[GLOBAL TECHNOLOGIES, LTD. LOGO]
SECOND SUPPLEMENT DATED JUNE 1, 2001 TO
PROSPECTUS DATED OCTOBER 24, 2000
----------
Please read this Second Supplement in conjunction with the Prospectus dated
October 24, 2000, which was filed as part of our Registration Statement On Form
S-3 (Registration No. 333-47740) filed with the Securities and Exchange
Commission on October 11, 2000 and declared effective on October 24, 2000 (the
"Original Prospectus"), as supplemented by the First Supplement to the Original
Prospectus dated April 27, 2001 (the "First Supplement").
A copy of the Original Prospectus and the First Supplement are attached to this
Second Supplement.
----------
This Second Supplement (the "Second Supplement") modifies, supplements and
amends the Original Prospectus and the First Supplement with respect to the
offer and sale of shares of our Class A Common stock by the selling stockholders
named in the Original Prospectus.
ADVANTAGE AND KOCH HAVE CONVERTED OR SOLD ALL OF
THEIR SHARES OF OUR SERIES D PREFERRED STOCK
In May 2001, we were informed by Advantage Fund II Ltd and Koch Investment
Group, Ltd. that they had converted and/or sold all of their shares of our
Series D convertible preferred stock. In addition, Advantage and Koch have
informed us that they have sold shares of our Class A common stock issued to
them upon conversion of their shares of our Series C preferred stock and Series
D preferred stock. Koch is a selling stockholder named in the Original
Prospectus. Koch has informed us that it has sold all of its shares of Class A
common stock previously registered for resale under Registration Statement No.
333-47740. We are supplementing the Selling Stockholder information contained in
the Original Prospectus to reflect prior resales, conversions and sales of
Series D preferred stock and resales of Class A common stock by Koch.
The following table sets forth for Koch, a selling stockholder, (a) the
name of the selling stockholder, (b) the number of shares of our Class A common
stock owned by the selling stockholder before the offering (in some cases, as
noted in the footnotes to the table, some or all shares underlie or otherwise
relate to the Series D preferred stock and warrants held by the selling
stockholder), reflecting transfers through the date of this Second Supplement,
(c) the number of shares of our Class A common stock offered by the selling
stockholder under this prospectus, (d) the number of shares of our Class A
common stock that will be owned by the selling stockholder assuming that all
shares of our Class A common stock registered hereby or otherwise registered on
that stockholder's behalf are sold, and (e) the percentage of our outstanding
shares of Class A common stock that those remaining shares will represent. Each
selling stockholder is a party to, or otherwise has rights under, an agreement
by which we agreed to register its shares of our Class A common stock.
Registration of these shares enabled the selling stockholder to sell the shares
from time to time in any manner described in "Plan of Distribution" in the
Original Prospectus.
PERCENTAGE OF
NUMBER OF OUTSTANDING CLASS
SHARES NUMBER OF SHARES A COMMON STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED BEFORE NUMBER OF SHARES TO OWNED AFTER OWNED AFTER
NAME OF SELLING STOCKHOLDER OFFERING BE SOLD IN OFFERING OFFERING OFFERING
--------------------------- -------- ------------------- -------- --------
Koch Investment Group Ltd. 102,870 (1) 0(2) -- --
----------
(1) Consists of (a) 40,370 shares issuable upon the exercise of our warrants
related to the issuance of our Series C preferred stock, which shares were
previously registered for resale under Registration Statement No.
333-32772; and (b) 62,500 shares issuable upon the exercise of warrants
issued upon the redemption of certain of our secured convertible notes,
which shares were previously registered for resale under Registration
Statement No. 333-41096.
(2) Koch has sold all of its shares of Class A common stock previously
registered for resale under Registration Statement No. 333-47740.
WE HAVE RECEIVED NOTICE OF DELISTING FROM NASDAQ REGARDING OUR
FAILURE TO MEET MAINTENANCE STANDARDS.
We have received a Nasdaq Staff Determination on May 23, 2001 indicating
that we fail to comply with the net tangible assets requirement for continued
listing set forth in Marketplace Rule 4450(a)(3), and that our shares of Class A
common stock are, therefore, subject to delisting from the Nasdaq National
Market. The letter noted that we also do not meet alternative maintenance
requirements under Nasdaq National Market Maintenance Standard 2. We have
requested a hearing before a Nasdaq Listing Qualifications Panel to review the
staff determination. By letter dated May 30, 2001, Nasdaq informed us that our
hearing is scheduled for June 28, 2001. This letter indicates that at this
hearing we will be required to address our plan to regain compliance with
certain quantitative maintenance criteria of the Nasdaq National Market and to
demonstrate our ability to sustain long term compliance with all applicable
maintenance criteria. Delisting of our securities is stayed pending issuance of
a written determination by the panel. There can be no assurance the panel will
grant our request for continued listing.
2
We also received a letter dated May 2, 2001 from Nasdaq stating that our
Class A common stock had failed to maintain a minimum market value of public
float of $5 million over the preceding 30 consecutive trading days and as a
result was not in compliance with the Nasdaq National Market maintenance
standards. The letter states that if at any time before July 31, 2001, the
minimum market value of public float of our Class A common stock is at least $5
million for a minimum of 10 consecutive trading days, Nasdaq staff will
determine if we comply with the maintenance standard. If we are unable to
demonstrate compliance with this maintenance standard on or before July 31,
2001, our Class A common stock will be delisted, subject to our right to appeal
to a Nasdaq Listing Qualifications Panel. The letter notes that we may be
delisted before July 31, 2001 for failure to maintain compliance with any other
listing requirement for which we are currently on notice or which occurs in that
period.
Our Class A common stock is listed for trading on the Nasdaq National
Market under the symbol "GTLL". A listed company may be delisted if it fails to
maintain minimum levels of stockholders' equity, shares publicly held, bid
price, number of stockholders or aggregate market value, or if it violates other
aspects of its listing agreement. We currently do not satisfy certain continued
listing standards. We are seeking additional capital and attempting to effect
other equity transactions to, among other things, increase our net tangible
assets. There can be no assurance that we will be able to raise this additional
capital, or if we are able to raise additional capital it will be on terms
satisfactory to us, or to effect other equity transactions currently under
consideration. There can be no assurance that any steps we take will enable us
to meet the criteria for continued listing relating to minimum market value of
public float or minimum bid price, which criteria relate to market factors
beyond our control. If we fail to satisfy the criteria for continued listing,
our Class A common stock will be delisted.
If our Class A common stock is delisted and we do not then qualify for a
listing on a stock exchange or for quotation on the Nasdaq SmallCap Market,
public trading, if any, would thereafter be conducted in the over-the-counter
market in the so-called "pink sheets," or on the NASD's "Electronic Bulletin
Board." In this event, it may be more difficult to dispose of, or even to obtain
quotations as to the price of, our Class A common stock and the price, if any,
offered for our Class A common stock may be substantially reduced.
If our common stock is delisted from trading on the Nasdaq National Market
and we do not then qualify for a listing on a qualified stock exchange or for
quotation in the Nasdaq SmallCap Market, and the market price of our common
stock is less than $5.00 per share, subject to certain exceptions, trading in
our common stock would be subject to the requirements of Rule 15g-9 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Under this rule, broker/dealers who recommend such securities to persons other
than established customers and accredited investors (generally institutions or
high-net worth individuals) must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement to
a transaction prior to sale. The requirements of Rule 15g-9, if applicable, may
affect the ability of broker/dealers to sell our securities and may also affect
the ability of purchasers in this offering to sell their shares in the secondary
market.
3
The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 (the
"Penny Stock Rule") also requires additional disclosure in connection with any
trades involving a stock defined as penny stock (any non-Nasdaq equity security
that has a market price or exercise price of less than $5.00 per share, subject
to certain exceptions). Unless exempt, the rules require the delivery, prior to
any transaction involving a penny stock, of a disclosure schedule prepared by
the SEC explaining important concepts involving the penny stock market, the
nature of such market, terms used in such market, the broker/dealer's duties to
the customer, a toll-free telephone number for inquiries about the
broker/dealer's disciplinary history and the customer's rights and remedies in
case of fraud or abuse in the sale. Disclosure must also be made about
commissions payable to both the broker/dealer and the registered representative,
and current quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.
THE NETWORK CONNECTION HAS RECEIVED NOTICE OF DELISTING FROM NASDAQ REGARDING
ITS FAILURE TO MEET MAINTENANCE STANDARDS WHICH SUBSTANTIALLY REDUCES
THE MARKETABILITY OF OUR HOLDINGS IN THE NETWORK CONNECTION.
The Network Connection has received a Nasdaq Staff Determination on May 25,
2001 indicating that, due to (a) the staff's concerns regarding the residual
equity interest of the existing listed securities holders, (b) The Network
Connection's March 24, 2001 filing under Chapter 11 of the U.S. Bankruptcy Code
as set forth in Marketplace Rules 4330(a)(1) and (3), (c) The Network
Connection's having not yet prepared a plan of reorganization (The Network
Connection is not obligated to file a plan of reorganization until July 22,
2001, subject to extension) and being unable to determine the effect on its
current shareholders and (d) The Network Connection's failure to demonstrate its
ability to sustain compliance with all requirements for continued listing on the
Nasdaq Stock Market, its shares of common stock are, therefore, subject to
delisting from the Nasdaq SmallCap Market at the opening of business on June 4,
2001. In addition, the staff noted that because The Network Connection had not
filed its Form 10-QSB for the period ended March 31,2001, the staff's
determination to delist was also based on this filing delinquency and its
trading symbol was changed from "TNCXQ" to `TNCQE". The Network Connection has
not filed its quarterly report on Form 10-QSB for the period ended March 31,
2001 because by letter dated May 4, 2001 it requested that the SEC permit it to
modify its reporting obligations under Section 13(a) of the Exchange Act until
completion of the Chapter 11 bankruptcy proceeding by filing its monthly
bankruptcy reports under cover of Current Reports on Form 8-K in lieu of
quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. The Network
Connection has begun filing in this modified fashion, although it has not yet
received a response from the SEC. The Network Connection does not intend to
appeal the staff's determination. When The Network Connection common stock is
delisted, public trading, if any, would thereafter be conducted in the
over-the-counter market in the so-called "pink sheets," or on the NASD's
"Electronic Bulletin Board." Public trading of The Network Connection's common
stock is currently halted on Nasdaq and trading is unlikely to resume prior to
delisting. As a result, it currently is, and when delisted would continue to be,
difficult to dispose of, or even to obtain quotations as to the price of, The
Network Connection common stock and the price, if any, offered for its common
stock may be substantially reduced.
4
If the Network Connection's common stock is delisted from trading on the
Nasdaq SmallCap Market, and the market price of its common stock is less than
$5.00 per share, subject to certain exceptions, trading in its common stock
would be subject to the requirements of Rule 15g-9 promulgated under the
Exchange Act. Under this rule, broker/dealers who recommend such securities to
persons other than established customers and accredited investors (generally
institutions or high-net worth individuals) must make a special written
suitability determination for the purchaser and receive the purchaser's written
agreement to a transaction prior to sale. The requirements of Rule 15g-9, if
applicable, may affect the ability of broker/dealers to sell its securities.
The Penny Stock Rule also requires additional disclosure in connection with
any trades involving a stock defined as penny stock (any non-Nasdaq equity
security that has a market price or exercise price of less than $5.00 per share,
subject to certain exceptions). Unless exempt, the rules require the delivery,
prior to any transaction involving a penny stock, of a disclosure schedule
prepared by the SEC explaining important concepts involving the penny stock
market, the nature of such market, terms used in such market, the
broker/dealer's duties to the customer, a toll-free telephone number for
inquiries about the broker/dealer's disciplinary history and the customer's
rights and remedies in case of fraud or abuse in the sale. Disclosure must also
be made about commissions payable to both the broker/dealer and the registered
representative, and current quotations for the securities. Finally, monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
----------
THIS SECOND SUPPLEMENT DOES NOT CONSTITUTE A COMPLETE PROSPECTUS AND SHALL NOT
BE CONSIDERED AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES
OF OUR CLASS A COMMON STOCK TO WHICH IT RELATES. REFERENCE IS MADE TO THE
ORIGINAL PROSPECTUS, AS SUPPLEMENTED BY THE FIRST SUPPLEMENT AND THIS SECOND
SUPPLEMENT, FOR INFORMATION WITH RESPECT TO GLOBAL AND THE SHARES OF CLASS A
COMMON STOCK OFFERED THEREBY.
5