GLOBAL TECHNOLOGIES, LTD.
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FIRST SUPPLEMENT DATED SEPTEMBER 5, 2000 TO
PROSPECTUS DATED AUGUST 16, 2000
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Please read this First Supplement in conjunction with the Prospectus dated
April 16, 2000, which was filed as part of Global Technologies, Ltd.'s
Amendment No. 1 to the Registration Statement on Form S-3 (Registration
No. 333-41096) filed with the Securities and Exchange Commission
on August 15, 2000 and declared effective on August 16, 2000
(the "Original Prospectus")
A copy of the Original Prospectus is attached to this First Supplement
This First Supplement ("the Supplement") modifies, supplements and amends
the Original Prospectus with respect to the offer and sale of shares of Class A
Common Stock of Global Technologies, Ltd. by the selling stockholders named in
the Original Prospectus.
TRANSFER OF INTEREST IN INTER LOTTO (UK) LIMITED AND TERMINATION OF
OPERATING AGREEMENTS
On August 18, 2000, Global Technologies, Ltd. ("Global") and its
wholly-owned United Kingdom subsidiaries, GlobalTech Holdings Limited
("GlobalTech Holdings") and GTL Management Limited ("GTL Management") entered
into a "Deed" with Inter Lotto (UK) Limited ("Inter Lotto"), a United Kingdom
company licensed pursuant to an External Lottery Manager's Certificate issued by
the Gaming Board for Great Britain ("ELMC License") to operate lotteries on
behalf of charities in Great Britain, and certain of its principals which, in
substance, constituted a settlement agreement providing for the disengagement of
Global and its subsidiaries from Inter Lotto and its operations by (i)
transferring back to the other principals of Inter Lotto all of the GlobalTech
Holdings' capital stock in Inter Lotto; (ii) payment to GTL Management of an
amount equal to the value added tax rebate to Inter Lotto, plus interest, less
an amount to be retained by Inter Lotto for salaries; (iii) termination of the
Operating Agreements between GTL Management and Inter Lotto, (iv) cooperative
arrangements for Global and its subsidiaries to assist in the operation of Inter
Lotto through the end of the year; and (v) termination of litigation and waiver
of all claims and releases.
In April, 1999, Global and certain of its wholly-owned United Kingdom
subsidiaries entered into an arrangement with Inter Lotto under which GlobalTech
Holdings purchased 27.5% of the outstanding capital stock of Inter Lotto and GTL
Management entered into an Operating Agreement with Inter Lotto to run Inter
Lotto's lotteries and gaming activities. Simultaneously, GTL Leasing Limited
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("GTL Leasing"), an indirect wholly-owned United Kingdom subsidiary of Global,
purchased computer equipment, which it leased to GTL Management for use in such
lottery and gaming operations. GTL Management entered into a further operating
agreement with Inter Lotto on January 13, 2000. The lottery and gaming business
under these agreements began with an official "launch" on April 4, 2000.
The August 18, 2000 "Deed" effectively terminates the April, 1999 and
January, 2000 arrangements and provides for a total separation of Inter Lotto
and Global and its subsidiaries by the end of the year 2000. Under the "Deed",
GlobalTech Holdings transferred all of its stock in Inter Lotto to the other
principals of Inter Lotto, to become effective the date upon which Inter Lotto
and its representatives vacate Inter Lotto's Dover Street address, which is
required to occur by September 30, 2000. The "Deed" terminates the Operating
Agreements and provides that Inter Lotto and GTL Management will together do
whatever is necessary to manage the lottery operations through December 31,
2000, including the maintenance of Inter Lotto's ELMC License during such
period. In consideration for the transfer of stock in Inter Lotto by GlobalTech
Holdings, Inter Lotto and its principals have agreed not to engage in the
business of the Daily Number Game or any similar three (3) or four (4) digit
lottery games within the United Kingdom of Great Britain for a period of two (2)
years following August 18, 2000.
The financial terms of the August 18, 2000 "Deed" provide for the
allocation of approximately (pound)970,000 in Value Added Tax rebates, with
Inter Lotto retaining (pound)220,000 (for the payment of back salaries which
were the subject of disputes between Global and certain other principals of
Inter Lotto) and paying to GTL Management the balance of approximately
(pound)750,000. GTL Management will be paid all revenues from Inter Lotto
lottery operations through December 31, 2000, after payment for prizes,
charities and sales commissions. Additionally, there are provisions for the
resolution for certain other outstanding debts and obligations.
The August 18, 2000 "Deed" also operates as a general settlement agreement
and includes waivers of all claims and releases, including the withdrawal of a
"winding up petition" calling for the dissolution of Inter Lotto, filed in court
by one or more of the other principals of Inter Lotto.
GTL Leasing retains ownership of the computer networking hardware,
software, terminals and other equipment which serves as the infrastructure of
the lottery operations conducted under Inter Lotto's ELMC License and managed by
GTL Management. Such lottery equipment is leased by GTL Leasing to GTL
Management. In addition, GTL Management remains obligated under the agreement
with International Lottery and Totalizator Systems, Inc. for certain facilities
management services and technological support in connection with such lottery
equipment, which Global, through Global Leasing, purchased from them. This
agreement requires that GTL Management pay International Lottery and Totalizator
Systems, Inc. $72,000 per week, plus additional amounts based on any terminals
in excess of 3,500 which are installed and a percentage of average daily sales.
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Global and its subsidiaries are currently investigating alternative
operating strategies for GTL Management and the use of its lottery equipment and
operating network following termination of the Inter Lotto lottery operations by
December 31, 2000. Such strategies include utilizing the network for operating
pools, lotteries and betting for established gaming companies, and to develop a
national linked bingo game in partnership with proprietary private clubs
throughout the United Kingdom. Global intends to have implemented an alternative
operating strategy by December 31, 2000, however, no assurance can be given that
it will be successful in doing so. If we are unable to successfully implement an
alternative operating strategy before the termination of Inter Lotto's lottery
operations, GTL Leasing's lottery equipment assets could be deemed impaired
under generally accepted accounting principals, as the carrying value of such
assets may not be fully recoverable in such event. Any "write down" of the value
of such assets due to such impairment could have a material adverse effect on
Global's financial condition.
For more information relating to the transfer of interest in Inter Lotto
and the termination of Operating Agreements with Inter Lotto, reference is made
to Global's Current Report on Form 8-K filed with the Securities and Exchange
Commission on September 5, 2000.
THIS SUPPLEMENT DOES NOT CONSTITUTE A COMPLETE PROSPECTUS AND SHALL NOT BE
CONSIDERED AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES OF
CLASS A COMMON STOCK OF GLOBAL TO WHICH IT RELATES. REFERENCE IS MADE TO THE
ORIGINAL PROSPECTUS, AS SUPPLEMENTED BY THIS SUPPLEMENT, FOR INFORMATION WITH
RESPECT TO GLOBAL AND THE SHARES OF CLASS A COMMON STOCK OFFERED THEREBY.
