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EX-31 - EXHIBIT 31 - GLOBALINK, LTD.globalink10q2q15ex31.htm
EX-32 - EXHIBIT 32 - GLOBALINK, LTD.globalink10q2q15ex32.htm

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 June 30, 2015


-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 of incorporation or organization)

 

(I.R.S. Employer Identification Number)


385 Boundary Road

Vancouver, BC

 

V5K 4S1

(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):



1





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,

August 14, 2015:

Common Stock  -  42,485,000


As used herein, the terms “Company,” “we,” “our,” “us,” “it,” and “its” refer to Globalink, Ltd., a Nevada corporation and its wholly owned subsidiaries, unless otherwise indicated.  


In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Company’s financial position as of June 30, 2015 and the results of its operations for the three and six month periods ended June 30, 2015 and 2014 and its cash flows for the six month periods ended June 30, 2015 and 2014.

 

The quarterly financial statements are presented in accordance with the requirements of Form 10-Q and do not include all of the disclosures required by accounting principles generally accepted in the United States of America.  For additional information, reference is made to the Company’s audited financial statements filed with Form 10-K for the years ended December 31, 2014.  The results of operations for the three and six month periods ended June 30, 2015 and 2014 are not necessarily indicative of operating results for the full year.




2




GLOBALINK, INC.

FORM 10-Q

For the quarterly period ended June 30, 2015

INDEX


PART 1 – FINANCIAL INFORMATION

 

 

Page

Item 1.  Financial Statements (Unaudited)

 

4

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

 

17

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

 

22

Item 4.  Controls and Procedures

 

22


PART II – OTHER INFORMATION



Item 1.  Legal Proceedings

 

24

Item 1A.  Risk Factors

 

24

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

 

24

Item 3.  Defaults upon Senior Securities

 

24

Item 4.  Mine Safety Disclosure

 

24

Item 5.  Other Information

 

24

Item 6.  Exhibits

 

24

 

 

 

SIGNATURES

 

25




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Table of Contents

GLOBALINK, LTD.

Condensed Consolidated Balance Sheets

 (Expressed in U.S. Dollars)

(Unaudited)

 

June 30,

2015


December 31,

2014

 

 $

 $

 

 

 

Assets

 

 

Current assets

 

 

Cash

1,304,572

1,236,137

Accounts receivable (note 4)

259,948

120,299

Other current assets (note 3)

24,062

28,821

Total current assets

1,588,582

1,385,257

 



Fixed assets

3,531

3,531

Goodwill

274,449

274,449

Total assets

1,866,562

1,663,237

Liabilities



Current liabilities



Accounts payable and accrued liabilities (notes 5 and 7)

703,021

483,706

Other current liabilities (note 6)

19,132

8,088

Total current liabilities

722,153

491,794

 



Shareholders’ equity



Common shares, $0.0002 par value;

Authorized - 500,000,000 common shares; shares issued and outstanding – 42,485,000 (June 30, 2015 and December 31, 2014 – 42,485,000)  (note 8)

8,497

8,497

Additional paid-in-capital

1,459,703

1,459,703

Accumulated other comprehensive loss

(5,911)

(7,691)

Deficit

(317,880)

(289,066)

Total shareholders’ equity

1,144,409

1,171,443

Total liabilities and shareholders’ equity

1,866,562

1,663,237


The notes are an integral part of these condensed consolidated interim financial statements.




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Table of Contents

GLOBALINK, LTD.

Condensed Consolidated Statements of Comprehensive Loss

(Expressed in U.S. Dollars)

(Unaudited)


 

 Three months ended June 30,

 2015

 Three months ended June 30,

 2014

 Six months ended June 30,

 2015

 Six months ended June 30,

 2014


 $

 $

 $

 $






Revenue (note 9)

84,823

107,627

156,744

172,538

General and administrative expenses

 

 

 

 

Accounting and legal

2,034

29,348

2,608

32,118

Director and management fees (note 7)

15,000

-

30,000

-

Foreign exchange (gain) loss

(8,982)

4,755

(9,576)

6,511

Rent

5,929

4,694

11,138

8,591

Salaries and benefits

58,240

67,460

110,582

115,617

Telephone

1,545

1,734

3,415

3,185

Transfer agent and filing fees

965

3,467

16,850

18,448

Travel

836

1,103

7,976

2,215

Other general and administrative expenses

10,237

6,922

12,565

15,084

Total general and administrative expenses

(85,804)

(119,483)

(185,558)

(201,769)

 

 

 

 

 

Net loss for the period

(981)

(11,856)

(28,814)

(29,231)

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

Exchange difference on translating foreign operations

84

294

1,780

496

   Comprehensive loss

(897)

(11,562)

(27,034)

(28,735)

Basic and diluted weighted average number of common shares outstanding  

42,485,000

26,661,923

42,485,000

25,728,646

Basic and diluted loss per common share

(0.00)

(0.00)

(0.00)

(0.00)

 

Common shares



Additional

paid-in-capital

 Accumulated other comprehensive income (loss)

 Deficit

Total

 

 #

 $

 $

 $

 $

 $

January 1, 2014

 24,785,000

 4,957

 403,243

 (9,303)

(174,824)

224,073

Private placements

 17,700,000

 3,540

 1,056,460

 -

-

1,060,000

Net loss for the year

 -

 -

 -

 -

(114,242)

(114,242)

Foreign currency translation difference

 -

 -

 

 -

 1,612

-

1,612

December 31, 2014

 42,485,000

 8,497

1,459,703

 (7,691)

(289,066)

1,171,443

Net loss for the period

 -

 -

 -

 -

(28,814)

(28,814)

Foreign currency translation difference

 -

 -

 

 -

 1,780

-

1,780

June 30, 2015

 42,485,000

 8,497

1,459,703

 (5,911)

(317,880)

1,144,409

 

2015

2014

 

$

$

 



Cash provided by (used in):



Operating activities



Net loss for the period

(28,814)

(29,231)

Changes in non-cash working capital:



Increase in accounts receivable

(146,927)

(96,930)

Decrease (increase) in other current assets

4,003

(6,546)

Increase in accounts payable and accrued liabilities

238,544

132,822

Increase in other current liabilities

11,535

25,970

Total cash provided by operating activities

78,341

26,086

Investing activities



Purchase of computer equipment

-

(145)

Total cash used in investing activities

-

(145)

Financing activities



Proceeds from share issuance

-

700,000

Advances from shareholders

-

2,729

Total cash provided by financing activities

-

702,729

Increase in cash

78,341

728,670

Effect of exchange rate changes on balance of cash held in foreign currencies

(9,906)

2,873

Cash, beginning of the period

1,236,137

426,088

Cash, end of the period

1,304,572

1,157,631


Supplemental information on cash flows



Income taxes paid

-

-

Interest paid

-

-


Supplemental disclosure with respect to cash flows (note 11)


The notes are an integral part of these condensed consolidated interim financial statements.




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Table of Contents

GLOBALINK LTD.

Notes to Condensed Consolidated Financial Statements

For the nine months ended June 30, 2015

(Expressed in U.S. Dollars)

(Unaudited)


1.

NATURE OF OPERATIONS


Globalink, Ltd. (the “Company”) was incorporated in the State of Nevada on February 3, 2006. The Company has focused its efforts on internet hotel booking services and 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 hotels, the Company acquired OneWorld Hotel Destination Service Inc. (“OneWorld”) in Vancouver, British Columbia, Canada on October 31, 2008. OneWorld is a hotel booking company which has established relationships with major hotel chains. Since the acquisition, OneWorld became a wholly-owned subsidiary of the Company.


2.

SIGNIFICANT ACCOUNTING POLICIES


Statement of presentation and consolidation


These unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission, including Form 10-Q and Regulation S-K. Certain information and footnote disclosures normally present in annual financial statements have been omitted pursuant to such rules and regulations. The Company believes that the disclosures provided are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and explanatory notes for the year ended December 31, 2014 as disclosed in the Company’s  Form 10-K as filed with the Securities and Exchange Commission.


Continuance of operation


These unaudited condensed consolidated financial statements prepared in conformity with US GAAP contemplate continuation of the Company as a going concern. As of June 30, 2015, the Company has an accumulated deficit of $317,880 since inception. Its ability to continue as a going concern depends upon whether it develops profitable operations and continues to raise adequate financing.  However, management believes that the Company has sufficient working capital to meet its projected minimum financial obligations for the next fiscal year. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.



8


Table of Contents

Consolidation


The unaudited condensed consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary. All inter-company transactions and balances between the Company and its subsidiary have been eliminated upon consolidation.


The subsidiary is consolidated from the date on which control is transferred to the Company and will cease to be consolidated from the date on which control is transferred out of the Company.


Use of estimates


The preparation of consolidated financial statements in conformity with US GAAP requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities and provisions, income and expenses and the disclosure of contingent assets and liabilities at the date of these financial statements.  Estimates are used for, but not limited to, the selection of the useful lives of fixed assets, provision necessary for contingent liabilities, allowance for doubtful debt associated with accounts receivable, fair values, revenue recognition, and taxes. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results may differ from these estimates.  


Foreign currency translation


The Company’s financial information is presented in United States dollars (“US dollars”). The functional currency of the Company is the US dollar. The functional currency of the Company’s subsidiary is the Canadian dollar (“CAD”). Transactions by the Company’s subsidiary which are denominated in currencies other than CAD are remeasured into CAD at the exchange rate prevailing at the date of the transaction. Exchange gains and losses resulting from transactions denominated in a currency other than CAD are included in the consolidated statements of comprehensive loss as exchange gain or loss. The financial statements of the Subsidiary are translated into US dollars in accordance with ASC 830, “Foreign Currency Matters”. The financial information is first presented in CAD and then is translated into US dollars at year-end exchange rates as to assets and liabilities and average exchange rates as to revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.




9


Table of Contents


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 less accumulated amortization. Amortization is computed using the declining balance method, other than leasehold improvements which is computed using the straight line method over the lease term. Estimated rates of amortization are as follows:


Computer equipment

30%, declining balance

Furniture and equipment

20%, declining balance


Fair Value


The Company measures fair values in accordance with accounting guidance that defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance also discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:


-

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

-

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

-

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.


The inputs used in the fair value measurement should be from the highest level available. In instances where the measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level input that is significant to the fair value measurement in its entirety.



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Table of Contents

As at June 30, 2015, the Company’s financial instruments are comprised of cash, accounts receivable, accounts payable and accrued liabilities and other current liabilities. Cash is measured at fair value using Level 1 inputs. With the exception of cash, all financial instruments held by the Company are measured at amortized cost. The fair values of these financial instruments approximate their carrying value due to their short-term maturities.


Goodwill


The Company recognizes goodwill in accordance with ASC 805 “Business Combination”. Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed, if any. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit's goodwill is compared to the carrying amount of that goodwill. If the carrying amount of a reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is indicated. The Company concluded that there were no indicators of impairment with respect to the Company's goodwill as of June 30, 2015 and December 31, 2014.


Impairment Reviews for Long-Lived Assets


Long-lived assets such as property, equipment and goodwill are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  The Company did not recognize any impairment losses for any periods presented.


Revenue Recognition


The Company recognizes revenue once the service is rendered and all the significant risks and rewards of the service have been transferred to the customer. As a result, revenue from hotel booking services are recognized when customers check in to the hotels. Amounts received from customers for services not yet rendered are included in other current liabilities as unearned revenue.



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Table of Contents


In accordance with the ASC 605 “Revenue Recognition”, the Company reports its revenue as an agent, on the net amount retained, which is the amount billed to a customer less the amount paid to a hotel.


Income Taxes


The Company accounts for income taxes following the assets and liability method in accordance with the ASC 740 “Income Taxes.” Under such method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company applies the accounting guidance issued to address the accounting for uncertain tax positions. This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that the asset is expected to be recovered or the liability settled.


Earnings (Loss) per Common Share


Basic earnings (loss) per common share is determined by dividing earnings (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted earnings (loss) per common share is determined by dividing earnings (loss) by the diluted weighted average number of shares outstanding. Diluted weighted average number of shares reflects the dilutive equity instruments, if any, of potentially dilutive common shares, such as stock options and warrants calculated using the treasury stock method. In periods with reported net operating losses, all common stock options and warrants are deemed anti-dilutive such that basic net loss per share and diluted net loss per share are equal.


Recent Accounting Pronouncements


In May 2014, the Financial Accounting Standards Board (“FASB”) issued a comprehensive new revenue recognition standard for contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The core principle of this standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the standard provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain



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circumstances. This guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early application is prohibited. The standard permits the use of either the retrospective or cumulative effect transition method. This guidance will be applicable to the Company at the beginning of its first quarter of fiscal year 2017. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.


In August 2014, the FASB issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessment of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is substantial doubt about the entity’s ability to continue as a going concern. The requirement is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.


3.

OTHER CURRENT ASSETS


The items comprising the Company’s other current assets are summarized below:


 

June 30,

2015

December 31,

2014

 

$

$

Deposits to hotels

19,821

23,021

Other deposits to suppliers

3,345

4,131

Credit card receivable

896

1,669

Total other current assets

24,062

28,821

 

June 30,

2015

December 31,

2014

 

$

$

Unearned revenue

12,520

7,881

Taxes payable

6,612

207

Total other current liabilities

19,132

8,088


7.

TRANSACTIONS WITH RELATED PARTIES


During the six months ended June 30, 2015, the Company paid or accrued management fees of $18,000 (2014 - $Nil) to a company controlled by a director and corporate secretary and $12,000 (2014 - $Nil) to a company controlled by a director and CFO. As of June 30, 2015, $5,000 (December 31, 2014 - $Nil) of the management fees were included in accounts payable and accrued liabilities.


8.

SHAREHOLDERS’ EQUITY


Share capital


Authorized


- 500,000,000 common voting shares with a par value of $0.0002 per share.


Issued and outstanding


As of June 30, 2015, the Company has 42,485,000 shares (December 31, 2014 – 42,485,000) issued and outstanding. There were no share issuances during the six months ended June 30, 2015.


During the year ended December 31, 2014:


In June 2014, the Company issued 12,000,000 common shares to two new directors for proceeds of $700,000. The Company also issued 200,000 common shares to an arm’s length party for $10,000 of share subscriptions received during the year ended December 31, 2012.  


In August 2014, the Company issued 1,500,000 common shares to an arm’s length party for total proceeds of $150,000.  


In December 2014, the Company issued 4,000,000 common shares to an arm’s length party for total proceeds of $200,000.



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The Company has no options or warrants outstanding as of June 30, 2015 or December 31, 2014. There were no option or warrant transactions during the three or six months ended June 30, 2015 or the year ended December 31, 2014.


9.

REVENUE


The Company reports its revenue as an agent on a net basis. The following table shows the gross amount the Company received from customers and the booking costs during the six months ended June 30, 2015 and 2014:



For the three months ended

June 30,

2015

June 30,

2014

 

$

$

Gross amount received

1,224,608

1,256,995

Costs

(1,067,864)

(1,084,456)

Revenue

156,744

172,538


10.

SEGMENTED INFORMATION


The Company currently operates in one business segment, which is the internet hotel booking service. Accordingly, the Company does not have separately reportable segments.


11.

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS


There were no significant non-cash transaction during the six months ended June 30, 2015.


During the six months ended June 30, 2014, the Company issued 200,000 common shares to an arm’s length party for $10,000 of share subscriptions received in advance during the year ended December 31, 2012.


12.

PROPOSED JOINT VENTURE


On May 4, 2014, the Company entered into a joint venture agreement (the “Agreement”) with Shizhen Bio-Technology Co., Ltd. (“Shizhen Biotech”) in Jiangsu Province, China. Subsequently on May 22, 2014, Globalink (Xuzhou) Bio-Technology Co., Ltd. (the “JV”) was incorporated in Jiangsu Province, China pursuant to the Agreement. The JV has total registered capital of $10,000,000, whereby the Company will invest $8,000,000 to earn an 80% interest of the JV and Shizhen Biotech will invest $2,000,000 to earn the remaining 20%. 15% of the total $10,000,000 investment should be paid up within three months after the incorporation of the JV, with the balance being paid up in the following two years. The JV will be involved in the business of biological science and technology



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research, biological technology popularization service, and fruit and vegetable distribution. Currently, the JV focuses on developing health supplement products from the extract of gingko leaves. There were no transactions incurred in the JV from its incorporation to the period ended June 30, 2015.  As the Company did not make its investment according to the JV agreement, it may lose its right to the JV. However, there is no other liability if the Company eventually does not make any investment in the JV.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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Item 2.  Management's 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.  


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, OneWorld 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 customers 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 the Internet as a tool to conduct business

         transaction.

   - Change of customer’s acceptance to use the Internet to book hotel rooms.




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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.


Capital and Sources of Liquidity


Prior to the acquisition of OneWorld, all of Globalink’s operating capital had either been advanced by current shareholders or from proceeds for the issuance of common shares.  


For the six months ended June 30, 2015, we incurred a net loss of $28,814.  We had the following changes in non-cash working capital: We had an increase of $146,927 due to an increase in accounts receivable, a decrease of $4,003 due to other current assets, an increase of $238,544 due to accounts payable and accrued liabilities, and an increase of $11,535 due to other current liabilities.  As a result, we had net cash provided by operating activities of $78,341 for the six months ended June 30, 2015.


For the six months ended June 30, 2014, we incurred a net loss of $29,231.  We had the following changes in non-cash working capital: We had an increase of $96,930 due to accounts receivable, an increase of $6,546 due to other current assets, an increase of $132,822 due to accounts payable and accrued liabilities, and an increase of $25,970 due to other current liabilities.  As a result, we had net cash provided by operating activities of $26,086 for the six months ended June 30, 2014.


The Company did not pursue any investing activities for the six months ended June 30, 2015.


For the six months ended June 30, 2014, the Company paid $145 for the purchase of computer equipment, resulting in total cash used in investing activities of $145 for the period.


For the six months ended June 30, 2015, the Company did not pursue any financing activities.




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For the six months ended June 30, 2014, the Company received $700,000 as proceeds from share issuance and $2,729 from advances from shareholders.  As a result, we had total cash provided by financing activities of $702,729 for the period.


Results of Operations


For the three months ended June 30, 2015, we earned revenues of $84,823.  We paid accounting and legal expenses of $2,034 and director and management fees of $15,000.  We had a foreign exchange gain of $8,982 and paid rent expenses of $5,929.  We paid salaries and benefits of $58,240 and telephone expenses of $1,545.  We paid transfer agent and filing fees of $965, travel expenses of $836, and other general and administrative expenses of $10,237.  We had a net loss of $981 for the period.  We had an exchange difference on translating foreign operations of $84.  As a result, we had a comprehensive loss of $897 for the three months ended June 30, 2015.


Comparatively, for the three months ended June 30, 2014, we earned revenues of $107,627.  We paid accounting and legal expenses of $29,348 and had a foreign exchange loss of $4,755.  We paid rent expenses of $4,694 and salaries and benefits of $67,460.  We paid telephone expenses of $1,734 and transfer agent and filing fees of $3,467.  We paid travel expenses of $1,103 and other general and administrative expenses of $6,922.  We had a net loss of $11,856.  We had an exchange difference on translating foreign operations of $294.  As a result, we had a comprehensive loss of $11,562 for the three months ended June 30, 2014.


The $10,875, or 91.7%, decrease in net loss between the three months ended June 30, 2015 compared to the three months ended June 30, 2014 is due to a decrease in accounting and legal fees during the three months ended June 30, 2015.  We earned 21.2% less in revenues, paid 13.7% less in salaries and benefits, and paid 93.1% less in accounting and legal expenses during the three months ended June 30, 2015.


For the six months ended June 30, 2015, we earned revenues of $156,744.  We paid accounting and legal expenses of $2,608 and director and management fees of $30,000.  We had a gain of $9,576 due to foreign exchange and paid rent expenses of $11,138.  We paid salaries and benefits of $110,582, telephone expenses of $3,415, and transfer agent and filing fees of $16,850.  We paid travel expenses of $7,976 and other general and administrative expenses of $12,565.  We had a net loss of $28,814.  We had an exchange difference on translating foreign operations of $1,780.  As a result, we had a comprehensive loss of $27,034 for the six months ended June 30, 2015.




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Comparatively, for the six months ended June 30, 2014, we earned revenues of $172,538.  We paid accounting and legal expenses of $32,118 and had a foreign exchange loss of $6,511.  We paid rent expenses of $8,591 and salaries and benefits of $115,617.  We paid telephone expenses of $3,185 and transfer agent and filing fees of $18,448.  We paid travel expenses of $2,215 and other general and administrative expenses of $15,084.  We had a net loss of $29,231.  We had an exchange difference on translating foreign operations of $496.  As a result, we had a comprehensive loss of $28,735 for the six months ended June 30, 2014.


The $417, or 1.4%, decrease in net loss between the six months ended June 30, 2015 compared to the six months ended June 30, 2014 is due to decreased accounting and legal expenses during the six months ended June 30, 2015.  We earned 9.2% less revenues, paid 91.9% fewer accounting and legal fees, paid 4.4% fewer salaries and benefits, and paid 72.2% more travel expenses during the six months ended June 30, 2015.


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 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.  This web site is still in the development stage.


In February 2014 two business persons who have vast high level connections to business and technologies in China, Mr. Hin Kwong Sheung and Mr. Jia Charles Yao, joined us as directors. They together invested US$500,000 into Globalink.




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With the new injection of capital and human resources, Globalink is also seeking investment opportunity in other industries. One of the other fields of endeavor that Gloablink has been considering is to develop a natural health maintenance system derived from Gingko leaves, among the well-known, is the Gingko Biloba.  Globalink is currently in the process of acquiring 20% of the world's supply of the raw material and also completing purchase agreements with wholesalers and retailers for the purchase and distribution rights of our finished products.  Once all paperwork is in place, Globalink would implement its plans to raise further capital for setting up the processing facilities for the Gingko system of health maintenance products.


Globalink’s website is also under development which will provide a company profile, anticipated implementation of business plans, news and reporting, management and contact information, and provide a name brand and higher exposure to the public.


Off-Balance Sheet Arrangements


The Company had no material off-balance sheet arrangements as of June 30, 2015.


Contractual Obligations


On May 4, 2014, the Company entered into a joint venture agreement (the “Agreement”) with Shizhen Bio-Technology Co., Ltd. (“Shizhen Biotech”) in Jiangsu Province, China. Subsequently on May 22, 2014, Globalink (Xuzhou) Bio-Technology Co., Ltd. (the “JV”) was incorporated in Jiangsu Province, China pursuant to the Agreement. The JV has total registered capital of $10,000,000, whereby the Company will invest $8,000,000 to earn an 80% interest of the JV and Shizhen Biotech will invest $2,000,000 to earn the remaining 20%. 15% of the total $10,000,000 investment should be paid up within three months after the incorporation of the JV, with the balance being paid up in the following two years. The JV will be involved in the business of biological science and technology research, biological technology popularization service, and fruit and vegetable distribution. Currently, the JV focuses on developing health supplement products from the extract of gingko leaves. There were no transactions incurred in the JV from its incorporation to the period ended June 30, 2015. As the Company did not make its investment according to the JV agreement, it may lose its right to the JV. However, there is no other liability if the Company eventually does not make any investment in the JV.


New Accounting Pronouncements


The Company 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 Company.




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Item 3.  Quantitative and Qualitative Disclosures about Market Risk


Not applicable for smaller reporting companies.


Item 4.  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 Commission’s 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 June 30, 2015.


Management’s Annual Report on Internal Control over Financial Reporting:


Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company. 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 recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.




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Management has evaluated the effectiveness of our internal control over financial reporting using the criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  


The matters involving internal control over financial reporting that our management considered to be material weaknesses were:


-

Lack of segregation of duties as we have an inadequate number of personnel to properly implement control procedures.


The aforementioned material weaknesses were identified by our CEO and CFO in connection with the review of our consolidated financial statements as of June 30, 2015.


Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee, the inadequate accounting personnel results in ineffective oversight in the monitoring of required internal controls over financial reporting, which weaknesses could result in a material misstatement in our financial statements in future periods.


Management’s Remediation Initiatives


In an effort to remediate the identified material weaknesses and enhance our internal controls over financial reporting, the Company plans to make the necessary improvements to remediate these deficiencies.  


This quarterly report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.  We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Commission that permit us to provide only management’s 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 three months ended June 30, 2015.  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.



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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.

None


Item 3.   Defaults Upon Senior Securities.

          

None


Item 4.   Mine Safety Disclosures

Not applicable


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

       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

*  Filed herewith

**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.




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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 thereunto duly authorized.


Dated:  August 14, 2015


GLOBALINK, LTD.


By: /s/Hin Kwok Sheung

Hin Kwok Sheung

Chief Executive Officer


By:  /s/Ke Feng (Andrea) Yuan

Ke Feng (Andrea) Yean

Chief Financial Officer





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