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EX-32 - EXHIBIT 32 - GLOBALINK, LTD. | globalink10k11ex32.htm |
EX-31 - EXHIBIT 31 - GLOBALINK, LTD. | globalink10k12ex31.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition 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 of incorporation or organization) | | (I.R.S. Employer Identification Number) |
938 Howe Street, Suite 405 | | |
Vancouver, BC V6Z 1N9 | | (604) 828-8822 |
(Address of Principal Executive Offices) | | (Registrant's telephone number) |
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
[ ] Yes [x] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. [ ] Yes [x] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.406 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 (1) has 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.
[x] Yes [ ] No
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, indefinitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x]
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] | | Accelerated filer [ ] |
Non-accelerated filer [ ] | | Smaller reporting company [x] |
Indicate by check mark whether Globalink is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [x]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter. The market value of the registrants voting common stock held by non-affiliates of the registrant was approximately $0.Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant's only class of common stock, as of April 16, 2013 was 24,785,000 shares of its common stock.No documents are incorporated into the text by reference.
2
Table of Contents
| | Page |
PART I | | 4 |
Item 1. Business | | 4 |
Item 1A. Risk Factors | | 5 |
Item 1B. Unresolved Staff Comments | | 5 |
Item 2. Properties | | 5 |
Item 3. Legal Proceedings | | 5 |
Item 4. Mine Safety Disclosures | | 5 |
| | |
PART II | | 6 |
Item 5. Market for Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities | | 6 |
Item 6. Selected Financial Data | | 6 |
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations | | 6 |
Item 7A. Quantitative and Qualitative Disclosures about Market Risk | | 9 |
Item 8. Financial Statements and Supplementary Data | | 10 |
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosures | | 31 |
Item 9A. Controls and Procedures | | 31 |
Item 9B. Other Information | | 32 |
| | |
PART III | | 33 |
Item 10. Directors and Executive Officers, Promoters, Control Persons, and Corporate Governance | | 33 |
Item 11. Executive Compensation | | 35 |
Item 12. Security Ownership of Certain Beneficial Owners and Management | | 35 |
Item 13. Certain Relationships and Related Transactions, and Director Independence | | 37 |
Item 14. Principal Accountant Fees and Services | | 37 |
| | |
PART IV | | 38 |
Item 15. Exhibits, Financial Statement Schedules | | 38 |
Signatures | | 40 |
3
PART I
ITEM 1. BUSINESS
The registrant was incorporated in the state of Nevada on February 3, 2006. The registrant has focused its efforts in the Internet Hotel booking services arena. The registrant 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, the registrant 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. The web site launched in 2012. The web site facilitates the companys 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. This web site is still in the development stage.
Competition
Competition is inevitable in any type of industries. This is particularly so for services using the internet to convey the products to the end users. The online commerce market, particularly over the Internet, is rapidly evolving and intensely competitive, and we expect that the competition will intensify in the future. Barriers to entry are minimal, and current and new competitors can launch new websites at a relatively low cost.
4
We believe that while we currently may have disadvantages in this market, the growth of this market is able to allow us to take a market share if we can maintain reliable, fast response, and quality service to our customers and hotel suppliers.
We intend to use our expertise in North America and China market and the user-friendly web site to compete with the majors in this field. We will compete on the basis of ease of use, pricing and customer preference. Our competitors are well established, substantially larger and have substantially greater market recognition, greater resources and broader capabilities than we have. There can be no assurance that we will be able to compete successfully against current and future competitors, and competitive pressures faced by the registrant may have a material adverse effect on our business, prospects, financial condition and results of operations.
ITEM 1A. RISK FACTORS
Not applicable to smaller reporting companies.
ITEM 2. PROPERTIES
Our offices consist approximately 1,200 square feet and are located at 938 Howe Street, Suite 405, Vancouver, BC V6Z 1N9
The Company leases its administrative offices for US$1,736 per month. The lease expires in July 2013. The operating lease expense for the year ended December 31, 2012 was $20,806 and $20,832 for December 31, 2011.
ITEM 3. LEGAL PROCEEDINGS.
The registrant is aware of no pending or threatened litigation.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
5
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Item 5(a)a) Market Information. Not applicable.
b) Holders. At April 16, 2013, there were approximately 49 shareholders of the registrant. c) Dividends. Holders of the registrant's common stock are entitled to receive such dividends as may be declared by its board of directors. No dividends on the registrants common stock have ever been paid, and the registrant does not anticipate that dividends will be paid on its common stock in the foreseeable future. d) Securities authorized for issuance under equity compensation plans. No securities are authorized for issuance by the registrant under equity compensation plans.e) Performance graph. Not applicable.f) Sale of unregistered securities. None.
Item 5(b) Use of Proceeds. Not applicable. Item 5(c) Purchases of Equity Securities by the issuer and affiliated purchasers. None.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable to a smaller reporting company.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Trends and Uncertainties
During 2008, we started generating revenue upon completion of the acquisition of OneWorld Hotel Destination Services, Inc. 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.
6
Due to the recession in 2009, the registrant halted the plan to raise extra capital which is for the completion of the online hotel room reservation web site and the expansion of the Hotel booking business. The registrant decided to allocate the majority cash flow to maintain the operation of One World because of the recession in 2009. The officers and directors also agreed not to receive cash compensation for their management work in the registrant including the continuation of the development of the website in-house by the directors, the defraying of marketing, promotion and travel.
While the economy is gradually recovering today, One World currently generates sufficient cash flow to maintain its own daily operation. However, in order to realize effective marketing and promotion, the registrant will need to raise the addition capital through the sale of capital stock in the future. The use of funds would be rationed for marketing and promotion purposes, expansion of the OneWorld operation and working capital needs.
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 provide their hotel rooms in our web site.
- 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 customers 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 control. There are no assurances that we will be successful in addressing these risks, and failure to do so may adversely affect our business.
7
Capital and Source of Liquidity.
Prior to the acquisition of OneWorld, all of Globalinks operating capital has either been advanced by current shareholders or from proceeds for the issuance on common shares.
For the year ended December 31, 2012, Globalink received advances from shareholders of $6,603 and received $10,000 from stock subscriptions. As a result, we had cash flows from financing activities of $16,603 for the year ended December 31, 2012.
Comparatively, for the year ended December 31, 2011, Globalink received advances from shareholders of $28,540. As a result, we had cash flows from financing activities of $28,540 for the year ended December 31, 2011.
For the year ended December 31, 2012, Globalink lost $46,992 on translation adjustments. As a result, we had cash flows used in investing activities of $46,992 for the year ended December 31, 2012.
Comparatively, for the year ended December 31, 2011, Globalink received $45,217 from translation adjustments. As a result, we had cash flows from investing activities of $45,217 for the year ended December 31, 2011.
Results of Operations
For the year ended December 31, 2012, Globalink received revenues of $421,790. We paid wages and salaries of $249,556 and other administrative expenses of $140,198. We had other income and expenses of $46,992, and paid $12,875 in income taxes. As a result, we had net income of $66,153 for the year ended December 31, 2012.
Comparatively, for the year ended December 31, 2011, Globalink received revenues of $350,142. We paid wages and salaries of $254,774 and other administrative expenses of $131,745. We had other income and expenses of $19,161. As a result, we had a net loss of $17,216 for the year ended December 31, 2011. The increase in net gain between 2011 and 2012 is primarily due to increased revenues while keeping operating costs roughly the same.
Management expects sales and gross revenue will grow significantly over the current year volume after the web site is launched. We anticipate that it will not be a straight-line growth pattern but an exponential increase. This anticipation can be realized if we spend the necessary funds in promotion through internet advertising, radio and television clicks and news media advertising. On the whole, the more we direct funds into promotion, the bigger the increase in sales as a return.
8
Although there are signs of gradual stability, management believes that the effects of the recent economic crisis is a long ways from being over. However, our One World operation has been well-established over the past ten years that we are capable of continuously sustain our existence during the current crisis. We will survive under future crisis by maintaining a skeleton staff, reduce promotion and advertising to a bare minimum and management officers providing services temporarily en gratis.
Off-Balance Sheet Arrangements
The registrant had no material off-balance sheet arrangements as of December 31, 2012.
Contractual Obligations
The registrant has no material contractual obligations
New Accounting Pronouncements
The registrant has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the registrant.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk.
The registrant does not have any significant market risk exposures.
9
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Globalink, Ltd.
Index to
Financial Statements
| | |
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| Page |
Report of Independent Registered Public Accounting Firm |
| 11 |
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Audited Consolidated Balance Sheets of December 31, 2012 and 2011 |
| 12 |
|
|
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Audited Consolidated Statements of Operations for the Years ended December 31, 2012 and 2011 |
| 13 |
|
|
|
Audited Consolidated Statement of Changes in Stockholders' (Deficit) |
| 14 |
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Audited Consolidated Statements of Cash Flows for the Years ended December 31, 2012 and 2011 |
| 16 |
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Notes to Consolidated Financial Statements |
| 17 |
10
THOMAS J. HARRIS
CERTIFIED PUBLIC ACCOUNTANT
3901 STONE WAY N., SUITE 202
SEATTLE, WA 98103
206.547.6050
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
GLOBALINK, LTD.
Vancouver,B.C., Canada
I have audited the balance sheets of GLOBALINK, LTD. AND SUBSIDIARY, as at DECEMBER 31, 2012 AND 2011, the statements of earnings and deficit, stockholders' deficiency and cash flows for the periods then ended. These financial statements are the responsibility of the company's management. My responsibility is to express an opinion on these financial statements based on our audit
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of GLOBALINK LTD. AND SUBSIDIARY, as of December 31, 2012 and 2011 and the results their operations and their cash flows for the periods then ended in conformity with generally accepted accounting principles accepted in the United States of America.
Thomas J Harris, CPA
April 16, 2013
11
GLOBALINK, LTD. and Subsidiary
Consolidated Balance Sheet
December 31, 2012 and 2011
(Expressed in U.S. Dollars)
| | | | | Audited | | Audited |
| | | | | 2012 | | 2011 |
ASSETS | | | | | | | |
CURRENT ASSETS: | | | | | | ||
| Cash | | | | $446,846 | | $383,454 |
| Term deposit | | | | | | |
| Accounts receivable trade | | | 196,628 | | 177,502 | |
| Other Receivable | | | | | | |
| Other Current Assets | | | 3,974 | | 2,231 | |
| | TOTAL CURRENT ASSETS | | | 647,448 | | 563,187 |
| | | | | | | |
Fixed assets, net of accumulated depreciation | | 3,818 | | 6,179 | |||
Goodwill | | | | 274,449 | | 274,449 | |
TOTAL ASSETS | | | $925,714 | | $843,815 | ||
| | | | | | | |
LIABILITIES & STOCKHOLDERS EQUITY | | | | | | ||
CURRENT LIABILITIES: | | | | | | ||
| Accounts Payable and accural | | | $528,496 | | $486,199 | |
| Other current liabilties | | | 14,379 | | 10,541 | |
| | TOTAL CURRENT LIABILITIES | | 542,875 | | 496,740 | |
OTHER LIABILITIES: | | | | | | ||
| Advances from Shareholders | | | 50,126 | | 43,523 | |
| | TOTAL OTHER LIABILITIES | | | 50,126 | | 43,523 |
TOTAL LIABILITIES | | | 593,001 | | 540,263 | ||
| | | | | | | |
STOCKHOLDERS EQUITY: | | | | | | ||
| Common Stock, $.0002 par value | | | | | | |
| 100,000,000 shares authorized and | | | | | | |
| 24,785,000 shares issued and outstanding | | 4,957 | | 4,957 | ||
| Common Stock authorized, issued and outstanding 1,000,000 shares | | | | | ||
| Preferred Stock authorized, issued and outstanding | | | | | ||
| 1,000,000 shares | | | | | | |
| Paid-in Surplus | | | 403,243 | | 403,243 | |
| Translation adjustment | | | (1,775) | | 45,217 | |
| Subscription receivable | | | 10,000 | | | |
| Retained earning | | | (83,712) | | (149,865) | |
| | TOTAL STOCKHOLDERS EQUITY | | 332,713 | | 303,552 | |
TOTAL LIABILITIES & STOCKHOLDERS EQUITY | | $925,714 | | $843,815 |
The accompanying notes are an integral part of these statements
12
GLOBALINK, LTD. And Subsidiary
Consolidated Statements of Operations
For the year ended December 31, 2012 and 2011
(Expressed in U.S. Dollars)
| | | | | For twelve months | | For twelve months |
| | | | | ended | | ended |
|
|
| | | 12/31/12 | | 12/31/11 |
| | | | | | | |
Revenue | | | | $ 421,790 | | $ 350,142 | |
| | | | | | | |
Expenses | | | | | | | |
| Wages & salaries | | | 249,556 | | 254,774 | |
| Expenses from subsidiary | | | | | | |
| Other administrative expenses | | | 140,198 | | 131,745 | |
| | | | | 389,754 | | 386,519 |
Income (deficit) from operations | | | 32,036 | | (36,377) | ||
| | | | | | | |
Other income and expenses | | | 46,992 | | 19,161 | ||
| | | | | | | |
Income before income taxes | | | 79,028 | | (17,216) | ||
| | | | | | | |
Income tax | | | | (12,875) | | (3,648) | |
Income for the period | | | | $ 66,153 | | $ (20,864) | |
| | | | | | | |
Basic and Diluted Loss per Share | | | 0.00 | | (0.00) | ||
| | | | | | | |
Weighted Number of Common Shares | | 24,785,000 | | 24,785,000 |
The accompanying notes are an integral part of these statements
13
GLOBALINK, LTD. And Subsidiary
Consolidated Statements of Shareholders' Equity (Deficit)
For the Years Ended December 31, 2012
(Expressed in U.S. Dollars)
| Number of shares | Common Stock | Preferred Stock | Paid In Surplus | Stock Subscription | Translation Adjustment | Retained Earnings | Total Stockholders' Equity |
BALANCE - June 30, 2006 | 2,000,000 | $6,382 | $6,382 | $ - | | $ - | $221,660 | $234,424 |
| | | | | | | | |
Net Income 2007 |
|
|
|
|
|
| 70,743 | 70,743 |
| | | | | | | | |
BALANCE AT JUNE 30, 2007 | 2,000,000 | 6,382 | 6,382 | - | | | 292,403 | 305,167 |
| | | | | | | | |
Dividends paid | | | | | | | (29,502) | (29,502) |
| | | | | | | | |
Net income 2008 | - | - |
| - |
|
| 119,371 | 119,371 |
| | | | | | | | |
BALANCE AT JUNE 30, 2008 | 2,000,000 | 6,382 | 6,382 | - | | | 382,272 | 395,036 |
| | | | | | | | |
Effects of merger | | | | | | | (39,283) | (39,283) |
| | | | | | | | |
Net income July 1, 2008 through October 31, 2008 |
|
|
|
|
|
| 19,598 | 19,598 |
| | | | | | | | |
BALANCE AT OCTOBER 31, 2008 | 2,000,000 | $6,382 | $6,382 | $ - |
|
| $362,587 | $375,351 |
| | | | | | | | |
GlobaLink Ltd and Subsidiary | | | | | | | | |
| | | | | | | | |
Effect of 5 for 1 stock split and reduction of par value to .0002 | 22,785,000 | 4,557 | | 223,643 | | - | (160,956) | 67,244 |
| | | | | | | | |
Shares Issued in acquisition of OneWorld Hotel Destination Services, Inc. | 2,000,000 | 400 | | 179,600 | | | - | 180,000 |
| | | | | | | | |
Net Loss for the year ended December 31,2008 |
|
|
|
|
|
| (106,831) | (106,831) |
| | | | | | | | |
BALANCE AT DECEMBER 31, 2008 | 24,785,000 | 4,957 | | 403,243 | | - | (267,787) | 140,413 |
| | | | | | | | |
Net Income for the year ended December 31, 2009 |
|
|
|
|
|
| 59,560 | 59,560 |
| | | | | | | | |
14
GLOBALINK, LTD. And Subsidiary
Consolidated Statements of Shareholders' Equity (Deficit)
For the Years Ended December 31, 2012
(Expressed in U.S. Dollars)
(Continued from previous page)
BALANCE AT DECEMBER 31, 2009 | 24,785,000 | 4,957 | - | 403,243 | | - | (208,227) | 199,973 |
| | | | | | | | |
Net Income for the year ended December 31, 2010 |
|
|
|
|
|
| 79,226 | 79,226 |
| | | | | | | | |
BALANCE AT DECEMBER 31, 2010 | 24,785,000 | 4,957 | - | 403,243 | | - | (129,001) | 279,199 |
| | | | | | | | |
Translation adjustment | | | | | | 45,217 | | 45,217 |
| | | | | | | | |
Net loss for the year ended December 31, 2011 |
|
|
|
|
|
| (20,864) | (20,864) |
| | | | | | | | |
BALANCE AT DECEMBER 31, 2011 | 24,785,000 | 4,957 | - | 403,243 | - | 45,217 | (149,865) | 303,552 |
| | | | | | | | |
Stock subscription | | | | | 10,000 | | | 10,000 |
| | | | | | | | |
Translation adjustment | | | | | | (46,992) | | (46,992) |
| | | | | | | | |
Net profit for the year ended December 31, 2012 |
|
|
|
|
|
| 66,153 | 66,153 |
| | | | | | | | |
BALANCE AT DECEMBER 31, 2012 | 24,785,000 | $4,957 | $ - | $403,243 | $10,000 | $(1,775) | $(83,712) | $332,713 |
The accompanying notes are an integral part of these statements
15
GLOBALINK, LTD.
Consolidated Statement of Cash Flows
For the year ended December 31, 2012 and 2011
(Expressed in U.S. Dollars)
|
|
| For the Year Ended December 31, 2012 |
| For the Year Ended December 31, 2011 |
Cash Flows from Operating Activities | | | | | |
| Profit/(loss) for the period |
| $ 66,153 | | $ (20,864) |
| Less Depreciation not requiring use of funds | 2,361 | | 3,398 | |
| Net loss on exchange transactions | | | | |
| Income taxes (paid)/refunded | | | | |
Net changes in working capital balances | | | | | |
| (Increase)/decrease accounts receivable | | (19,126) | | 55,254 |
| Other Receivable | | | | |
| (Increase)/decrease in other current assets | (1,743) | | 222 | |
| Increase/(decrease) in accounts payable and accruals | 42,298 | | (93,365) | |
| (Due to)/refunded government agencies | | | | |
| Increase/(decrease) in the current liabilities | 3,838 | | (40,039) | |
| Cash flows provided/(used) in operating activities | 93,781 | | (95,394) | |
| | | | | |
Cash Flows from Financing Activities | | | | | |
| Increase/(decrease) in advances from shareholders | 6,603 | | 28,540 | |
| Cash dividend | | | | |
| Stock subscription | | 10,000 | |
|
| Cash flows from financing activities | | 16,603 | | 28,540 |
| | | | | |
Cash Flows from Investing Activities | | | | | |
| Acquisition of capital assets | | | | |
| Note payable for purchase of sub | | | | |
| Translation adjustments | | (46,992) | | 45,217 |
| Purchase effects of subsidiary | | | | |
| Cash from acquisition of Subsidiary | |
| |
|
| Cash flows from (used in) investing activities | (46,992) | | 45,217 | |
Net (Decrease) Increase in Cash | | | | | |
| And cash Equivalents | | 63,392 | | (21,637) |
| | | | | |
Cash and Cash Equivalents at | | | | | |
| Beginning of Period | | 383,454 | | 405,091 |
Cash and Cash Equivalents at | | | | | |
| End of Period | | $ 446,846 | | $ 383,454 |
| | | | | |
Represented by: | | | | | |
| Cash | | 446,846 | | 383,454 |
| Term | |
| |
|
| | | $ 446,846 | | $ 383,454 |
The accompanying notes are an integral part of these statements
16
GLOBALINK LTD. And Subsidiary
Notes to Financial Statements
December 31, 2012
(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.
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 companys 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:
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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 gain for the period from January 1 to December 31, 2011 was $19,161 and 28,571 from January 1, 2012 through December 31, 2012.
b)
Financial instruments
The companys financial instruments consist of accounts receivable, accounts payable, directors fees payable and advances from shareholders. It is managements 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 companys 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
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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.
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 customers 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.
i)
Translation adjustments
The Company has translations adjustments due to a subsidiary operating in Canada. The translation adjustment arises from the currency differences in the US dollar and the Canadian dollar. The Company reports all figures in US dollars and reports the currency translation adjustment through the equity section of the consolidated balance sheet.
3.
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
19
Company uses an accelerated method of depreciating their assets over their useful lives.
Computer equipment acquired
30%, declining balance
Computer equipment acquired
45%, declining balance
Furniture and equipment
20%, declining balance
Leasehold improvements
20%, straight line
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, 2012 was $50,126 and $43,523 for December 31, 2011.
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:
| 12/31/2012 | | 12/31/2011 |
Taxable (Credit) Federal Income tax attributable to: | | | |
Current operations | $22,492 | | (7,094) |
Less, Nondeductible expenses | -0- | | -0- |
Less, Change in valuation allowance | (22,492) | | 7,094 |
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:
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| 12/31/2012 | | 12/31/2011 |
Deferred tax asset attributable to: | | | |
Net operating loss carryover | $ 28,462 | | 50,954 |
Less, Valuation allowance | (28,462) | | (50,954) |
Net deferred tax asset | -0- | | -0- |
The Companys subsidiary had a foreign taxable income of $36,000, which generated foreign taxes paid of $12,869 USD. The company will apply these foreign taxes as a credit for foreign taxes paid on their US tax filing.
At December 31, 2012, an unused net operating loss carryover approximating $83,712 which 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.
6.
Operating Leases
The Company leases its administrative offices for US$1,736 per month. The lease expires in July 2013. The operating lease expense for the year ended December 31, 2012 was $20,806 and $20,832 for December 31, 2011. Future minimum lease payments are as follows:
Future lease payments are as follows:
2013 | | $12,152 |
| | $12,152 |
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7. Supplemental information consolidated statements
| One World | Globalink | | |
| 12/31/2012 | 12/31/2012 | Eliminations | Consolidated |
ASSETS | | | | |
Current Assets: | | | | |
Cash | $444,330 | $2,516 | $ - | $446,846 |
Accounts receivable | 196,628 | - | - | 196,627 |
Other receivable | 523,396 | - | (523,396) | 0 |
Investment in subsidiary | - | 629,061 | (629,061) | - |
Other current assets | 3,765 | 209 | - | 3,974 |
Total current assets | 1,168,120 | 631,786 | (1,152,457) | 647,447 |
| | | | |
Fixed assets, net of accumulated depreciation | 3,818 | - | - | 3,818 |
| | | | |
Other Assets: | | | | |
Goodwill | - | 274,449 | - | 274,449 |
Note Receivable | - | - | - | - |
TOTAL ASSETS | $1,171,938 | $906,235 | $(1,152,457) | $925,714 |
| | | | |
LIABILITIES AND SHAREHOLDERS EQUITY | | |||
Current Liabilities | | | | |
Accounts payable | $528,497 | $ - | $ - | $528,496 |
Notes payable | - | 523,396 | (523,396) | - |
Other current liabilities | 14,379 | 50,126 | - | 64,505 |
Total current liabilities | 542,877 | 573,522 | (523,396) | 593,001 |
| | | | |
Shareholders Equity | | | | |
Common stock | 20,135 | 4,957 | (20,135) | 4,957 |
Paid in surplus | - | 403,243 | - | 403,243 |
Translation adjustment | 12,388 | (1,775) | (12,388) | (1,775) |
Stock subscription | - | 10,000 | - | 10,000 |
Retained earnings/ (deficit) | 596,538 | (83,712) | (596,538) | (83,712) |
Total shareholders equity | 629,061 | 332,713 | (629,061) | 332,713 |
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | $1,171,938 | $906,235 | $(1,152,457) | $925,714 |
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| For the year ended December 31, 2012 | |||
| One World | Global | Eliminations | Consolidated |
Revenue: | $421,790 | $84,774 | $(84,774) | $421,790 |
| | | | |
Expenses: | | | | |
Wages and salaries | 249,556 | - | - | 249,556 |
Subsidiary expenses | - | - | - | - |
Other administrative expenses | 121,577 | 18,621 | - | 140,198 |
Total expenses | 371,133 | 18,621 | - | 389,754 |
| | | | |
Income/(loss) from operations | 50,657 | 66,153 | (84,774) | 32,036 |
| | | | |
Other income/(expenses) | 46,992 | - | - | 46,992 |
| | | | |
Income before income taxes | 97,649 | 66,153 | (84,774) | 79,028 |
Income taxes | (12,875) | - | - | (12,875) |
| | | | |
Net income/(loss) | $84,774 | $66,153 | $(84,774) | $66,153 |
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| One World | GlobaLink | | |
| ||
| 12/31/2011 | 12/31/2011 | Eliminations | Consolidated |
| ||
ASSETS | | | | |
| ||
Current Assets: | | | |
| |||
Cash | $379,884 | $3,570 | | $383,454 |
| ||
Accounts receivable | 177,504 | - | | 177,504 |
| ||
Other receivable | 508,872 | | (508,872) | - |
| ||
Investment in subsidiary | 576,629 | (576,629) | - |
| |||
Other current assets | 2,022 | 209 | | 2,231 |
| ||
Total current assets | 1,068,282 | 580,408 | (1,085,501) | 563,189 |
| ||
| | | | |
| ||
Fixed assets, net of accumulated depreciation | 5,087 | 1,090 | | 6,177 |
| ||
| | | | |
| ||
Other Assets: | | | |
| |||
Goodwill | 274,449 | | 274,449 |
| |||
Note Receivable | - | - | - | - | |||
| | | | |
| ||
TOTAL ASSETS | $1,073,369 | $855,947 | ($1,085,501) | $843,815 |
| ||
| | | | |
| ||
LIABILITIES AND SHAREHOLDERS EQUITY | |
| |||||
Current Liabilities | | | |
| |||
Accounts payable | $486,199 | $ - | $ - | $486,199 |
| ||
Notes payable | - | 508,872 | (508,872) | - |
| ||
Other current liabilities | 10,541 | 43,523 | | 54,064 |
| ||
Total current liabilities | 496,740 | 552,395 | (508,872) | 540,263 |
| ||
| | | | |
| ||
Shareholders Equity | | | |
| |||
Common stock | 19,648 | 4,957 | (19,648) | 4,957 |
| ||
Paid in surplus | 403,243 | | 403,243 |
| |||
Translation adjustment | 45,217 | 45,217 | (45,217) | 45,217 |
| ||
Retained earnings/(deficit) | 511,764 | (149,865) | (511,764) | (149,865) |
| ||
Total shareholders equity | 576,629 | 303,552 | (576,629) | 303,552 |
| ||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY | $1,073,369 | $855,947 | ($1,085,501) | $843,815 |
|
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| For the year ended December 31, 2011 | |||
| One World | Global | Eliminations | Consolidated |
Revenue: | $350,142 | $3,249 | ($3,249) | $350,142 |
| | | | |
Expenses: | | | | |
Wages and salaries | 254,774 | - | - | 254,744 |
Subsidiary expenses | - | - | - | - |
Other administrative expenses | 116,715 | 15,030 | - | 131,745 |
| | | | |
Total expenses | 371,489 | 15,030 | - | 386,519 |
| | | | |
Income/(loss) from operations | (21,347) | (11,781) | (3,249) | (36,377) |
| | | | |
Other income/(expenses) | 28,244 | (9,083) | - | 19,161 |
| | | | |
Income before income taxes | 6,897 | (20,864) | (3,249) | (17,216) |
Income taxes | (3,648) | - | - | (3,648) |
| | | | |
Net income/(loss) | $3,249 | $(20,864) | $(3,249) | $(20,864) |
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.
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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 | $375,351 |
Following is the proforma balance sheet and income statement as of the acquisition date, October 31, 2008:
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| 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 |
| | | | |
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 |
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| 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 |
| | | | |
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
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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.
During 2012, the Company raised $10,000 for operating needs. The Company was to issue shares of stock in exchange for these funds. The Company is presently working on either paying this loan back or issuing share of stock. At December 31, 2012, the Company recorded a stock subscription for these funds.
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, 2012 and the three months ended March 31, 2012:
| 12/31/2012 | | 12/31/2011 |
Gross Revenue | $3,211,108 | | $3,226,762 |
Cost of Revenue | 2,789,318 | | 2,876,620 |
Net Revenue | $ 421,790 | | $ 350,142 |
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.
29
12. New accounting pronouncements:
In December 2010, the FASB issued updated guidance on when and how to perform certain steps of the periodic goodwill impairment test for public entities that may have reporting units with zero or negative carrying amounts. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010, with early adoption prohibited. The adoption of this standard update did not impact the Companys consolidated financial statements.
In May 2011, the FASB issued guidance to amend certain measurement and disclosure requirements related to fair value measurements to improve consistency with international reporting standards. This guidance is effective prospectively for public entities for interim and annual reporting periods beginning after December 15, 2011, with early adoption by public entities prohibited. The Company is currently evaluating this guidance, but does not expect its adoption will have a material effect on its consolidated financial statements.
In June 2011, the FASB issued new guidance on the presentation of comprehensive income that will require a company to present components of net income and other comprehensive income in one continuous statement or in two separate, but consecutive statements. There are no changes to the components that are recognized in net income or other comprehensive income under current GAAP. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, with early adoption permitted. The Company is currently evaluating this guidance, but does not expect its adoption will have a material effect on its consolidated financial statements.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Controls and Procedures. Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to insure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the Securities and Exchange Commissions rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, or the persons performing similar functions, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Based on that evaluation, our CEO and CFO, or the persons performing similar functions, concluded that our disclosure controls and procedures were not effective as of December 31, 2012.
Managements Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of our CEO and CFO, or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management has evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control over Financial Reporting Guidance for Smaller Public Companies.
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Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2012, and concluded that it is not effective due to the reasons discussed above.
This annual report does not include an attestation report of the registrants registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the registrants registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the registrant to provide only managements report in this annual report.
Evaluation of Changes in Internal Control over Financial Reporting:
Under the supervision and with the participation of our CEO and CFO, or those persons performing similar functions, our management has evaluated changes in our internal controls over financial reporting that occurred during the fourth quarter of 2012. Based on that evaluation, our CEO and CFO, or those persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our bylaws provide that the number of directors who shall constitute the whole board shall be such number as the board of directors shall at the time have designated. We confirm that the number of authorized directors has been set at three (3) pursuant to our bylaws. Each director shall be selected for a term of one year and until his successor is elected and qualified. Vacancies are filled by a majority vote of the remaining directors then in office with the successor elected for the unexpired term and until the successor is elected and qualified.
The directors and executive officers are as follows:
NAME AGE POSITIONS HELD SINCE
Robin Young 69 President/Director Inception to
Present
Ben Choi 57 Treasurer/Director Inception to
Present
Daniel Lo 46 Secretary/Director Inception to
Present
Business Experience of Officers and Directors
Robin Young, President and Director, has been the principal of Young Engineering Corporation, an engineering consultant firm for the building industry since 1975. He has also been the president of Landtek Properties Ltd., a development company since 1994 and Coreng Construction Corporation, a company providing project and construction management as well as general contracting from 1976 to 1990. Mr. Young was listed in the Whos Who in British Columbia and International Whos Who of Professionals. Mr. Young received a bachelor of applied science degree in civil engineering from the University of British Columbia in 1963. He conducted his post-graduate studies both at McGill University and at Concordia University and received his masters degree in civil and structural engineering in 1970 from Concordia University.
33
Ben Choi, Treasurer and Director, is a software development consultant. From 2001 to present, Mr. Choi has been project manager of NewViews Health Care Consultants Ltd, a company which develops health care software programs. He has also been the project leader of developing Pharmacy Claims Adjudicate Software, a Health Canada, Non-Insurance Health Benefit Pilot project & Medical Transportation Software for Alberta Regional Health Department. Mr. Choi has extensive consulting experiences in the technology fields including network services, hardware and software sales and implementation. Mr. Choi received a Bachelor of Science degree from the University of Winnipeg in 1976. In 1988, he took courses in computer programming and data processing at the University of Alberta.
Daniel Lo, Secretary and Director, has been the president of LCF Advanced Technology Ltd which is a leading computer hardware solution company in Western Canada since 1996. LCF is an Intel Premier Partner and Microsoft Certified partner. In 1998, Mr. Lo led LCF to become an ISO 2002 company and upgraded the company into the new ISO 2001:2000 standard in 2003. The ISO 2001:2000 standard is an international quality management system which ensures consistency and improvement of working practices, including the products and services product. In 1986, Mr. Lo received his business administration degree in finance from Simon Fraser University, BC.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, as amended, an officer, director, or greater-than-10% shareholder of the registrant must file a Form 4 reporting the acquisition or disposition of registrant's equity securities with the Securities and Exchange Commission no later than the end of the second business day after the day the transaction occurred unless certain exceptions apply. Transactions not reported on Form 4 must be reported on Form 5 within 45 days after the end of the registrant's fiscal year. Such persons must also file initial reports of ownership on Form 3 upon becoming an officer, director, or greater-than-10% shareholder. To our knowledge, based solely on a review of the copies of these reports furnished to it, the officers, directors, and greater than 10% beneficial owners have not complied with all applicable Section 16(a) filing requirements during 2012.
Code of Ethics Policy
The registrant has prepared but has not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
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Corporate Governance
There have been no changes in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert. Based on the fact that our current business affairs are simple, any such committees are excessive and beyond the scope of our business and needs.
ITEM 11. EXECUTIVE COMPENSATION
Since inception in February 2006, we have issued 375,000 shares of the company securities to each of the president, secretary and treasurer as compensation for their services performed to and on behalf of the Company. No executive compensation in cash has been made. We may elect to award a cash bonus to key employees, directors, officers and consultants based on meeting individual and corporate planned objectives. We have not entered into any employment agreements with our officers, however, we estimate that the executive officers will be paid an annual salary of $84,000 each.
Directors Compensation. We do not have any standard arrangements by which directors are compensated for any services provided as a director. No cash has been paid to the directors in their capacity as such.
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.
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.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
The following table sets forth, as of December 31, 2012, the number and percentage of outstanding shares of the registrants common stock owned by (i) each person known to us to beneficially own more than 5% of its outstanding common stock, (ii) each director, (iii) each named executive officer, and (iv) all officers and directors as a group.
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Name of Beneficial Owners
Common Stock
Beneficially Owned
Percentage(1)
Robin Young
3,750,000 15.13%
426 Main Street
Suite #202
Vancouver, B.C. V6A 2T4
Ben Choi
3,750,000 15.13%
426 Main Street
Suite #202
Vancouver, B.C. V6A 2T4
Daniel Lo
3,750,000 15.13%
333 - 13988 Cambie Road
Richmond, B.C. Canada V6V 2K4
Directors and Officers,
as a group(3 persons)
11,250,000 45,39%
Barry Phillips
3,750,000 15.13%
7903 - 93a Ave.
Edmonton, Alberta T6C 1V2
Petula Wong
3,750,000 15.13%
Rm C 12/F 55 Tong Mi Road
Kowloon, Hong Kong
Vincent Au
2,000,000 8.07%
426 Main Street
Suite #202
Vancouver, B.C. V6A 2T4
(1) Based upon 24,785,000 issued and outstanding as of April 16, 2013.
All the above-named officers and directors would be deemed to be promoters of Globalink.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Shareholder Advances. 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, 2011 is $43,523 and $50,126 for December 31, 2012.
Director Independence.
The registrants board of directors consists of Robin Young, Ben Choi and Daniel Lo. None of them is independent as such term is defined by a national securities exchange or an inter-dealer quotation system. During the fiscal year ended December 31, 2012, there were no transactions with related persons other than as described in the section above entitled Item 11. Executive Compensation.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees. We incurred aggregate fees and expenses of $15,000 and $15,000 from Thomas J. Harris, CPA, respectfully for the 2012 and 2011 fiscal years. Such fees included work completed for our annual audit and for the review of our financial statements included in our Forms 10-K and 10-Q.
Tax Fees. We did not incur any aggregate tax fees and expenses from Thomas J. Harris, CPA for the 2012 and 2011 fiscal years for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees. We incurred audit related fees of $0 and $0 from Thomas J. Harris, CPA during fiscal 2012 and 2011. The Board of Directors, acting as the Audit Committee considered whether, and determined that, the auditor's provision of non-audit services was compatible with maintaining the auditor's independence. All of the services described above for fiscal years 2012 and 2011 were approved by the Board of Directors pursuant to its policies and procedures. We intend to continue using Thomas J. Harris, CPA solely for audit and audit-related services, tax consultation and tax compliance services, and, as needed, for due diligence in acquisitions.
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a)(1) List of Financial statements included in Part II hereofReport of Independent Registered Public Accounting Firm
Balance Sheet:
December 31, 2012 and 2011
Statements of Operations:
For the year ended December 31, 2012 and 2011
Statements of Cash Flows:
For the year ended December 31, 2012 and 2011
Notes to Financial Statements:
December 31, 2012
(a)(2) List of Financial Statement schedules included in Part IV hereof: None (a)(3) Exhibits The following exhibits are included herewith:
Exhibit No. | Description |
31 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS* | XBRL Instance Document |
101.SCH* | XBRL Taxonomy Extension Schema Document |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
Following are a list of exhibits which we previously filed in other reports which we filed with the SEC, including the Exhibit No., description of the exhibit and the identity of the Report where the exhibit was filed.
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NO. | DESCRIPTION | FILED WITH | DATE FILED |
|
|
|
|
3.1 | Articles of Incorporation | Form SB-2 | May 10, 2006 |
3.2 | Bylaws | Form SB-2 | May 10, 2006 |
4 | Specimen Stock Certificate | Form SB-2 | May 10, 2006 |
10 | Share Exchange Agreement | Form 8-K | March 6, 2009 |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned duly authorized person.
Dated: April 16, 2013
/s/Robin Young
By: Robin Young, President/CEO
In accordance with the requirements of the Securities Exchange Act of 1934, as amendment, this report has been signed by the following persons in the capacities and on the dates stated.
Globalink, Inc.
(Registrant)
By: /s/Robin Young Dated: April 16, 2013
Robin Young
Chief Financial Officer, Controller and Director
Director, Chief Executive Officer
(As a duly authorized officer on behalf of the registrant and as Principal Executive Officer)
By: /s/Ben Choi Dated: April 16, 2013
Ben Choi
Chief Financial Officer, Controller and Director
By: /s/Daniel Lo Dated: April 16, 2013
Daniel Lo
Director
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