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EX-32 - 906 CERTIFICATIONS - GLOBALINK, LTD.globalink10q3q09ex32.txt
EX-31 - 302 CERTIFICATIONS - GLOBALINK, LTD.globalink10q3q09ex31.txt

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[x]     Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended September 30, 2009

-OR-

[ ]     Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________ to________

Commission File Number             333-133961

Globalink, Ltd.
--------------------------------------------
   (Exact name of registrant as specified in its charter)

   Nevada                                        06-1812762
-----------------------------------------------------------------------
(State or other jurisdiction                  (I.R.S. Employer
of incorporation or organization            Identification Number)

          938 Howe Street, Suite 405
         Vancouver, BC V6Z 1N9
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      Address of principal executive offices,      Zip Code

(604) 828-8822
------------------------------------------
(Registrant's telephone number, including area code)

Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes  [ X ]      No [   ]

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerate filer, or a small
reporting company as defined by Rule 12b-2 of the Exchange Act):

Large accelerated filer [ ]      Non-accelerated filer [ ]
Accelerated filer  [ ]           Smaller reporting company [x]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

Yes  [ ]      No [x]

The number of outstanding shares of the registrant's common stock,
November 20, 2009:

  Common Stock  -  24,785,000


2 PART I Item I - FINANCIAL STATEMENTS Consolidated Balance Sheet as of September 30, 2009 and December 31, 2008 Consolidated Statement of Operations for the three and nine months ended September 30, 2009 and 2008 Consolidated Statement of Cash Flows for the nine months ended September 30, 2009 and year ended December 31, 2008 Consolidated Notes to Financial Statements
3 Globalink, Ltd. and Subsidiary Consolidated Balance Sheets (Expressed in U.S. Dollars) (unaudited) September 30, 2009 December 31, 2008 ------------- ----------------- ASSETS CURRENT ASSETS: Cash $ 355,706 $ 579,464 Accounts receivable trade 46,852 109,405 Other Receivable - 28,743 Other Current Assets 69,518 22,383 --------- ---------- TOTAL CURRENT ASSETS 472,076 739,995 --------- ---------- Fixed assets, net of accumulated depreciation 15,669 17,909 Other assets: Goodwill 274,449 274,449 --------- ---------- TOTAL ASSETS $ 762,194 $1,032,353 ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrual $ 391,363 $ 388,775 Notes payable OneWorld Acquisition 159,105 469,800 Other current liabilities 56,517 2,974 --------- ---------- TOTAL CURRENT LIABILITIES 606,985 861,550 --------- ---------- OTHER LIABILITIES: Advances from Shareholders - 30,390 --------- ---------- Total other liabilities - 30,390 --------- ---------- TOTAL LIABILITIES 606,985 891,940 --------- ---------- STOCKHOLDERS' EQUITY: Common stock, $.0002 par value, 500,000,000 shares authorized, 24,785,000 shares issue and outstanding 4,957 4,957 Paid-in Surplus 403,243 403,243 Retained earnings (252,991) (267,787) --------- ---------- TOTAL STOCKHOLDERS' EQUITY 155,209 140,413 --------- ---------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 762,194 $1,032,353 ========= ========== The accompanying notes are an integral part of these statements.
4 Globalink, Ltd. and Subsidiary Consolidated Statements of Operations (Expressed in U.S. Dollars) (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Revenue $ 69,482 $ 836 $ 195,426 $ 836 Expenses Wages & salaries 39,197 - 134,485 - Expenses from subsidiary - - - - Other administrative expenses 16,624 6,944 68,570 20,514 --------- --------- --------- --------- 55,821 6,944 203,055 20,514 --------- --------- --------- --------- Income (deficit) from operations 13,661 (6,108) (7,629) (19,678) --------- --------- --------- --------- Other income and expenses 5,145 - 22,425 - --------- --------- --------- --------- Income before income taxes 18,806 (6,108) 14,796 (19,678) Income tax - - - - --------- --------- --------- --------- Income for the period $ 18,806 $ (6,108) $ 14,796 $ (19,678) ========= ========= ========= ========= Basic and diluted Loss per Share $ 0.00 $ (0.00) $ (0.00) $ (0.00) ========= ========= ========= ========= Weighted Number of Common Shares 24,785,000 24,785,000 24,785,000 24,785,000 ========== ========== ========== ========== The accompanying notes are an integral part of these statements.
5 Globalink, Ltd. and Subsidiary Consolidated Statement of Cash Flows (Expressed in U.S. Dollars) (Unaudited) For nine months For nine months ended ended Sept. 30, 2009 Sept. 30, 2008 -------------- -------------- Cash Flows from Operating Activities Loss for the period $14,796 (19,678) Less Depreciation not requiring use of funds 3,701 2,201 Net loss on exchange transactions - - Net changes in working capital balances Accounts receivable 62,553 280 Other Receivable 28,743 - Other Current Assets (47,135) - Accounts payable and accruals 2,587 - Other Current Liabilities - - Due to government agencies - - Directors' services paid in shares - - ---------- --------- Cash flows used in operating activities 118,788 (17,197) ---------- --------- Cash Flows from Financing Activities Advances from shareholders (30,390) 2,894 Share capital issued - - --------- --------- Cash flows provided by (used in) financing activities (30,390) 2,894 --------- --------- Cash Flows from Investing Activities Acquisition of capital assets (1,461) - Note payable for purchase of sub (310,695) - Purchase effects of subsidiary - - Cash from acquisition of subsidiary - - --------- --------- Cash flows provided by (used in) Investing activities (312,156) - Net (Decrease) Increase in Cash and Cash Equivalents (223,758) (14,303) Cash and Cash Equivalents at Beginning of Period 579,464 81,077 --------- --------- Cash and Cash Equivalents at end of Period $ 355,706 $ 66,774 ========= ========= Represented by: Cash $ 355,706 $ 66,774 ========= ========= See accompanying notes
6 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) 1. Nature of Operations GLOBALINK LTD. was incorporated in the State of Nevada on February 3, 2006. GLOBALINK has focused its efforts in the Internet Hotel booking services arena. The Company has developed a proprietary online hotel booking program for connecting users with available rooms in hotels across the world. In order to gain the access to the hotels, GLOBALINK LTD. acquired OneWorld Hotel Destination Service Inc in Vancouver, B.C. Canada on October 31, 2008. OneWorld Hotel Destination Service Inc is a hotel booking company which has established strong relationships with major hotel chains such as Radisson, Hilton and Sheraton. Its clients include travel agents in major cities such as Vancouver, Toronto, Calgary, and Montreal. After the acquisition the Company intends to put the OneWorld operations into the online platform. 2. Accounting Policies The financial statements have been prepared in accordance with generally accepted accounting principles accepted in the United States of America and reflect the following policies: a) Translation of foreign currencies Monetary assets and liabilities in foreign currencies are translated into United States dollars at the prevailing year-end exchange rates. Revenue and expense items are translated at the average rates in effect during the month of transaction. Resulting exchange gains and losses on transactions are included in the determination of earnings for the year. The exchange loss for this period from January 1 to December 31, 2008 is $151. b) Financial instruments The Company's financial instruments consist of accounts receivable, accounts payable, directors' fees payable and advances from shareholders. It is management's opinion that the Company is not exposed to significant interest rate risk arising from these financial instruments and that their carrying values approximate their fair values. c) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses for the year reported. Actual results could differ from those estimates.
7 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) d) Stock-based compensation FAS 123(r), Accounting for Stock-based compensation requires companies to record compensation cost for stock-based employee compensation to be measured at the grant date, and not subsequently revised. The company has chosen to continue to account for stock-based compensation using the provisions of FAS 123(r). In addition the company's policy is to account for all stock based transactions in conformance with FAS 123(r). e) Income taxes The Company utilizes the asset and liability method for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The company provides a valuation allowance on net deferred tax assets when it is more likely than not that such assets will be realized. Currently the Company does not have any proven periods of profitability. With the purchase of OneWorld Hotel Destination Services, Inc., the Company has projected profitability in the following years. When this profitability is realized, the Company will enact Statements of Financial Accounting Standards regarding Accounting for Income Taxes. f) Basic and diluted loss per share Basic loss per common share is based upon the net loss for the year divided by the weighted average number of common shares outstanding during the year. Such effect was not dilutive in any of the years presented. g) Revenue recognition Revenue is recorded when the corresponding expense can be recognized. Due to this matching principle, revenue is reported by the net proceeds of the services performed as required by EIFT 99-19. h) Accounts receivable Trade receivables are carried at original invoice amount. Accounts receivable are written off to bad debt expense using the direct write- off method. Receivables past due for more than 120 days are considered delinquent. Management determines uncollectible accounts by regularly evaluating individual customer receivables and considering a customer's financial condition, credit history, and current economic conditions and by using historical experience applied to an aging of accounts. Recoveries of trade receivables previously written off are recorded when received.
8 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through June 30, 2009 (Expressed in U.S. Dollars) 3. Restated statements The financial statements have been revised due to management's determination that the merger of the Company with OneWord Hotel Destination Services, Inc. which was originally shown without the creation of Goodwill was incorrect. The statements have been revised for the creation of Goodwill. All statement since October 31, 2008, date of merger, have been revised for this correction. The quarterly statements have been restated up to and including June 30, 2009. The following table represents the effects of the restated statements as of December 31, 2008: Restated Original 2008 2008 -------- -------- Sales 247,685 247,685 Loss (106,831) (72,291) Common Stock 4,957 4,957 Paid in Surplus 403,243 128,794 Retained Deficit (267,787) (267,787) Earnings Per Share (0.0046) (0.0031) 4. Fixed assets Furniture, fixtures and equipment are recorded at cost. Depreciation is provided annually at rates calculated to write off the assets over their estimated useful lives as follows, except in the year of acquisition when one half of the rate is used. The Company uses an accelerated method of depreciating their assets over their useful lives. Computer equipment acquired before March 24, 2004 30%, declining balance Computer equipment acquired after March 23, 2004 45%, declining balance Furniture and equipment 20%, declining balance Leasehold improvements 20%, straight line 5. Advances from Shareholders Advances from shareholders are for the reimbursement of expenses incurred on behalf of the company by the three principal shareholders and they bear no interest due. These notes are short term advances which are paid generally within one year. The balance at December 31, 2008 was $30,390.
9 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through June 30, 2009 (Expressed in U.S. Dollars) 6. Operating Leases The Company leases its administrative offices for US$938 per month. The lease expires in May 2011. The operating lease expense for the year ended December 31, 2008 was $1,876. Future minimum lease payments are as follows: Fiscal year ending June 30, 2009 $ 11,256 2010 11,256 2011 11,256 --------- $ 33,768 The Company leases a motor vehicle under an operating lease for a term of 48 months from June 21, 2005 at a monthly payment of US$537 excluding taxes. Future minimum payments are as follows: Fiscal year ending June 30, 2009 $6,450 7. Supplemental information - consolidated statements One World Globalink 9/30/09 9/30/09 Eliminations Consolidated -------- -------- ------------ ------------ ASSETS Current Assets: Cash $ 333,323 $ 22,383 - $355,706 Accounts receivable 46,852 - - 46,852 Other receivable 310,695 - (310,695) - Investment in subsidiary - 383,020 (383,202) - Other current assets 69,518 - - 69,518 --------- --------- --------- --------- Total current assets 760,388 405,403 (693,715) 472,076 Fixed assets, net Of accumulated depreciation 7,499 8,170 - 15,669 Goodwill - 274,449 - 274,449 --------- --------- --------- --------- TOTAL ASSETS $ 767,887 $ 688,022 $(693,715) $ 762,194 ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Accounts payable $ 358,873 $ 32,490 $ - $ 391,363 Notes payable - 469,800 (310,695) 159,105 Other current liabilities 25,994 30,523 - 56,517 --------- --------- --------- --------- Total current liabilities 384,867 532,813 (310,695) 606,985
10 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) Shareholders Equity Common stock 16,400 4,957 (16,400) 4,957 Paid in surplus - 403,243 - 403,243 Retained earnings/(deficit) 366,620 (252,991) (366,620) (252,991) --------- --------- -------- --------- Total shareholders equity 353,869 (155,209) (383,020) 155,209 --------- --------- -------- --------- TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $ 745,828 $ 688,022 $(693,715) $ 762,194 ========= ========= ========= ========= January through September 30, 2009 One World** Global Eliminations Consolidated Revenue: 195,426 41,044 (41,044) 195,426 Expenses: Wages and salaries 134,485 - - 134,485 Subsidiary expenses - - - - Other administrative expenses 41,818 26,752 - 68,570 -------- -------- -------- --------- Total expenses 176,303 26,752 - 203,055 -------- -------- -------- --------- Income/(loss) from operations 19,123 14,292 (41,044) (7,629) Other income/(expenses) 21,921 504 - 22,425 -------- -------- -------- --------- Income before income taxes 41,044 14,796 (41,044) 14,796 Income taxes - - - - -------- -------- -------- --------- Net income/(loss) $ 41,044 $ 14,796 $(41,044) $ 14,796 ======== ======== ======== ========= **The OneWorld income includes the amounts since acquisition November 1, 2008 through December 31, 2008. 8. Business Combination Effective October 31, 2008, the Company issued 2,000,000 shares of common stock and a notes payable to acquire all of the outstanding stock of OneWorld Hotel Destination Services, Inc. The purchase is being accounted for as an acquisition as required by SFAS No. 141. The Company did not issue a significant amount of its stock to acquire the OneWorld and therefore it is not considered a reverse acquisition under SFAS No. 141. Although OneWorld Hotel Destination Services, Inc. operations are significantly greater, GlobaLink is considered the predecessor company due to the fact that a majority of Globalink's shareholders own a majority of the outstanding shares. Goodwill has been recorded and listed as another asset. The purchase is being reported and operating as a wholly owned subsidiary of the parent company.
11 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) OneWorld Globalink 10/31/08 10/31/08 Eliminations Consolidated -------- -------- ------------ ------------ ASSETS Current Assets: Cash $ 623,005 $ 66,080 - $689,085 Accounts receivable 252,698 251 - 252,949 Investment in subsidiary - 375,351 375,351 - Other current assets 17,224 - - 17,224 --------- --------- --------- --------- Total current assets 892,927 441,682 375,351 959,258 Other Assets: Goodwill - 274,449 - 274,449 Other 44,536 11,020 - 55,556 --------- --------- --------- --------- TOTAL ASSETS $ 937,463 $ 727,151 $ 375,351 $1,289,263 ========= ========= ========= ========= LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Accounts payable $ 560,263 $ 1,280 $ - $ 561,543 Other current liabilities 1,849 500,100 - 501,949 --------- --------- --------- --------- Total current liabilities 562,112 501,380 - 1,063,492 Shareholders Equity Common stock 6,382 4,957 (6,382) 4,957 Paid in surplus - 403,243 - 403,243 Retained earnings/(deficit) 362,587 (182,429) (362,587) (182,429) --------- --------- -------- --------- Total shareholders equity 375,351 225,771 (375,351) 225,771 --------- --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $ 937,463 $ 727,151 $(375,351) $1,289,263 ========= ========= ========= ========== January through December 31, 2008 One World** Global Eliminations Consolidated Revenues $97,996 $ - $ - $ 97,996 Expenses: Wages and salaries 44,386 - - 44,386 Other administrative expenses 28,821 8,990 - 37,811 -------- ---------- ---------- --------- Total expenses 73,207 8,990 - 82,197 -------- ---------- ---------- --------- Income/(loss) from operations 24,789 (8,990) - 15,799
12 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) Other income/(expenses) (5,191) 1,088 - (4,103) -------- ---------- ---------- --------- Income before income taxes 19,598 (7,902) - 11,696 Income taxes - - - - -------- ---------- ---------- --------- Net income/(loss) 19, 598 $ (7,902) $ - $ 11,696 ======== ========== ========== ========= ** OneWorld is reported for the four months ended October 31, 2008 9. Capital Stock Authorized 500,000,000 Common shares with $0.0002 par value Issued 24,785,000 shares The Company issued 2,625,000 shares for cash of $.0133333 per share in the amount of $35,000 and 1,125,000 shares for services at $.10 in the amount of $112,500 in 2006.
13 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) The Company also issued 807,000 shares at $.10 in the amount of $80,700 for cash under the filing with the Securities and Exchange Commission of the United States in 2007. The Company split its common stock on a 5 for 1 basis on July 1, 2008. The Company issued 2,000,000 shares to Vincent Au in exchange for 100% of his shares in One World Hotel Destination Service, Inc. on October 31, 2008. 10. Net Revenue The Company follows the reporting requirements of EIFT 99-19, which requires revenue to be reported net after costs. Following is the gross revenue and expenses for the nine months ending September 30, 2009 and September 30, 2008. 09/30/2009 09/30/2008 Gross Revenue $1,863,285 $ - Cost of Revenue 1,620,656 - ---------- -------- Net Revenue $ 242,629 $ - 11. New accounting pronouncements: In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts- and interpretation of FASB Statement No. 60". SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company's financial position, statements of operations, or cash flows at this time. In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB's amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company's financial position, statements of operations, or cash flows at this time.
14 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows. In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for "plain vanilla" share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company's consolidated financial position, results of operations or cash flows. In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51. This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity.
15 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) This statement improves comparability by eliminating that diversity. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The Company will adopt this Statement beginning March 1, 2009. It is not believed that this will have an impact on the Company's consolidated financial position, results of operations or cash flows. In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations.' This Statement replaces FASB Statement No. 141, Business Combinations, but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this statement is the same as that of the related FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements. The Company will adopt this statement beginning March 1, 2009. It is not believed that this will have an impact on the Company's consolidated financial position, results of operations or cash flows. In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities-Including an Amendment of FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in FAS 159 are elective; however, an amendment to FAS 115 Accounting for Certain Investments in Debt and Equity Securities applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 is effective as of the beginning of an entities first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157 Fair Value Measurements. The Company will adopt SFAS No. 159 beginning March 1, 2008 and is currently evaluating the potential impact the adoption of this pronouncement will have on its consolidated financial statements.
16 Globalink, Ltd. and Subsidiary Notes to Financial Statements For The Period from January 1, 2009 through September 30, 2009 (Expressed in U.S. Dollars) In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this statement does not require any new fair value measurements. However, for some entities, the application of this statement will change current practice. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company will adopt this statement March 1, 2008, and it is not believed that this will have an impact on the Company's consolidated financial position, results of operations or cash flows. These new accounting pronouncements are not currently expected to have a material effect on our financial Statements, except as noted above. 12. Acquisition of OneWorld Hotel Destination Services, Inc.(OneWorld) Effective October 31, 2008 the Company acquired all of the outstanding stock of OneWorld. The Company has not merged OneWorld's operations into its own.
17 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Trends and Uncertainties. We are pursuing financing for our operations and seeking additional investments to launch the Hotel Travel booking web site. We will need a minimum of $500,000 over the next twelve months to continue the operation and to launch the Hotel Travel booking web site. We acquired all of the common shares of OneWorld for 2,000,000 common shares and a promissory note. In addition, we are seeking to expand our revenue base by adding new customers and increasing our marketing and advertising. Failure to secure such financing or to raise additional equity capital and to expand its revenue base may result in Globalink depleting our available funds and not being able to pay our obligations. There are several known trends that are reasonably likely to have a material effect on our net sales or revenues alongside our income from continuing operations and profitability. We expect to experience significant fluctuations in our future operating results due to a variety of factors, many of which are outside our control. Factors that may adversely affect our quarterly operating results include but are not limited to: - Our ability to develop and complete the hotel booking website. - Our ability to attract customer to use our web site and maintain user satisfaction; - Our ability to attract hotel suppliers to post their hotel rooms in our web site. - Our ability to maintain our projected 10% commission profit from the hotel suppliers. - Our ability to hire and train qualified personnel. - Our ability to resolve any technical difficulties and system downtime or Internet disconnection. - Governmental regulations on use of Internet as a tool to conduct business transaction. - Change of customer's acceptance to use Internet to book hotel rooms. We may also incur losses for the foreseeable future due to costs and expenses related to: - The implementation of our hotel booking web site business model; - Marketing and other promotional activities; - Competition - The continued development of our website; - High cost to maintain the hotel booking web site, and - Hiring and training new staff for customer services. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. In addition, our operating results are dependent to a large degree upon factors outside of our
18 control. There are no assurances that we will be successful in addressing these risks, and failure to do so may adversely affect our business. Capital and Source of Liquidity. Prior to the acquisition of OneWorld, all of Globalink's operating capital has either been advanced by current shareholders or from proceeds for the issuance on common shares. After acquisition of OneWorld on Oct 31, 2008, Globalink received significant improvement in cash position. By the end of September 30, 2009, Globalink & its subsidiary have $355,706 cash on hand. For the nine months ended September 30, 2009, Globalink acquired capital assets of $1,461 and has a note payable for the purchase of subsidiary of $(310,695). As a result, Globalink had cash flows used in investing activities of $312,156 for the nine months ended September 30, 2009. For the nine months ended September 30, 2008, Globalink did not pursue any investing activities. For the nine months ended September 30, 2009, Globalink received advances from shareholders of $30,390 resulting in cash flows from financing activities of $30,390. For the nine months ended September 30, 2008, Globalink received advances from shareholders of $2,894 resulting in cash flows from financing activities of $2,894. Results of Operations For the three months ended September 30, 2009, Globalink received revenues of $69,482. Expenses consisted of wages and salaries of $39,197 and other administrative expenses of $16,624. These amounts increased over 2008 due to the acquisition of OneWorld. For the three months ended September 30, 2008, Globalink received any revenues of $836. The net loss for the period was $(6,108). The expenses of $6,944 consisted mainly of basic operating expenses and legal and accounting expenses necessary to complete filings with the Securities and Exchange Commission. For the nine months ended September 30, 2009, Globalink received revenues of $195,426. The loss for the nine months ended September 30, 2009 was $(7,629). Expenses consisted of wages and salaries of $134,485 and other administrative expenses of $68,570. These amounts increased over 2008 due to the acquisition of OneWorld.
19 For the nine months ended September 30, 2008, Globalink received revenue of $836. The net loss for the period was $(19,678). The other administrative expenses of $20,514 consisted mainly of basic operating expenses and legal and accounting expenses necessary to complete filings with the Securities and Exchange Commission. Hotel booking web site: The initial structure and preliminary functions of the Hotel Booking Web sites are done. We will launch the hotel web site in two stages. The first stage of the web site to launch will be the booking functions for the existing customers of OneWorld. We believe the on-line booking will help the OneWorld sales increase significantly because they can capture new sales without the time zone difference in a short period of time. We also accept and welcome the comments and suggestion from the existing users (customers) about the web site. These suggestions will help us to improve our web site to be more user-friendly and easy to use. By the end of this year, we will launch the final product, Hotel Booking Web site for consumers in general. Off-Balance Sheet Arrangements Globalink had no material off-balance sheet arrangements as of September 30, 2009. Contractual Obligations Globalink has no material contractual obligations New Accounting Pronouncements In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts- and interpretation of FASB Statement No. 60". SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the registrant's financial position, statements of operations, or cash flows at this time. In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after
20 the SEC approves the PCAOB's amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the registrant's financial position, statements of operations, or cash flows at this time. In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The registrant has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows. In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The registrant currently uses the simplified method for "plain vanilla" share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company's consolidated financial position, results of operations or cash flows. In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51. This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable
21 diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity. This statement improves comparability by eliminating that diversity. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The registrant will adopt this Statement beginning March 1, 2009. It is not believed that this will have an impact on the registrant's consolidated financial position, results of operations or cash flows. In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations.' This Statement replaces FASB Statement No. 141, Business Combinations, but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this statement is the same as that of the related FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements. The Company adopted this statement beginning March 1, 2009. It is not believed that this will have an impact on the registrant's consolidated financial position, results of operations or cash flows. In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities-Including an Amendment of FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in FAS 159 are elective; however, an amendment to FAS 115 Accounting for Certain Investments in Debt and Equity Securities applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157 Fair Value Measurements. The registrant will adopt SFAS No. 159 beginning March 1, 2008 and is currently evaluating the potential impact the adoption of this pronouncement will have on its consolidated financial statements.
22 In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this statement does not require any new fair value measurements. However, for some entities, the application of this statement will change current practice. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The registrant adopted this statement March 1, 2008, and it is not believed that this will have an impact on the registrant's consolidated financial position, results of operations or cash flows. Item 3. Quantitative and Qualitative Disclosures about Market Risk We do not consider the effects of interest rate movements to be a material risk to our financial condition. We do not hold any derivative instruments and do not engage in any hedging activities. Item 4T. Controls and Procedures. During the three months ended September 30, 2009, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2009. Based on this evaluation, our chief executive officer and chief principal financial officers have concluded such controls and procedures effective as of September 30, 2009 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
23 PART II - OTHER INFORMATION Item 1. Legal Proceedings. not applicable. Item 1A. Risk Factors. not applicable Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. not applicable. Item 3. Defaults Upon Senior Securities. not applicable. Item 4. Submission of Matters to a Vote of Security Holders. not applicable. Item 5. Other Information. not applicable. Item 6. Exhibits Exhibit 31 - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 32 - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: November 20, 2009 GLOBALINK, LTD. By: /s/Robin Young --------------------------- Robin Young, President and Director