AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 16, 1999

                     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 JUNE 30, 1999

                                     OR

  [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                            EXCHANGE ACT OF 1934

   FOR THE TRANSITION PERIOD FROM _______________ TO ___________________

                        COMMISSION FILE NO. 0-25053

                             THEGLOBE.COM, INC.

           (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            STATE OF DELAWARE                         14-1781422
     -------------------------------        -------------------------------
     (STATE OR OTHER JURISDICTION OF              (I.R.S. EMPLOYER
      INCORPORATION OR ORGANIZATION)             IDENTIFICATION NO.)

            120 BROADWAY
         NEW YORK, NEW YORK                             10271
 ---------------------------------------              ----------
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)             (ZIP CODE)

                               (212) 894-3600

            ----------------------------------------------------
            (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                            31 WEST 21ST STREET
                         NEW YORK, NEW YORK 10010

                        ---------------------------
           (Former name, former address and former fiscal year,
                       if changed since last report.)

     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.

Yes X   No

     The number of shares  outstanding  of the  Registrant's  Common Stock,
$.001 par value (the "Common Stock"), as of August 11, 1999 was 26,529,718.


<PAGE>
                             theglobe.com, inc.
                                 FORM 10-Q

                                   INDEX


                                                                PAGE NUMBER
                                                                -----------

PART I.  FINANCIAL INFORMATION

Item 1.  Condensed Consolidated Financial Statements                 1

         Condensed Consolidated Balance Sheets at
          June 30, 1999 (unaudited) and December 31, 1998            1

         Unaudited Condensed Consolidated Statements of
          Operations for the three and six months ended
          June 30, 1999 and 1998                                     2

         Unaudited Condensed Consolidated Statements of
          Cash Flows for the six months ended June 30, 1999
           and 1998                                                  3

         Notes to Unaudited Condensed Consolidated Financial
          Statements                                                 4

Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                       11

Item 3.  Qualitative and Quantitative Disclosures about Market
          Risk                                                      33

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                        II-1

Item 2.  Changes in Securities and Use of Proceeds                II-2

Item 3.  Defaults Upon Senior Securities                          II-2

Item 4.  Submission of Matters to a Vote of Security Holders      II-2

Item 5.  Other Information                                        II-2

Item 6.  Exhibits and Reports on Form 8-K                         II-2

         A.  Exhibits
         B.  Reports on Form 8-K

Signatures                                                       II-3


<PAGE>
                                   PART I

                           FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                             theglobe.com, inc.
                   CONDENSED CONSOLIDATED BALANCE SHEETS

                                              June 30,               December 31,
                                                1999                     1998
                                          ---------------          --------------
                                           (unaudited)
<S>                                       <C>                      <C>
              ASSETS
Current assets:
  Cash and cash equivalents............   $    77,855,242          $   29,250,572
  Short-term investments...............           906,472                 898,546
  Accounts receivable, net.............         2,879,491               2,004,875
  Prepaids and other current assets....           634,996                 678,831
                                          ---------------          --------------

      Total current assets.............        82,276,201              32,832,824

Property and equipment, net............         8,248,701               3,562,559
Goodwill and other intangible
  assets, net..........................        63,182,341                      --
Restricted investments.................         3,584,109               1,734,495
                                          ---------------          --------------

      Total assets.....................   $   157,291,352          $   38,129,878
                                          ===============          ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable.....................   $     2,940,452          $    2,614,445
  Accrued expenses.....................         1,070,452                 817,463
  Accrued compensation.................           913,492                 691,279
  Deferred revenue.....................         1,099,266                 673,616
  Current installments of obligations
    under capital leases...............         1,600,401               1,026,728
  Current portion of long-term debt....           234,319                      --
                                          ---------------          --------------

      Total current liabilities........         7,858,382               5,823,531

Long-term debt.........................         2,443,882                      --
Obligations under capital leases,
  excluding current installments.......         2,631,934               2,005,724
Deferred rent..........................           381,282                      --

Stockholders' equity:
  Common stock.........................            26,528                  20,625
  Additional paid-in capital...........       183,931,162              50,904,181
  Deferred compensation................           (95,413)               (128,251)
  Accumulated other comprehensive
    income.............................           (63,662)                (50,006)
  Accumulated deficit..................       (39,822,743)            (20,445,926)
                                          ---------------          --------------

      Total stockholders' equity.......       143,975,872              30,300,623

Commitments & contingencies............
                                          ---------------          --------------
      Total liabilities and
        stockholders' equity...........   $   157,291,352          $   38,129,878
                                          ===============          ==============


    See accompanying notes to unaudited condensed consolidated financial
                                statements.
</TABLE>


                                     1
<PAGE>
<TABLE>
<CAPTION>
                              theglobe.com, inc.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                       Three Months Ended               Six Months Ended
                                            June 30,                        June 30,
                                 -----------------------------    ----------------------------
                                     1999            1998             1999           1998
                                 -------------   -------------    ------------   -------------
                                           (unaudited)                     (unaudited)
<S>                               <C>             <C>             <C>             <C>
Revenues......................    $  4,130,017    $    779,812    $  7,321,821    $  1,173,398
Cost of revenues..............       1,753,958         265,229       2,950,308         463,275
                                  ------------    ------------    ------------    ------------
      Gross profit............       2,376,059         514,583       4,371,513         710,123

Operating expenses:
  Sales and marketing.........       3,481,616       3,107,939       5,668,534       4,532,945
  Product development.........       2,805,981         165,337       4,919,787         250,869
  General and
    administrative............       2,992,649       1,299,108       5,746,680       2,396,716
  Amortization of goodwill
    and intangible assets.....       6,408,765              --       7,769,543              --
                                  ------------    ------------    ------------    ------------

        Total operating
          expenses............      15,689,011       4,572,384      24,104,544       7,180,530
                                  ------------    ------------    ------------    ------------

      Loss from operations....     (13,312,952)     (4,057,801)    (19,733,031)     (6,470,407)

Interest and other
  income, net.................         313,553         217,458         509,179         672,637
                                  ------------    ------------    ------------    ------------

      Loss before provision
        for income taxes......     (12,999,399)     (3,840,343)    (19,223,852)     (5,797,770)

Provision for income taxes....         107,076          10,475         152,965          26,500
                                  ------------    ------------    ------------    ------------

      Net loss................    $(13,106,475)   $ (3,850,818)   $(19,376,817)   $ (5,824,270)
                                  ============    ============    ============    ============

Basic and diluted net loss
  per share...................    $      (0.54)   $      (1.65)   $      (0.85)   $      (2.51)
                                  ============    ============    ============    ============

Weighted average basic and
  diluted shares outstanding..      24,421,000       2,337,640      22,764,751       2,322,778
                                  ============    ============    ============    ============

    See accompanying notes to unaudited condensed consolidated financial
                                statements.
</TABLE>


                                     2
<PAGE>
<TABLE>
<CAPTION>
                              theglobe.com, inc.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                Six Months Ended
                                                                    June 30,
                                                   ---------------------------------------
                                                          1999                    1998
                                                   ---------------------------------------
                                                       (unaudited)             (unaudited)
<S>                                                <C>                     <C>
Cash flows from operating activities:
 Net loss....................................      $   (19,376,816)        $    (5,824,270)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
   Depreciation and amortization.............            8,674,559                 238,411
   Non-cash compensation.....................               31,769                      --
   Deferred compensation.....................               32,838                  23,119
   Amortization of debt discount.............               65,505                      --
   Deferred rent.............................              381,282                      --
  Changes in operating assets and
   liabilities, net of effect of
   acquisitions:
   Accounts receivable, net..................             (554,210)               (369,982)
   Prepaids and other current assets.........              170,800                 (75,847)
   Other assets..............................                   --                (568,226)
   Accounts payable..........................             (364,044)              1,633,521
   Accrued expenses..........................             (631,549)                509,505
   Accrued compensation......................              121,279                (998,999)
   Deferred revenue..........................             (121,125)                 19,063
                                                   ----------------        ---------------

  Net cash used in operating activities......          (11,569,712)             (5,413,705)
                                                   ----------------        ---------------

Cash flows from investing activities:
 Purchases of securities.....................          (10,796,291)               (230,484)
 Proceeds from sales of securities...........           10,783,388               3,087,381
 Purchases of property and equipment.........           (3,410,242)               (247,859)
 Cash acquired in connection with
  acquisitions, net..........................              691,320                      --
 Payments of security deposits...............           (1,825,509)                     --
                                                   ----------------        ---------------

  Net cash (used in) provided by investing
   activities................................           (4,557,334)              2,609,038
                                                   ----------------        ---------------

Cash flows from financing activities:
 Payments under capital lease obligations....             (599,702)                (77,405)
 Payments of long-term debt..................              (10,037)                     --
 Proceeds from exercise of common stock
  options and warrants.......................              336,699                   8,172
 Proceeds from issuance of common stock......           65,013,435                      --
                                                   ---------------         ---------------

  Net cash provided by (used in) financing
   activities................................           64,740,395                 (69,233)
                                                   ---------------         ----------------

Net change in cash and cash equivalents......           48,613,349              (2,873,900)

Effect of exchange rate changes on cash and
 cash equivalents............................               (8,679)                     --

Cash and cash equivalents at beginning of
 period......................................           29,250,572               5,871,291
                                                   ---------------         ---------------

Cash and cash equivalents at end of period...      $    77,855,242         $     2,997,391
                                                   ===============         ===============

Supplemental disclosure of noncash
   transactions:
   Equipment acquired under capital leases...      $     1,632,801         $       836,648
                                                   ===============         ===============

         See accompanying notes to unaudited condensed consolidated
                           financial statements.
</TABLE>
                                     3
<PAGE>
                             theglobe.com, inc.

       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



(1)  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)  Description of Business

theglobe.com,  inc. (the "Company" or "theglobe")  was  incorporated in May
1995 (inception) and commenced  operations on that date.  theglobe operates
an online  network with members and users in the United  States and abroad.
Users are able to personalize  their online  experience by publishing their
own content and  interacting  with others  having  similar  interests.  The
Company's  primary  revenue  source  is the  sale  of  advertisements  with
additional  revenues  generated through the sale of sponsorship  placements
within the Company's website, the sale of merchandise through the Company's
on-line store, electronic commerce revenue shares, development fees and, to
a lesser extent, the sale of membership service fees for enhanced services.

The Company's business is characterized by rapid technological  change, new
product  development  and  evolving  industry  standards.  Inherent  in the
Company's  business  are various  risks and  uncertainties,  including  its
limited operating history,  unproven business model and the limited history
of commerce on the Internet.  The Company's success may depend in part upon
the  emergence  of the  Internet as a  communications  medium,  prospective
product  development  efforts and the acceptance of the Company's solutions
by the marketplace.

(b)  Unaudited Interim Condensed Consolidated Financial Information

The unaudited interim condensed  consolidated  financial  statements of the
Company as of June 30, 1999 and for the three and six months ended June 30,
1999 and 1998 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  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 June 30, 1999,  the results of their  operations
for three and six months  ended June 30, 1999 and 1998 and their cash flows
for the six months ended June 30, 1999 and 1998.

The results of operations for such periods are not  necessarily  indicative
of  results  expected  for the full year or for any  future  period.  These
financial  statements  should  be  read in  conjunction  with  the  audited
financial  statements as of December 31, 1998, and for the three years then
ended and related notes  included in the Company's Form 10-K filed with the
Securities and Exchange Commission.

(c)  Principles of Consolidation

The Company's unaudited condensed  consolidated  financial statements as of
and for the  three and six  months  ended  June 30,  1999  include  (i) the
consolidated  accounts  of  the  Company  (prior  to  the  acquisitions  of
factorymall.com,  inc. and Attitude  Network,  Ltd.) (ii) the  consolidated
accounts of  shop.theglobe.com,  (formerly known as factorymall.com,  inc),
from  February  1, 1999 and (iii) the  consolidated  accounts  of  Attitude
Network,  Ltd.  from April 9, 1999.  The unaudited  condensed  consolidated
financial  statements for the prior year periods  include only the accounts
of theglobe.  All significant  intercompany  balances and transactions have
been eliminated.


                                     4
<PAGE>
(d)  Use of Estimates

The  preparation of  consolidated  financial  statements in conformity with
generally  accepted  accounting  principles  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 condensed  consolidated  financial  statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates.

(e)  Short-term Investments

Short-term   investments  are  classified  as  available-for-sale  and  are
available  to support  current  operations  or to take  advantage  of other
investment opportunities.  These investments primarily consist of corporate
bonds which are stated at their  estimated  fair value based upon  publicly
available  market quotes.  Unrealized  gains and losses are computed on the
basis of specific  identification and are included in stockholders' equity.
Realized  gains,  realized  losses  and  declines  in  value,  judged to be
other-than-temporary,  are included in other income. There were no material
gross  realized  gains or losses  from sales of  securities  in the periods
presented.    The   costs   of   securities   sold   are   based   on   the
specific-identification  method and interest earned is included in interest
income.  As of June 30, 1999,  the Company had gross  unrealized  losses of
$62,936  and  gross   unrealized   gains  of  $7,953  from  its  short-term
investments.  As of December  31,  1998,  the Company had gross  unrealized
losses of $50,006 from its short-term investments.

(f)  Goodwill and Other Intangible Assets

Goodwill  and  all  other  intangible  assets  are  being  amortized  on  a
straight-line  basis over their expected period of benefit ranging from two
to three years (three years for  goodwill).  Goodwill and other  intangible
assets are  stated  net of total  accumulated  amortization  of  $7,769,543
million at June 30,  1999.  The  Company  did not have  goodwill  and other
intangible assets for the three and six months ended June 30, 1998.

(g)  Revenue Recognition

The  Company's   revenues  are  derived   principally   from  the  sale  of
advertisements  under  short-term  contracts.  To date, the duration of the
Company's advertising  commitments has generally averaged from one to three
months.  Advertising revenues are recognized ratably in the period in which
the  advertisement  is  displayed,  provided  that no  significant  Company
obligations remain and collection of the resulting  receivable is probable.
Company obligations  typically include the guarantee of a minimum number of
"impressions" or times that an advertisement appears in pages viewed by the
users of the Company's online properties.

The  Company  also  derived  other  revenues  from the sale of  sponsorship
placements  within the Company's  website,  sales of  merchandise  from the
Company's  on-line   department  store  acquired  in  connection  with  the
acquisition of  factorymall.com,  inc.,  e-commerce  revenue shares and the
sales  of  membership  service  fees for  enhanced  services.  The  Company
recognizes  development fees related to the sale of sponsorship  placements
on the Company's website as revenue once the related development activities
have  been  performed.  The  Company  recognizes  revenue  from the sale of
merchandise  from its  on-line  store  when the  products  are  shipped  to
customers.  The Company provides an allowance for sales returns,  which has
been  insignificant  to  date.  Revenues  from the  Company's  share of the
proceeds  from  its  e-commerce   partners'   sales  are  recognized   upon
notification from its partners of sales attributable to the Company's site.
Membership  service fees are deferred and recognized  ratably over the term
of the subscription  period.  Other revenues accounted for 11.8% and 14.1%,
and 8.5% and 10.8% of revenues  for the three and six months ended June 30,
1999 and 1998, respectively.

The Company  trades  advertisements  on its web  properties in exchange for
advertisements  on the Internet sites of other  companies.  Barter revenues
and expenses are recorded at the fair market value of services  provided or
received, whichever is more determinable in the circumstances. Revenue from
barter  transactions  is  recognized  as  income  when  advertisements  are
delivered on the Company's web  properties.  Barter  expense is included in
sales and marketing and is recognized when the Company's advertisements are
run on other  companies'  web  properties,  which is  typically in the same
period when the barter revenue is recognized.  Barter revenues  represented
9% and 7%,  respectively,  of total  revenues  for the three and six months
ended June 30, 1999 and 3% of revenues  for the three and six months  ended
June 30 1998.
                                     5
<PAGE>
(h)  Net Loss Per Common Share

The Company  adopted  SFAS No. 128,  "Computation  of Earnings  Per Share,"
during the year ended  December 31, 1997. In  accordance  with SFAS No. 128
and the SEC Staff Accounting  Bulletin No. 98, basic earnings per share are
computed  using the weighted  average  number of common shares  outstanding
during  the  period.  Diluted  earnings  per share  reflect  the  potential
dilution that could occur if the weighted  average  number of common shares
outstanding  for the  period  included  common  equivalent  shares.  Common
equivalent  shares consist of the  incremental  common shares issuable upon
the  conversion  of  convertible  preferred  stock (using the  if-converted
method) and 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.  Pursuant to SEC
Staff  Accounting  Bulletin No. 98, common stock and convertible  preferred
stock issued for nominal consideration,  prior to the anticipated effective
date of an initial public offering (an "IPO"),  are required to be included
in the calculation of basic and diluted net loss per share, as if they were
outstanding for all periods presented. To date, the Company has not had any
issuances or grants for nominal consideration.

Diluted  loss  per  share  has  not  been  presented  separately,   as  the
outstanding stock options,  warrants and contingent stock purchase warrants
are anti-dilutive for each of the periods presented.

Diluted net loss per common  share for the three and six months  ended June
30,  1999 and 1998 does not  include  the  effects of  options to  purchase
4,553,988 and 1,400,742 shares of Common Stock, respectively; 4,011,534 and
3,522,732 Common Stock warrants, respectively; and -0- and 9,906,654 shares
of convertible  preferred stock on an "as if" converted basis for the three
and six months ended June 30, 1998.

(i)  Recent Accounting Pronouncements

In March  1998,  the AICPA  issued SOP 98-1,  "Accounting  for the Costs of
Computer   Software   Developed  or  Obtained  for  Internal  Use",   which
establishes  guidelines  for the  accounting  for the costs of all computer
software  developed  or  obtained  for  internal  use.  We adopted SOP 98-1
effective  for the year ended  December 31, 1998.  The adoption of SOP 98-1
did not have a  material  impact on our  condensed  consolidated  financial
statements contained herein.

In June 1998,  the FASB  issued  SFAS No. 133,  Accounting  for  Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting  standards  for  derivative  instruments,   including  derivative
instruments embedded in other contracts,  and for hedging activities.  SFAS
No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15, 2000.  This  statement  does not apply to the Company as the
Company  currently  does not have any  derivative  instruments  or  hedging
activities.

(j)  Stock Split

On May 14,  1999,  the  Company  effected  a  2-for-1  stock  split  to all
shareholders  of  record  as of  May 3,  1999.  All  share  and  per  share
information in the accompanying  consolidated financial statements has been
retroactively restated to reflect the effect of the stock split.

(k)  Reclassifications

Certain   reclassifications  have  been  made  to  prior  year's  financial
statements to conform to the current year's presentation.

(2)  ACQUISITIONS

a) factorymall.com, inc.

On February 1, 1999, theglobe formed Nirvana Acquisition Corp. ("Nirvana"),
a Washington corporation and a wholly-owned subsidiary of theglobe. Nirvana
was merged with and into  factorymall.com,  inc., a Washington  corporation
d/b/a  Azazz.com,   ("factorymall"),  with  factorymall  as  the  surviving
corporation.  The merger was effected pursuant to the Agreement and Plan of
Merger,  dated  February  1,  1999,  by and among  theglobe,  Nirvana,  and
factorymall and certain shareholders thereof.


                                     6
<PAGE>
As a result of the merger,  factorymall became a wholly-owned subsidiary of
theglobe.   factorymall  operates  Azazz.com,   a  leading  interactive
department store.  Subsequent to the acquisition,  factorymall was re-named
shop.theglobe.com.

The consideration  paid by theglobe in connection with the merger consisted
of  approximately  614,000 newly issued shares of Common Stock of theglobe.
In addition,  options to purchase  shares of  factorymall's  common  stock,
without par value,  were  exchanged  for options to purchase  approximately
82,034 shares of theglobe's  Common Stock.  Warrants to purchase  shares of
factorymall   common  stock  were   exchanged   for  warrants  to  purchase
approximately  18,810  shares of  theglobe's  common  stock.  theglobe also
assumed  certain bonus  obligations of factorymall  triggered in connection
with the merger that resulted in the issuance by theglobe of  approximately
73,728  shares of  theglobe's  common  stock and  payment  by  theglobe  of
approximately  $451,232 in cash.  The  Company  also  incurred  expenses of
approximately $694,300 related to the merger.

The  total  purchase   price  for  this   transaction   was   approximately
$22,776,000.  Of this amount,  approximately $126,000 of the purchase price
was allocated to net tangible  assets.  The historical  carrying amounts of
such net tangible assets approximated their fair values. The purchase price
in excess  of the fair  value of the net  tangible  assets  assumed  in the
amount of  $22,650,000  was  allocated to goodwill  and certain  identified
intangible  assets and is being amortized on a straight line basis over its
estimated useful life of 2 to 3 years (3 years for goodwill),  the expected
period of benefit.

b)   Attitude Network, Ltd.

On April 5, 1999,  theglobe formed Bucky  Acquisition  Corp.  ("Bucky"),  a
Delaware  corporation  and a wholly-owned  subsidiary of theglobe. Bucky was
merged  with  and into  Attitude  Network,  Ltd.,  a  Delaware  corporation
("Attitude"),  with Attitude as the surviving  corporation.  The merger was
effective  pursuant  to the  Agreement  and Plan of Merger,  dated April 5,
1999,  which closed on April 9, 1999,  by and among  theglobe,  Bucky,  and
Attitude  and  certain  shareholders  thereof.  As a result of the  merger,
Attitude became a wholly-owned  subsidiary of theglobe.  Attitude publishes
entertainment  websites including Happy Puppy.com and Games Domain.com.

The  consideration  payable  by  theglobe  in  connection  with the  merger
consists of 1,570,922  newly issued shares of Common Stock of theglobe.  In
addition,  options  to  purchase  shares of  Attitude's  common  stock were
exchanged for options to purchase  approximately  84,760 shares of theglobe
Common  Stock.  Warrants to purchase  shares of Attitude  common stock were
exchanged for warrants to purchase  approximately 46,706 shares of theglobe
Common Stock. The Company also incurred expenses of approximately  $800,000
related to the merger.

The  total  purchase   price  for  this   transaction   was   approximately
$46,828,000.  Of this amount,  approximately $208,000 of the purchase price
was allocated to net tangible liabilities.  The historical carrying amounts
of such net  tangible  liabilities  approximated  their  fair  values.  The
purchase price in excess of the fair value of the net tangible  liabilities
assumed in the amount of $47,036,000  was allocated to goodwill and certain
identified  intangible  assets and is being  amortized  on a straight  line
basis over a its estimated  useful life of 3 years,  the expected period of
benefit.

The following  unaudited pro forma consolidated  amounts give effect to the
above  described  acquisitions  as if they had occurred at the beginning of
the respective  periods by  consolidating  the results of operations of the
Company,  shop.theglobe.com and Attitude for the three and six months ended
June 30, 1999 and 1998.
<TABLE>
<CAPTION>
                                       Three Months Ended               Six Months Ended
                                            June 30,                        June 30,
                                 -----------------------------    ----------------------------
                                     1999            1988             1999           1998
                                 -------------   -------------    ------------   -------------
<S>                               <C>             <C>             <C>            <C>
Revenues........................  $  4,130,017    $  1,257,703    $  7,713,128   $   2,077,626
Net loss........................   (13,106,475)    (11,250,116)    (26,798,489)    (21,446,600)
Net loss per share-basic and
  diluted.......................  $      (0.53)   $      (2.45)   $      (1.13)  $       (4.68)
Weighted average shares used in
  the basic and diluted net
  loss per share calculation....    24,576,566       4,596,394      23,738,624       4,581,532
</TABLE>
                                     7
<PAGE>
(3)  CONCENTRATION OF CREDIT RISK

Financial instruments which subject the Company to concentrations of credit
risk consist primarily of cash and cash equivalents, short-term investments
and  trade  accounts  receivable.  The  Company  maintains  cash  and  cash
equivalents  with  various  domestic  financial  institutions.  The Company
performs  periodic  evaluations  of the relative  credit  standing of these
institutions.  From time to time,  the Company's cash balances with any one
financial  institution  may exceed Federal  Deposit  Insurance  Corporation
insurance limits.

The Company's  customers are concentrated in the United States. The Company
performs  ongoing  credit  evaluations  and  establishes  an allowance  for
doubtful  accounts  based  upon  factors  surrounding  the  credit  risk of
customers,  historical trends and other  information;  to date, such losses
have been within management's expectations.

For the three and six months  ended June 30,  1999 and 1998,  there were no
customers that accounted for over 10% of revenues generated by the Company,
or of accounts receivable at June 30, 1999 and December 31, 1998.

(4)  PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                              June 30,            December 31,
                                                1999                  1998
                                             ------------         ------------
                                             (unaudited)

Computer equipment, including assets
  under capital leases of $4,937,999
  and $3,305,598, respectively.........   $     8,177,527       $    4,298,702
Furniture and fixtures, including
  assets under capital leases of
  $42,171 and $42,171, respectively....         1,018,488               88,819
Leasehold improvements.................         1,250,448                   --
                                          ---------------       --------------

                                               10,446,463            4,387,521
Less accumulated depreciation and
  amortization, including amounts
  related to assets under capital
  leases of $984,861 and $460,998,
  respectively.........................         2,197,762              824,962
                                          ---------------       --------------

         Total.........................   $     8,248,701       $    3,562,559
                                          ===============       ==============


(5)  LONG-TERM DEBT

Upon  acquisition of Attitude,  the Company assumed a non interest  bearing
obligation payable to the former owner of the happypuppy.com website, which
was  acquired by Attitude  prior to its  acquisition  by the  Company.  The
obligation  is to be repaid based upon 5% of the  Company's  gross  revenue
related  to  the  happypuppy.com   website,  less  certain  costs  directly
associated  with such website.  The payments  required by the agreement are
also subject to specific  minimum  amounts payable each year. The principal
amount of the obligation as of April 9, 1999, the date the Company acquired
Attitude was $5,079,738. As of June 30, 1999, the obligation payable (as of
the acquisition date) was recorded at its net present value,  assuming a 9%
interest rate, and has been reduced by principal payments totaling $10,037.
The unamortized discount as of June 30, 1999 was $2,687,839.


                                     8
<PAGE>
The minimum principal amounts payable over the next five years under this
agreement are as follows:

1999.......................................................     $   200,000
2000.......................................................         250,000
2001.......................................................         300,000
2002.......................................................         300,000
2003.......................................................         300,000
2004 & thereafter..........................................       3,719,701
                                                                -----------
                                                                  5,069,701
Less discount..............................................      (2,425,819)
                                                                -----------
                                                                  2,643,882
Less current portion.......................................        (200,000)
                                                                -----------
                                                                $ 2,443,882
                                                                ===========

In addition  to the  $200,000  of short term debt  related to the  Attitude
acquisition,  the  Company  acquired  short-term  notes  payable of $34,419
related to its acquisition of factorymall.

(6)  STOCKHOLDERS' EQUITY

Common Stock

In February  1999, the Company issued 687,728 shares of its Common Stock in
connection with the acquisition of  factorymall,  which currently  conducts
its operations under the name shop.theglobe.com.

In April,  1999, the Company issued 1,570,922 shares of its Common Stock in
connection with the acquisition of Attitude.

In May 1999, the Company  completed an offering of 3,500,000  shares of its
Common Stock in a secondary public offering at an offering price of $20 per
share.   Net  proceeds  to  the  Company   totaled  $65.0  million,   after
underwriting discounts of $3.5 million and offering costs of $1.5 million.

Accumulated Other Comprehensive Income

Accumulated other comprehensive  income as of June 30, 1999 is comprised of
$54,983  of net  unrealized  losses  related  to the  Company's  short term
investments  and $8,679  related to the foreign  currency  translation of a
wholly owned  subsidiary  of Attitude  which was acquired by the Company in
April of 1999. The $50,006 as of December 31, 1998 represents the Company's
net unrealized losses related to its short term investments.

Comprehensive  net loss was  $13,112,157  and $19,390,473 for the three and
six months ended June 30, 1999,  respectively and $3,852,027 and $5,812,716
for the three and six months ended June 30, 1998, respectively.

(7)  1998 STOCK OPTION PLAN

The  Company's  1998 Stock Option Plan (the "1998 Plan") was adopted by the
Board of Directors on July 15, 1998,  and approved by the  stockholders  of
the Company as of July 15,  1998.  The 1998 Plan  provides for the grant of
"incentive stock options" intended to qualify under Section 422 of the Code
and stock options which do not so qualify.  The granting of incentive stock
options is subject to limitation as set forth in the 1998 Plan.  Directors,
officers,  employees and consultants of the Company are eligible to receive
grants  under the 1998  Plan.  The 1998 Plan  authorizes  the  issuance  of
2,400,000 shares of Common Stock,  subject to adjustment as provided in the
1998 Plan.  In March 1999 the Board of Directors  authorized an increase in
the number of shares  reserved for issuance  under the Company's  1998 Plan
from 2,400,000 to 3,400,000.


                                     9
<PAGE>
(8)  EMPLOYEE STOCK PURCHASE PLAN

The  Company's  Employee  Stock  Purchase  Plan ("ESPP") was adopted by the
Board of  Directors  in  February  1999.  The ESPP  will  provide  eligible
employees  of the  Company  the  opportunity  to apply a  portion  of their
compensation  to the  purchase of shares of the Company at a 15%  discount.
The Company has reserved  400,000  authorized but unissued shares of Common
Stock  for  issuance   under  the  ESPP.  The  ESPP  was  approved  by  the
shareholders in May 1999.

(9)  CONTINGENCIES

On May 13, 1999, Accursed Toys, Inc. filed a complaint in the United States
District  Court  for  the  Middle  District  of  Florida  relating  to  the
acquisition of Attitude. The lawsuit alleges that the Company, Attitude and
others  have  engaged  in  various  acts  of  unfair   competition,   false
advertising and deceptive trade  practices,  as well as breach of contract,
interference with contractual relations,  fraud and misrepresentation.  The
suit seeks actual and consequential damages and a preliminary and permanent
injunction  prohibiting  the  operation  of  the  Company's  happypuppy.com
website.   The  Company  owes  Accursed  Toys  (the  former  owner  of  the
happypuppy.com website) approximately $5.0 million to be paid over the next
seventeen  (17) years.  Accursed Toys alleges that this amount is currently
due and payable. As of June 30, 1999, the unaudited condensed  consolidated
financial  statements of the Company  reflect a long-term  liability at its
net  present  value  of  approximately  $2.6  million  in  respect  to this
obligation.  The Company believes that these  allegations are without merit
and plans to vigorously defend these allegations. The Company believes that
it is  unlikely  that the  ultimate  disposition  of this claim will have a
material adverse effect on the Company's  consolidated  financial condition
or results of operations.

On May 14, 1999, two principals of Accursed Toys, Inc. filed a complaint in
the United States District Court for the Eastern District of Virginia.  The
lawsuit   alleges  that   Attitude   engaged  in  various  acts  of  unfair
competition,  false advertising,  interference with contractual  relations,
fraud  and  misrepresentation.  The suit  seeks  actual  and  consequential
damages  and  a  preliminary  and  permanent  injunction   prohibiting  the
operation of the Company's  happypuppy.com  website.  On August 6, 1999 the
court  granted  Attitude's  motion to dismiss the  complaint,  but gave the
plaintiff  opportunity  to amend the complaint.  The Company  believes that
these  allegations  are without merit and plans to vigorously  defend these
allegations.  The Company  believes  that it is unlikely  that the ultimate
disposition  of this  claim  will  have a  material  adverse  effect on the
Company's consolidated financial condition or results of operations.

On May 20, 1999, Fortune Casuals LLC filed a complaint in the United States
District  Court for the Central  District of  California  alleging that the
Company  infringes Fortune Casuals LLC's state and federal trademark rights
with respect to the GLOBE mark. The Company believes that these allegations
are without merit and plans to  vigorously  defend these  allegations.  The
Company believes that it is unlikely that the ultimate  disposition of this
claim will have a material  adverse  effect on the  Company's  consolidated
financial condition or results of operations.

On July 1, 1999,  the  Company  filed a complaint  in Supreme  Court of the
State  of  New  York,   County  of  New  York.  The  lawsuit  alleges  that
Stockplayer.com,  Inc. breached  advertising  services  agreements with the
Company  by  failing  to pay  for  advertising  services  performed  by the
Company. On August 13, 1999, Stockplayer.com, inc. filed its answer denying
that it breached these  advertising  services  agreements.  The answer also
alleges that the Company breached alleged express and implied warranties in
connection   with   certain   information   provided   by  the  Company  to
Stockplayer.com.  Stockplayer.com  alleges  that it has been  damaged in an
amount not less than  $5,000,000.  Based on our preliminary  analysis,  the
Company  believes  that these  allegations  are without  merit and plans to
vigorously  defend  these  allegations.  The  Company  believes  that it is
unlikely  that  this  claim  will  have a  material  adverse  effect on the
Company's consolidated financial condition or results of operations.

From time to time the  Company is subject to legal  proceedings  and claims
arising in the ordinary  course of business.  In the opinion of management,
the ultimate  disposition of these matters will not have a material adverse
effect on the  Company's  consolidated  financial  condition  or results of
operations.


                                    10
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Certain statements contained herein constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended
(the  "Securities  Act") and Section 21E of the Securities  Exchange Act of
1934, as amended (the "Exchange Act"). These forward-looking statements can
be identified by the use of  predictive,  future-tense  or  forward-looking
terminology,  such as "believes,"  "anticipates,"  "expects,"  "estimates,"
"plans,"  "may,"  "intends,"  "will," or similar  terms.  These  statements
appear  in a  number  of  places  in this  report  and  include  statements
regarding the intent,  belief or current  expectations of the Company,  its
directors or its officers with respect to, among other  things:  (i) trends
affecting the Company's financial condition or results of operations,  (ii)
the  Company's  business  and growth  strategies,  (iii) the  Internet  and
Internet  commerce and (iv) the Company's  financing  plans.  Investors are
cautioned  that any such  forward-looking  statements are not guarantees of
future  performance and involve  significant risks and  uncertainties,  and
that  actual  results may differ  materially  from those  projected  in the
forward-looking  statements as a result of various  factors set forth under
"Risk  Factors" and elsewhere in this report.  The following  discussion of
the financial  condition  and results of  operations of the Company  should
also be read in conjunction with the financial statements and notes related
thereto included elsewhere in this report.

OVERVIEW

theglobe  operates an online  network  with members and users in the United
States and abroad. Users are able to personalize their online experience by
publishing  their own content and  interacting  with others having  similar
interests.  We  facilitate  this  interaction  by  providing  various  free
services,  including home page building,  discussion forums,  chat, on-line
calendars and address books, e-mail and electronic commerce.  Additionally,
we  provide  our users  with news,  business  information,  real time stock
quotes, weather, movie and music reviews,  multi-player gaming,  horoscopes
and personals.  By satisfying our users'  personal and practical  needs, we
seek to become our users' online home.  Our primary  revenue  source is the
sale of advertisements  with additional revenues generated through the sale
of  sponsorship  placements  within our  website,  the sale of  merchandise
through our on-line store, electronic commerce revenue shares,  development
fees and,  to a lesser  extent,  the sale of  membership  service  fees for
enhanced services.

We were  incorporated  in May 1995. For the period from  inception  through
December  1995, we had minimal sales and our operating  activities  related
primarily to the development of the necessary  computer  infrastructure and
initial planning and development.  Operating expenses in 1995 were minimal.
During 1996,  we continued  the  foregoing  activities  and also focused on
recruiting  personnel,  raising capital and developing  programs to attract
and retain members. In 1997, we

    o  moved our headquarters to New York City;

    o  expanded our membership base from less than 250,000 to almost
       1 million;

    o  improved and upgraded our services;

    o  expanded our production staff;

    o  built an internal sales department; and

    o  began active promotion of theglobe to increase market
       awareness.

During  1998,  revenues  and  operating  expenses  increased as we placed a
greater  emphasis on building our  advertising  revenues and memberships by
expanding our sales force and promoting theglobe brand.


                                    11
<PAGE>
In November  1998,  the Company  completed  an initial  public  offering of
approximately  7.0 million shares of its $.001 par value Common Stock.  The
initial  offering price was $4.50 per share and resulted in net proceeds of
$27.3 million,  after  underwriting  discounts of $2.1 million and offering
costs of $2.1 million.

On February 1, 1999, we acquired  factorymall,  an online  department store
then  doing  business  as  Azazz.com,  which  sells a variety of name brand
products  directly to  consumers.  We have  integrated  Azazz.com  into our
electronic commerce site, and it has been re-named "shop.theglobe.com."

In April 1999,  we acquired  Attitude,  a provider of online  entertainment
content whose websites include Happy  Puppy.com,  Games Domain.com and Kids
Domain.com, three leading websites serving game enthusiasts.

In May 1999,  we completed an offering of 3,500,000  shares of Common Stock
in a secondary  public offering at an offering price of $20 per share.  Net
proceeds  totaled  $65.0  million,  after  underwriting  discounts  of $3.5
million and offering costs of $1.5 million.

To date,  our primary  revenue  source has been the sale of  advertisements
with  additional   revenues  generated  through  the  sale  of  sponsorship
placements within our website,  the sale of merchandise through our on-line
store,  electronic  commerce  revenue  shares,  development  fees and, to a
lesser extent,  the sale of membership  service fees for enhanced services.
Electronic commerce revenues have not been significant to date. Advertising
revenues  constituted  88.2% and 85.9% of total  revenues for the three and
six months  ended June 30, 1999 and 91.5% and 89.2% of total  revenues  for
the  three  and six  months  ended  June 30,  1998.  We sell a  variety  of
advertising  packages to clients,  including banner  advertisements,  event
sponsorship,   and  targeted  and  direct  response   advertisements.   Our
advertising  revenues are derived  principally from short-term  advertising
arrangements,  averaging  one to three  months.  We  generally  guarantee a
minimum number of  impressions  for a fixed fee.  Advertising  revenues are
recognized  ratably in the period in which the  advertisement is displayed,
provided that no significant  company  obligations remain and collection of
the resulting  receivable is probable.  Payments  received from advertisers
prior to  displaying  their  advertisements  on the site  are  recorded  as
deferred   revenues  and  are  recognized  as  revenue   ratably  when  the
advertisement  is displayed.  To the extent minimum  guaranteed  impression
levels are not met,  we defer  recognition  of the  corresponding  revenues
until guaranteed levels are achieved.

In addition to advertising  revenues,  we derive other  revenues  primarily
from our membership service fees, electronic commerce revenue,  development
fees and sponsorship  placements within our site.  Membership  service fees
are recognized  over the membership  term. A number of recent  arrangements
with our premier  electronic  commerce  partners provide us with a share of
any sales  resulting  from  direct  links from our  website.  We  recognize
revenues  from our  share of the  proceeds  from  our  electronic  commerce
partners' sales upon notification  from our partners of sales  attributable
to our website.  To date,  revenues from electronic  commerce  arrangements
have not been significant.  We also earn additional  revenue on sponsorship
contracts for fees relating to the design, coordination, and integration of
the customer's  content and links. We recognize these  development  fees as
revenue once the related development activities have been performed.


RESULTS OF OPERATIONS

Revenues

Revenues  increased  to $4.1 million and $7.3 million for the three and six
months ended June 30, 1999, respectively, as compared with $0.8 million and
$1.2   million  for  the  three  and  six  months   ended  June  30,  1998,
respectively.  The period to period  growth in revenues  for both the three
and six  months  ended  resulted  from an  increase  in (1) the  number  of
advertisers  as well as the  average  commitment  per  advertiser,  (2) our
website  traffic and (3) the number of sales people.  Advertising  revenues
for the three and six months ended June 30, 1999 were $3.6 million and $6.3
million, respectively,  which represented 88.2% and 85.9%, respectively, of
total  revenues.  Advertising  revenues  for the three and six months ended
June 30,  1998 were $0.7  million  and $1.0  million,  respectively,  which
represented 91.5% and 89.2%, respectively, of total revenues. We anticipate
that advertising  revenues will continue to account for a substantial share
of our total  revenues for the  foreseeable  future.  Other  revenues  were
derived from membership service fees, development fees, electronic commerce
revenue shares and sponsorship  placements within our website.  At June 30,
1999, we had deferred  revenues of  approximately  $1.1 million as compared
with deferred revenues of $0.7

                                    12
<PAGE>
million at  December  31,  1999.  Barter  revenues  represented  9% and 7%,
respectively, of total revenues for the three and six months ended June 30,
1999 and 3% and 3% of revenues  for the three and six months  ended June 30
1998.

Cost of Revenues

Cost of revenues consist primarily of Internet  connection  charges,  staff
costs and  related  expenses  of  operations  personnel,  depreciation  and
maintenance of website  equipment as well as the costs of merchandise  sold
and shipping and handling fees in connection with our on-line store.  Gross
margins were 58% and 60%, respectively,  for the three and six months ended
June 30, 1999 and 66% and 61%,  respectively,  for the three and six months
ended June 30, 1998.  The decrease in the gross  margins for both the three
and six months  ended June 30,  1999 as compared to the same period in 1998
is, in part, attributed to increased costs of merchandise sold and shipping
and handling fees as a result of the factorymall acquisition. Additionally,
the  decrease  in margins is  attributed  to the  duplication  of  Internet
connection costs resulting from the Attitude  acquisition which the Company
plans to  eliminate  in the fourth  quarter of 1999.  The  absolute  dollar
increase in cost of revenues was due to an increase in Internet  connection
costs to support the increase in website traffic, as well as an increase in
equipment costs, cost of merchandise, depreciation and staff costs required
to support the expansion of our site and services.

Sales and Marketing Expenses

Sales and  marketing  expenses  consist  primarily  of salaries and related
expenses of sales and marketing personnel, commissions, advertising, public
relations expenses,  other  marketing-related  expenses and barter expense.
Sales and  marketing  expenses  were $3.5  million and $5.7 million for the
three and six months ended June 30, 1999,  respectively,  as compared  with
sales and marketing expenses of $3.1 million and $4.5 million for the three
and six months  ended  June 30,  1998,  respectively.  The period to period
increase in sales and marketing  expenses in absolute dollars was primarily
attributable  to  increased  sales  and  marketing  personnel  and  related
expenses  required to implement  our branding and  marketing  strategy.  We
expect sales and marketing  expenses to increase over the next few quarters
as the Company increases advertising  expenditures as part of our effort to
increase brand awareness and drive traffic to our sites.

Product Development Expenses

Product  development  expenses include  professional  fees, staff costs and
related expenses  associated with the development,  testing and upgrades to
our  website as well as  expenses  related  to its  editorial  content  and
community  management and support.  Product development  expenses were $2.8
million and $4.9  million for the three and six months ended June 30, 1999,
respectively, as compared with product development expenses of $0.2 million
and $0.3  million  for the  three  and six  months  ended  June  30,  1998,
respectively.  The increase in product  development  expenses was primarily
attributable to increased staffing levels required to support the growth in
our website and to enhance its content and features.  In addition,  product
development   expenses  increased  as  a  result  of  our  acquisitions  of
factorymall  and  Attitude.  We intend to  continue  recruiting  and hiring
experienced   product   development   personnel  and  to  make   additional
investments in product development.

General and Administrative Expenses

General and  administrative  expenses  consist  primarily  of salaries  and
related costs for general corporate  functions,  including  finance,  human
resources,  facilities and legal,  along with  professional  fees and other
corporate expenses.  General and administrative  expenses were $3.0 million
and $5.7  million  for the  three  and six  months  ended  June  30,  1999,
respectively,  as compared with general and administrative expenses of $1.3
million and $2.4  million for the three and six months ended June 30, 1998,
respectively.  The absolute dollar increase in these expenses was primarily
due to increased  salaries and related  expenses  associated with increased
staffing in order to build our basic infrastructure along with increases in
professional  fees and travel.  The  increased  salaries  also  reflect the
highly competitive nature of hiring in the new media industry. The increase
was also due to costs  associated with operating as a public company,  such
as  directors'  and  officers'  liability  insurance,   investor  relations
programs  and  professional  service  fees.  We expect  that we will  incur
additional  general  and  administrative  expenses  as we  hire  additional
personnel and incur additional costs related to the growth of the business.
Accordingly,  we anticipate that general and  administrative  expenses will
continue to increase in absolute dollars.

Amortization of Goodwill and Intangible Assets

                                    13
<PAGE>
We recorded amortization of $6.4 million and $7.8 million for the three and
six months  ended June 30,  1999,  respectively.  This  amortization  is in
connection  with the  acquisitions  of  factorymall  in  February  1999 and
Attitude  in  April  1999.  The  goodwill  and  purchased   intangibles  of
approximately   $71.0  million  related  to  these  acquisitions  is  being
amortized  over the  expected  period of benefit  ranging from two to three
years (three years for goodwill).  There was no similar charge for the same
periods in 1998.

Interest and Other Income, net

Interest and other income,  net includes  interest income from our cash and
investments, interest expenses related to our capital lease obligations and
amortization  of debt  discounts.  Other  income was $0.3  million and $0.5
million for the three and six months ended June 30, 1999, respectively,  as
compared  to $0.2  million  and $0.7  million  for the three and six months
ended June 30, 1998,  respectively.  The period to period  increase for the
three months ended is attributed  to increased  interest  income  resulting
from the net  proceeds of our initial  public  offering  and our  secondary
offering of our Common Stock offset by increased  interest expenses related
to an increase  in the  assumption  of capital  lease  obligations  and the
amortization of the debt discount related to Attitude's long-term debt. The
period  to  period  decrease  for the six  months  ended is  attributed  to
increased interest expenses related to the assumption of additional capital
leases and the  amortization  of the debt  discount  related to  Attitude's
long-term debt.

Income Taxes

Income taxes for the three and six months ended June 30, 1999 were $107,000
and $153,000,  respectively,  and $10,000 and $27,000 for the three and six
months ended June 30, 1998. The income taxes were based solely on state and
local taxes on business and investment capital. The increase from the prior
year for both the three and six month  periods  is a result of our  initial
and  secondary  public  offerings  which,  in turn,  increased  our capital
structure. Our effective tax rate differs from the statutory federal income
tax rate, primarily as a result of the uncertainty regarding our ability to
utilize  our  net  operating  loss  carryforwards.  Due to the  uncertainty
surrounding  the timing or realization of the benefits of our net operating
loss  carryforwards  in future  tax  returns,  we have  placed a  valuation
allowance  against our otherwise  recognizable  deferred tax assets.  As of
December  31,  1998,  we had  approximately  $29.2  million of federal  net
operating loss carryforwards for tax reporting purposes available to offset
future taxable income. Our federal net operating loss carryforwards  expire
beginning  2001 through 2018,  if not utilized.  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 the change in our  ownership  interests in the third quarter of 1997, as
defined in the  Internal  Revenue Code of 1986,  as amended  (the  "Code"),
future  utilization of our net operating loss carryforwards will be subject
to certain limitations or annual restrictions.


LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1999,  we had  approximately  $77.9 million in cash and cash
equivalents and  approximately  $.9 million in marketable  securities.  Net
cash used in operating  activities  was $11.6  million and $5.4 million for
the six months ended June 30, 1999 and 1998, respectively.  The increase in
net cash used resulted primarily from an increase in our net cash operating
losses  exclusive of amortization  expense  related to our  acquisitions of
factorymall and Attitude.

Net cash (used in) provided by investing  activities was ($4.6) million and
$2.6 million for the six months ended June 30, 1999 and 1998, respectively.
Net cash used in  investing  activities  for the six months  ended June 30,
1999 was primarily related to increased  capital  expenditures and security
deposits related to the pending re-location of our corporate offices. These
expenditures  were partially  offset by the net cash received in connection
with the acquisitions of factorymall and Attitude. For the six months ended
June 30, 1998, the net cash provided by investing  activities was primarily
related  to the sale of  short-term  investments  in order to  finance  our
operating expenses.

Net cash provided by (used in) financing activities was approximately $64.7
million and ($0.1) million for the six months ended June 30, 1999 and 1998,
respectively.  Net cash provided by financing activities for the six months
ended June 30, 1999 consisted

                                    14
<PAGE>
primarily of proceeds received in connection with our secondary offering of
3.5 million shares of the Company's Common Stock and proceeds received from
the  exercise of Common  Stock  options and  warrants  partially  offset by
payments under our capital lease obligations. For the six months ended June
30, 1998,  cash used in financing  activities was related to the payment of
capital lease obligations.

On February 1, 1999, we purchased  factorymall,  an interactive  department
store  doing  business as  Azazz.com,  which has been  integrated  into our
electronic commerce site and been re-named  "shop.theglobe.com."  We expect
to invest an  aggregate  of up to  approximately  $3.8  million  of working
capital in 1999 to support the future  operation of  shop.theglobe.com.  On
April 9, 1999, we purchased  Attitude,  an online provider of entertainment
content.  We expect to invest an aggregate of up to $3.5 million of working
capital in 1999 to support the future operations of Attitude. In connection
with the Attitude  acquisition,  the Company assumed a non interest bearing
obligation payable to the former owner of the happypuppy.com website, which
was  acquired by Attitude  prior to its  acquisition  by the  Company.  The
obligation  is to be repaid based upon 5% of the  Company's  gross  revenue
related  to  the  happypuppy.com   website,  less  certain  costs  directly
associated  with such website.  The payments  required by the agreement are
also subject to specific  minimum  amounts payable each year. The principal
amount of the obligation as of April 9, 1999, the date the Company acquired
Attitude, was $5,079,738.

Our capital  requirements  depend on  numerous  factors,  including  market
acceptance  of  our  services,   the  amount  of  resources  we  devote  to
investments  in our website,  the  resources  we devote to  marketing  and
selling our services and our brand  promotions and other  factors.  We have
experienced a substantial  increase in our capital  expenditures  and lease
obligations  since  our  inception   consistent  with  the  growth  in  our
operations and staffing,  and we anticipate that this will continue for the
foreseeable  future.  Additionally,  we will continue to evaluate  possible
investments in businesses, products and technologies, and we plan to expand
our sales force.  On May 19, 1999 we completed a secondary  public offering
of our  Common  Stock in which the  Company  sold 3.5  million  shares  and
existing  shareholders  sold an additional 3.4 million shares.  The sale of
these shares  resulted in net proceeds of $66.5  million  prior to offering
costs.  We  believe  that our  current  cash and cash  equivalents  will be
sufficient  to meet our  anticipated  cash needs for  working  capital  and
capital  expenditures for our existing business for the foreseeable future.
However,  we may need to raise funds during 1999 or thereafter to obtain or
operate any additional acquired  businesses or joint venture  arrangements.
See "Risk Factors--We may need to raise additional funds, including through
the issuance of debt."


IMPACT OF THE YEAR 2000

The Year 2000 issue is the potential for system and processing  failures of
date-related data and the result of  computer-controlled  systems using two
digits  rather  than four to  define  the  applicable  year.  For  example,
computer  programs that have  time-sensitive  software may recognize a date
using "00" as the year 1900 rather than the Year 2000. This could result in
system  failure  or  miscalculations  causing  disruptions  of  operations,
including,   among  other   things,   a  temporary   inability  to  process
transactions,   send  invoices  or  engage  in  similar   normal   business
activities.

State of  Readiness.

We may be affected by Year 2000 issues related to non-compliant information
technology systems or non-information  technology systems operated by us or
by third  parties.  We have  substantially  completed an  assessment of our
internal  and  external  third-party  information  technology  systems  and
non-information technology systems and a test of the information technology
systems that support our website.  Following the acquisition of factorymall
in February of 1999 and Attitude in April of 1999,  we began to assess each
of their internal and external third party information  technology  systems
and  non-information  technology  systems and integrate  those hardware and
software  systems into ours.  At this point in our  assessment  testing and
integration, we are not aware of any Year 2000 problems relating to systems
we or third  parties  operate  that  would  have a  material  effect on our
business or financial condition, without taking into account our efforts to
avoid these problems.  However,  we cannot assure you that there will be no
Year 2000 problems.

Our information  technology  systems consist of software  developed  either
in-house or  purchased  from third  parties,  and hardware  purchased  from
vendors.  We have contacted our principal vendors of hardware and software.
All of those  contacted  vendors  have  notified us that the  hardware  and
software that they supplied to us is Year 2000 compliant.

We have also substantially  completed an assessment of our  non-information
technology  systems which we have  identified as possibly  having Year 2000
issues. At this point in our assessment,  we are not aware of any Year 2000
problems relating to these


                                    15
<PAGE>
systems  which would have a material  effect on our  business or  financial
condition, without taking into account our efforts to avoid these problems.

Our  information  technology  systems and other business  resources rely on
information  technology  systems  and  non-information  technology  systems
provided by service  providers  and  therefore  may be  vulnerable to those
service providers'  failure to remediate their own Year 2000 issues.  These
service  providers  include  those for our network and e-mail  services and
landlords for our leased office spaces.  We have contacted  these principal
service providers and we have been notified that the information technology
and  non-information  technology  systems which they provide to us are Year
2000 compliant.

Cost.  Based on our  assessment to date, we estimate that costs  associated
with remediating our non-compliant systems will be less than $200,000.

Risks. To the extent that our assessment is finalized  without  identifying
any  material  non-compliant   information  technology  or  non-information
technology  systems  operated  by us or by third  parties,  the most likely
worst case Year 2000  scenario is the failure of one or more of our vendors
of  hardware  or  software  or one or  more  providers  of  non-information
technology systems to properly identify any Year 2000 compliance issues and
remediate any issues  before  November 30, 1999. A failure could prevent us
from  operating our business,  prevent users from  accessing our website or
change the  behavior of  advertising  customers  or persons  accessing  our
website.  We believe  that the primary  business  risks,  in the event of a
failure, would include but not be limited to:

    o  lost advertising revenues;

    o  increased operating costs;

    o  loss of customers or persons accessing our website;

    o  other business interruptions of a material nature; and

    o  claims of mismanagement, misrepresentation, or breach of
       contract.

Contingency  Plan.  As discussed  above,  we are engaged in an ongoing Year
2000  assessment  and testing.  We completed an initial  simulation  of our
information  technology  systems in the second quarter of 1999. To date, we
are not  aware of any Year  2000  problems  with  systems  that we or third
parties  operate that would have a material  adverse effect on our business
or  financial  condition.  We plan to  continue  to assess  our  technology
systems  and those  operated  by third  parties  in the  third  and  fourth
quarters of 1999 and will take the results into account in determining  the
nature and extent of any contingency plans.

EFFECTS OF INFLATION

Due to  relatively  low levels of  inflation in 1996,  1997,  1998 and 1999
inflation  has not had a  significant  effect on our results of  operations
since inception.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In March  1998,  the AICPA  issued SOP 98-1,  "Accounting  for the Costs of
Computer   Software   Developed  or  Obtained  for  Internal   Use,"  which
establishes  guidelines  for the  accounting  for the costs of all computer
software  developed  or  obtained  for  internal  use.  We adopted SOP 98-1
effective for the year ended December 31, 1998. The adoption of SOP 98-1 is
not  expected  to have a  material  impact  on our  consolidated  financial
statements.

In June 1998,  the FASB  issued  SFAS No. 133,  Accounting  for  Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting  standards  for  derivative  instruments,   including  derivative
instruments embedded in other contracts,  and for hedging activities.  SFAS
No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15, 2000.  This  statement  does not apply to the Company as the
Company  currently  does not have any  derivative  instruments  or  hedging
activities.


                                    16
<PAGE>
                                RISK FACTORS

OUR LIMITED OPERATING HISTORY MAKES FINANCIAL FORECASTING DIFFICULT.

theglobe was founded in May 1995. Accordingly,  we have a limited operating
history for you to use in  evaluating us and our  prospects.  Our prospects
should be considered in light of the risks  encountered by companies in the
early stages of development,  particularly  companies  operating in new and
rapidly evolving markets like the Internet. We may not successfully address
these risks. For example, we may not be able to:

    o  maintain and increase levels of user and member traffic on our
       website;
    o  maintain and increase the percentage of our advertising
       inventory sold;
    o  adapt to meet changes in our markets and competitive
       developments;
    o  develop or acquire content for our services;
    o  generate electronic commerce-related revenues; and
    o  identify, attract, retain and motivate qualified personnel.

REVENUE GROWTH IN PRIOR PERIODS MAY NOT BE INDICATIVE OF FUTURE GROWTH.

We  achieved  significant  revenue  growth  in 1998  and in the  first  two
quarters of 1999. Our limited  operating history makes prediction of future
growth difficult.  Accurate predictions of future growth are also difficult
because of the rapid changes in our markets. Accordingly,  investors should
not rely on past revenue growth rates as a prediction of future growth.

WE ANTICIPATE INCREASED OPERATING EXPENSES AND EXPECT TO
CONTINUE TO INCUR LOSSES.

To date, we have not been  profitable,  and we expect that we will continue
to incur  net  losses  for the  foreseeable  future.  We had net  losses of
approximately  $0.8 million for 1996, $3.6 million for 1997,  $16.0 million
for 1998,  and $19.4  million for the six months ended June 30, 1999. As of
June  30,  1999,  we had an  accumulated  deficit  of  approximately  $39.8
million. The principal causes of our losses are likely to continue to be:

    o  increased general and administrative expenses;
    o  costs resulting from enhancement of our services;
    o  significant increases in operating expenses in the next several
       years, especially in the areas of sales and marketing;
    o  increased expenses necessary to maintain and develop brand
       identity;
    o  growth of our sales force;
    o  expansion of our business facilities; and
    o  failure to generate sufficient revenue in light of increased
       costs.

We will  need to  generate  significantly  increased  revenues  to  achieve
profitability,  particularly  if we are  unable to adjust our  expenses  in
light of any  revenue  shortfall.  We cannot  assure  you that we will ever
achieve or sustain profitability.

OUR QUARTERLY OPERATING RESULTS FLUCTUATE AND VARY BY SEASON.

Our  quarterly  revenues,   expenses  and  operating  results  have  varied
significantly in the past and are likely to vary significantly from quarter
to quarter in the future.  As a result,  quarter to quarter  comparisons of
our revenues and operating results may not be meaningful.  In addition, due
to our limited  operating  history and our new and unproven business model,
we cannot predict our future revenues or results of operations  accurately.
It is likely that in one or more future quarters our operating results will
fall


                                    17
<PAGE>
below  the  expectation  of  securities  analysts  and  investors.  If this
happens,  the trading  price of our Common Stock would almost  certainly be
materially and adversely affected.

The factors which will cause our quarterly  operating  results to fluctuate
include:

    o  the level of traffic on our website;
    o  the overall demand for Internet advertising and electronic
       commerce;
    o  the addition or loss of advertisers and electronic commerce
       partners on our website;
    o  usage of the Internet;
    o  seasonal trends in advertising and electronic commerce sales
       and member usage;
    o  capital expenditures and other costs relating to the expansion
       of our operations;
    o  the incurrence of costs relating to acquisitions;
    o  the timing and profitability of acquisitions, joint ventures
       and strategic alliances; and
    o  system failures that cause an interruption to our site.

We  derive  a  substantial  portion  of  our  revenues  from  the  sale  of
advertising  under  short-term  contracts.  These contracts  average one to
three months in length. As a result,  our quarterly  revenues and operating
results are, to a significant  extent,  dependent on  advertising  revenues
from  contracts  entered  into  within the  quarter,  and on our ability to
adjust spending in a timely manner to compensate for any unexpected revenue
shortfall.  We believe that advertising sales in traditional media, such as
television  and radio,  generally are lower in the first and third calendar
quarters.  If the Internet transitions from an emerging to a more developed
form of media,  these same  patterns  may develop in  Internet  advertising
sales.  Internet  advertising  expenditures  may also  develop a  different
seasonality  pattern.  Traffic  levels  on our site and the  Internet  have
typically  declined  during the summer and  year-end  vacation  and holiday
periods.

In addition to selling  advertising,  an increasing portion of our revenues
may be generated from  electronic  commerce  through our  shop.theglobe.com
subsidiary.  We also have existing  electronic  commerce  arrangements with
third  parties  for the  sale  of  merchandise  on our  website  which  are
terminable  upon short notice.  As a result,  our revenues from  electronic
commerce may fluctuate significantly from period to period depending on the
level of demand for the products we offer on our site and the  continuation
of our electronic commerce arrangements.

WE DEPEND ON OUR MEMBERS FOR CONTENT AND PROMOTION.

We  depend   substantially   upon  member   involvement   for  content  and
word-of-mouth promotion. Particularly, we depend upon the voluntary efforts
of some highly motivated members who are most active in developing  content
to  attract  other  Internet  users to our site.  This  member  involvement
reduces  the need for us to spend  funds on  content  development  and site
promotion.  However,  we cannot assure you that these members will continue
to  effectively  generate  significant  content  or promote  our site.  Our
business may be materially and adversely affected if our most highly active
members  become  dissatisfied  with  our  services  or  our  focus  on  the
commercialization of those services or for any other reason stop generating
content that effectively promotes our site.

OUR BUSINESS MODEL IS NEW AND UNPROVEN.

Our business model is new and relatively unproven.  This model depends upon
our  ability to obtain  more than one type of  revenue  source by using our
community platform. To be successful,  we must, among other things, develop
and market  products and services that achieve  broad market  acceptance by
our  users,  advertisers  and  electronic  commerce  vendors.  We must also
develop  significant  electronic  commerce  revenues by marketing  products
directly to users and having users purchase  products  through our site. We
cannot assure you that any Internet  community,  including  our site,  will
achieve  broad  market  acceptance  and to be able to generate  significant
electronic  commerce revenues.  We also cannot assure you that our business
model will be  successful,  that it will sustain  revenue growth or that it
will be profitable.


                                    18
<PAGE>
Additionally,  the market for our  products  and  services is new,  rapidly
developing and characterized by an increasing number of market entrants. As
is  typical of most new and  rapidly  evolving  markets,  demand and market
acceptance  for  recently  introduced  products  and  services  are  highly
uncertain  and risky.  Moreover,  because  this  market is new and  rapidly
evolving,  we cannot predict our future growth rate, if any. If this market
fails to develop,  develops more slowly than expected or becomes  saturated
with competitors, or if our products and services do not achieve or sustain
market acceptance, our business would be materially and adversely affected.

OUR ACQUISITIONS OR JOINT VENTURES ENTAIL NUMEROUS RISKS
AND UNCERTAINTIES.

As part of our business strategy,  we review acquisition prospects or joint
ventures that we expect to complement our existing  business,  increase our
traffic,   augment  the   distribution   of  our  community,   enhance  our
technological capabilities or increase our electronic commerce revenues. On
February 1, 1999, we acquired  factorymall,  to develop electronic commerce
retailing on our site.  On April 9, 1999,  we acquired  Attitude to add two
leading game enthusiast  websites to our entertainment  theme. We have been
approached  from time to time to consider and evaluate  potential  business
combinations,  either involving potential  investments in our Common Stock,
or other business  combinations  or joint  ventures,  or our acquisition of
other companies.  If consummated,  any such  transaction  could result in a
change of control of our  company or could  otherwise  be  material  to our
business or to your  investment  in our Common  Stock.  We are currently in
discussions  or  negotiations  for various of these kinds of  transactions,
some  of  which  may be  material,  but we have  not  reached  any  binding
agreements.  These  transactions may or may not be consummated.  Our future
acquisitions   or  joint  ventures  could  result  in  numerous  risks  and
uncertainties, including:

    o  potentially dilutive issuances of equity securities, which may
       be freely tradable in the public market;
    o  large and immediate write-offs;
    o  the incurrence of debt and contingent liabilities or amortization
       expenses related to goodwill and other intangible assets;
    o  difficulties in the assimilation of operations, personnel,
       technologies, products and information systems of the acquired
       companies;
    o  the diversion of management's attention from other business
       concerns;
    o  the risks of entering geographic and business markets in which
       we have no or limited prior experience such as electronic commerce
       retailing;
    o  the risk that the acquired business will not perform as
       expected; and
    o  risks associated with international expansion.

WE MAY BE UNSUCCESSFUL IN DEVELOPING BRAND AWARENESS;
BRAND IDENTITY IS CRITICAL TO US.

We believe that establishing and maintaining  awareness of "theglobe" brand
name is critical to attracting  and expanding our member base,  the traffic
on our website and advertising and electronic commerce relationships. If we
fail to promote and maintain  our brand or our brand value is diluted,  our
business,  operating  results and financial  condition  could be materially
adversely  affected.  The  importance  of brand  recognition  will increase
because low barriers to entry continue to result in an increased  number of
websites.  To promote our brand, we may be required to continue to increase
our financial  commitment to creating and maintaining  brand awareness.  We
may not  generate a  corresponding  increase in  revenues to justify  these
costs.  Additionally,  if members,  other Internet  users,  advertisers and
customers do not perceive our  community  experience to be of high quality,
or if we introduce  new services or enter into new business  ventures  that
are not favorably  received by these parties,  the value of our brand could
be diluted.

WE RELY SUBSTANTIALLY ON ADVERTISING REVENUES.


                                    19
<PAGE>
We  derive  a  substantial  portion  of  our  revenues  from  the  sale  of
advertisements  on our website.  We expect  to  continue  to do so for the
foreseeable  future.  For the year ended  December 31, 1998 and for the six
months ended June 30, 1999,  advertising  revenues represented 89% and 86%,
respectively,  of our total  revenues.  Our business model and revenues are
highly dependent on the amount of traffic on our site. The level of traffic
on our site determines the amount of advertising inventory we can sell. Our
ability to generate  significant  advertising revenues depends, in part, on
our  ability  to create  new  advertising  programs  without  diluting  the
perceived  value  of  our  existing  programs.   Our  ability  to  generate
advertising revenues will also depend, in part, on the following:

    o  advertisers' acceptance of the Internet as an attractive and
       sustainable medium;
    o  advertisers' willingness to pay for advertising on the Internet
       at current rates;
    o  the development of a large base of users of our products and
       services;
    o  our level of traffic;
    o  the effective development of website content that attracts
       users having demographic characteristics attractive to
       advertisers; and
    o  price competition among websites.

We cannot assure you that the market for Internet advertising will continue
to  emerge  or  become  sustainable.  If the  Internet  advertising  market
develops  slower  than  we  expect,  our  business   performance  would  be
materially adversely affected.  To date,  substantially all our advertising
contracts have been for terms averaging one to three months in length, with
relatively  few  longer  term  advertising  contracts.   Additionally,  our
advertising  customers may object to the placement of their  advertisements
on some  members'  personal  homepages,  the  content  of which  they  deem
undesirable.  For any of the foregoing  reasons,  we cannot assure you that
our current  advertisers  will continue to purchase  advertisements  on our
site.  We  also  compete  with  traditional  advertising  media,  including
television,  radio,  cable and  print,  for a share of  advertisers'  total
advertising  budgets.  This results in significant pricing pressures on our
advertising rates, which could have a material adverse effect on us.

WE RELY ON THIRD PARTIES OVER WHOM WE HAVE LIMITED
CONTROL TO MANAGE THE PLACEMENT OF ADVERTISING ON OUR WEBSITE.

The process of managing  advertising within a large,  high-traffic  website
such as ours is an increasingly  important and complex task. We license our
advertising  management  system from  DoubleClick,  Inc. under an agreement
expiring  April 15, 2000.  DoubleClick  may terminate the agreement upon 30
days'  notice  (1)  if we  breach  the  agreement  or  (2)  if  DoubleClick
reasonably determines that we have used their advertising management system
in  a  manner  that  could  damage  their   technology  or  which  reflects
unfavorably  on  DoubleClick's  reputation.  No assurance can be given that
DoubleClick  would  not  terminate  the  agreement.   Any  termination  and
replacement  of  DoubleClick's  service could disrupt our ability to manage
our advertising operations.  Additionally,  we have entered into a contract
with Engage  Technologies,  Inc. for the license of proprietary software to
manage the placement of  advertisements  on our website.  This software has
been implemented and our  relationship  under the contract has not yet been
material.  There can be no assurance  that this software  will  effectively
manage the placement of  advertisements on our website and that errors will
not occur.

To the extent that we encounter system failures or material difficulties in
the operation of our advertising management systems, we may

    o  be unable to deliver banner advertisements and sponsorships
       through our site; and

    o  be required to provide additional impressions to our advertisers
       after the contract term.


                                    20
<PAGE>
Our obligations to provide  additional  impressions would displace saleable
advertising inventory. This would reduce revenues and could have a material
adverse effect on us.

WE DEPEND SUBSTANTIALLY ON OUR KEY PERSONNEL.

Our performance is substantially  dependent on the continued service of our
senior management and key technical personnel, all of whom have only worked
together  for a short  time.  In  particular,  our  success  depends on the
continued  efforts of our senior  management team,  especially our Co-Chief
Executive Officers,  Co-Presidents,  and co-founders, Todd V. Krizelman and
Stephan J.  Paternot.  We do not carry key person life  insurance on any of
our personnel. The loss of the services of any of our executive officers or
other key  employees  would  likely have a material  adverse  effect on our
business.

WE DEPEND ON HIGHLY QUALIFIED TECHNICAL AND MANAGERIAL PERSONNEL.

Our future  success  also  depends on our  continuing  ability to  attract,
retain and motivate highly  qualified  technical and managerial  personnel.
Our business  plan  requires us to increase our employee base over the next
12 months.  Competition for employees in our industry is intense. We may be
unable to attract,  assimilate  or retain  highly  qualified  technical and
managerial  personnel in the future.  Wages for  managerial  and  technical
employees  are  increasing  and are expected to continue to increase in the
future. We have from time to time in the past experienced, and we expect to
continue to  experience  in the future,  difficulty in hiring and retaining
highly skilled employees with appropriate qualifications.  If we are unable
to attract and retain the technical and managerial  personnel  necessary to
support the growth of our business, our business would likely be materially
and adversely affected.

WE MAY NOT EFFECTIVELY MANAGE OUR GROWTH; OUR MANAGEMENT TEAM IS
INEXPERIENCED IN THE MANAGEMENT OF A PUBLIC COMPANY.

Our recent  growth  has placed  significant  strains on our  resources.  To
manage our future  growth,  we must  continue to implement  and improve our
operational  and  financial  software  systems  and  expand  and  train our
employee base. Some of our key employees were hired during 1998,  including
our Chief  Operating  Officer,  who joined us in August  1998 and our Chief
Financial Officer, who joined us in July 1998. In addition, our Director of
Marketing,  Director of Advertising  Sales,  General  Counsel,  Director of
Business  Development,  Director of  Communications  and  Director of Human
Resources each have been with us for less than two years. Furthermore,  the
members of our current senior management, other than the Chairman, have not
had any previous  experience managing a public company or a large operating
company. Accordingly, we cannot assure you that:

    o  we will be able to effectively manage the expansion of our
       operations;
    o  our key employees will be able to work together effectively as
       a team to successfully manage our growth;
    o  we will be able to hire, train and manage our growing employee
       base;
    o  our systems, procedures or controls will be adequate to support
       our operations; and
    o  our management will be able to achieve the rapid execution
       necessary to fully exploit the market opportunity for our
       products and services.

Our inability to manage growth  effectively  could have a material  adverse
effect on our business.

OUR CHAIRMAN AND VICE PRESIDENT OF CORPORATE DEVELOPMENT HAVE OTHER
INTERESTS AND TIME COMMITMENTS; WE HAVE CONFLICTS OF INTEREST WITH
SOME OF OUR DIRECTORS.

Because our Chairman and our Vice  President of Corporate  Development  are
officers or employees of other companies, we will have to compete for their
time.  Michael S. Egan is our Chairman.  Mr. Egan serves as the Chairman of
our  board  of  directors   and  as  an  executive   officer  with  primary
responsibility   for   day-to-day    strategic   planning   and   financing
arrangements. Mr. Egan also


                                    21
<PAGE>
is the controlling  investor of Dancing Bear  Investments,  Inc., an entity
controlled  by Mr.  Egan,  which  is our  largest  stockholder.  Edward  A.
Cespedes  is our Vice  President  of  Corporate  Development  with  primary
responsibility for corporate  development  opportunities  including mergers
and  acquisitions.  Mr.  Cespedes  also  serves as a Managing  Director  of
Dancing Bear Investments.  Messrs.  Egan and Cespedes have not committed to
devote any specific percentage of their business time with us. Accordingly,
we compete with Dancing Bear  Investments  and Messr.  Egan's other related
entities for their time. In April 1999, Mr. Egan was appointed to the board
of  directors  of  Lowestfare.com,  an entity  with which we have a premier
partner relationship.

We  have  begun  advertising  and  electronic  commerce  arrangements  with
entities  controlled  by  Mr.  Egan  and by  AutoNation,  Inc.,  an  entity
affiliated with H. Wayne Huizenga, one of our directors. These arrangements
were not the result of arm's-length  negotiations,  but we believe that the
terms of these arrangements are on comparable terms as if they were entered
into with unaffiliated third parties. Due to their relationships with their
related entities, Messrs. Egan, Cespedes and Huizenga will have an inherent
conflict of interest in making any decision related to transactions between
their  related   entities  and  us.  We  intend  to  review  related  party
transactions in the future on a case-by-case basis.

WE MAY NOT BE ABLE TO KEEP UP WITH RAPID TECHNOLOGICAL AND OTHER CHANGES.

    The markets in which we compete are characterized by:

    o  rapidly changing technology;
    o  evolving industry standards;
    o  frequent new service and product announcements, introductions
       and enhancements; and
    o  changing consumer demands.

We may not be able to keep up with these rapid changes. In addition,  these
market  characteristics  are  heightened  by  the  emerging  nature  of the
Internet and the  apparent  need of companies  from varying  industries  to
offer Internet-based products and services. As a result, our future success
depends  on our  ability  to adapt to  rapidly  changing  technologies  and
standards.  We will  also  need to  continually  improve  the  performance,
features  and  reliability  of our  services  in  response  to  competitive
services and product offerings and the evolving demands of the marketplace.
In  addition,  the  widespread  adoption  of new  Internet,  networking  or
telecommunications   technologies  or  other  technological  changes  could
require us to incur  substantial  expenditures  to modify our  services  or
infrastructure and could fundamentally affect the nature of our business.

WE HAVE CAPACITY CONSTRAINT AND SYSTEM DEVELOPMENT RISKS.

A key element of our strategy is to generate a high volume of user traffic.
Our ability to attract  advertisers and to achieve market acceptance of our
products and  services and our  reputation  depend  significantly  upon the
performance of our network  infrastructure,  including our server, hardware
and software. Any system failure,  including network,  software or hardware
failure,  that  causes an  interruption  in our  service or a  decrease  in
responsiveness  of our website could result in reduced  traffic and reduced
revenue,  and could impair our reputation.  Our website must  accommodate a
high volume of traffic  and deliver  frequently  updated  information.  Our
website has in the past and may in the future  experience  slower  response
times for a variety of reasons,  including  system failures and an increase
in the volume of user  traffic on our website.  Accordingly,  we face risks
related to our ability to accommodate  our expected  customer  levels while
maintaining  superior  performance.  In addition,  slower response time may
result in fewer users at our site or users  spending less time at our site.
This  would  decrease  the  amount  of  inventory  available  for  sale  to
advertisers.  Accordingly, any failure of our server and networking systems
to handle current or higher volumes of traffic at sufficient response times
would have a material adverse effect on our business.

In the fourth  quarter of 1998 and the first  quarter of 1999, we moved our
principal servers to the New York Teleport  facility in Staten Island,  New
York under a lease with  Telehouse  International  Corporation  of America.
Telehouse International does not guarantee that our Internet access will be
uninterrupted, error-free or secure. We maintain computer hardware, servers
and operations relating to shop.theglobe.com  in Seattle,  Washington which
are  hosted  by  Exodus  Communications,  Inc.  Additionally,  we  maintain
computer hardware,  servers and operations  relating to Attitude Network in
Herndon, Virginia which are hosted by Frontier GlobalCenter, and in London,
England,  which are hosted by  Telehouse  International.  Although  each of
Exodus, Frontier and Telehouse provides comprehensive facilities management
services, including human and technical monitoring of all


                                    22
<PAGE>
production servers 24 hours-per-day,  seven days-per-week,  neither Exodus,
Frontier  nor  Telehouse  guarantees  that  our  Internet  access  will  be
uninterrupted,  error-free or secure.  Our operations depend on the ability
to protect our systems  against damage from  unexpected  events,  including
fire, power loss, water damage,  telecommunications failures and vandalism.
Any disruption in our Internet access could have a material  adverse effect
on us. In addition, computer viruses, electronic break-ins or other similar
disruptive problems could also materially adversely affect our website. Our
reputation and theglobe brand could be materially and adversely affected by
any  problems  to our  site.  Our  insurance  policies  may not  adequately
compensate  us for  any  losses  that  may  occur  due to any  failures  or
interruptions  in our  systems.  We do not  presently  have  any  secondary
off-site systems or a formal disaster recovery plan.

In addition, our users depend on Internet service providers, online service
providers and other website  operators for access to our websites.  Many of
them have experienced significant outages in the past, and could experience
outages,  delays and other difficulties due to system failures unrelated to
our  systems.  Moreover,  the  Internet  infrastructure  may not be able to
support  continued  growth in its use.  Furthermore,  we depend on hardware
suppliers for prompt  delivery,  installation and service of equipment used
to  deliver  our  products  and  services.  Any  of  these  problems  could
materially adversely affect our business.

HACKERS MAY ATTEMPT TO PENETRATE OUR SECURITY SYSTEM; ONLINE SECURITY
BREACHES COULD HARM OUR BUSINESS.

Consumer  and supplier  confidence  in our website  depends on  maintaining
relevant security features. Substantial or ongoing security breaches on our
system  or  other  Internet-based  systems  could  significantly  harm  our
business.  We incur substantial  expenses  protecting against and remedying
security  breaches.  Security breaches also could damage our reputation and
expose  us to a risk of  loss or  litigation.  Experienced  programmers  or
"hackers" have successfully  penetrated our system and we expect that these
attempts will continue to occur from time to time.  Because a hacker who is
able to penetrate our network  security  could  misappropriate  proprietary
information  or cause  interruptions  in our products and services,  we may
have to expend  significant  capital and resources to protect against or to
alleviate problems caused by these hackers. Additionally, we may not have a
timely  remedy  against  a  hacker  who is able to  penetrate  our  network
security.  Such security  breaches could  materially  adversely  affect our
company.  In addition,  the transmission of computer viruses resulting from
hackers  or  otherwise  could  expose  us  to  significant  liability.  Our
insurance policies carry low coverage limits,  which may not be adequate to
reimburse  us for losses  caused by security  breaches.  We also face risks
associated with security breaches affecting third parties with whom we have
relationships.

COMPETITION FOR MEMBERS, USERS AND ADVERTISERS, AS WELL AS COMPETITION
IN THE ELECTRONIC COMMERCE MARKET IS INTENSE AND IS EXPECTED TO
INCREASE SIGNIFICANTLY.

The market for members,  users and Internet  advertising  among websites is
new and rapidly evolving.  Competition for members,  users and advertisers,
as well as competition in the electronic commerce market, is intense and is
expected  to  increase  significantly.  Barriers  to entry  are  relatively
insubstantial  and we believe we will face competitive  pressures from many
additional  companies  both in the United  States and abroad.  Accordingly,
pricing  pressure on  advertising  rates will  increase in the future which
could have a material  adverse effect on us. All types of websites  compete
for  users.  Competitor  websites  include  community  sites,  as  well  as
"gateway" or "portal" sites and various other types of websites. We believe
that the principal competitive factors in attracting users to a site are:

     o  functionality of the website;
     o  brand recognition;
     o  member affinity and loyalty;
     o  broad demographic focus;
     o  open access for visitors;
     o  critical mass of users, particularly for community-type sites; and
     o  services for users.

We compete for users,  advertisers and electronic  commerce  marketers with
the following types of companies:

     o  other online community websites, such as GeoCities, which was
        acquired by Yahoo!; Tripod and AngelFire,


                                    23
<PAGE>
        subsidiaries of Lycos; and Xoom.com;
     o  search engines and other Internet "portal" companies, such as
        Excite@Home, InfoSeek, Lycos and Yahoo!;
     o  online content websites, such as CNET, ESPN.com and ZDNet.com;
     o  publishers and distributors of television, radio and print, such
        as CBS, NBC and CNN/Time Warner;
     o  general purpose consumer online services, such as America Online
        and Microsoft Network;
     o  websites maintained by Internet service providers, such as AT&T
        WorldNet, EarthLink and MindSpring;
     o  electronic commerce websites, such as Amazon.com, Etoys and
        CDNow; and
     o  other websites serving game enthusiasts, including Ziff Davis'
        Gamespot and CNET's Gamecenter.

Many of our competitors,  including other community  sites,  have announced
that they are contemplating developing Internet navigation services and are
attempting  to become  "gateway" or "portal"  sites through which users may
enter the web. In the event these  companies  develop  successful  "portal"
sites,   we  could  lose  a  substantial   portion  of  our  user  traffic.
Furthermore,  many  non-community  sites are  seeking to develop  community
aspects in their sites.

Many  of  our  existing  and  potential  competitors,  including  companies
operating  web  directories  and  search  engines,  and  traditional  media
companies, have the following advantages:

     o  longer operating histories in the Internet market,
     o  greater name recognition;
     o  larger customer bases; and
     o  significantly greater financial, technical and marketing
        resources.

In  addition,   providers  of  Internet   tools  and  services,   including
community-type  sites,  may be acquired by,  receive  investments  from, or
enter into other commercial relationships with larger, well-established and
well-financed companies, such as Microsoft and America Online. For example,
Excite  merged with At Home,  America  Online  acquired  Netscape  and Xoom
announced a transaction  in which NBC would merge some of its online assets
with Xoom. In addition,  there has been other significant  consolidation in
the industry.  This consolidation may continue in the future. We could face
increased  competition  in the future  from  traditional  media  companies,
including cable,  newspaper,  magazine,  television and radio companies.  A
number of these large  traditional media companies,  including Disney,  CBS
and NBC, have been active in Internet related activities. Those competitors
may be able to  undertake  more  extensive  marketing  campaigns  for their
brands and services, adopt more aggressive advertising pricing policies and
make more attractive offers to potential employees,  distribution partners,
electronic commerce companies,  advertisers,  third-party content providers
and   acquisition   targets.   Furthermore,   our  existing  and  potential
competitors  may develop sites that are equal or superior in quality to, or
that achieve greater market acceptance than, our site. We cannot assure you
that advertisers may not perceive our competitors'  sites as more desirable
than ours.

To  compete  with other  websites,  we plan to develop  and  introduce  new
features  and   functions,   such  as  increased   capabilities   for  user
personalization  and  interactivity.  We also plan to develop and introduce
new products and services,  such as new content  targeted for specific user
groups with particular  demographic and geographic  characteristics.  These
improvements will require us to spend significant funds and may require the
development or licensing of increasingly complex technologies. Enhancements
of or improvements to our website may contain undetected programming errors
that  require  significant  design  modifications,  resulting  in a loss of
customer  confidence  and user  support  and a decrease in the value of our
brand name.  Our failure to  effectively  develop and produce new features,
functions,  products and services  could affect our ability to compete with
other websites. This could have a material adverse effect on us.

Web  browsers   offered  by  Netscape  and  Microsoft   also   increasingly
incorporate  prominent  search  buttons  that direct  traffic to  competing
services. These features could make it more difficult for Internet users to
find and use our product and services. In the


                                    24
<PAGE>
future,  Netscape,  Microsoft  and other  browser  suppliers  may also more
tightly integrate products and services similar to ours into their browsers
or their browsers' pre-set home page.  Additionally,  entities that sponsor
or maintain high-traffic websites or that provide an initial point of entry
for Internet viewers, such as the Regional Bell Operating Companies,  cable
companies or Internet  service  providers,  such as  Microsoft  and America
Online,  offer  and  can  be  expected  to  consider  further  development,
acquisition or licensing of Internet  search and navigation  functions that
compete  with us.  These  competitors  could also take actions that make it
more difficult for viewers to find and use our products and services.

Additionally,  the electronic  commerce market is new and rapidly evolving,
and we expect  competition among electronic  commerce merchants to increase
significantly.  Because the Internet  allows  consumers  to easily  compare
prices of similar products or services on competing  websites and there are
low  barriers  to  entry  for  potential  competitors,  gross  margins  for
electronic  commerce  transactions  may narrow in the  future.  Many of the
products  that  we sell on our website  may be sold by the  maker  of the
product  directly  or  by  other  websites.   Competition   among  Internet
retailers,  our electronic  commerce partners and product makers may have a
material  adverse  effect  on our  ability  to  generate  revenues  through
electronic   commerce   transactions  or  from  these  electronic  commerce
partners.

WE DEPEND ON THE CONTINUED GROWTH IN THE USE AND COMMERCIAL
VIABILITY OF THE WEB.

Our market is new and  rapidly  evolving.  Our  business  is  substantially
dependent  upon the  continued  rapid growth in the use of the Internet and
electronic  commerce on the Internet  becoming more widespread.  Commercial
use of the Internet is  relatively  new.  Web usage may be inhibited  for a
number of reasons, including:

     o  inadequate network infrastructure;
     o  security and authentication concerns with respect to
        transmission over the Internet of confidential information,
        including credit card numbers, or other personal information;
     o  ease of access;
     o  inconsistent quality of service;
     o  availability of cost-effective, high-speed service; and
     o  bandwidth availability.

If the Internet develops as a commercial medium more slowly than we expect,
it will adversely  affect our business.  Additionally,  if web usage grows,
the Internet  infrastructure  may not be able to support the demands placed
on it by this  growth  or its  performance  and  reliability  may  decline.
Websites  have  experienced  interruptions  in their service as a result of
outages  and  other  delays  occurring   throughout  the  Internet  network
infrastructure.  If these outages or delays frequently occur in the future,
web  usage,  as well as usage of our  website,  could  grow more  slowly or
decline.  Also, the Internet's  commercial  viability may be  significantly
hampered due to:

     o  delays in the development or adoption of new operating and
        technical standards and performance improvements required to
        handle increased levels of activity;
     o  increased government regulation; and
     o  insufficient availability of telecommunications services which
        could result in slower response times and adversely  affect usage
        of the Internet.

WE MAY BE MATERIALLY  ADVERSELY  AFFECTED IF  ELECTRONIC  COMMERCE DOES NOT
BECOME A VIABLE SOURCE OF SIGNIFICANT  REVENUES FOR THEGLOBE.  IN ADDITION,
OUR ELECTRONIC COMMERCE BUSINESS MAY RESULT IN SIGNIFICANT LIABILITY CLAIMS
AGAINST US.

In the first  quarter of 1999,  we acquired  shop.theglobe.com,  which is a
direct  marketer of products  over the Internet.  However,  we have limited
experience  in  the  sale  of  products   online  and  the  development  of
relationships with  manufacturers and suppliers of these products.  We also
face many uncertainties which may affect our ability to generate electronic
commerce revenues, including:


                                    25
<PAGE>
    o  our ability to obtain new customers at a reasonable cost,
       retain existing customers and encourage repeat purchases;
    o  the likelihood that both online and retail purchasing trends
       may rapidly change;
    o  the level of product returns;
    o  merchandise shipping costs and delivery times;
    o  our ability to manage inventory levels;
    o  our ability to secure and maintain relationships with vendors;
    o  the possibility that our vendors may sell their products
       through other sites; and
    o  intense competition for electronic commerce revenues.

Accordingly,  we cannot assure you that  electronic  commerce  transactions
will provide a significant  or  sustainable  source of revenues or profits.
Additionally,  due to the ability of consumers to easily  compare prices of
similar  products or services on  competing  websites,  gross  margins for
electronic  commerce  transactions  which are narrower than for advertising
businesses may further narrow in the future and, accordingly,  our revenues
and  profits  from  electronic  commerce  arrangements  may  be  materially
negatively  impacted.  If use of the Internet for electronic  commerce does
not  continue  to grow,  our  business  and  financial  condition  would be
materially and adversely affected.

Additionally,  consumers may sue us if any of the products that we sell are
defective,  fail to  perform  properly  or  injure  the  user.  Some of our
agreements  with  manufacturers  contain  provisions  intended to limit our
exposure to liability  claims.  However,  these limitations may not prevent
all  potential   claims.   Liability  claims  could  require  us  to  spend
significant time and money in litigation or to pay significant  damages. As
a result, any claims, whether or not successful, could seriously damage our
reputation and our business.

INTERNET ADVERTISING MAY NOT PROVE AS EFFECTIVE AS TRADITIONAL MEDIA.

The Internet advertising market is new and rapidly evolving.  We cannot yet
gauge its effectiveness as compared to traditional  advertising media. Many
of  our  current  or  potential  advertising  partners  have  little  or no
experience  using  the  Internet  for  advertising  purposes  and they have
allocated only a limited portion of their  advertising  budgets to Internet
advertising.  The adoption of Internet  advertising,  particularly by those
entities that have historically relied upon traditional media, requires the
acceptance of a new way of conducting business,  exchanging information and
advertising  products and  services.  Advertisers  that have  traditionally
relied upon other  advertising  media may be  reluctant to advertise on the
Internet or find it less effective.

No  standards  have been widely  accepted to measure the  effectiveness  of
Internet  advertising  or to  measure  the  demographics  of our user base.
Additionally,  no standards have been widely accepted to measure the number
of members,  unique users or page views  related to a particular  site.  We
cannot assure you that any standards  will become  available in the future,
that standards will accurately  measure our users or the full range of user
activity on our site or that  measurement  services will accurately  report
our user activity  based on their  standards.  If standards do not develop,
advertisers  may not advertise on the Internet.  In addition,  we depend on
third parties to provide these measurement services. These measurements are
often based on sampling  techniques  or other  imprecise  measures  and may
materially differ from each other and from our estimates.  We cannot assure
you that  advertisers will accept our or other parties'  measurements.  The
rejection  by  advertisers  of these  measurements  could  have a  material
adverse effect on our business and financial condition.

The sale of Internet advertising is subject to intense competition that has
resulted in a wide variety of pricing  models,  rate quotes and advertising
services. For example, advertising rates may be based on the number of user
requests for additional  information made by clicking on the advertisement,
known as "click  throughs," or on the number of times an  advertisement  is
displayed to a user, known as "impressions." Our contracts with advertisers
typically guarantee the advertiser a minimum number of impressions.  To the
extent that  minimum  impression  levels are not  achieved  for any reason,
including the failure to obtain the expected  traffic,  our contracts  with
advertisers  may  require us to provide  additional  impressions  after the
contract  term,   which  may  adversely  affect  the  availability  of  our
advertising inventory. This could have a material adverse effect on us.


                                    26
<PAGE>
Our revenues  could be  materially  adversely  affected if we are unable to
adapt to other pricing models for Internet advertising if they are adopted.
It is  difficult  to predict  which,  if any,  pricing  models for Internet
advertising will emerge as the industry  standard.  This makes it difficult
to project our future advertising rates and revenues.  Additionally,  it is
possible that Internet access providers may, in the future, act to block or
limit  various types of  advertising  or direct  solicitations,  whether at
their own behest or at the request of users.  Moreover,  "filter"  software
programs  that limit or prevent  advertising  from  being  delivered  to an
Internet  user's  computer  are  available.  Widespread  adoption  of  this
software  could  adversely  affect the  commercial  viability  of  Internet
advertising.

WE DEPEND ON THIRD PARTIES TO INCREASE TRAFFIC ON OUR
SITE AND TO PROVIDE SOFTWARE AND PRODUCTS.

We are dependent on various websites that provide direct links to our site.
These websites may not attract  significant numbers of users and we may not
receive a significant number of additional users from these  relationships.
We  also  enter  into  agreements  with  advertisers,  electronic  commerce
marketers or other  third-party  websites  that  require us to  exclusively
feature  these parties in  particular  areas or on particular  pages of our
site.  These  exclusivity  agreements  may limit our  ability to enter into
other  relationships.  Our agreements with third party sites do not require
future  minimum  commitments  to use our services or provide  access to our
site and may be terminated at the convenience of the other party. Moreover,
we do not have  agreements  with a majority of the  websites  that  provide
links to our site.  These sites may terminate their links at any time. Many
companies  we  may  pursue  for  strategic  relationships  offer  competing
services.  As a result,  these  competitors  may be reluctant to enter into
strategic relationships with us. Our business could be materially adversely
affected if we do not establish  and maintain  strategic  relationships  on
commercially  reasonable terms or if any of our strategic  relationships do
not result in increased traffic on our website.

Additionally,  we  cannot  assure  you  that we  will  be able to  maintain
relationships  with third  parties that supply us with software or products
that are crucial to our success, or that these software or products will be
able to  sustain  any  third-party  claims or  rights  against  their  use.
Furthermore,  we cannot assure you that the software,  services or products
of those companies that provide access or links to our services or products
will achieve  market  acceptance or  commercial  success.  Accordingly,  we
cannot assure you that our existing  relationships will result in sustained
business  partnerships,  successful  service  or product  offerings  or the
generation of significant revenues for us.

WE MAY NEED TO RAISE ADDITIONAL FUNDS, INCLUDING THROUGH
THE ISSUANCE OF DEBT.

We believe that the net proceeds from our secondary offering, together with
our  current  cash and cash  equivalents,  will be  sufficient  to meet our
anticipated cash needs for working capital and capital expenditures for our
existing business for the foreseeable future. However, we may need to raise
additional  funds  during  1999 or  thereafter  to  obtain or  operate  any
additional  acquired  businesses or joint venture  arrangements.  We expect
that we will continue to experience  negative  operating  cash flow for the
foreseeable  future as a result of significant  spending on advertising and
infrastructure.  Accordingly,  we may need to raise  additional  funds in a
timely manner in order to:

    o  fund our anticipated expansion;
    o  develop new or enhanced services or products;
    o  respond to competitive pressures;
    o  acquire complementary products, businesses or technologies; and
    o  enter into joint ventures.

If we raise  additional funds through the issuance of equity or convertible
debt  securities,  the  percentage  ownership of our  stockholders  will be
reduced.   Stockholders  may  experience   additional  dilution  and  these
securities  may have  rights  senior to those of the  holders of our Common
Stock. We do not have any contractual  restrictions on our ability to incur
debt.  Any  indebtedness   could  contain   covenants  which  restrict  our
operations.  We  cannot  assure  you  that  additional  financing  will  be
available on terms  favorable  to us, or at all. If adequate  funds are not
available or are not available on acceptable  terms,  our business could be
materially adversely affected. See "Management's Discussion and Analysis of
Financial  Condition  and  Results  of  Operations--Liquidity  and  Capital
Resources."

                                    27
<PAGE>
WE RELY ON INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS.

We regard substantial elements of our website and underlying technology as
proprietary and attempt to protect them by relying on intellectual property
laws  and  restrictions  on  disclosure.   We  also  generally  enter  into
confidentiality   agreements  with  our  employees  and   consultants.   In
connection with our license agreements with third parties we generally seek
to  control  access  to  and  distribution  of  our  technology  and  other
proprietary information.  Despite these precautions, it may be possible for
a third  party  to  copy  or  otherwise  obtain  and  use  our  proprietary
information   without   authorization  or  to  develop  similar  technology
independently.  Thus,  we cannot assure you that the steps taken by us will
prevent  misappropriation  or infringement  of our proprietary  information
which could have a material  adverse  effect on our business.  In addition,
our competitors may independently develop similar technology, duplicate our
products or design around our intellectual property rights.

We pursue the  registration  of our  trademarks  in the  United  States and
internationally.   However,  effective  trademark  and  other  intellectual
property  protection  may not be  available  in every  country in which our
services are distributed or made available  through the Internet.  Policing
unauthorized  use  of  our  proprietary  information  is  difficult.  Legal
standards relating to the validity,  enforceability and scope of protection
of proprietary rights in Internet-related businesses are also uncertain and
still evolving. We cannot assure you about the future viability or value of
any of our proprietary rights.

Litigation  may be  necessary  in the  future to enforce  our  intellectual
property  rights or to determine the validity and scope of the  proprietary
rights of  others.  Furthermore,  we cannot  assure  you that our  business
activities will not infringe upon the proprietary rights of others, or that
other parties will not assert  infringement  claims  against us,  including
claims  related to  providing  hyperlinks  to  websites  operated  by third
parties or providing  advertising  on a keyword basis that links a specific
search  term  entered  by  a  user  to  the   appearance  of  a  particular
advertisement. Moreover, from time to time, third parties may assert claims
of alleged infringement by us or our members of their intellectual property
rights.  See  note 9 and  Item 1 in  Part  II.  Any  litigation  claims  or
counterclaims could impair our business because they could:

    o  be time-consuming;
    o  result in costly litigation;
    o  subject us to significant liability for damages;
    o  result in invalidation of our proprietary rights;
    o  divert management's attention;
    o  cause product release delays; or
    o  require us to redesign our products or require us to enter
       into royalty or licensing agreements that may not be available
       on terms acceptable to us, or at all.

We license from third parties various  technologies  incorporated  into our
site.  As we  continue to  introduce  new  services  that  incorporate  new
technologies,  we may be required  to license  additional  technology  from
others.  We cannot assure you that these  third-party  technology  licenses
will  continue to be  available  to us on  commercially  reasonable  terms.
Additionally,  we cannot  assure you that the third  parties  from which we
license  our  technology  will be able to  defend  our  proprietary  rights
successfully against claims of infringement.  As a result, our inability to
obtain  any  of  these  technology  licenses  could  result  in  delays  or
reductions in the  introduction of new services or could  adversely  affect
the performance of our existing services until equivalent technology can be
identified, licensed and integrated.

We own  the  Internet  domain  names  "theglobe.com,"  "shop.theglobe.com,"
"globelists.com," "tglo.com," "azazz.com," "happypuppy.com, " "realmx.com,"
"kidsdomain.com" and  "gamesdomain.com."  The regulation of domain names in
the United States and in foreign  countries may change.  Regulatory  bodies
could establish  additional  top-level  domains,  appoint additional domain
name registrars or modify the requirements for holding domain names, any or
all of which may dilute the  strength  of our names.  We may not acquire or
maintain our domain names in all of the  countries in which our website may
be accessed,  or for any or all of the  top-level  domain names that may be
introduced. The relationship between regulations governing domain names and
laws protecting  proprietary  rights is unclear.  Therefore,  we may not be
able to prevent third parties from acquiring  domain names that infringe or
otherwise  decrease  the  value of our  trademarks  and  other  proprietary
rights.

                                    28
<PAGE>
WE MAY FACE INCREASED GOVERNMENT REGULATION AND LEGAL
UNCERTAINTIES IN OUR INDUSTRY.

There are an increasing  number of federal,  state,  local and foreign laws
and  regulations  pertaining  to the  Internet.  In  addition,  a number of
federal,  state, local and foreign legislative and regulatory proposals are
under consideration. Laws or regulations may be adopted with respect to the
Internet   relating  to  liability  for   information   retrieved  from  or
transmitted over the Internet, online content regulation,  user privacy and
quality  of  products  and  services.  Changes  in  tax  laws  relating  to
electronic  commerce could materially  affect our business.  Moreover,  the
applicability  to the Internet of existing  laws  governing  issues such as
intellectual  property  ownership and infringement,  copyright,  trademark,
trade  secret,  obscenity,   libel,  employment  and  personal  privacy  is
uncertain  and  developing.  Any  new  legislation  or  regulation,  or the
application or interpretation of existing laws or regulations, may decrease
the growth in the use of the  Internet,  may impose  additional  burdens on
electronic  commerce or may alter how we do business.  This could  decrease
the demand for our services,  increase our cost of doing business, increase
the costs of  products  sold  through  the  Internet  or  otherwise  have a
material  adverse  effect  on  our  business,  results  of  operations  and
financial condition.

WE MAY BE EXPOSED TO LIABILITY FOR INFORMATION RETRIEVED
FROM OR TRANSMITTED OVER THE INTERNET OR FOR PRODUCTS
SOLD OVER THE INTERNET.

Users may access content on our website or the websites of our distribution
partners or other third parties through  website links or other means,  and
they may download content and subsequently  transmit this content to others
over the  Internet.  This  could  result  in claims  against  us based on a
variety  of  theories,   including   defamation,   obscenity,   negligence,
copyright, trademark infringement or the wrongful actions of third parties.
Other  theories  may be  brought  based  on  the  nature,  publication  and
distribution  of our  content  or based on  errors  or false or  misleading
information  provided  on our  website.  Claims have been  brought  against
online  services  in the past and we have  received  inquiries  from  third
parties  regarding  these  matters.  The claims  could be  material  in the
future.  We could also be  exposed to  liability  for third  party  content
posted by members on their personal web pages or by users in our chat rooms
or on our bulletin boards.

Additionally,  we offer e-mail service,  which a third party provides.  The
e-mail service may expose us to potential  liabilities or claims  resulting
from unsolicited  e-mail, lost or misdirected  messages,  fraudulent use of
e-mail or delays in e-mail  service.  We also  enter into  agreements  with
commerce  partners  and  sponsors  under which we are entitled to receive a
share of any revenue from the purchase of goods and services through direct
links from our site. After the factorymall acquisition in February 1999, we
also began selling products directly to consumers.  Those  arrangements may
expose us to additional legal risks,  regulations by local, state,  federal
and foreign  authorities  and potential  liabilities  to consumers of these
products and services,  even if we do not ourselves  provide these products
or  services.  We cannot  assure you that any  indemnification  that may be
provided  to us in some of these  agreements  with  these  parties  will be
adequate.  Even if these  claims do not result in our  liability,  we could
incur  significant  costs in  investigating  and  defending  against  these
claims. The imposition of potential liability for information carried on or
disseminated  through our systems could require us to implement measures to
reduce  our  exposure  to  liability.   Those   measures  may  require  the
expenditure of substantial  resources and limit the  attractiveness  of our
services.  Additionally, our insurance policies may not cover all potential
liabilities to which we are exposed.

WE MAY HAVE TROUBLE EXPANDING INTERNATIONALLY.

A part of our strategy is to expand into foreign markets. In April 1999, we
acquired Attitude,  which operates the Games Domain.com and Kids Domain.com
websites  through a wholly-owned  U.K.  subsidiary.  We have not previously
operated internationally. Additionally, we are not completely familiar with
U.K. law and its  ramifications on our business.  There can be no assurance
that the Internet or our community  model will become  widely  accepted for
advertising and electronic commerce in any international markets. To expand
overseas we intend to seek to acquire  additional  websites  and enter into
relationships with foreign business partners. This strategy contains risks,
including:

    o  we may experience difficulty in managing international operations
       because of distance, as well as language and cultural
       differences;
    o  we or our future foreign business associates may not be able to

                                    29
<PAGE>
       successfully market and operate our services in foreign markets;
    o  because of substantial anticipated competition, it will be
       necessary to implement our business strategy quickly in
       international markets to obtain a significant share of the
       market; and
    o  we do not have the content or services necessary to substantially
       expand our operations in many foreign markets.

We will unlikely be able to significantly penetrate these markets unless we
gain the relevant  content,  either  through  partnerships,  other business
arrangements  or  possibly  acquisitions  with  content-providers  in these
markets.   There  are  also  risks   inherent  in  doing   business  on  an
international level, including:

    o  unexpected changes in regulatory requirements;
    o  trade barriers;
    o  difficulties in staffing and managing foreign operations;
    o  fluctuations in currency exchange rates and the introduction
       of the euro;
    o  longer payment cycles in general;
    o  problems in collecting accounts receivable;
    o  difficulty in enforcing contracts;
    o  political and economic instability;
    o  seasonal reductions in business activity in certain other
       parts of the world; and
    o  potentially adverse tax consequences.


VARIOUS STOCKHOLDERS, INDIVIDUALLY OR IN THE AGGREGATE, MAY CONTROL US.

Michael S. Egan, our Chairman,  beneficially owns or controls,  directly or
indirectly,  9,834,606  shares of our Common  Stock which in the  aggregate
represents approximately 32% of the outstanding shares of our common stock.
Todd V. Krizelman and Stephen J. Paternot,  our Co-Chief Executive Officers
and  Co-Presidents,  together,  beneficially own  approximately  14% of our
Common Stock.

Messrs.  Egan,  Krizelman,  Paternot and Edward A.  Cespedes and Rosalie V.
Arthur, each of whom is a director of our company, and we have entered into
a stockholders'  agreement. As a result of the stockholders' agreement, Mr.
Egan has agreed to vote for up to two  nominees  of Messrs.  Krizelman  and
Paternot to the board of directors and Messrs.  Krizelman and Paternot have
agreed to vote for the nominees of Mr. Egan to the board,  which will be up
to five directors.  Consequently,  Mr. Egan, Krizelman and Paternot control
the ability to elect a majority of our directors.  Additionally, each party
other than Mr. Egan has granted an  irrevocable  proxy with  respect to all
matters subject to a stockholder vote to Dancing Bear Investments, Inc., an
entity  controlled by Mr. Egan,  for any shares held by that party received
upon the exercise of outstanding  warrants for 400,000 shares of our Common
Stock.  The  stockholders'   agreement  also  provides  for  tag-along  and
drag-along rights in connection with any private sale of these securities.

THE YEAR 2000 ISSUE MAY AFFECT OUR OPERATIONS.

Year 2000 issues related to non-compliant information technology systems or
non-information  technology  systems operated by us or by third parties may
affect us. We have  substantially  completed an  assessment of our internal
and external third-party information technology systems and non-information
technology  systems and a test of the information  technology  systems that
support our website.  Following the  acquisition of factorymall in February
of 1999 and  Attitude  in April of 1999,  we began to assess  each of their
internal  and  external  third  party  information  technology  systems and
non-information   technology  systems  and  integrate  those  hardware  and
software  systems into ours. At this point in our  assessment,  testing and
integration, we are not aware of any Year 2000 problems relating to systems
operated by us or by third parties that would have a material effect on our
business,  without taking into account our efforts to avoid these problems.
Based on our assessment to date, we do not anticipate that costs associated
with  remediating  our  non-compliant  information  technology  systems  or
non-information  technology  systems will be  material,  although we cannot
assure you that this will be the case.  See  "Management's  Discussion  and
Analysis of Financial  Condition and Results of  Operations--Impact  of the
Year 2000."


                                    30
<PAGE>
To the extent that we  finalize  our  assessment  without  identifying  any
material non-compliant  information technology systems operated by us or by
third parties, the most likely worst case Year 2000 scenario is the failure
of one or  more of our  vendors  of  hardware  or  software  or one or more
providers of  non-information  technology  systems to properly identify any
Year 2000  compliance  issues and remediate any issues before  December 31,
1999. A failure could prevent us from operating our business, prevent users
from accessing our website, or change the behavior of advertising customers
or persons  accessing  our website.  We believe  that the primary  business
risks, in the event of a failure, would include, but not be limited to:

    o  lost advertising revenues;
    o  increased operating costs;
    o  loss of customers or persons accessing our website;
    o  other business interruptions of a material nature; and
    o  claims of mismanagement, misrepresentation, or breach of
       contract.

Any of these risks could have a material adverse effect on our business.

OUR STOCK PRICE IS VOLATILE.

The trading price of our Common Stock has been volatile and may continue to
be volatile in response to various factors, including:

    o  quarterly variations in our operating results;
    o  competitive announcements;
    o  changes in financial estimates by securities analysts;
    o  the operating and stock price performance of other companies
       that investors may deem comparable to us; and
    o  news relating to trends in our markets.

The stock market has experienced significant price and volume fluctuations,
and   the   market   prices   of   technology    companies,    particularly
Internet-related  companies,  have  been  highly  volatile.  In  the  past,
following  periods  of  volatility  in  the  market  price  of a  company's
securities,  securities  class action  litigation has often been instituted
against a company.  Litigation,  if instituted,  whether or not successful,
could result in substantial costs and a diversion of management's attention
and resources, which would have a material adverse effect on our business.

THE SALE OF SHARES ELIGIBLE FOR FUTURE SALE IN THE OPEN
MARKET COULD DEPRESS OUR STOCK PRICE.

Sales of  significant  amounts of Common Stock in the public  market in the
future or the  perception  that  sales  will  occur  could  materially  and
adversely affect the market price of the Common Stock or our future ability
to raise capital  through an offering of our equity  securities.  There are
approximately  12.0 million shares of Common Stock held by our stockholders
that are  "restricted  securities,"  as that term is defined in Rule 144 of
the Securities Act of 1933. Restricted securities may be sold in the public
market  only  if  registered  or if  they  qualify  for an  exemption  from
registration  under Rules 144,  144(k) or 701 under the Securities  Act. In
connection with our initial public offering and secondary offering,  all of
our  directors,  officers and the holders of a  substantial  portion of our
stock  agreed,  with  exceptions,  that they will not sell any Common Stock
without the prior  consent of Bear,  Stearns & Co. Inc.  before  August 18,
1999.  Following  this  date,  approximately  2.3  million  shares  of  the
restricted  securities will be immediately  eligible for sale in the public
market under Rule 144 without  volume  limitation  or further  registration
under the Securities Act, not including approximately 8,000,978 shares held
by our  "affiliates",  within the  meaning  of the  Securities  Act.  These
8,000,978  shares  will be  eligible  for  public  sale  subject  to volume
limitation.


                                    31
<PAGE>
There are outstanding  options to purchase 4,565,576 shares of Common Stock
which  are  eligible  for  sale  in the  public  market  from  time to time
depending on vesting and the expiration of lock-up agreements. The issuance
of these  securities are registered  under the Securities Act. In addition,
there are  outstanding  warrants to purchase up to 4,011,534  shares of our
Common Stock upon exercise.  Substantially all of our stockholders  holding
restricted  securities,  including  shares  issuable  upon the  exercise of
warrants to purchase our Common Stock, are entitled to registration  rights
under various conditions.

ANTI-TAKEOVER  PROVISIONS  AFFECTING US COULD  PREVENT OR DELAY A CHANGE OF
CONTROL.

Provisions  of  our  charter,  by-laws  and  stockholder  rights  plan  and
provisions of applicable  Delaware law may  discourage,  delay or prevent a
merger or other change of control that a stockholder may:

    o  have the effect of delaying, deferring or preventing a change
       in control of our company;
    o  discourage bids of our Common Stock at a premium over the
       market price; or
    o  adversely affect the market price of, and the voting and other
       rights of the holders of, our Common Stock.

We must  follow  Delaware  laws that  could  have the  effect of  delaying,
deterring or  preventing  a change in control of our company.  One of these
laws  prohibits  us  from  engaging  in a  business  combination  with  any
interested stockholder for a period of three years from the date the person
became an interested  stockholder,  unless  various  conditions are met. In
addition, provisions of our charter and by-laws, and the significant amount
of Common Stock held by our executive  officers,  directors and affiliates,
could together have the effect of discouraging  potential takeover attempts
or making it more difficult for stockholders to change management.

WE DO NOT EXPECT TO PAY CASH DIVIDENDS.

We do not anticipate paying any cash dividends in the foreseeable future.


                                    32
<PAGE>
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk.  theglobe.'s  accounts  receivables are subject, in the normal
course of business,  to collection risks. theglobe regularly assesses these
risks and has  established  policies  and  business  practices  to  protect
against the adverse effects of collection risks. As a result, theglobe does
not anticipate any material losses in this area.

Interest rate risk. theglobe's  investments that are classified as cash and
cash  equivalents  have  maturities  of 3 months or less.  The  globe.com's
short-term  investments  are in bonds that have fixed interest rates at the
time of purchase.  Therefore, changes in the market's interest rates do not
affect  the  carrying   value  of  our  cash   equivalents  or  short  term
investments.


                                    33
<PAGE>
                                  PART II

                             OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On May 13, 1999, Accursed Toys, Inc. filed a complaint in the United States
District  Court  for  the  Middle  District  of  Florida  relating  to  the
acquisition of Attitude. The lawsuit alleges that the Company, Attitude and
others  have  engaged  in  various  acts  of  unfair   competition,   false
advertising and deceptive trade  practices,  as well as breach of contract,
interference with contractual relations,  fraud and misrepresentation.  The
suit seeks actual and consequential damages and a preliminary and permanent
injunction  prohibiting  the  operation  of  the  Company's  happypuppy.com
website.   The  Company  owes  Accursed  Toys  (the  former  owner  of  the
happypuppy.com website) approximately $5.0 million to be paid over the next
seventeen  (17) years.  Accursed Toys alleges that this amount is currently
due and payable. As of June 30, 1999, the unaudited condensed  consolidated
financial  statements of the Company  reflect a long-term  liability at its
net  present  value  of  approximately  $2.6  million  in  respect  to this
obligation.  The Company believes that these  allegations are without merit
and plans to vigorously defend these allegations. The Company believes that
it is  unlikely  that the  ultimate  disposition  of this claim will have a
material adverse effect on the Company's  consolidated  financial condition
or results of operations.

On May 14, 1999, two principals of Accursed Toys, Inc. filed a complaint in
the United States District Court for the Eastern District of Virginia.  The
lawsuit   alleges  that   Attitude   engaged  in  various  acts  of  unfair
competition,  false advertising,  interference with contractual  relations,
fraud and misrepresention.  The suit seeks actual and consequential damages
and a preliminary and permanent injunction prohibiting the operation of the
Company's  happypuppy.com  website.  On August  6,  1999 the court  granted
Attitude's  motion  to  dismiss  the  complaint,  but  gave  the  plaintiff
opportunity  to amend  the  complaint.  The  Company  believes  that  these
allegations  are  without  merit  and  plans  to  vigorously  defend  these
allegations.  The Company  believes  that it is unlikely  that the ultimate
disposition  of this  claim  will  have a  material  adverse  effect on the
Company's consolidated financial condition or results of operations.

On May 20, 1999, Fortune Casuals LLC filed a complaint in the United States
District  Court for the Central  District of  California  alleging that the
Company  infringes Fortune Casuals LLC's state and federal trademark rights
with respect to the GLOBE mark. The Company believes that these allegations
are without merit and plans to  vigorously  defend these  allegations.  The
Company believes that it is unlikely that the ultimate  disposition of this
claim will have a material  adverse  effect on the  Company's  consolidated
financial condition or results of operations.

On July 1, 1999,  the  Company  filed a complaint  in Supreme  Court of the
State  of  New  York,   County  of  New  York.  The  lawsuit  alleges  that
Stockplayer.com,  Inc. breached  advertising  services  agreements with the
Company  by  failing  to pay  for  advertising  services  performed  by the
Company. On August 13, 1999, Stockplayer.com,inc.  filed its answer denying
that it breached these  advertising  services  agreements.  The answer also
alleges that the Company breached alleged express and implied warranties in
connection   with   certain   information   provided   by  the  Company  to
Stockplayer.com.  Stockplayer.com  alleges  that it has been  damaged in an
amount not less than  $5,000,000.  Based on our  preliminary  analysis  the
Company  believes  that these  allegations  are without  merit and plans to
vigorously  defend  these  allegations.  The  Company  believes  that it is
unlikely  that  this  claim  will  have a  material  adverse  effect on the
Company's consolidated financial condition or results of operations.

From time to time the  Company is subject to legal  proceedings  and claims
arising in the ordinary  course of business.  In the opinion of management,
the ultimate  disposition of these matters will not have a material adverse
effect on the  Company's  consolidated  financial  condition  or results of
operations.



                                   II-1

<PAGE>
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

(c)  SALES  OF  UNREGISTERED  SECURITIES.  On April 9,  1999,  we  acquired
Attitude in exchange for the issuance of approximately  1.57 million shares
of Common Stock.  In addition,  options and warrants to purchase  shares of
Attitude's  Common  Stock  were  exchanged  for  options  and  warrants  to
purchase,   respectively,   approximately   84,760  and  46,706  shares  of
theglobe's  Common Stock.  The transaction was a private  placement  exempt
from the  registration  requirements  of the  Securities  Act of  1933,  as
amended, pursuant to Rule 506 of Regulation D, promulgated thereunder.

On May 19, 1999, two holders of warrants exerciseable into shares of Common
Stock  notified the Company of the exercise of such  warrants.  The Company
issued an  aggregate  of 100,000  shares of Common  stock for an  aggregate
exercise price of $145,386.  The transaction was a private placement exempt
from the  registration  requirements  of the  Securities  Act of  1933,  as
amended, pursuant to Rule 506 of Regulation D, promulgated thereunder.

(d) USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES.  During the period
from  December 31, 1998 through June 30, 1999, we have used an aggregate of
$16.4 million for investments in our website, including enhancements to our
server and networking  infrastructure and the functionality of our website,
and for general corporate  purposes  including working capital,  new office
facilities  and  expansion  of our sales  and  marketing  capabilities  and
brand-name promotions. We have also used a portion of such net proceeds for
acquisitions of complementary businesses, services and technology.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We held our Annual Meeting of  Stockholders  on June 8, 1999. The following
is a brief  description  of each  matter  voted upon at the meeting and the
number  of  votes  cast  for,  withheld,  or  against  and  the  number  of
abstentions  with respect to each  matter.  Each  director  proposed by the
Company was elected and the two  management  proposals were approved by the
stockholders.

A.  The stockholders re-elected the nine nominees for theglobe's Board of
    Directors:

     Nominee                      Shares For               Shares Withheld
     -------                      ----------               ---------------
     Michael S. Egan              10,202,077                     27,676
     Todd V. Krizelman            10,202,077                     27,676
     Stephan J. Paternot          10,202,077                     27,676
     Edward A. Cespedes           10,202,077                     27,676
     Rosalie V. Arthur            10,202,077                     27,676
     Henry C. Duques              10,202,077                     27,676
     Robert M. Halperin           10,202,077                     27,676
     David H. Horowitz            10,202,077                     27,676
     H. Wayne Huizenga            10,202,077                     27,676


B.   Approval of theglobe's 1998 Stock Option Plan, as amended and
     restated:

     Shares For      Shares Against     Shares Abstained    Broker Non-Votes
     ----------      --------------     ----------------    ----------------
     6,928,881          449,897              9,785              2,841,190


C.   Approval of theglobe's 1999 Employee Stock Purchase Plan:


     Shares For      Shares Against     Shares Abstained    Broker Non-Votes
     ----------      --------------     ----------------    ----------------
     7,284,054          95,312               9,197              2,841,190


ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a) Exhibits

     Exhibit Number      Description
     --------------      -----------
          27.1           Financial Data Schedule

     (b) Reports on Form 8-K.

     On April 1,  1999 we filed a Form  8-K/A  under  Item 7  amending  the
     original 8-K filed on February 15, 1999  regarding  the  completion of
     the acquisition of factorymall.

     On April 9, 1999 we filed a Form 8-K under Item 2 and 7 regarding  the
     completion of the acquisition of Attitude.

     On May 3, 1999 we filed a Form 8-K under Item 5 and 7  announcing  our
     financial results for the first quarter of 1999.

     On June 15,  1999 we filed a Form 8-K under Item 5 and 7  regarding  a
     clarification of our March 1999 unique user count.


                                    II-2
<PAGE>
                                 SIGNATURES

Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report on Form 10-Q to be signed on its
behalf by the undersigned thereto duly authorized.



                        theglobe.com, inc.

                        /s/ Francis T. Joyce
                        --------------------

                        Francis T. Joyce
                        Vice President, Chief Financial Officer
                        and Treasurer (Principal Financial and
                        Accounting Officer)

August 16, 1999


                                    II-3
<PAGE>