persons desiring to exercise their Warrants unless and until the
shares could be registered or qualified for sale in the jurisdictions in which
such purchasers reside, or an exemption to such qualification exists in such
jurisdiction. No assurance can be given as to the ability of the Company to
effect any required registration or qualification of the Common Stock in any
jurisdiction. See "Description of Securities - Common Stock Purchase Warrants."
15
<PAGE>
USE OF PROCEEDS
The securities registered herein were sold by the Company in two private
placements completed in January 1997 and March 1997, respectively, pursuant to
the Securities Act of 1933, as amended, and Rule 506 as promulgated thereunder.
The net proceeds of these private placements will be applied to research
and development ($1,100,000), enhanced marketing of new products ($1,300,000)
and general working capital ($1,145,000). Because the securities registered
herein have been issued previously by the Company, all proceeds from any sale of
the securities registered therein will accrue to the current holders of such
securities. The Company will not receive proceeds from any such sale, but will
receive proceeds from the exercise of Warrants, the underlying Common Stock of
which is registered in the registration statement on Form S-3 of which this
prospectus forms a part.
DIVIDEND POLICY
The Company has not paid any dividends on its Common Stock in the past, and
does not expect to declare or pay any cash dividends for the foreseeable future.
The Company anticipates that the earnings which might be generated from
operation of the Company will be used to finance the growth of the Company and
that cash dividends will not be paid on common stock.
DETERMINATION OF OFFERING PRICE
The securities registered by the Registration Statement on Form S-3 (of
which this prospectus forms a part) are quoted on the American Stock Exchange.
The price of any sale of these securities will be determined pursuant to the
these quotations.
The price of the Preferred Stock and/or Common Stock when originally
offered by the Company was determined by negotiations between the Company and
the respective Purchasers. Among the factors considered in the determination was
the market price of the Company's Common Stock, an analysis of the areas of
activity in which the Company was engaged, the then present state of the
Company's business, the Company's financial condition, the Company's prospects,
an assessment of management, the general condition of the securities market at
the time of the offering and the demand for similar securities of comparable
companies. The price of the Preferred Stock and/or Common Stock did not then,
and may not now, necessarily bear any relationship to assets, earnings, book
value or other criteria of value applicable to the Company.
DILUTION
Because the securities registered herein have previously been issued by the
Company, the purchaser of these shares will not incur any dilution of the net
tangible book value of the shares. However, in the event the Company chooses to
issue additional shares in the future, ownership percentages for existing
stockholders would be diluted, and such dilution could be material.
SELLING SECURITYHOLDERS AND PLAN OF DISTRIBUTION
All of the shares of Common Stock being offered hereby are being sold by
the Selling Securityholders. An aggregate of up to 2,469,408 shares of Common
Stock may be offered and sold pursuant to this Prospectus by the Selling
Securityholders. The Company has agreed to register such shares under the
Securities Act and to pay all expenses in connection therewith (other than
brokerage commissions and fees). Such shares have been included in the
Registration Statement of which this Prospectus forms a part. One of the Selling
Securityholders, the Pangaea Fund Limited, beneficially owns more than 5% of the
Company's outstanding Common Stock.
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 31, 1997 assuming the exercise of all
options exercisable on, or within sixty days of, such date, and as adjusted to
give effect to the Offering, by the Selling Securityholders. No Selling
Securityholders have held any position, office, or had any other material
relationship with the Company or any of its predecessors or affiliates within
the last three years.
16
<PAGE>
<TABLE>
<CAPTION>
Before Offering After Offering(1)
--------------- ................. -----------------
Name Fully Diluted(2) Percentage Fully Diluted(2) Percentage
- ---- ------------- ---------- -------------- ----------
<S> <C> <C> <C> <C>
Pangaea Fund Limited 1,422,891 20.04(3) 224,943 3.81
Tanner Unman Securities, Inc. 45,020 * 20,000 *
J. Michael Reisert, Inc. 133,680 2.30 0 0
Prudential Securities, Inc. 60,000 1.05 20,000 *
The Americas Growth Fund, Inc. 299,060 5.00 0 0
Alex E. Booth, Jr. P. 14,960 * 0 0
William A. Boyd 59,820 1.04 0 0
Case Holding Company, Inc. 89,720 1.56 0 0
Manuel Diaz 8,980 * 0 0
Oscar Gruss & Sons, Inc. 29,900 * 0 0
Brian Hanley Revocable Trust 35,880 * 0 0
John D. Lium 14,960 * 0 0
Starr Management Corporation 47,840 * 0 0
Carl Myers & Margot Myers 8,980 * 0 0
Eli & Esther Shapiro, JTWROS 59,820 1.04 0 0
Julius A. Nicolai 14,960 * 0 0
Nossaman, Guthner, Knox & Elliott 14,960 * 0 0
Stanley Schweiger CPA, P.A. 29,900 * 0 0
Allan Sorensen IRA RO 29,900 * 0 0
Walter G. Campbell, Jr. 14,960 * 0 0
Willard Campbell Rev Living Trust 14,960 * 0 0
Hyman Indowsky 14,960 * 0 0
E. Ted Prince 14,960 * 0 0
Kenneth H. Robertson 15,000 * 0 0
Henry R. Schuler, Jr. 8,980 * 0 0
-------- --- -------- -----
TOTAL 2,505,051 30.61 264,943 4.46
========= ===== ======= ====
</TABLE>
(1) Assumes all of the Selling Securityholders' shares of Common Stock offered
hereby are sold and no additional shares are acquired.
(2) Includes Common Stock underlying Common Stock Purchase Warrants exercisable
on the date of this Prospectus. Does not include Common Stock issuable upon
conversion of Series A-2 Preferred Stock Dividend.
(3) Pursuant to the terms of the Certificate of Designations for Preferred
Stock, no holder can convert any portion of such holder's Preferred Stock
if such conversion would increase such holder's beneficial ownership of the
Common Stock (other than shares so owned through ownership of the Preferred
Stock) in excess of 4.9%.
* Less than one percent (1%) of the outstanding common stock of the Company.
17
<PAGE>
The 2,469,408 shares of Common Stock being offered by the Selling
Securityholders, or by pledges, donees, tranferees, or other successors in
interest, pursuant to this Prospectus may be offered and sold from time to time
as market conditions permit on the American Stock Exchange, in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then current market price, or in negotiated transactions.
The Selling Securityholders' shares may be sold by one or more of the following
methods, without limitation: (a) a block trade in which a broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) face-to-face
transactions between sellers and purchasers without a broker/dealer. In
effecting sales, brokers or dealers engaged by the Selling Securityholders may
arrange for other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from Selling Securityholders in amounts to be
negotiated. Such brokers and dealers and any other participating brokers and
dealers may be deemed to be "Underwriters" within the meaning of the Securities
Act in connection with such sales.
The Company has agreed to indemnify certain of the Selling Securityholders
against certain liabilities, including certain liabilities under the Securities
Act of 1933, as amended, or to contribute to payments which the Selling
Securityholders may be required to make in respect thereof.
18
<PAGE>
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, $.01 par value per share and 250,000 shares of Preferred Stock,
$.01 par value per share. The holders of Common Stock (i) have equal ratable
rights to dividends from funds legally available therefor, when, as and if
declared by the Board of Directors of the Company; (ii) are entitled to share
ratably in all of the assets of the Company available for distribution to
holders of Common Stock upon liquidation, dissolution or winding up of the
affairs of the Company; (iii) do not have preemptive, subscription or conversion
rights and there are no redemption or sinking fund provisions applicable
thereto; and (iv) are entitled to one vote per share on all matters on which
stockholders may vote at all meetings of stockholders. All shares of Common
Stock now outstanding are fully paid and non-assessable, and all shares of
Common Stock included in the Units and underlying the Warrants included in this
Offering, when issued, will be fully paid and non-assessable.
The holders of shares of Common Stock of the Company do not have cumulative
voting rights, which means that the holders of more than fifty-one percent (51%)
of such outstanding shares, voting for the election of Directors, can elect all
of the Directors to be elected, if they so choose and in such event, the holders
of the remaining shares will not be able to elect any of the Company's
Directors.
DELAWARE LAW WITH RESPECT TO BUSINESS COMBINATIONS
Following the consummation of this offering, the Company will be subject to
the State of Delaware's "business combination" statute, Section 203 of the
Delaware General Corporation Law. In general, such statute prohibits a publicly
held Delaware corporation from engaging in a "business combination" with a
person who is an "interested stockholder" for a period of three years after the
date of the transaction in which that person became an interested stockholder,
unless the business combination is approved in a prescribed manner. A "business
combination" includes a merger, asset sale or other transaction resulting in a
financial benefit to the interested stockholder. An "interested stockholder" is
a person who, together with affiliates, owns (or, within three years prior to
the proposed business combination, did own) 15% or more of the Delaware
corporation's voting stock. The statute could prohibit or delay mergers or other
takeover or change in control attempts with respect to the Company and,
accordingly, may discourage attempts to acquire the Company.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is American
Stock Transfer and Trust Company. Its telephone number is (212) 936-5100.
REPORTS TO STOCKHOLDERS
The Company intends to furnish its stockholders with annual reports
containing audited financial statements and such other periodic reports as the
Company may determine to be appropriate or as may be required by law.
19
<PAGE>
LITIGATION
The Company is not currently a party to any litigation that it believes
could have a material effect on the Company or its business.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the
Company by The Stoppelman Law Firm, P.C., McLean, Virginia.
EXPERTS
The consolidated financial statements of the Company and its subsidiary for
the year ended December 31, 1996, incorporated by reference in this Prospectus
and Registration Statement have been audited by Grant Thornton, LLP, independent
auditors, as set forth in their report thereon, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
20
<PAGE>
UNTIL JUNE 1, 1997 (TWENTY-FIVE
DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN
THE REGISTERED SECURITIES, WHETHER OR
NOT PARTICIPATING IN THE DISTRIBUTION 2,469,408 SHARES
THEREOF, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE
OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENT OR SUBSCRIPTIONS.
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION.................2 GLOBALINK, INC.
INCORPORATION OF CERTAIN DOCUMENTS 9302 LEE HIGHWAY
BY REFERENCE........................2 12TH FLOOR
SUMMARY PROSPECTUS....................3 FAIRFAX, VA 22031
THE COMPANY...........................3 (703) 273-5600
RISK FACTORS.........................12
USE OF PROCEEDS......................16
DIVIDEND POLICY......................16
DETERMINATION OF OFFERING PRICE......16
DILUTION.............................16
SELLING SECURITYHOLDER AND PLAN
OF DISTRIBUTION....................16
DESCRIPTION OF SECURITIES............19
LITIGATION...........................20
LEGAL MATTERS........................20
EXPERTS..............................20
PROSPECTUS
NO DEALER, SALESMAN OR ANY OTHER
PERSON HAS BEEN AUTHORIZED TO GIVE ANY ------------
INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED ON
AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY, BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT
IS UNLAWFUL FOR SUCH PERSON TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY
OFFER, SOLICITATION OR SALE MADE
HEREUNDER, SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION
THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE
OF THE PROSPECTUS.
May 6, 1997
