UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





x
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d)   OF THE SECURITIES EXCHANGE ACT
      OF 1934





For the
quarterly period ended March 31, 2010





OR





o
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE   SECURITIES EXCHANGE ACT OF
      1934





FOR
THE TRANSITION PERIOD FROM _______ TO _________





COMMISSION
FILE NO. 0-25053





THEGLOBE.COM,
INC.


(EXACT
NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)




STATE
      OF DELAWARE
                
                14-1782422(STATE
      OR OTHER JURISDICTION OF
                
                (I.R.S.
      EMPLOYERINCORPORATION
      OR ORGANIZATION)
                
                IDENTIFICATION
      NO.)





110 EAST
BROWARD BOULEVARD, SUITE 1400


FORT LAUDERDALE, FL.
33301


(ADDRESS
OF PRINCIPAL EXECUTIVE OFFICES)





(954) 769 -
5900


(Registrant's
telephone number, including area code)




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 o
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 (§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 o No   o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “small
reporting company” in Rule 12b-2 of the Exchange Act.  (check
one)





Large accelerated filer
            o
            Accelerated filer
            oNon-accelerated filer
            o
      (Do not check if a smaller reporting company)
            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 x   No o





The
number of shares outstanding of the Registrant's Common Stock, $.001 par value
(the "Common Stock") as of May 10, 2010 was 441,484,838.








THEGLOBE.COM,
INC.


FORM
10-Q





TABLE OF
CONTENTS





PART
      I:
              FINANCIAL
      INFORMATION
              1Item
      1.
              Financial
      Statements
              1Condensed
      Consolidated Balance Sheets at March 31, 2010 (unaudited) and December 31,
      2009
              1Unaudited
      Condensed Consolidated Statements of Operations for the three months ended
      March 31, 2010 and 2009
              2Unaudited
      Condensed Consolidated Statements of Cash Flows for the three months ended
      March 31, 2010 and 2009
              3Notes
      to Unaudited Condensed Consolidated Financial Statements
              4Item
      2.
              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
              10Item
      4T.
              Controls
      and Procedures
              15PART
      II:
              OTHER
      INFORMATION
              15Item
      1.
              Legal
      Proceedings
              15Item
      1A.
              Risk
      Factors
              15Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              18Item
      3.
              Defaults
      Upon Senior Securities
              19Item
      4.
              (Removed
      and Reserved)
              19Item
      5.
              Other
      Information
              19Item
      6.
              Exhibits
              20SIGNATURES
              21








PART
I - FINANCIAL INFORMATION





ITEM
1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


THEGLOBE.COM,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS





MARCH 31,
                                
                                
                                DECEMBER 31,2010
                                
                                
                                2009(UNAUDITED)ASSETSCurrent
      Assets:Cash
      and cash equivalents
                                
                                $
                                596
                                
                                
                                $
                                1,259Prepaid
      expenses
                                
                                
                                7,022
                                
                                
                                
                                6,972Total
      current assets
                                
                                $
                                7,618
                                
                                
                                $
                                8,231LIABILITIES AND STOCKHOLDERS'
      DEFICITCurrent
      Liabilities:Accounts
      payable to related party
                                
                                $
                                175,000
                                
                                
                                $
                                120,000Accounts
      payable
                                
                                
                                199,588
                                
                                
                                
                                184,479Accrued
      expenses and other current liabilities
                                
                                
                                443,624
                                
                                
                                
                                449,862Accrued
      interest due to related party
                                
                                
                                85,562
                                
                                
                                
                                73,233Notes
      payable due to related party
                                
                                
                                500,000
                                
                                
                                
                                500,000Deferred
      income – related party
                                
                                
                                —
                                
                                
                                
                                40,000Net
      liabilities of discontinued operations
                                
                                
                                1,714,556
                                
                                
                                
                                1,729,556Total
      current liabilities
                                
                                
                                3,118,330
                                
                                
                                
                                3,097,130Stockholders'
      Deficit:Common stock, $0.001 par value;
      500,000,000 shares authorized; 441,484,838 issued and
      outstanding at March 31, 2010 and December 31, 2009
                                
                                
                                441,485
                                
                                
                                
                                441,485Additional
      paid-in capital
                                
                                
                                294,301,845
                                
                                
                                
                                294,301,845Accumulated
      deficit
                                
                                
                                (297,854,042
                                )
                                
                                
                                (297,832,229
                                )Total
      stockholders' deficit
                                
                                
                                (3,110,712
                                )
                                
                                
                                (3,088,899
                                )Total
      liabilities and stockholders’ deficit
                                
                                $
                                7,618
                                
                                
                                $
                                8,231





See notes
to unaudited condensed consolidated financial statements.


1




THEGLOBE.COM,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS





Three Months Ended March 31,2010
                                      
                                      
                                      2009(UNAUDITED)Net
      Revenue
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —Operating
      Expenses:General
      and administrative
                                      
                                      
                                      29,132
                                      
                                      
                                      
                                      23,363Related
      party transactions
                                      
                                      
                                      60,000
                                      
                                      
                                      
                                      60,00089,132
                                      
                                      
                                      
                                      83,363Operating
      Loss from Continuing Operations
                                      
                                      
                                      (89,132
                                      )
                                      
                                      
                                      (83,363
                                      )Other
      Income (Expense), net:Related
      party interest expense
                                      
                                      
                                      (12,329
                                      )
                                      
                                      
                                      (12,329
                                      )Interest
      income (expense)
                                      
                                      
                                      —
                                      
                                      
                                      
                                      (24
                                      )Related
      party other income
                                      
                                      
                                      81,250
                                      
                                      
                                      
                                      75,000Other
      income
                                      
                                      
                                      —
                                      
                                      
                                      
                                      4468,921
                                      
                                      
                                      
                                      62,691Loss
      from Continuing OperationsBefore
      Income Tax
                                      
                                      
                                      (20,211
                                      )
                                      
                                      
                                      (20,672
                                      )Income
      Tax Provision
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —Loss
      from Continuing Operations
                                      
                                      
                                      (20,211
                                      )
                                      
                                      
                                      (20,672
                                      )Discontinued
      Operations, net of tax
                                      
                                      
                                      (1,602
                                      )
                                      
                                      
                                      (2,997
                                      )Net
      Loss
                                      
                                      $
                                      (21,813
                                      )
                                      
                                      $
                                      (23,669
                                      )Loss
      Per Share -Basic
      and Diluted:Continuing
      Operations
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —Discontinued
      Operations
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —Net
      Loss
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —Weighted
      Average Common Shares Outstanding
                                      
                                      
                                      441,484,838
                                      
                                      
                                      
                                      441,484,838





See notes
to unaudited condensed consolidated financial statements.


2


THEGLOBE.COM,
INC. AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS





Three Months
                                Ended March 31,2010
                              
                              
                              2009(UNAUDITED)Cash
      Flows from Operating Activities:Net
      loss
                              
                              $
                              (21,813
                              )
                              
                              $
                              (23,669
                              )Add
      back: loss from discontinued operations
                              
                              
                              1,602
                              
                              
                              
                              2,997Net
      loss from continuing operations
                              
                              
                              (20,211
                              )
                              
                              
                              (20,672
                              )Adjustments
      to reconcile net loss from continuing operations to net cash flows from
      operating activitiesEmployee
      stock compensation
                              
                              
                              —
                              
                              
                              
                              2,429Compensation
      related to non-employee stock options
                              
                              
                              —
                              
                              
                              
                              426Changes
      in operating assets and liabilitiesAccounts
      receivable from related party
                              
                              
                              —
                              
                              
                              
                              75,000Prepaid
      and other current assets
                              
                              
                              (50
                              )
                              
                              
                              8,633Accounts
      payable to related party
                              
                              
                              55,000
                              
                              
                              
                              (35,667
                              )Accounts
      payable
                              
                              
                              15,109
                              
                              
                              
                              (11,632
                              )Accrued
      expenses and other current liabilities
                              
                              
                              (6,238
                              )
                              
                              
                              (47,558
                              )Accrued
      interest due to related party
                              
                              
                              12,329
                              
                              
                              
                              12,329Deferred
      income – related party
                              
                              
                              (40,000
                              )
                              
                              
                              —Net
      cash flows from operating activities of continuing
    operations
                              
                              
                              15,939
                              
                              
                              
                              (16,712
                              )Net
      cash flows from operating activities of discontinued
      operations
                              
                              
                              (16,602
                              )
                              
                              
                              (27,996
                              )Net
      cash flows from operating activities
                              
                              
                              (663
                              )
                              
                              
                              (44,708
                              )Net
      Decrease in Cash and Cash Equivalents
                              
                              
                              (663
                              )
                              
                              
                              (44,708
                              )Cash
      and Cash Equivalents, at beginning of period
                              
                              
                              1,259
                              
                              
                              
                              89,754Cash
      and Cash Equivalents, at end of period
                              
                              $
                              596
                              
                              
                              $
                              45,046





See notes
to unaudited condensed consolidated financial statements.


3





THEGLOBE.COM,
INC. AND SUBSIDIARIES


NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





(1)
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





DESCRIPTION
OF THEGLOBE.COM





theglobe.com,
inc. (the “Company” or “theglobe”) was incorporated on May 1, 1995 (inception)
and commenced operations on that date.  Originally, theglobe.com was
an online community with registered members and users in the United States and
abroad.  However, due to the deterioration of the online advertising
market, the Company was forced to restructure and ceased the operations of its
online community on August 15, 2001.  The Company then sold most of
its remaining online and offline properties.  The Company continued to
operate its Computer Games print magazine and the associated CGOnline website,
as well as the e-commerce games distribution business of Chips &
Bits.  On June 1, 2002, Chairman Michael S. Egan and Director Edward
A. Cespedes became Chief Executive Officer and President of the Company,
respectively.  On November 14, 2002, the Company entered into the
Voice over Internet Protocol (“VoIP”) business by acquiring certain VoIP
assets.  On September 1, 2004, the Company acquired SendTec, Inc., a
direct response marketing services and technology company.





On May 9,
2005, the Company exercised an option to acquire all of the outstanding capital
stock of Tralliance Corporation (“Tralliance”), an entity which had been
designated as the registry for the “.travel” top-level domain through an
agreement with the Internet Corporation for Assigned Names and Numbers
(“ICANN”).





As more
fully discussed in Note 4, “Discontinued Operations,” in October 2005, the
Company completed the sale of the business and substantially all of the assets
of SendTec, Inc.  Additionally, in March 2007, management and the
Board of Directors of the Company made the decision to (i) cease all activities
related to its computer games businesses, including discontinuing the operations
of its magazine publications, games distribution business and related websites;
and (ii) discontinue the operating, research and development activities of its
VoIP telephony services business and terminate all of the remaining employees of
that business.





On
September 29, 2008, the Company sold its Tralliance business and issued
229,000,000 shares of its Common Stock to a company controlled by Michael S.
Egan, the Company’s Chairman and Chief Executive Officer (see Note 3, “Sale of
Tralliance and Share Issuance”).  As a result of the sale of its
Tralliance business, the Company became a shell company (as defined in Rule
12b-2 of the Securities and Exchange Act of 1934) with no material operations or
assets.  The Company presently intends to continue as a public company
and make all the requisite filings under the Securities and Exchange Act of
1934.  However, certain matters, as more fully discussed in Note 2,
“Liquidity and Going Concern Considerations,” raise substantial doubt about the
Company’s ability to continue as a going concern.





PRINCIPLES
OF CONSOLIDATION





The
condensed consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries from their respective dates of acquisition.
All significant intercompany balances and transactions have been eliminated in
consolidation.




UNAUDITED
INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION





The
unaudited interim condensed consolidated financial statements of the Company as
of March 31, 2010 and for the three months ended March 31, 2010 and 2009
included herein have been prepared in accordance with the instructions for Form
10-Q under the Securities Exchange Act of 1934, as amended, and Article 10 of
Regulation S-X under the Securities Act of 1933, as amended. Certain information
and note disclosures normally included in consolidated financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations relating to interim
condensed consolidated financial statements.




In the
opinion of management, the accompanying unaudited interim condensed consolidated
financial statements reflect all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial position of the
Company at March 31, 2010 and the results of its operations and its cash flows
for the three months ended March 31, 2010 and 2009. The results of operations
and cash flows for such periods are not necessarily indicative of results
expected for the full year or for any future period.





USE OF
ESTIMATES





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. These estimates and assumptions relate primarily to estimates of the
collectability of accounts receivable, accounts payable and accrued expenses. At
March 31, 2010 and December 31, 2009, a significant portion of our liabilities
of discontinued operations relate to charges that have been disputed by the
Company and for which estimates have been required. Our estimates, judgments and
assumptions are continually evaluated based upon available information and
experience. Because of estimates inherent in the financial reporting process,
actual results could differ from those estimates.


4





CASH AND
CASH EQUIVALENTS





Cash
equivalents consist of money market funds and highly liquid short-term
investments with qualified financial institutions. The Company considers all
highly liquid securities with original maturities of three months or less to be
cash equivalents.





NET
INCOME PER SHARE





The
Company reports basic and diluted net income per common share in accordance with
FASB ASC Topic 260, "Earnings Per Share."  Basic earnings per share is
computed using the weighted average number of common shares outstanding during
the period. Common equivalent shares consist of the incremental common shares
issuable upon the exercise of stock options and warrants (using the treasury
stock method). Common equivalent shares are excluded from the calculation if
their effect is anti-dilutive.





Due to
the anti-dilutive effect of potentially dilutive securities or common stock
equivalents that could be issued, such securities were excluded from the diluted
net loss per common share calculation for all periods presented. Such
potentially dilutive securities and common stock equivalents consisted of the
following for the periods ended March 31:





2010
                    
                    
                    2009Options
      to purchase common stock
                    
                    
                    13,572,000
                    
                    
                    
                    13,597,000Common
      shares issuable upon exercise of warrants
                    
                    
                    7,725,000
                    
                    
                    
                    13,235,000Total
                    
                    
                    21,297,000
                    
                    
                    
                    26,832,000





RECENT
ACCOUNTING PRONOUNCEMENTS





In the
second quarter of 2009, the Company adopted a new accounting standard included
in FASB ASC Topic 855 Subsequent Events that establishes general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before the financial statements are issued or are available to be issued.
This new accounting standard provides guidance on the period after the balance
sheet date during which management of a reporting entity should evaluate events
or transactions that may occur for potential recognition or disclosure in the
financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial
statements and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. The implementation of
this standard did not have a material impact on the Company’s consolidated
financial statements.





The FASB
has issued Accounting Standard Update (ASU) No. 2010-02, Consolidation (Topic 810) –
Accounting and Reporting for Decreases in Ownership of a Subsidiary – A Scope
Clarification.  This ASU clarifies that the scope of the
decrease in ownership provisions of Subtopic 810-10 and related guidance and
also clarifies that the decrease in ownership guidance in Subtopic 810-10 does
not apply to:  (a) sales of in substance real estate; and (b)
conveyances of oil and gas mineral rights, even if these transfers involve
businesses.  The amendments in this ASU also expand the disclosure
requirements about deconsolidation of a subsidiary or derecognition of a group
of assets. ASU 2010-02 is effective beginning in the first interim or annual
reporting period ending on or after December 15, 2009.  The adoption
of this accounting standard will have an effect on the presentation and
disclosure of the noncontrolling interests of any non wholly-owned businesses
acquired in the future.





Management
has determined that all other recently issued accounting pronouncements will not
have a material impact on the Company’s financial statements or do not apply to
the Company’s operations.





RECLASSIFICATIONS





Certain
amounts in the prior year financial statements have been reclassified to conform
to the current year presentation.





(2)
LIQUIDITY AND GOING CONCERN CONSIDERATIONS





The
accompanying condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business.
Accordingly, the condensed consolidated financial statements do not include any
adjustments relating to the recoverability of assets and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern. However, for the reasons described below, Company management
does not believe that cash on hand and cash flow generated internally by the
Company will be adequate to fund its limited overhead and other cash
requirements beyond a short period of time. These reasons raise significant
doubt about the Company’s ability to continue as a going
concern.


5





During
its recent past, the Company was able to continue operating as a going concern
due principally to funding of $500,000 received during 2008 under a Revolving
Loan Agreement with an entity controlled by Michael S. Egan, its Chairman and
Chief Executive Officer and a total of approximately $463,000 received during
2009 and the first quarter of 2010 under an Earn-out Agreement with an entity
also controlled by Mr. Egan .





At
March 31, 2010, the Company had a net working capital deficit of approximately
$3,111,000.  Such working capital deficit included (i) a total of
approximately $586,000 in principal and accrued interest owed under the
aforementioned Revolving Loan Agreement; (ii) a total of $175,000 in management
service fees owed under a Master Services Agreement to an entity controlled by
Mr. Egan; and (iii) an aggregate of approximately $2,350,000 in unsecured
accounts payable and accrued expenses owed to vendors and other non-related
third parties (of which approximately $1,700,000 relates to liabilities of our
VoIP telephony service discontinued business, with a significant portion of such
liabilities related to charges which have been disputed by theglobe). theglobe
believes that its ability to continue as a going concern for any significant
length of time in the future will be heavily dependent, among other things, on
its ability to prevail and avoid making any payments with respect to such
disputed vendor charges and/or to negotiate favorable settlements (including
discounted payment and/or payment term concessions) with the aforementioned
creditors.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
29, 2008, the Company (i) sold the business and substantially all of the assets
of its Tralliance Corporation subsidiary to Tralliance Registry Management, and
(ii) issued 229,000,000 shares of its Common Stock (the “Shares”) to Registry
Management (the “Purchase Transaction”). Tralliance Registry Management and
Registry Management are entities controlled by Michael S. Egan. The closing of
the Purchase Transaction resulted in the cancellation of all of the Company’s
remaining Convertible Debt, related accrued interest and rent and accounts
payable owed to entities controlled by Mr. Egan as of the date of closing
(totaling approximately $6,400,000). However, the Company continues to be
obligated to repay its principal borrowings totaling $500,000, plus accrued
interest at the rate of 10% per annum (approximately $86,000 as of March 31,
2010), due to an entity controlled by Mr. Egan under the aforementioned
Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
Agreement, as amended on May 7, 2009, including accrued interest, are due and
payable by the Company in one lump sum on the earlier of (i) five business days
following any demand for payment, which demand can be made at any time, or (ii)
the occurrence of an event of default as defined in the Revolving Loan
Agreement. The Company currently has no ability to repay this loan should a
demand for payment be made by the noteholder.  All borrowings under
the Revolving Loan Agreement are secured by a pledge of all of the assets of the
Company and its subsidiaries. After giving effect to the closing of the Purchase
Transaction and the issuance of the Shares thereunder, Mr. Egan now beneficially
owns approximately 76% of the Company’s issued and outstanding Common Stock at
March 31, 2010.





As
additional consideration under the Purchase Transaction, Tralliance Registry
Management is obligated to pay an earn-out to theglobe equal to 10% (subject to
certain minimums) of Tralliance Registry Management’s net revenue (as defined)
derived from “.travel” names registered by Tralliance Registry Management from
September 29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out
payable by Tralliance Registry Management to theglobe was $300,000 in the first
year, and will increase by $25,000 in each subsequent year (pro-rated for the
final year of the Earn-out).





In
connection with the closing of the Purchase Transaction, the Company also
entered into a Master Services Agreement with an entity controlled by Mr. Egan
whereby for a fee of $20,000 per month ($240,000 per annum) such entity will
provide personnel and services to the Company so as to enable it to continue its
existence as a public company without the necessity of any full-time employees
of its own. Additionally, commensurate with the closing of the Purchase
Transaction, Termination Agreements with each of its current executive officers,
which terminated their previous and then existing employment agreements, were
executed. Notwithstanding the termination of these employment agreements, each
of our current executive officers and directors remain as executive officers and
directors of the Company.





Immediately
following the closing of the Purchase Transaction, theglobe became a shell
company with no material operations or assets, and no source of revenue other
than under the Earn-out.  It is expected that theglobe’s future
operating expenses as a public shell company will consist primarily of expenses
incurred under the aforementioned Master Services Agreement and other customary
public company expenses, including legal, audit and other miscellaneous public
company costs.





MANAGEMENT’S
PLANS





As a
shell company, management believes that theglobe will most likely continue to
incur net and cash flow losses for the foreseeable future. However, assuming
that no significant unplanned costs are incurred, management believes that
theglobe’s future losses will be limited. Further, in the event that Registry
Management is successful in substantially increasing net revenue derived from
“.travel” name registrations (and as the result maximizing theglobe’s Earn-out
revenue) in the future, theglobe’s prospects for achieving profitability will be
enhanced.  To date, the Company has received only the minimum payments
pursuant to the Earn-out.


6





It is the
Company’s preference to avoid filing for protection under the U.S. Bankruptcy
Code. However, based upon the Company’s current financial condition as discussed
above, management believes that additional debt or equity capital will need to
be raised in order for theglobe to continue to operate as a going concern on a
long-term basis. Such capital will be needed both to (i) fund its expected
limited future net losses and (ii) repay the $586,000 of secured debt and
related accrued interest due under the Revolving Loan Agreement and the $175,000
of management service fees due under the Master Services Agreement, and a
portion of the $2,350,000 unsecured indebtedness (assuming theglobe is
successful in favorably resolving and settling certain disputed and non-disputed
vendor charges related to such unsecured indebtedness).  Any such
capital would likely come from Mr. Egan, or affiliates of Mr. Egan, as the
Company currently has no access to credit facilities and had traditionally
relied upon borrowings from related parties to meet short-term liquidity
needs.  Any such capital raised would likely result in very
substantial dilution in the number of outstanding shares of the Company’s Common
Stock.





On a
short-term liquidity basis, the Company must be successful in collecting the
quarterly Earn-out payments contractually due from Tralliance Registry
Management on a timely basis, and must receive the continued indulgence of
substantially all of its creditors, in order to continue to operate as a going
concern in the near term.  Given theglobe’s current financial
condition and the state of the current United States capital markets and
economy, it has no current intent to seek to acquire, or start, any other
businesses.





(3)  SALE
OF TRALLIANCE AND SHARE ISSUANCE





On
September 29, 2008, theglobe closed upon a Purchase Agreement (the “Purchase
Agreement”), by and between theglobe.com, its subsidiary, Tralliance, Registry
Management and Tralliance Registry Management, a wholly-owned subsidiary of
Registry Management.  In connection with the closing, Registry
Management assigned certain of its rights and obligations with respect to the
purchased assets of Tralliance to Tralliance Registry
Management.  Pursuant to the provisions of the Purchase Agreement,
theglobe (i) issued two hundred twenty nine million (229,000,000) shares of its
Common Stock (the “Shares”) (the “Share Issuance”) and (ii) sold the business
and substantially all of the assets of its subsidiary, Tralliance to Tralliance
Registry Management (the “Asset Sale” and, together with the Share Issuance, the
“Sale” or “Purchase Transaction”) for (i) consideration totaling approximately
$6,409,800 and consisting of surrender to theglobe and satisfaction of secured
demand convertible promissory notes issued by theglobe and held by the Registry
Management in the aggregate principal amount of $4,250,000, together with all
accrued and unpaid interest of approximately $1,290,300 through the date of the
closing of the Purchase Transaction and satisfaction of approximately $869,500
in outstanding rent and miscellaneous fees due and unpaid to Registry Management
through the date of closing of the Purchase Transaction, and (ii) an earn-out
equal to 10% of Tralliance Registry Management’s “net revenue” (as defined)
derived from “.travel” names registered by Tralliance Registry Management from
September 29, 2008 through May 5, 2015 (the “Earn-out”).  Registry
Management and Tralliance Registry Management are directly or indirectly
controlled by Michael S. Egan, our Chairman and Chief Executive Officer and
principal stockholder and each of our two remaining Board members own a minority
interest in Registry Management.  After giving effect to the closing
of the Purchase Transaction, and the issuance of the Shares thereunder, Mr. Egan
now beneficially owns approximately 76% of the Company’s issued and outstanding
Common Stock.





Commensurate
with the closing of the Purchase Agreement on September 29, 2008, the Company
also entered into several ancillary agreements.  These agreements
included an Earn-out Agreement pursuant to which the aforementioned “net
revenue” Earn-out would be paid (the “Earn-out Agreement”), and Termination
Agreements with each of our executive officers (each a “Termination
Agreement”).  The minimum Earn-out amount payable under the Earn-out
Agreement was $300,000 in the first year of the Earn-out Agreement and will
increase by $25,000 in each subsequent year (pro-rated for the final year of the
Earn-out) with incremental Earn-out payments to be determined and paid to the
Company on an annual basis to the extent that 10% of Tralliance Registry
Management’s “net revenue” (as defined) exceeds the minimum Earn-out amount
payable for such year.  For the first annual Earn-out period that was
completed on September 29, 2009, no incremental Earn-out payments were due or
paid to the Company.  Pursuant to the Termination Agreements, the
Company’s employment agreements with each of Michael S. Egan, Edward A. Cespedes
and Robin Segaul Lebowitz, the Company’s Chief Executive Officer, President and
Vice President of Finance, all dated August 1, 2003, respectively, were
terminated.  Notwithstanding the termination of these employment
agreements, each of Messrs. Egan, Cespedes and Ms. Lebowitz remains as an
officer and director of the Company.





Due
to various factors related to the collectability of Earn-out payments from
Tralliance Registry Management, including the current weak financial condition
of Tralliance Registry Management, the uncertainty of its ability to become
profitable in the future, and the fact that such Earn-out payments are payable
to theglobe over an extended period of time (approximately 6 1⁄2 years), no
portion of the Earn-out was included in the purchase price for the Purchase
Transaction as of the closing of the transaction.  Instead, the
Company intends to recognize income related to the Earn-out on a prospective
basis as and to the extent that future Earn-out payments are
collected.  During the three months ended March 31, 2010 and 2009,
income related to the Earn-out of $81,250 and $75,000, respectively, was
recorded as related party other income in the Unaudited Condensed Consolidated
Statement of Operations for such periods.





In
connection with the closing of the Purchase Agreement, the Company also entered
into a Master Services Agreement (“Services Agreement”) with Dancing Bear
Investments, Inc. (“Dancing Bear”), which is controlled by Mr.
Egan.  Under the terms of the Services Agreement, for a fee of $20,000
per month ($240,000 per annum), Dancing Bear will provide personnel and services
to the Company so as to enable it to continue its existence as a public company
without the necessity of any full-time employees of its own.  The
Services Agreement has an initial term of one year and is subject to renewal or
early termination under certain events.  Services under the Services
Agreement include, without limitation, accounting, assistance with financial
reporting, accounts payable, treasury/financial planning, record retention and
secretarial and investor relations functions. A total of $60,000 related to the
Services Agreement has been expensed during both the first quarter of 2010 and
2009.  At March 31, 2010, a total of $175,000 remains unpaid and is
accrued on the Company’s condensed consolidated balance sheet.


7





After
giving effect to the closing of the Purchase Transaction, theglobe has no
material operations or assets and no source of revenue other than the
Earn-out.





(4)
DISCONTINUED OPERATIONS





In
March 2007, management and the Board of Directors of the Company made the
decision to cease all activities related to its Computer Games businesses,
including discontinuing the operations of its magazine publications, games
distribution business and related websites. The Company’s decision to shutdown
its computer games businesses was based primarily on the historical losses
sustained by these businesses during the recent past and management’s
expectations of continued future losses. As of March 31, 2010, all significant
elements of its computer games business shutdown plan have been completed by the
Company.





In
addition, in March 2007, management and the Board of Directors of the Company
decided to discontinue the operating, research and development activities of its
VoIP telephony services business and terminate all of the remaining employees of
the business.  The
Company’s decision to discontinue the operations of its VoIP telephony services
business was based primarily on the historical losses sustained by the business
during the past several years, management’s expectations of continued losses for
the foreseeable future and estimates of the amount of capital required to
attempt to successfully monetize its business. As of March 31, 2010, all
significant elements of its VoIP telephony services business shutdown plan have
been completed by the Company, except for the resolution of certain vendor
disputes and the payment of remaining outstanding vendor payables.





In
October 2005, the Company completed the sale of the business and substantially
all of the assets of SendTec, Inc., its former Marketing Services
subsidiary.  During the fourth quarter of 2009, the Company settled
and paid to a state taxing authority approximately $88,000 in income taxes and
interest due in connection with prior year audits of this
subsidiary.  The Company is not currently aware of any other pending
or unsettled Marketing Services business liabilities at this time.





Results
of operations for the Computer Games, VoIP telephony services and Marketing
Services businesses have been reported separately as “Discontinued Operations”
in the accompanying condensed consolidated statements of operations for all
periods presented. There are no discontinued operations assets included in the
accompanying condensed consolidated balance sheets. The liabilities of the
Computer Games, VoIP telephony services and Marketing Services businesses have
been included in the caption, “Liabilities of Discontinued Operations” in the
accompanying condensed consolidated balance sheets for all applicable periods
presented.




The
following is a summary of the liabilities of the discontinued operations of the
Computer Games, VoIP telephony services and Marketing Services businesses as
included in the accompanying condensed consolidated balance sheets. A
significant portion of the liabilities of discontinued operations at March 31,
2010 and 2009 relate to charges that have been disputed by the Company and for
which estimates have been required.





March
      31,
                                
                                December 31,2010
                                
                                2009Liabilities
      of discontinued operations:VoIP
      Telephony Services
                                
                                $
                                1,714,556
                                
                                
                                $
                                1,729,556Total
      liabilities of discontinued operations
                                
                                $
                                1,714,556
                                
                                
                                $
                                1,729,556





Summarized
results of operations financial information for the discontinued operations of
our Computer Games, VoIP telephony services and Marketing Services businesses
was as follows:




Three
      Month Ended March 31,2010
                        
                        
                        2009Loss
      from discontinued operations, net of tax:Computer
      Games
                        
                        $
                        (1,268
                        )
                        
                        $
                        (2,698
                        )VoIP
      Telephony Services
                        
                        $
                        (334
                        )
                        
                        $
                        (299
                        )Total
      Loss from discontinued operations, net of tax
                        
                        $
                        (1,602
                        )
                        
                        $
                        (2,997
                        )


8





(5)
STOCK OPTION PLANS





We have
several stock option plans under which nonqualified stock options may be granted
to officers, directors, other employees, consultants and advisors of the
Company. In general, options granted under the Company’s stock option plans
expire after a ten-year period and generally vest no later than three years from
the date of grant. Incentive options granted to stockholders who own greater
than 10% of the total combined voting power of all classes of stock of the
Company must be issued at 110% of the fair market value of the stock on the date
the options are granted. As of March 31, 2010, there were approximately
9,413,000 shares available for grant under the Company’s stock option
plans.





There
were no stock option grants or exercises during each of the three months ended
March 31, 2010 and 2009.





Stock
option activity during the three months ended March 31, 2010 was as
follows:





Total Options
                      
                      
                      Weighted
                        Average Exercise
                        PriceOutstanding at December
      31, 2009
                      
                      
                      13,596,580
                      
                      
                      $
                      0.18Granted
                      
                      
                      —Exercised
                      
                      
                      —Expired
                      
                      
                      (25,000
                      )
                      
                      
                      6.69Outstanding
      at March 31, 2010
                      
                      
                      13,571,580
                      
                      
                      $
                      0.17Options
      exercisable at March 31, 2010
                      
                      
                      13,571,580
                      
                      
                      $
                      0.17





Each of
the weighted-average remaining contractual terms of stock options outstanding
and stock options exercisable at March 31, 2010 were 4.0 years. The aggregate
intrinsic value of both options outstanding and stock options exercisable at
March 31, 2010 was $0.





Stock
compensation cost is recognized on a straight-line basis over the vesting
period. Stock compensation expense totaling $2,855 was charged to continuing
operations during the three months ended March 31, 2009, including $426 of
expense resulting from the vesting of non-employee stock options.





At March
31, 2010, there was no unrecognized compensation expense related to unvested
stock options.





The
Company estimates the fair value of each stock option at the grant date by using
the Black Scholes option-pricing model using the following assumptions: no
dividend yield; a risk free interest rate based on the U.S. Treasury yield in
effect at the time of grant; an expected option life based on historical and
expected exercise behavior; and expected volatility based on the historical
volatility of the Company’s stock price over a time period that is consistent
with the expected life of the option.




(6)
LITIGATION





On and
after August 3, 2001 six putative shareholder class action lawsuits were filed
against the Company, certain of its current and former officers and directors
(the “Individual Defendants”), and several investment banks that were the
underwriters of the Company's initial public offering and secondary offering.
The lawsuits were filed in the United States District Court for the Southern
District of New York. A Consolidated Amended Complaint, which is now the
operative complaint, was filed in the Southern District of New York on April 19,
2002.





The
lawsuit purports to be a class action filed on behalf of purchasers of the stock
of the Company during the period from November 12, 1998 through December 6,
2000. The purported class action alleges violations of Sections 11 and 15 of the
Securities Act of 1933 (the “1933 Act”) and Sections 10(b), Rule 10b-5 and 20(a)
of the Securities Exchange Act of 1934 (the “1934 Act”). Plaintiffs allege that
the underwriter defendants agreed to allocate stock in the Company's initial
public offering and its secondary offering to certain investors in exchange for
excessive and undisclosed commissions and agreements by those investors to make
additional purchases of stock in the aftermarket at pre-determined prices.
Plaintiffs allege that the Prospectuses for the Company's initial public
offering and its secondary offering were false and misleading and in violation
of the securities laws because it did not disclose these arrangements. The
action seeks damages in an unspecified amount. On October 9, 2002, the Court
dismissed the Individual Defendants from the case without prejudice. This
dismissal disposed of the Section 15 and 20(a) control person claims without
prejudice.





At the
Court’s request, plaintiffs selected six “focus” cases, which do not include the
Company.  The Court indicated that its decisions in the six focus
cases are intended to provide strong guidance for the parties in the remaining
cases.  On December 5, 2006, the U.S. Court of Appeals for the Second
Circuit vacated a decision by the District Court granting class certification in
the focus cases. On April 6, 2007, the Second Circuit denied a petition for
rehearing filed by plaintiffs, but noted that plaintiffs could ask the District
Court to certify more narrow classes than those that were
rejected.


9


The
parties in the approximately 300 coordinated cases, including ours, reached a
settlement. The insurers for the issuer defendants in the coordinated cases will
make the settlement payment on behalf of the issuers, including
theglobe.  On October 5, 2009, the Court granted final approval of the
settlement.   A group of three objectors has filed a petition to the
Second Circuit seeking permission to appeal the District Court’s final approval
order on the basis that the settlement class is broader than the class
previously rejected by the Second Circuit in its December 5, 2006 order vacating
the District Court’s order certifying classes in the focus
cases.  Plaintiffs have filed an opposition to the
petition.  Objectors, including the objectors that filed the petition
seeking permission to appeal, filed six notices of appeal of the Court’s order
finally approving the settlement.  The deadline to file additional
notices of appeal has run.





Due to
the inherent uncertainties of litigation, the Company cannot accurately predict
the ultimate outcome of the matter. If the settlement does not survive appeal
and the Company is found liable, we are unable to estimate or predict the
potential damages that might be awarded, whether such damages would be greater
than the Company’s insurance coverage, and whether such damages would have a
material impact on our results of operations or financial condition in any
future period.





The Company is currently a
party to certain other claims and disputes arising in the ordinary course of
business, including certain disputes related to vendor charges incurred
primarily as the result of the failure and subsequent shutdown of its
discontinued VoIP telephony services business. The Company believes that it has
recorded adequate accruals on its balance sheet to cover such disputed charges
and is seeking to resolve and settle such disputed charges for amounts
substantially less than recorded amounts. An adverse outcome in any of these
matters, however, could materially and adversely effect our financial position
and prospects, utilizing all or a significant portion of our limited cash
resources, and adversely affect our ability to continue as a going concern (see
Note 4, “Discontinued Operations”).





(7)   RELATED PARTY
TRANSACTIONS





On June
6, 2008, the Company entered into a Revolving Loan Agreement with Dancing Bear
Investments, Inc. (“Dancing Bear”), pursuant to which Dancing Bear may loan up
to $500,000 to the Company on a revolving basis (the “Credit
Line”).   Dancing Bear is an entity controlled by Michael S.
Egan, the Company’s Chairman and Chief Executive Officer.  During 2008
the Company made borrowings totaling the full amount of the $500,000 Credit
Line.  At March 31, 2010, outstanding principal and accrued interest
under the Credit Line totaled $500,000 and $85,562,
respectively.  During both the three months ended March 31, 2010 and
2009, interest expense related to the Credit Line of $12,329 was
recorded.  All borrowings under the Credit Line, including accrued
interest on borrowed funds at the rate of 10% per annum, were initially due and
payable in one lump sum on the first anniversary of the Credit Line, or June 6,
2009, or sooner upon the occurrence of an event of default under the loan
documentation.  On May 7, 2009, such repayment terms were amended so
as to require the Company to repay any or all amounts due under the Credit Line
in one lump sum on the earlier of (i) five business days following any demand
for payment that is made on or after June 6, 2009, or (ii) the occurrence
of an event of default as defined in the Revolving Credit
Agreement.





During
the three months ended March 31, 2010 and 2009, the Company received minimum
Earn-out installment payments totaling $41,250 and $150,000, respectively, from
Tralliance Registry Management Company LLC (“Tralliance Registry Management”)
under an Earn-out Agreement entered into on September 29, 2008 by and between
Tralliance Registry Management and the Company.  Tralliance Registry
Management is an entity controlled by Michael S. Egan, and each of our two
remaining executive officers and Board members, Edward A. Cespedes, our
President, and Robin S. Lebowitz, our Vice President of Finance, who own a
minority interest in The Registry Management Company, LLC, the parent company of
Tralliance Registry Management.





During
the three months ended March 31, 2010 and 2009, the Company paid management
services fees totaling $5,000 and $95,667, respectively, to Dancing Bear under a
Master Services Agreement entered into on September 29, 2008 by and between
Dancing Bear and the Company.   At March 31, 2010, a total of
$175,000 in management service fees remains unpaid and is accrued on the
Company’s condensed consolidated balance sheet.





(8)   SUBSEQUENT EVENTS





We have
performed an evaluation of subsequent events that have occurred after the
balance sheet date, but before the financial statements were available to be
issued, which the Company considers to be the date the financial statements were
issued.  There were none.








ITEM
      2.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





FORWARD
LOOKING STATEMENTS





This Form
10-Q contains forward-looking statements within the meaning of the federal
securities laws that relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology, such as "may," "will," "should," "could," "expect," "plan,"
"anticipate," "believe," "estimate," "project," "predict," "intend," "potential"
or "continue" or the negative of such terms or other comparable terminology,
although not all forward-looking statements contain such terms. In addition,
these forward-looking statements include, but are not limited to, statements
regarding:




·
            the outcome of pending
      litigation;


10





·
            our ability to negotiate
      favorable settlements with unsecured
  creditors;





·
            our ability to successfully
      resolve disputed
liabilities;





·
            our estimates or expectations of
      continued losses;





·
            our expectations regarding future
      income (and in particular, income from an earn-out due from an affiliate)
      and expenses;





·
            our ability to raise additional
      and sufficient capital; and





·
            our ability to continue to
      operate as a going concern.





These
statements are only predictions. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or achievements. We
are not required to and do not intend to update any of the forward-looking
statements after the date of this Form 10-Q or to conform these statements to
actual results. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this Form 10-Q might not occur. Actual
results, levels of activity, performance, achievements and events may vary
significantly from those implied by the forward-looking statements. A
description of risks that could cause our results to vary appears under "Risk
Factors" and elsewhere in this Form 10-Q. The following discussion should be
read together in conjunction with the accompanying unaudited condensed
consolidated financial statements and related notes thereto and the audited
consolidated financial statements and notes to those statements contained in the
Annual Report on Form 10-K for the year ended December 31, 2009.





OVERVIEW





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance” in the
accompanying Notes to Unaudited Condensed Consolidated Financial Statements, on
September 29, 2008, theglobe.com, inc. consummated the sale of the business and
substantially all of the assets of its Tralliance Corporation subsidiary to
Tralliance Registry Management Company, LLC, an entity controlled by Michael S.
Egan, the Company’s Chairman and Chief Executive Officer.  As a result
of and on the effective date of the sale of its Tralliance business, which was
theglobe’s remaining operating business, theglobe became a “shell company,” as
that term is defined in Rule 12b-2 of the Exchange Act, with no material
operations or assets.





As part
of the consideration for the sale of its Tralliance business, theglobe received
earn-out rights from Tralliance Registry Management (“Earn-out”), which
constitutes the only source of revenue for theglobe as a shell
company.  theglobe’s operating expenses as a shell company consist of
customary public company expenses, including accounting, financial reporting,
legal, audit and other related public company costs.





In
connection with the sale of its Tralliance business and Share Issuance, the
Company entered into a Master Services Agreement with Dancing Bear Investments,
Inc., an entity which is controlled by Mr. Egan.  Under the terms of
the Services Agreement, for a fee of $20 thousand per month ($240 thousand per
annum), Dancing Bear will provide personnel and services to the Company so as to
enable it to continue its existence as a public company without the necessity of
any full-time employees of its own.  Services under the Services
Agreement include, without limitation, accounting, assistance with financial
reporting, accounts payable, treasury/financial planning, record retention and
secretarial and investor relations functions.





In
March 2007, management and the Board of Directors of the Company made the
decision to cease all activities related to its computer games and VoIP
telephony services businesses. In October 2005, the Company completed the sale
of SendTec, Inc., its former marketing services subsidiary. Results of
operations for the computer games, VoIP telephony services and marketing
services businesses have been reported separately as “Discontinued Operations”
in the accompanying condensed consolidated statements of operations for all
periods presented. There are no discontinued operations assets included in the
accompanying condensed consolidated balance sheets. The liabilities of the
computer games, VoIP telephony services and marketing services businesses have
been included in the caption, “Liabilities of Discontinued Operations” in the
accompanying condensed consolidated balance sheets.





BASIS
OF PRESENTATION OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS; GOING
CONCERN





We
received a report from our independent registered public accountants, relating
to our December 31, 2009 audited financial statements, containing an explanatory
paragraph regarding our ability to continue as a going concern. As a shell
company, management believes that theglobe will not be able to generate
operating cash flows sufficient to fund its operations and pay its existing
current liabilities (including those liabilities related to its discontinued
operations) in the foreseeable future. Based upon our current cash resources and
without the infusion of additional capital and/or the continued indulgence of
its creditors, management does not believe the Company can operate as a going
concern beyond a short period of time.  See “Future and Critical Need
for Capital” section of this Management’s Discussion and Analysis of Financial
Condition and Results of Operations for further details.


11





Our
condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America on
a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. Accordingly, our
condensed consolidated financial statements do not include any adjustments
relating to the recoverability of assets and classification of liabilities that
might be necessary should we be unable to continue as a going
concern.





RESULTS
OF OPERATIONS





THREE
MONTHS ENDED MARCH 31, 2010 COMPARED TO


THE
THREE MONTHS ENDED MARCH 31, 2009





CONTINUING
OPERATIONS





NET
REVENUE. Commensurate with the sale of our Tralliance business on September 29,
2008, we became a shell company. As a result, net revenue for both the three
months ended March 31, 2010 and 2009 was $0.





GENERAL
AND ADMINISTRATIVE. General and administrative expenses include only customary
public company expenses, including accounting, legal, audit, insurance and other
related public company costs. General and administrative expenses totaled
approximately $29 thousand in the first quarter of 2010 as compared to
approximately $23 thousand for the same quarter of the prior year.





RELATED
PARTY TRANSACTIONS.  Related party transaction expense totaled $60
thousand for both the three months ended March 31, 2010 and 2009 and consisted
of management services fees payable to Dancing Bear for accounting, finance,
administrative and managerial support.





RELATED
PARTY INTEREST EXPENSE. Related party interest expense for both the three months
ended March 31, 2010 and 2009 was $12 thousand and consisted of interest due and
payable to Dancing Bear under the Revolving Loan Agreement.





RELATED
PARTY OTHER INCOME.  Related party other income consists of the
minimum Earn-out payable quarterly by Tralliance Registry Management to the
Company as further discussed in Note 3, “Sale of Tralliance and Share Issuance”
in the accompanying Notes to Unaudited Condensed Consolidated Financial
Statements.  Related party other income for the three months ended
March 31, 2010 was approximately $81 thousand compared to $75 thousand for the
three months ended March 31, 2009.





INCOME
TAXES. No tax benefit was recorded for the losses incurred during the first
quarter of 2010 or the first quarter of 2009 as we recorded a 100% valuation
allowance against our otherwise recognizable deferred tax assets due to the
uncertainty surrounding the timing or ultimate realization of the benefits of
our net operating loss carryforwards in future periods.





DISCONTINUED
OPERATIONS





The loss
from discontinued operations, net of income taxes totaled $1,602 in the first
quarter of 2010 as compared to a loss of $2,997 during the first quarter of 2009
and is summarized as follows:





Computer
                      Games
                    
                    
                    VoIP
                      Telephony
                      Services
                    
                    
                    TotalThree
      months ended March 31, 2010:Operating
      expenses
                    
                    
                    (1,268
                    )
                    
                    
                    (334
                    )
                    
                    
                    (1,602
                    )$
                    (1,268
                    )
                    
                    $
                    (334
                    )
                    
                    $
                    (1,602
                    )





Computer
                      Games
                    
                    
                    VoIP
                      Telephony
                      Services
                    
                    
                    TotalThree
      months ended March 31, 2009:Operating
      expenses
                    
                    
                    (2,698
                    )
                    
                    
                    (299
                    )
                    
                    
                    (2,997
                    )$
                    (2,698
                    )
                    
                    $
                    (299
                    )
                    
                    $
                    (2,997
                    )


12





LIQUIDITY
AND CAPITAL RESOURCES


CASH
FLOW ITEMS





As of
March 31, 2010, we had approximately $596 in cash and cash equivalents as
compared to approximately $1,259 as of December 31, 2009. Net cash flows
provided from operating activities of continuing operations totaled
approximately $16 thousand for the three months ended March 31, 2010 compared to
net cash flows used in operating activities of continuing operations of
approximately $17 thousand for the three months ended March 31,
2009.





A total
of approximately $17 thousand in net cash flows were used in the operating
activities of discontinued operations during the first quarter of 2010 as
compared to a use of approximately $28 thousand of cash in operating activities
of discontinued operations during the same period of the prior
year.





FUTURE
AND CRITICAL NEED FOR CAPITAL





The
accompanying condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business.
Accordingly, the condensed consolidated financial statements do not include any
adjustments relating to the recoverability of assets and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern. However, for the reasons described below, Company management
does not believe that cash on hand and cash flow generated internally by the
Company will be adequate to fund its limited overhead and other cash
requirements beyond a short period of time. These reasons raise significant
doubt about the Company’s ability to continue as a going concern.





During
its recent past, the Company was able to continue operating as a going concern
due principally to funding of $500 thousand received during 2008 under a
Revolving Loan Agreement with an entity controlled by Michael S. Egan, its
Chairman and Chief Executive Officer and a total of approximately $463 thousand
received during 2009 and the first quarter of 2010 under an Earn-out Agreement
with an entity also controlled by Mr. Egan.





At
March 31, 2010, the Company had a net working capital deficit of approximately
$3.1 million.  Such working capital deficit included (i) a total of
approximately $586 thousand in principal and accrued interest owed under the
aforementioned Revolving Loan Agreement; (ii) a total of $175 thousand in
management service fees owed under a Master Services Agreement to an entity
controlled by Mr. Egan; and (iii) an aggregate of approximately $2.35 million in
unsecured accounts payable and accrued expenses owed to vendors and other
non-related third parties (of which approximately $1.7 million relates to
liabilities of our VoIP telephony service discontinued business, with a
significant portion of such liabilities related to charges which have been
disputed by theglobe). theglobe believes that its ability to continue as a going
concern for any significant length of time in the future will be heavily
dependent, among other things, on its ability to prevail and avoid making any
payments with respect to such disputed vendor charges and/or to negotiate
favorable settlements (including discounted payment and/or payment term
concessions) with the aforementioned creditors.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
29, 2008, the Company (i) sold the business and substantially all of the assets
of its Tralliance Corporation subsidiary to Tralliance Registry Management, and
(ii) issued 229 million shares of its Common Stock (the “Shares”) to Registry
Management (the “Purchase Transaction”). Tralliance Registry Management and
Registry Management are entities controlled by Michael S. Egan. The closing of
the Purchase Transaction resulted in the cancellation of all of the Company’s
remaining Convertible Debt, related accrued interest and rent and accounts
payable owed to entities controlled by Mr. Egan as of the date of closing
(totaling approximately $6.4 million). However, the Company continues to be
obligated to repay its principal borrowings totaling $500 thousand, plus accrued
interest at the rate of 10% per annum (approximately $86 thousand as of March
31, 2010), due to an entity controlled by Mr. Egan under the aforementioned
Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
Agreement, as amended on May 7, 2009, including accrued interest, are due and
payable by the Company in one lump sum on the earlier of (i) five business days
following any demand for payment, which demand can be made at any time, or (ii)
the occurrence of an event of default as defined in the Revolving Loan
Agreement. The Company currently has no ability to repay this loan should a
demand for payment be made by the noteholder.  All borrowings under
the Revolving Loan Agreement are secured by a pledge of all of the assets of the
Company and its subsidiaries. After giving effect to the closing of the Purchase
Transaction and the issuance of the Shares thereunder, Mr. Egan now beneficially
owns approximately 76% of the Company’s issued and outstanding Common Stock at
March 31, 2010.





As
additional consideration under the Purchase Transaction, Tralliance Registry
Management is obligated to pay an earn-out to theglobe equal to 10% (subject to
certain minimums) of Tralliance Registry Management’s net revenue (as defined)
derived from “.travel” names registered by Tralliance Registry Management from
September 29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out
payable by Tralliance Registry Management to theglobe was $300 thousand in the
first year, and will increase by $25 thousand in each subsequent year (pro-rated
for the final year of the Earn-out).


13


In
connection with the closing of the Purchase Transaction, the Company also
entered into a Master Services Agreement with an entity controlled by Mr. Egan
whereby for a fee of $20 thousand per month ($240 thousand per annum) such
entity will provide personnel and services to the Company so as to enable it to
continue its existence as a public company without the necessity of any
full-time employees of its own. Additionally, commensurate with the closing of
the Purchase Transaction, Termination Agreements with each of its current
executive officers, which terminated their previous and then existing employment
agreements, were executed. Notwithstanding the termination of these employment
agreements, each of our current executive officers and directors remain as
executive officers and directors of the Company.





Immediately
following the closing of the Purchase Transaction, theglobe became a shell
company with no material operations or assets, and no source of revenue other
than under the Earn-out.  It is expected that theglobe’s future
operating expenses as a public shell company will consist primarily of expenses
incurred under the aforementioned Master Services Agreement and other customary
public company expenses, including legal, audit and other miscellaneous public
company costs.





As a
shell company, management believes that theglobe will most likely continue to
incur net and cash flow losses for the foreseeable future. However, assuming
that no significant unplanned costs are incurred, management believes that
theglobe’s future losses will be limited. Further, in the event that Registry
Management is successful in substantially increasing net revenue derived from
“.travel” name registrations (and as the result maximizing theglobe’s Earn-out
revenue) in the future, theglobe’s prospects for achieving profitability will be
enhanced. To date, the Company has received only the minimum payments pursuant
to the Earn-out.





It is the
Company’s preference to avoid filing for protection under the U.S. Bankruptcy
Code. However, based upon the Company’s current financial condition as discussed
above, management believes that additional debt or equity capital will need to
be raised in order for theglobe to continue to operate as a going concern on a
long-term basis. Such capital will be needed both to (i) fund its expected
limited future net losses and (ii) repay the $586 thousand of secured debt and
related accrued interest due under the Revolving Loan Agreement and the $175
thousand of management service fees due under the Master Services Agreement, and
a portion of the $2.35 million unsecured indebtedness (assuming theglobe is
successful in favorably resolving and settling certain disputed and non-disputed
vendor charges related to such unsecured indebtedness).  Any such
capital would likely come from Mr. Egan, or affiliates of Mr. Egan, as the
Company currently has no access to credit facilities and had traditionally
relied upon borrowings from related parties to meet short-term liquidity
needs.  Any such capital raised would likely result in very
substantial dilution in the number of outstanding shares of the Company’s Common
Stock.





On a
short-term liquidity basis, the Company must be successful in collecting the
quarterly Earn-out payments contractually due from Tralliance Registry
Management on a timely basis, and must receive the continued indulgence of
substantially all of its creditors, in order to continue to operate as a going
concern in the near term.  Given theglobe’s current financial
condition and the state of the current United States capital markets and
economy, it has no current intent to seek to acquire, or start, any other
businesses.





EFFECTS
OF INFLATION





Management
believes that inflation has not had a significant effect on our results of
operations during 2010 and 2009.





MANAGEMENT'S
DISCUSSION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES





The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. At March 31, 2010 and December 31, 2009, a significant portion of our
net liabilities of discontinued operations relate to charges that have been
disputed by the Company and for which estimates have been required. Our
estimates, judgments and assumptions are continually evaluated based on
available information and experience. Because of the use of estimates inherent
in the financial reporting process, actual results could differ from those
estimates.





Certain
of our accounting policies require higher degrees of judgment than others in
their application. Primarily, these include valuation of accounts receivables,
accounts payable and accrued expenses.





IMPACT
OF RECENTLY ISSUED ACCOUNTING STANDARDS





In the
second quarter of 2009, the Company adopted a new accounting standard included
in FASB ASC Topic 855 Subsequent Events that establishes general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before the financial statements are issued or are available to be issued.
This new accounting standard provides guidance on the period after the balance
sheet date during which management of a reporting entity should evaluate events
or transactions that may occur for potential recognition or disclosure in the
financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial
statements and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. The implementation of
this standard did not have a material impact on the Company’s consolidated
financial statements.





The FASB
has issued Accounting Standard Update (ASU) No. 2010-02, Consolidation (Topic 810) –
Accounting and Reporting for Decreases in Ownership of a Subsidiary – A Scope
Clarification. This ASU clarifies that the scope of the decrease in
ownership provisions of Subtopic 810-10 and related guidance and also clarifies
that the decrease in ownership guidance in Subtopic 810-10 does not apply to:
(a) sales of in substance real estate; and (b) conveyances of oil and gas
mineral rights, even if these transfers involve businesses. The amendments in
this ASU also expand the disclosure requirements about deconsolidation of a
subsidiary or derecognition of a group of assets. ASU 2010-02 is effective
beginning in the first interim or annual reporting period ending on or after
December 15, 2009. The adoption of this accounting standard will have an effect
on the presentation and disclosure of the noncontrolling interests of any non
wholly-owned businesses acquired in the future.


14





Management
has determined that all other recently issued accounting pronouncements will not
have a material impact on the Company’s financial statements or do not apply to
the Company’s operations.





ITEM
4T. CONTROLS AND PROCEDURES





We
maintain disclosure controls and procedures that are designed to ensure (1) that
information required to be disclosed by us in the reports we file or submit
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's ("SEC") rules and forms, and (2)
that this information is accumulated and communicated to management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, management recognizes that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the
cost benefit relationship of possible controls and procedures.





Our Chief
Executive Officer and Chief Financial Officer have evaluated the effectiveness
of our disclosure controls and procedures as of March 31, 2010. Based on that
evaluation, our Chief Executive Officer and our Chief Financial Officer have
concluded that our disclosure controls and procedures are effective in alerting
them in a timely manner to material information regarding us (including our
consolidated subsidiaries) that is required to be included in our periodic
reports to the SEC.





Our
management, with the participation of our Chief Executive Officer and our Chief
Financial Officer, have evaluated any change in our internal control over
financial reporting that occurred during the quarter ended March 31, 2010 that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting, and have determined there to be no
reportable changes.





PART
II - OTHER INFORMATION


ITEM
1. LEGAL PROCEEDINGS





See Note
6, "Litigation," of the Financial Statements included in this
Report.





ITEM
1A. RISK FACTORS





In
addition to the other information in this report, the following factors should
be carefully considered in evaluating our business and prospects.





RISKS
RELATING TO OUR BUSINESS GENERALLY





WE
MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN.





The
accompanying condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business.
Accordingly, the condensed consolidated financial statements do not include any
adjustments relating to the recoverability of assets and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern. However, for the reasons described below, Company management
does not believe that cash on hand and cash flow generated internally by the
Company will be adequate to fund its limited overhead and other cash
requirements beyond a short period of time. These reasons raise significant
doubt about the Company’s ability to continue as a going concern.





During
its recent past, the Company was able to continue operating as a going concern
due principally to funding of $500 thousand received during 2008 under a
Revolving Loan Agreement with an entity controlled by Michael S. Egan, its
Chairman and Chief Executive Officer and a total of approximately $463 thousand
received during 2009 and the first quarter of 2010 under an Earn-out Agreement
with an entity also controlled by Mr. Egan.





At
March 31, 2010, the Company had a net working capital deficit of approximately
$3.1 million.  Such working capital deficit included (i) a total of
approximately $586 thousand in principal and accrued interest owed under the
aforementioned Revolving Loan Agreement; (ii) a total of $175 thousand in
management service fees owed under a Master Services Agreement to an entity
controlled by Mr. Egan; and (iii) an aggregate of approximately $2.35 million in
unsecured accounts payable and accrued expenses owed to vendors and other
non-related third parties (of which approximately $1.7 million relates to
liabilities of our VoIP telephony service discontinued business, with a
significant portion of such liabilities related to charges which have been
disputed by theglobe). theglobe believes that its ability to continue as a going
concern for any significant length of time in the future will be heavily
dependent, among other things, on its ability to prevail and avoid making any
payments with respect to such disputed vendor charges and/or to negotiate
favorable settlements (including discounted payment and/or payment term
concessions) with the aforementioned creditors.


15





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
29, 2008, the Company (i) sold the business and substantially all of the assets
of its Tralliance Corporation subsidiary to Tralliance Registry Management, and
(ii) issued 229 million shares of its Common Stock (the “Shares”) to Registry
Management (the “Purchase Transaction”). Tralliance Registry Management and
Registry Management are entities controlled by Michael S. Egan. The closing of
the Purchase Transaction resulted in the cancellation of all of the Company’s
remaining Convertible Debt, related accrued interest and rent and accounts
payable owed to entities controlled by Mr. Egan as of the date of closing
(totaling approximately $6.4 million). However, the Company continues to be
obligated to repay its principal borrowings totaling $500 thousand, plus accrued
interest at the rate of 10% per annum (approximately $86 thousand as of March
31, 2010), due to an entity controlled by Mr. Egan under the aforementioned
Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
Agreement, as amended on May 7, 2009, including accrued interest, are due and
payable by the Company in one lump sum on the earlier of (i) five business days
following any demand for payment, which demand can be made at any time, or (ii)
the occurrence of an event of default as defined in the Revolving Loan
Agreement. The Company currently has no ability to repay this loan should a
demand for payment be made by the noteholder.  All borrowings under
the Revolving Loan Agreement are secured by a pledge of all of the assets of the
Company and its subsidiaries. After giving effect to the closing of the Purchase
Transaction and the issuance of the Shares thereunder, Mr. Egan now beneficially
owns approximately 76% of the Company’s issued and outstanding Common Stock at
March 31, 2010.





As
additional consideration under the Purchase Transaction, Tralliance Registry
Management is obligated to pay an earn-out to theglobe equal to 10% (subject to
certain minimums) of Tralliance Registry Management’s net revenue (as defined)
derived from “.travel” names registered by Tralliance Registry Management from
September 29, 2008 through May 5, 2015 (the “Earn-out”). The minimum Earn-out
payable by Tralliance Registry Management to theglobe was $300 thousand in the
first year, and will increase by $25 thousand in each subsequent year (pro-rated
for the final year of the Earn-out).





In
connection with the closing of the Purchase Transaction, the Company also
entered into a Master Services Agreement with an entity controlled by Mr. Egan
whereby for a fee of $20 thousand per month ($240 thousand per annum) such
entity will provide personnel and services to the Company so as to enable it to
continue its existence as a public company without the necessity of any
full-time employees of its own. Additionally, commensurate with the closing of
the Purchase Transaction, Termination Agreements with each of its current
executive officers, which terminated their previous and then existing employment
agreements, were executed. Notwithstanding the termination of these employment
agreements, each of our current executive officers and directors remain as
executive officers and directors of the Company.





Immediately
following the closing of the Purchase Transaction, theglobe became a shell
company with no material operations or assets, and no source of revenue other
than under the Earn-out.  It is expected that theglobe’s future
operating expenses as a public shell company will consist primarily of expenses
incurred under the aforementioned Master Services Agreement and other customary
public company expenses, including legal, audit and other miscellaneous public
company costs.





As a
shell company, management believes that theglobe will most likely continue to
incur net and cash flow losses for the foreseeable future. However, assuming
that no significant unplanned costs are incurred, management believes that
theglobe’s future losses will be limited. Further, in the event that Registry
Management is successful in substantially increasing net revenue derived from
“.travel” name registrations (and as the result maximizing theglobe’s Earn-out
revenue) in the future, theglobe’s prospects for achieving profitability will be
enhanced. To date, the Company has received only the minimum payments pursuant
to the Earn-out.





It is the
Company’s preference to avoid filing for protection under the U.S. Bankruptcy
Code. However, based upon the Company’s current financial condition as discussed
above, management believes that additional debt or equity capital will need to
be raised in order for theglobe to continue to operate as a going concern on a
long-term basis. Such capital will be needed both to (i) fund its expected
limited future net losses and (ii) repay the $586 thousand of secured debt and
related accrued interest due under the Revolving Loan Agreement and the $175
thousand of management service fees due under the Master Services Agreement, and
a portion of the $2.35 million unsecured indebtedness (assuming theglobe is
successful in favorably resolving and settling certain disputed and non-disputed
vendor charges related to such unsecured indebtedness).  Any such
capital would likely come from Mr. Egan, or affiliates of Mr. Egan, as the
Company currently has no access to credit facilities and had traditionally
relied upon borrowings from related parties to meet short-term liquidity
needs.  Any such capital raised would likely result in very
substantial dilution in the number of outstanding shares of the Company’s Common
Stock.





On a
short-term liquidity basis, the Company must be successful in collecting the
quarterly Earn-out payments contractually due from Tralliance Registry
Management on a timely basis, and must receive the continued indulgence of
substantially all of its creditors, in order to continue as a going concern in
the near term.  Given theglobe’s current financial condition and the
state of the current United States capital markets and economy, it has no
current intent to seek to acquire, or start, any other
businesses.


16





WE
MAY NOT BE SUCCESSFUL IN SETTLING DISPUTED VENDOR CHARGES.





Our
balance sheet at March 31, 2010 includes certain material estimated liabilities
related to disputed vendor charges incurred primarily as the result of the
failure and subsequent shutdown of our discontinued VoIP telephony services
business. Although we are seeking to resolve and settle these disputed charges
for amounts substantially less than recorded amounts, there can be no assurances
that we will be successful in this regard. Additionally, the legal and
administrative costs of resolving these disputed charges may be expensive. An
adverse outcome in any of these matters could materially and adversely affect
our financial position, utilize a significant portion of our cash resources
and/or require additional capital to be infused into the Company, and adversely
affect our ability to continue to operate as a going concern. See Note 4,
“Discontinued Operations” in the Notes to Consolidated Financial Statements for
future details.





OUR
NET OPERATING LOSS CARRYFORWARDS MAY BE SUBSTANTIALLY LIMITED.





As of
December 31, 2009, we had net operating loss carryforwards which may be
potentially available for U.S. tax purposes of approximately $166 million. These
carryforwards expire through 2029. The Tax Reform Act of 1986 imposes
substantial restrictions on the utilization of net operating losses and tax
credits in the event of an "ownership change" of a corporation. Due to various
significant changes in our ownership interests, as defined in the Internal
Revenue Code of 1986, as amended, that occurred prior to December 31, 2008, we
have substantially limited the availability of our net operating loss
carryforwards.





OUR
OFFICERS, INCLUDING OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER AND PRESIDENT HAVE
OTHER INTERESTS; WE HAVE CONFLICTS OF INTEREST WITH OUR DIRECTORS; ALL OF OUR
DIRECTORS ARE EMPLOYEES OR STOCKHOLDERS OF THE COMPANY OR AFFILIATES OF OUR
LARGEST STOCKHOLDER.





Our
Chairman and Chief Executive Officer, Mr. Michael Egan, is an officer or
director of other companies. Mr. Egan became our Chief Executive Officer
effective June 1, 2002. Mr. Egan is also the controlling investor of The
Registry Management Company, LLC, Dancing Bear Investments, Inc., E&C
Capital Partners LLLP, and E&C Capital Partners II, LLC, which are our
largest stockholders. Mr. Egan is also the controlling investor of Certified
Vacations Group, Inc. and Labigroup Holdings, LLC, entities which have had
various ongoing business relationships with the Company. Additionally, Mr. Egan
is the controlling investor of Tralliance Registry Management Company, LLC, an
entity which has recently acquired our Tralliance business (see Note 3, “Sale of
Tralliance and Share Issuance” in the Notes to Consolidated Financial Statements
for further details).





Our
President, Treasurer and Chief Financial Officer and Director, Mr. Edward A.
Cespedes, is also an officer, director or shareholder of other companies,
including E&C Capital Partners LLLP, E&C Capital Partners II, LLC,
Labigroup Holdings LLC and The Registry Management Company, LLC.





Our Vice
President of Finance and Director, Ms. Robin Lebowitz is also an officer of
Dancing Bear Investments, Inc and director of Certified Vacations Group, Inc.
She is also an officer, director or shareholder of other companies or entities
controlled by Mr. Egan and Mr. Cespedes, including The Registry Management
Company, LLC.





Due to
the relationships with his related entities, Mr. Egan will have an inherent
conflict of interest in making any decision related to transactions between the
related entities and us. Furthermore, the Company's Board of Directors presently
is comprised entirely of individuals who are executive officers of theglobe, and
therefore are not "independent." We intend to review related party transactions
in the future on a case-by-case basis.





WE
CURRENTLY HAVE NO BUSINESS OPERATIONS AND ARE A SHELL COMPANY.





Immediately
following the closing of the Purchase Transaction, theglobe became a shell
company with no material operations or assets, and no source of revenue other
than under the “net revenue” earn-out arrangement with Tralliance Registry
Management. It is expected that theglobe’s future operating expenses as a public
shell company will consist primarily of expenses incurred under the
aforementioned Master Services Agreement and other customary public company
expenses, including legal, audit and other miscellaneous public company costs.
Given theglobe’s current financial condition and the state of the current United
States capital markets and economy, the Company has no current intent to seek to
acquire, or start, any other business.





WE
MAY SUFFER ADVERSE CONSEQUENCES IF WE ARE DEEMED AN INVESTMENT COMPANY (DEFINED
BELOW) AND WE MAY INCUR SIGNIFICANT COSTS TO AVOID INVESTMENT COMPANY
STATUS.





We
believe that we are not an investment company as defined by the Investment
Company Act of 1940.  If the Commission or a court were to disagree
with us, we could be required to register as an investment
company.  This would negatively affect our ability to consummate a
potential acquisition of an operating company, subjecting us to disclosure and
accounting guidance geared toward investment, rather than operating companies;
limiting our liability to borrow money, issue options, issue multiple classes of
stock and debt, and engage in transactions with affiliates; and requiring us to
undertake significant costs and expenses to meet disclosure and regulatory
requirements to which we would be subject as a registered investment
company.


17





RISKS
RELATING TO OUR COMMON STOCK





WE
ARE CONTROLLED BY OUR CHAIRMAN.





On
September 29, 2008, in connection with the closing of the Purchase Transaction
more fully described in Note 3, “Sale of Tralliance and Share Issuance,” in the
accompanying Notes to Consolidated Financial Statements, the Company issued 229
million shares of its Common Stock to Registry Management, an entity controlled
by Michael S. Egan, its Chairman and Chief Executive Officer. Previously on June
10, 2008, Dancing Bear Investments, Inc., also an entity controlled by Mr. Egan,
converted an aggregate of $400 thousand of outstanding convertible secured
promissory notes due to them by the Company into 40 million shares of our Common
Stock. As a result of the issuance of the 269 million shares under the
transactions described above, Mr. Egan’s beneficial ownership has been increased
to approximately 76% of the Company’s Common Stock. Accordingly, Mr. Egan is now
in a position to control the vote on all corporate actions in the
future.





DELISTING
OF OUR COMMON STOCK MAKES IT MORE DIFFICULT FOR INVESTORS TO SELL
SHARES.





The
shares of our Common Stock were delisted from the NASDAQ national market in
April 2001 and are now traded in the over-the-counter market on what is commonly
referred to as the electronic bulletin board or "OTCBB." As a result, an
investor may find it more difficult to dispose of or obtain accurate quotations
as to the market value of the securities. The delisting has made trading our
shares more difficult for investors. It has also made it more difficult for us
to raise additional capital. We may also incur additional costs under state
blue-sky laws if we sell equity due to our delisting.





OUR
COMMON STOCK IS SUBJECT TO CERTAIN "PENNY STOCK" RULES WHICH MAY MAKE IT A LESS
ATTRACTIVE INVESTMENT.





Since the
trading price of our Common Stock is less than $5.00 per share and our net
tangible assets are less than $2.0 million, trading in our Common Stock is
subject to the requirements of Rule 15g-9 of the Exchange Act. Under Rule 15g-9,
brokers who recommend penny stocks to persons who are not established customers
and accredited investors, as defined in the Exchange Act, must satisfy special
sales practice requirements, including requirements that they make an
individualized written suitability determination for the purchaser; and receive
the purchaser's written consent prior to the transaction. The Securities
Enforcement Remedies and Penny Stock Reform Act of 1990 also requires additional
disclosures in connection with any trades involving a penny stock, including the
delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated with that market.
Such requirements may severely limit the market liquidity of our Common Stock
and the ability of purchasers of our equity securities to sell their securities
in the secondary market. For all of these reasons, an investment in our equity
securities may not be attractive to our potential investors.





AS
A RESULT OF THE CLOSING OF THE PURCHASE AGREEMENT, WE ARE A SHELL COMPANY AND
ARE SUBJECT TO MORE STRINGENT REPORTING REQUIREMENTS AND RULE 144 IS NOT
AVAILABLE AS A BASIS OF RESALE.





As a
result of the consummation of the Purchase Transaction, we have no or nominal
operations and assets, and pursuant to Rule 405 and Exchange Act Rule 12b-2, we
are a shell company. Applicable securities rules prohibit shell companies from
using a Form S-8 to register securities pursuant to employee compensation plans.
However, the rules do not prevent us from registering securities pursuant to
certain other registration statements. Additionally, Form 8-K requires shell
companies to provide more detailed disclosure upon completion of a transaction
that causes it to cease being a shell company. To the extent we acquire a
business in the future, we must file a current report on Form 8-K containing the
information required in a registration statement on Form 10, within four
business days following completion of the transaction together with financial
information of the private operating company. In order to assist the SEC in the
identification of shell companies, we are also required to check a box on Form
10-Q and Form 10-K indicating that we are a shell company. To the extent that we
are required to comply with additional disclosure because we are a shell
company, we may be delayed in executing any mergers or acquiring other assets
that would cause us to cease being a shell company. In addition, the SEC adopted
amendments to Rule 144 effective February 15, 2008, which do not allow a holder
of restricted securities of a “shell company” to resell their securities
pursuant to Rule 144. Preclusion from the use of the exemption from registration
afforded by Rule 144 may make it more difficult for us to sell equity securities
in the future.




ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





(a)
Unregistered Sales of Equity Securities.





None.





(b) Use
of Proceeds From Sales of Registered Securities.





Not
applicable.


18





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





None.





ITEM
4. (REMOVED AND RESERVED)





ITEM
5. OTHER INFORMATION





None.


19





ITEM
6. EXHIBITS





31.1
            Certification of the Chief
      Executive Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a).





31.2
            Certification of the Chief
      Financial Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a).





32.1
            Certification of the Chief
      Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of
  2002.





32.2
            Certification of the Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of
  2002.


20





SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) 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.





theglobe.com,
      inc.Dated :  May 12,
      2010
                    By:
                    /s/ 
      Michael S.
      EganMichael
      S. EganChief
      Executive Officer(Principal
      Executive Officer)By:
                    /s/ 
      Edward A.
      CespedesEdward
      A. CespedesPresident
      and Chief Financial Officer(Principal
      Financial
Officer)


21





EXHIBIT
INDEX




31.1
            Certification of the Chief
      Executive Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a).





31.2
            Certification of the Chief
      Financial Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a).





32.1
            Certification of the Chief
      Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of
  2002.





32.2
            Certification of the Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of
  2002.


22