Attached files
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 March 31, 2011
-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
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 has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (section 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes [ ] 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,
May 16, 2011: Common Stock - 24,785,000
2
PART I
Item I - FINANCIAL STATEMENTS
Consolidated Balance Sheet as of March 31, 2011 and December 31, 2010
Consolidated Statement of Operations for the three months ended March
31, 2011
Consolidated Statement of Cash Flows for the three months ended March
31, 2011
Consolidated Notes to Financial Statements
3
GLOBALINK, LTD. and Subsidiary
Consolidated Balance Sheet
March 31, 2011 and December 31, 2010
(Expressed in U.S. Dollars)
March 31, 2011 December 31, 2011
(Unaudited) (Audited)
-------------- -----------------
ASSETS
CURRENT ASSETS:
Cash $ 437,456 $ 405,091
Term deposit - -
Accounts receivable trade 246,372 232,756
Other Receivable - -
Other Current Assets 2,715 2,453
----------- -----------
TOTAL CURRENT ASSETS 686,543 640,300
----------- -----------
Fixed assets, net of accumulated
depreciation 9,321 9,577
Goodwill 274,449 274,449
----------- -----------
TOTAL ASSETS $ 970,313 $ 924,326
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable and accural $ 540,805 $ 579,564
Notes payable OneWorld Acquisition - -
Dividends payable
Other current liabilties 116,959 50,580
----------- -----------
TOTAL CURRENT LIABILITIES 657,764 630,144
----------- -----------
OTHER LIABILITIES:
Advances from Shareholders 30,523 14,983
----------- -----------
TOTAL OTHER LIABILITIES 30,523 14,983
----------- -----------
TOTAL LIABILITIES 688,287 645,127
----------- -----------
STOCKHOLDERS' EQUITY:
Common Stock, $.0002 par value
500,000,000 shares authorized and
24,785.000 shares issued and
outstanding 4,957 4,957
Common Stock authorized, issued and
Outstanding-1,000,000 shares
4
Preferred Stock authorized, issued
and outstanding-1,000,000 shares
Paid-in Surplus 403,243 403,243
Retained earning (126,174) (129,001)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 282,026 279,199
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $ 970,313 $ 924,326
=========== ===========
The accompanying notes are an integral part of these statements.
5
GLOBALINK, LTD. and Subsidiary
Consolidated Statements of Operations
For the Three Months ended March 31, 2011 and 2010
(Expressed in U.S. Dollars)
Three months Three months
ended ended
03/31/11 03/31/10
------------ ------------
Revenue $ 62,735 $ 78,176
Expenses
Wages & salaries 52,194 41,903
Expenses from subsidiary
Other administrative expenses 25,260 18,798
77,454 60,701
Income (deficit) from operations (14,719) 17,475
Other income and expenses 17,546 12,818
Income before income taxes 2,827 30,293
Income tax - -
Income for the period $ 2,827 $ 30,293
Basic and Diluted Loss per Share 0.0001 0.0012
Weighted Number of Common Shares 24,785,000 24,785,000
The accompanying notes are an integral part of these statements.
6
GLOBALINK, LTD. and Subsidiary
Consolidated Statement of Cash Flows
For the Three Months ended March 31, 2011 and 2010
(Expressed in U.S. Dollars)
Three months Three months
ended ended
03/31/11 03/31/10
------------ ------------
Cash Flows from Operating Activities
Profit/(loss) for the period $ 2,827 $ 30,293
Less Depreciation not requiring use
of funds 256 787
Net loss on exchange transactions
Income taxes (paid)/refunded
Net changes in working capital balances
(Increase)/decrease accounts receivable (13,616) (46,618)
Other Receivable - 61,798
(Increase)/decrease in other current
assets (262) 1,310
Increase/(decrease) in accounts payable
and accruals (38,759) 75,339
(Due to)/refunded government agencies - 34,549
Increase in other current liabilities 66,379 -
--------- ---------
Cash flows provided/(used) in
operating activities 16,825 157,458
--------- ---------
Cash Flows from Financing Activities
Increase/(decrease) in advances from
shareholders 15,540 (19,003)
Cash dividend - -
Share capital issued - -
--------- ---------
Cash flows from financing activities 15,540 (19,003)
--------- ---------
Cash Flows from Investing Activities
Acquisition of capital assets - (1,385)
Note payable for purchase of sub - (159,105)
Purchase effects of subsidiary - -
Cash from acquisition of Subsidiary - -
--------- ---------
Cash flows from (used in) investing
activities - (160,490)
--------- ---------
Net (Decrease) Increase in Cash
And cash Equivalents 32,365 (22,035)
Cash and Cash Equivalents at
Beginning of Period 405,091 288,978
--------- ---------
Cash and Cash Equivalents at
End of Period $ 437,456 $ 266,943
========= =========
7
Represented by:
Cash 437,456 266,943
--------- ---------
Term $ 437,456 $ 266,943
========= =========
The accompanying notes are an integral part of these statements.
8
Globalink Ltd. and Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Unaudited
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.
Our hotel travel booking web site for the business-to-business stage is
now under testing prior to the official launching. The initial 39,000
available hotel rooms have been uploaded to the site, and will
facilitate travel agencies to book rooms directly via the internet
without having to personally call the office for booking. Official
launching is anticipated to be in the early second quarter of 2011.
Initially the web site will only facilitate the company's travel agency
customers, who already have or will set up accounts with us (B to B).
B to B is defined as business interactions between one business entity
(OneWorld) to other business entities (the travel agencies in the
travel industry). Our next stage of the web site development will be to
facilitate non-business customers such that any individuals wishing to
book rooms themselves may do so from our web site instead of booking
through their travel agencies (B to C). B to C is defined as business
interactions between a business entity (OneWorld) and the individual
customers, be they an individual or corporation, whose business is not
related to the travel industry. We anticipate this 2nd stage of the
web site would be ready for launching during the last quarter of 2011.
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
9
Globalink Ltd. and Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Unaudited
year. The exchange gain for the period from January 1 to December 31,
2009 is $86,189 and an exchange loss of $59,351 for the year ended
December 31, 2010.
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.
d) Stock-based compensation
Accounting Standards Codification 718, 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 ASC 718. In addition
the company's policy is to account for all stock based transactions in
conformance with ASC 718.
e) Income taxes
Deferred income taxes are reported for timing differences between items
of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with Accounting
Standards Codification regarding Accounting for Income Taxes, which
requires the use of the asset/liability method of accounting for income
taxes. Deferred income taxes and tax benefits 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 for tax loss and 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. Deferred taxes are provided for the estimated future tax
effects attributable to temporary differences and carryforwards when
realization is more likely than not.
10
Globalink Ltd. and Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Unaudited
f) Net income per share of common stock
We have adopted Accounting Standards Codification regarding Earnings
per Share, which requires presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation. In the accompanying
financial statements, basic earnings per share of common stock is
computed by dividing net income by the weighted average number of
shares of common stock outstanding during the period. We do not have a
complex capital structure requiring the computation of diluted earnings
per share.
g) Revenue recognition
Revenue is recorded when the corresponding expense can be recognized.
Specially, room revenue is recorded when the client checks into the
room. Due to this matching principle revenue is reported by the net
proceeds of the services performed as required by Accounting Standards
Codification 605.
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.
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
11
Globalink Ltd. and Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Unaudited
4. 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,
2010 is $14,983 and $30,523 for March 31, 2010.
5. Federal income tax:
We follow Accounting Standards Codification regarding Accounting for
Income Taxes. Deferred income taxes reflect the net effect of (a)
temporary difference between carrying amounts of assets and liabilities
for financial purposes and the amounts used for income tax reporting
purposes, and (b) net operating loss carryforwards. No net provision
for refundable Federal income tax has been made in the accompanying
statement of loss because no recoverable taxes were paid previously.
Similarly, no deferred tax asset attributable to the net operating loss
carryforward has been recognized, as it is not deemed likely to be
realized.
The provision for refundable Federal income tax consists of the
following:
12/31/2010 12/31/2009
Refundable Federal income tax
attributable to:
Current operations $ 26,936 $ 20,250
Less, Nondeductible expenses -0- -0-
-Less, Change in valuation allowance (26,936) (20,250)
Net refundable amount -0- -0-
The cumulative tax effect at the expected rate of 34% of significant
items comprising our net deferred tax amount is as follows:
12/31/2010 12/31/2009
Deferred tax asset attributable to:
Net operating loss carryover $ 43,860 $ 70,797
Less, Valuation allowance (43,860 (70,797)
Net deferred tax asset -0- -0-
At December 31, 2010, an unused net operating loss carryover
approximating $129,001 is available to offset future taxable income; it
expires beginning in 2018. Due to the change of control of the
Company, the use of the net operating loss may be limited in the
future.
12
Globalink Ltd. and Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Unaudited
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, 2009 and 2008 was $1,876. Future minimum
lease payments are as follows:
Year ending December 31,
2011 11,256
-------
$11,256
=======
Balance of Page Intentionally Left Blank
13
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
7. Supplemental information - consolidated statements
One World GlobaLink
12/31/2010 12/31/2010 Eliminations Consolidated
-------- -------- --------- --------
ASSETS
Current Assets:
Cash $ 401,428 $ 3,663 $405,091
Accounts receivable 232,756 - 232,756
Other receivable 389,222 (389,222) -
Investment in subsidiary - 528,475 (528,475) -
Other current assets 2,244 209 - 2,453
---------- -------- --------- --------
Total current assets 1,025,650 532,347 (917,697) 640,200
Fixed assets, net
of accumulated
depreciation 5,340 4,237 - 9,577
Goodwill - 274,449 - 274,449
---------- -------- --------- --------
TOTAL ASSETS $1,030,990 $811,033 $(917,697) $924,326
========== ======== ========= ========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Accounts payable $ 467,475 $112,089 - $579,564
Notes payable 14,983 389,222 $(389,222) 14,983
Other current
liabilities 20,057 20,523 - 50,580
---------- -------- --------- --------
Total current
liabilities 502,515 531,834 (389,222) 645,127
Shareholders Equity
Common stock 19,960 4,957 (19,960) 4,957
Paid in surplus - 403,243 - 403,243
Retained earnings/
(deficit) 508,515 (129,001) (508,515) (129,001)
---------- -------- --------- --------
Total shareholders
equity 528,475 279,199 (528,475) 279,199
---------- -------- --------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $1,030,990 $811,033 $(917,697) $924,326
========== ======== ========= ========
14
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
For the year ended December 31, 2010
------------------------------------
One World Global Eliminations Consolidated
-------- ------ ------------ ------------
Revenue: $373,772 $ - $373,772
Expenses:
Wages and salaries 169,416 169,416
Subsidiary expenses -
Other administrative
expenses 167,491 16,990 184,481
-------- -------- --- --------
Total expenses 336,907 16,990 - 353,897
-------- -------- --- --------
Income/(loss) from operations 36,865 (16,990) - (19,875)
Other income/(expenses) 59,351 - - 59,351
-------- -------- --- --------
Income before income taxes 96,216 (16,990) - 79,226
Income taxes - - - -
-------- -------- --- --------
Net income/(loss) $ 96,216 $(16,990) $ - $ 79,226
======== ======== === ========
15
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
One World GlobaLink
3/31/2011 3/31/2011 Eliminations Consolidated
---------- ---------- --------- ------------
ASSETS
Current Assets:
Cash $ 435,489 $ 1,967 $437,456
Accounts receivable 246,372 - - 246,372
Other receivable 402,117 - (402,117) -
Investment in subsidiary - 532,575 (532,575) -
Other current assets 2,506 209 - 2,715
========== ======== ========= ========
Total current assets 1,086,484 534,751 (934,692) 686,543
Fixed assets, net
of accumulated
depreciation 5,871 3,450 - 9,321
Goodwill - 274,449 - 274,449
---------- -------- --------- --------
TOTAL ASSETS $1,092,355 $812,650 $(934,692) $970,313
========== ======== ========= ========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Accounts payable $ 442,821 $ 97,984 - $540,805
Notes payable 95,903 402,117 $(402,117) 95,903
Other current
liabilities 21,056 30,523 - 51,579
---------- -------- --------- --------
Total current
liabilities 559,780 530,624 (402,117) 688,287
Shareholders Equity
Common stock 20,621 4,957 (20,621) 4,957
Paid in surplus - 403,243 - 403,243
Retained earnings/
(deficit) 511,954 (126,174) (511,954) (126,174)
---------- -------- --------- --------
Total shareholders equity 532,575 282,026 (532,575) 282,026
---------- -------- --------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $1,092,355 $812,650 $(934,692) $970,313
========== ======== ========= ========
16
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
December 31, 2010
(Expressed in U.S. Dollars)
Audited
For the three months ended March 31, 2011
-----------------------------------------
One World Global Eliminations Consolidated
--------- ------ ------------ ------------
Revenue: $62,735 $ - - $62,735
Expenses:
Wages and salaries 52,194 - -
Subsidiary expenses - - - -
Other administrative
expenses 23,986 1,274 - 25,260
------- -------- --- --------
Total expenses 76,180 1,274 - 77,454
------- -------- --- --------
Income/(loss) from
operations (13,445) - - (14,719)
Other income/(expenses) 17,546 - - 17,546
------- -------- --- --------
Income before income taxes 4,101 (1,274) - 2,827
Income taxes - - - -
------- -------- --- --------
Net income/(loss) $ 4,101 $(16,990) $ - $ 2,817
======= ======== === ========
8. Business Combinations
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. Due
to SFAS No. 141 OneWorld Hotel Destination Services, Inc. is considered
the predecessor company. 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. The purchase has been
recorded as follows:
2,000,000 shares of common stock valued at $.09 each equals
$180,000.
Notes payable at $469,800, with 1% interest and maturity dates
of May 9, 2011 and October 19, 2011
Total purchase price of OneWorld Hotel Destination Services,
Inc. was $649,800.
Net assets of OneWorld Hotel Destination Services, Inc. was
$375,351.
Goodwill recorded on purchase ($649,800 - $375,351) is $274,449.
17
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
The quote for the price of the stock was from Otcbb.com. It showed the
price of the stock to be in the $.10 range. The Company used a price
of $.09 because of the large volume of shares. That is also the price
used by the seller when he filed his Canadian income tax return. The
value used for the note was principal amount.
Net assets were calculated as follows:
One World
10/31/2008
--------
ASSETS
Current Assets:
Cash $623,005
Accounts receivable 252,698
Other current assets 17,224
--------
Total current assets 892,927
Other Asset 44,536
--------
TOTAL ASSETS 937,463
LIABILITIES
Current Liabilities
Accounts payable $560,263
Other current liabilities 1,849
--------
Total current liabilities 562,112
--------
NET ASSETS $375,251
========
Following is the pro forma balance sheet and income statement as of the
acquisition date, October 31, 2008.
One World GlobaLink
10/31/2008 10/31/2008 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
18
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
(continued)
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
Preferred stock 6,382 (6,382) -
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 October 31, 2008
--------------------------------
One World**Global Eliminations Consolidated
------- ------- ---- --------
Revenue $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
======= ======= === =======
19
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
Income/(loss) from operations 24,789 (8,990) - 15,799
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.
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 issued stock options of 100,000 each to three directors on
January 2, 2008; which expire on January 2, 2010. The strike price on
these shares were $0.10 per share. After the 5 for 1 stock split the
outstanding options were $500,000 per director at $0.02 per share.
On December 23, 2009 the Board of Directors extended these options to
January 2, 2012.
The company has split its common stock on a 5 for 1 basis on July 1,
2008.
The company has 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.
On March 30, 2010 the Board of Directors authorized an additional
400,000 shares of common stock each to three directors. The options
expire on March 31, 2012 and have a strike of $0.01 per share.
20
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
10. Net Revenue
The Company follows the reporting requirements of Accounting Standards
Codification 605, which requires revenue to be reported net after
costs. Following is the gross revenue and expenses for the period
ending December 31, 2010 and the three months ended March 31, 2011:
12/31/2010 3/31/2011
---------- ---------
Gross Revenue $3,166,602 $ 650,139
Cost of Revenue 2,792,830 587,404
---------- ---------
Net Revenue $ 373,772 $ 62,735
========== =========
11. Stock Based Compensation
On January 2, 2008 the Board of Directors approved a motion to extend
to three Directors options to purchase 100,000 shares of common stock
(pre 5:1 split) at $.10 per share to expire on January 2, 2010. On
December 23, 2009 the Directors extended the options to January 2,
2012. No expense has been added as a result of the issuance of these
options because the stock was trading and still is trading below the
option price.
12. New accounting pronouncements:
In May 2008, the Accounting Standards Codification issued 944,
"Accounting for Financial Guarantee Insurance Contracts-and
interpretation of Accounting Standards Codification 944". Accounting
Standards Codification 944 clarifies how Accounting Standards
Codification 944 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. Accounting Standards
Codification 944 is effective for fiscal years beginning on or after
December 15, 2008, and interim periods within those years. Accounting
Standards Codification 944 has no effect on the Company's financial
position, statements of operations, or cash flows at this time.
In March 2008, the Accounting Standards Codification issued 815,
Disclosures about Derivative Instruments and Hedging Activities-an
amendment of Accounting Standards Codification 815. 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 815 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
21
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
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 Accounting Standards Codification
815, 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 Accounting Standards Codification 815,
Noncontrolling Interests in Consolidated Financial Statements-an
amendment of Accounting Standards Codification 810. This statement
amends Accounting Standards Codification 810 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. 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 Accounting Standards Codification 805
(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 Accounting Standards Codification, issued
Accounting Standards Codification 805 (revised 2007), Business
Combinations.' 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 Accounting Standards Codification 810,
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.
22
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
March 31, 2011
(Expressed in U.S. Dollars)
Audited
In February 2007, the Accounting Standards Codification, issued
Accounting Standards Codification 810, The Fair Value Option for
Financial Assets and Liabilities-Including an Amendment of Accounting
Standards Codification 320. 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 Accounting Standards Codification 810 are elective; however, an
amendment to Accounting Standards Codification 320 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. Accounting Standards Codification 810 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 ASC 810 Fair Value Measurements. The Company will adopt
Accounting Standards Codification 810 beginning March 1, 2008 and is
currently evaluating the potential impact the adoption of this
pronouncement will have on its consolidated financial statements.
In September 2006, the Accounting Standards Codification issued
Accounting Standards Codification 820, 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.
23
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
24
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 October 31, 2008, Globalink received
significant improvement in cash position. At September 30, 2010,
Globalink & its subsidiary have $435,949 cash on hand.
For the three months ended March 31, 2011, Globalink did not pursue any
investing activities.
For the three months ended March 31, 2010, Globalink acquired capital
assets of $1,385. Additionally, for the three months ended March 31,
2010, Globalink had a note payable for the purchase of subsidiary of
$159,105. As a result, Globalink had cash flows used in investing
activities of $160,490 for the three months ended March 31, 2010.
For the three months ended March 31, 2011, Globalink had an increase in
advances from shareholders of $15,540 resulting in cash flows provided
by financing activities of $15,540.
For the three months ended March 31, 2010, Globalink had a decrease in
advances from shareholders of $19,003 resulting in cash flows used in
financing activities of $19,003.
Results of Operations
For the three months ended March 31, 2011, Globalink received revenues
of $62,735. Expenses consisted of wages and salaries of $52,194 and
other administrative expenses of $25,260. Additionally, Globalink had
other income of $17,546 resulting in net income of $2,827 for the three
months ended March 31, 2011.
Comparatively, for the three months ended March 31, 2010, Globalink
received revenues of $78,176. The expenses of $60,701 consisted mainly
of wages and salaries of $41,903 and basic operating expenses and legal
and accounting expenses necessary to complete filings with the
Securities and Exchange Commission. Other administrative expenses
increased in spite of management's attempts to reduce overhead costs.
Additionally, Globalink received other income of $12,818 resulting in
net income of $30,293 for the three months ended March 31, 2010.
25
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 intend to 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 March 31,
2011.
Contractual Obligations
Globalink has no material contractual obligations.
New Accounting Pronouncements
In May 2008, the Accounting Standards Codification issued 944,
"Accounting for Financial Guarantee Insurance Contracts-and
interpretation of Accounting Standards Codification 944". Accounting
Standards Codification 944 clarifies how Accounting Standards
Codification 944 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. Accounting Standards
Codification 944 is effective for fiscal years beginning on or after
December 15, 2008, and interim periods within those years. Accounting
Standards Codification 944 has no effect on Globalink's financial
position, statements of operations, or cash flows at this time.
In March 2008, the Accounting Standards Codification issued 815,
Disclosures about Derivative Instruments and Hedging Activities-an
amendment of Accounting Standards Codification 815. 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 815 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. Globalink has
not yet adopted the provisions of Accounting Standards Codification
815, but does not expect it to have a material impact on its
consolidated financial position, results of operations or cash flows.
26
In December 2007, the Accounting Standards Codification 815,
Noncontrolling Interests in Consolidated Financial Statements-an
amendment of Accounting Standards Codification 810. This statement
amends Accounting Standards Codification 810 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. 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 Accounting Standards Codification 805
(revised 2007). Globalink will adopt this Statement beginning March 1,
2009. It is not believed that this will have an impact on Globalink's
consolidated financial position, results of operations or cash flows.
In December 2007, the Accounting Standards Codification, issued
Accounting Standards Codification 805 (revised 2007), Business
Combinations.' 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 Accounting Standards Codification
810, Noncontrolling Interests in Consolidated Financial
27
Statements. Globalink will adopt this statement beginning March 1,
2009. It is not believed that this will have an impact on Globalink's
consolidated financial position, results of operations or cash flows.
In February 2007, the Accounting Standards Codification, issued
Accounting Standards Codification 810, The Fair Value Option for
Financial Assets and Liabilities-Including an Amendment of Accounting
Standards Codification 320. 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 Accounting Standards Codification 810 are elective;
however, an amendment to Accounting Standards Codification 320
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. Accounting Standards Codification 810 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 ASC 810 Fair Value Measurements. The Company will adopt
Accounting Standards Codification 810 beginning March 1, 2008 and is
currently evaluating the potential impact the adoption of this
pronouncement will have on its consolidated financial statements.
In September 2006, the Accounting Standards Codification issued
Accounting Standards Codification 820, Fair Value Measurements. This
statement defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles, 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.
Globalink will adopt this statement March 1, 2008, and it is not
believed that this will have an impact on Globalink'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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable for smaller reporting companies.
28
Item 4. Controls and Procedures
During the three months ended March 31, 2011, 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 March 31, 2011.
During the edgarization process, the incorrect footnotes to the
financial statements were inserted into the Form 10-Qs recently filed
for the quarters ended June 30, 2010 and September 30, 2010. As a
result, the registrant implemented new review procedures to ensure the
accuracy in the required filings.
Based on this evaluation, our chief executive officer and chief
principal financial officers have concluded such controls and
procedures were not effective as of March 31, 2011 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.
29
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 1A. Risk Factors
Not applicable for smaller reporting companies
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Removed and Reserved
Item 5. Other Information
None
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: May 16, 2011
GLOBALINK, LTD.
By: /s/Robin Young
---------------------------
Robin Young, Chief Executive Officer
By: /s/Ben Choi
---------------------------
Ben Choi, Chief Financial Officer
