SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) February 12, 2002
Global Technologies, Ltd.
(Exact Name of Registrant as specified in its charter)
Delaware 0-25668 86-0970492
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
The Belgravia, 1811 Chestnut Street, Suite 120, Philadelphia, PA 19103
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (215) 972-8191
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(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN THIS REPORT
ITEMS 2 AND 5. ACQUISITION OR DISPOSITION OF ASSETS AND OTHER EVENTS
FEBRUARY 12, 2002 TRANSACTIONS
Prior to February 12, 2002, Global Technologies, Ltd., a Delaware
corporation ("Global"), owned approximately 60% of the outstanding equity of
TNCI UK Limited, a company incorporated under the laws of England and Wales
("TNCI UK"). As of February 12, 2002, TNCI UK's working capital was depleted.
Global did not then, and does not now, have capital available to satisfy TNCI
UK's financing needs.
Global and Ocean Castle Partners LLC, a Delaware limited liability company
controlled by Irwin L. Gross, Chairman and Chief Executive Officer of Global
("Ocean Castle"), secured financing for TNCI UK that it is anticipated will
allow it to remain viable for up to another 12 months. The investor conditioned
the investment on the following: (1) that it have the ability to designate a
majority of the Board of Directors of TNCI UK; (2) that Global convert all but
$45,000 of debt owed by TNCI UK to Global into equity (with such conversion
resulting in Global acquiring 4,000,000 ordinary shares (the "Conversion
Shares") of 1p each in the capital of TNCI UK ("Ordinary Shares")), and (3) that
Global waive any rights that it had with respect to its preference shares of
TNCI UK (the "Preference Shares") that are in addition to rights Global would
have had as an ordinary shareholder until it can convert its Preference Shares
into Ordinary Shares, and that Global will so convert its Preference Shares as
soon as it is possible for it to do so. Additional terms of the financing
transaction included that, in consideration of its services in securing the
financing discussed above, (x) Global receive warrants exercisable for 2,069,850
Ordinary Shares (representing 5% of TNCI UK's outstanding share capital as of
the time of investment (the "Warrants")) and a grant of the exclusive
distributorship with respect to any of TNCI UK's products or technologies for
the rail industry for the United States of America, which by its terms shall
terminate in the event that Global goes into bankruptcy; and (y) TNCI UK shall
enter into a two-year consulting and management agreement with Ocean Castle,
which such agreement shall provide for, among other things, payment of $33,000
per month (the "Consulting Agreement").
Recognizing that without this investment Global's investment in TNCI UK
would be forced into liquidation, Global agreed to such conversion and waiver.
The $45,000 debt is represented by a new note. The terms of the investment
described above are set out in the Subscription Agreement, which was executed
and delivered as of February 12, 2002 by the investor. After the investment,
Global maintains an approximately 24% ownership interest in TNCI UK.
Ocean Castle has assigned in part its right to receive payments under the
Consulting Agreement to Global. This partial assignment of rights terminates
automatically in the event of bankruptcy of Global, discontinuance of Global's
business or such time as Mr. Gross ceases to be employed by Global. Global has
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assigned the Warrants that it received to three of its remaining employees as
partial payment of their salaries.
In October 2001, Global entered into a line of credit note with Mr. Gross
and his spouse for an aggregate principal amount of $500,000 (the "Gross Note")
and with the Gross Investment Company LP, a limited partnership controlled by
Mr. Gross ("GIC"), for an aggregate principal amount of $167,000 (the "GIC
Note"). Each of these notes is a demand note. There is currently an outstanding
balance of $13,000 on the Gross Note and of $60,000 on the GIC Note. Each of the
Gross Note and the GIC Note is secured by a pledge of and security interest in
the Preference Shares and any proceeds thereof. Each of the Grosses and GIC has
agreed to forebear until the earlier to occur of 12 months from the date hereof
or an event of bankruptcy for Global from demanding repayment of any balance due
under the Gross Note and the GIC Note in return for a pledge of and security
interest in the Conversion Shares.
GOING FORWARD
Since April 2001, other than proceeds from the sale of certain of Global's
lottery equipment in November 2001, Global's cash requirements, including those
of TNCI UK, have been met through advances from Mr. Gross and various entities
established by him. While it is expected that the proceeds of the February 12,
2002 transaction will keep TNCI UK viable for up to another 12 months, it is
imperative that both Global and TNCI UK keep overhead to a minimum in order to
stretch the funding as far as possible.
In an effort to remain viable long enough to bring Global's investment in
TNCI UK to fruition, Global began reducing its overhead in December 2000. These
reductions have included workforce reductions, termination of a lease for
certain New York office space, and subletting portions of the space leased by
Global in Philadelphia. In addition, the majority of Global's remaining
employees have agreed to defer payment of portions of their salaries until
Global is in a position to repay such amounts. Currently, Global has four
full-time employees, who, on average, have been receiving approximately 50% of
their salaries since December 2000. TNCI UK has four full-time employees.
In order to further reduce overhead, Global has determined to de-register
its securities, and therefore discontinue its public reporting. In addition,
Global will reduce the number of its directors to one. It has been determined
that the cost of auditors, attorneys and financial printers, among others,
necessary in connection with continuing to report publicly will be too
burdensome to Global's already tenuous financial condition. Accordingly,
simultaneously with the filing of this Current Report on Form 8-K, Global has
filed a Certification and Notice of Termination of Registration Under Section
12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File
Reports Under Sections 13 and 15(d) Of the Securities Exchange Act of 1934 on
Form 15.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
EXHIBITS
10.1 Master Agreement by and among TNCI UK Limited, Global Technologies, Ltd.,
Ocean Castle Partners LLC, the Gross Investment Company LP, and Irwin L.
and Linda Gross, dated as of February 12, 2002.
10.2 $45,000 Note from TNCI UK Limited to Global Technologies, Ltd., dated as
of February 12, 2002.
10.3 Subscription Agreement for Ordinary Shares of TNCI UK Limited, dated as
of February 12, 2002.
10.4 Warrant to Global to purchase Ordinary Shares of TNCI UK Limited, dated
as of February 12, 2002.
10.5 Consulting and Management Agreement by and between Ocean Castle Partners
LLC and TNCI UK Limited, dated as of February 12, 2002.
10.6 Assignment in part of Consulting and Management Agreement from Ocean
Castle Partners LLC to Global Technologies, Ltd., dated as of February
12, 2002.
10.7 Letter from Global Technologies, Ltd. to TNCI UK Limited re: waiver of
rights and conversion in connection with Preference Shares, dated
February 8, 2002.
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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 hereunto duly authorized.
GLOBAL TECHNOLOGIES, LTD.
Dated: February 12, 2002 By: /s/ IRWIN L. GROSS
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Name: Irwin L. Gross
Title: Chairman and
Chief Executive Officer
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INDEX TO EXHIBITS
No. Description
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10.1 Master Agreement by and among TNCI UK Limited, Global Technologies, Ltd.,
Ocean Castle Partners LLC, the Gross Investment Company LP, and Irwin L.
and Linda Gross, dated as of February 12, 2002.
10.2 $45,000 Note from TNCI UK Limited to Global Technologies, Ltd., dated as
of February 12, 2002.
10.3 Subscription Agreement for Ordinary Shares of TNCI UK Limited, dated as
of February 12, 2002.
10.4 Warrant to Global to purchase Ordinary Shares of TNCI UK Limited, dated
as of February 12, 2002.
10.5 Consulting and Management Agreement by and between Ocean Castle Partners
LLC and TNCI UK Limited, dated as of February 12, 2002.
10.6 Assignment in part of Consulting and Management Agreement from Ocean
Castle Partners LLC to Global Technologies, Ltd., dated as of February
12, 2002.
10.7 Letter from Global Technologies, Ltd. to TNCI UK Limited re: waiver of
rights and conversion in connection with Preference Shares, dated
February 8, 2002.
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* Filed herewith.