UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





(Mark
One)





x   Annual Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934


For
the fiscal year ended December 31, 2009





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




110 EAST
BROWARD BOULEVARD, SUITE 1400, FORT LAUDERDALE, FL. 33301


(ADDRESS
OF PRINCIPAL EXECUTIVE OFFICES)





Registrant’s
telephone number, including area code (954) 769 - 5900





Securities
registered pursuant to Section 12(b) of the Act: None





Securities
registered pursuant to Section 12(g) of the Act:





Common
Stock, par value $.001 per share





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


 ̈ Yes  x No




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


 ̈ Yes  x No





Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days: x
Yes  ̈
No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).     ̈
Yes    ̈ No





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (Sec.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x




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




Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer (do not check if a smaller reporting company )  ̈
              Smaller
      reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).


x   Yes 
 ̈ No





Aggregate
market value of the voting Common Stock held by non-affiliates of the registrant
as of the close of business as of the last business day of the registrant’s most
recently completed second fiscal quarter, June 30, 2009: $341,072.*





*Includes
voting stock held by third parties, which may be deemed to be beneficially owned
by affiliates, but for which such affiliates have disclaimed beneficial
ownership.





The
number of shares outstanding of the Registrant's Common Stock, $.001 par value
(the "Common Stock") as of March 13, 2010 was 441,484,838.









theglobe.com,
inc.





FORM
10-K





TABLE
OF CONTENTS




PagePART
      IItem
      1.
                      Business
                      
                      
                      1Item
      1A.
                      Risk
      Factors
                      
                      
                      4Item
      1B.
                      Unresolved
      Staff Comments
                      
                      
                      7Item
      2.
                      Properties
                      
                      
                      7Item
      3.
                      Legal
      Proceedings
                      
                      
                      7Item
      4.
                      Removed
      and Reserved
                      
                      
                      8PART
      IIItem
      5.
                      Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                      
                      
                      8Item
      6.
                      Selected
      Financial Data
                      
                      
                      9Item
      7.
                      Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                      
                      
                      10Item
      7A.
                      Quantitative
      and Qualitative Disclosures About Market Risk
                      
                      
                      15Item
      8.
                      Financial
      Statements and Supplementary Data
                      
                      
                      F-1Item
      9.
                      Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
                      
                      
                      16Item
      9A(T).
                      Controls
      and Procedures
                      
                      
                      16Item
      9B.
                      Other
      Information
                      
                      
                      17PART
      IIIItem
      10.
                      Directors,
      Executive Officers and Corporate Governance
                      
                      
                      17Item
      11.
                      Executive
      Compensation
                      
                      
                      19Item
      12.
                      Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                      
                      
                      21Item
      13.
                      Certain
      Relationships and Related Transactions and Director
      Independence
                      
                      
                      23Item
      14.
                      Principal
      Accounting Fees and Services
                      
                      
                      24PART
      IVItem
      15.
                      Exhibits
      and Financial Statement Schedules
                      
                      
                      25SIGNATURES
                      
                      
                      
                      28


i





FORWARD
LOOKING STATEMENTS





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




·
            the outcome of pending
      litigation;





·
            our ability to negotiate
      favorable settlements with  unsecured
      creditors;





·
            our ability to successfully
      resolve disputed
liabilities;





·
            our estimates or expectations of
      continued losses;





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





·
            our ability to raise additional
      and sufficient capital; and





·
            our ability to continue as a
      going concern.





These
statements are only predictions. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or achievements. We
are not required to and do not intend to update any of the forward-looking
statements after the date of this Form 10-K or to conform these statements to
actual results. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this Form 10-K might not occur. Actual
results, levels of activity, performance, achievements and events may vary
significantly from those implied by the forward-looking statements. A
description of risks that could cause our results to vary appears under "Risk
Factors" and elsewhere in this Form 10-K.




PART
I


ITEM
1. BUSINESS


DESCRIPTION
OF BUSINESS





As more
fully discussed in the section below entitled “Sale of Tralliance and Share
Issuance,” on September 29, 2008, theglobe.com, inc. (the “Company” or
“theglobe”) consummated the sale of the business and substantially all of the
assets of its Tralliance Corporation subsidiary (“Tralliance”) to Tralliance
Registry Management Company, LLC (“Tralliance Registry Management”), an entity
controlled by Michael S. Egan, the Company’s Chairman and Chief Executive
Officer.  As a result of and on the effective date of the sale of its
Tralliance business, which was theglobe’s last remaining operating business,
theglobe became a “shell company,” as that term is defined in Rule 12b-2 of the
Exchange Act, with no material operations or assets.  At the present
time, theglobe has no plans to acquire or start-up any new
businesses.





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





As of
December 31, 2009, as reflected in our accompanying Consolidated Balance Sheet,
our current liabilities significantly exceed our total
assets.  Additionally, we received a report from our independent
registered public accountants, relating to our December 31, 2009 audited
financial statements, containing an explanatory paragraph regarding our ability
to continue as a going concern.





It is the
Company’s preference to avoid filing for protection under the U.S. Bankruptcy
Code.  However, unless the Company is successful in restructuring or
settling its current liabilities and/or raising additional debt or equity
securities, it may not be able to continue to operate as a going concern for any
significant length of time in the future.  Notwithstanding the above,
theglobe currently intends to continue as a public company and make all the
requisite filings under the Securities and Exchange Act of 1934.




SALE
OF TRALLIANCE AND SHARE ISSUANCE





On
September 29, 2008, the Company (i) sold the business and substantially all of
the assets of its Tralliance Corporation subsidiary to Tralliance Registry
Management and (ii) issued 229 million of its Common Stock (the “Shares”) to The
Registry Management Company, LLC (“Registry Management”), (the “Purchase
Transaction”).  Tralliance Registry Management and Registry Management
are entities directly or indirectly controlled by Michael S. Egan, our Chairman
and Chief Executive Officer and principal stockholder, and each of our two
remaining executive officers and Board members, Edward A. Cespedes, our
President, and Robin Segaul Lebowitz, our Vice President of Finance, own a
minority interest in Registry Management.  After giving effect to the
closing of the Purchase Transaction, and the issuance of the Shares thereunder,
Mr. Egan beneficially owns approximately 76% of the Company’s Common Stock at
December 31, 2009.


1





In
connection with the Purchase Transaction, the Company received (i) consideration
totaling approximately $6.4 million which consisted of the surrender to theglobe
and satisfaction of secured demand convertible promissory notes issued by
theglobe and held by Registry Management in the aggregate principal amount of
$4.25 million, together with all accrued and unpaid interest of approximately
$1.3 million through the date of closing of the Purchase Transaction and
satisfaction of approximately $870 thousand in outstanding rent and
miscellaneous fees due and unpaid to the Registry Management through the date of
closing of the Purchase Transaction, and (ii) an earn-out equal to 10% (subject
to certain minimums) of Tralliance Registry Management’s “net revenue” (as
defined) derived from “.travel” names registered by Tralliance Registry
Management from September 29, 2008 through May 15, 2015 (the
“Earn-out”).  The minimum Earn-out payable by Tralliance Registry
Management to theglobe was $300 thousand in the first year of the Earn-out
Agreement, and will increase by $25 thousand in each subsequent year (pro-rated
for the final year of the Earn-out).





Commensurate
with the closing of the Purchase Transaction on September 29, 2008, the Company
also entered into Termination Agreements with each of its executive officers
(each a “Termination Agreement”).  Pursuant to the Termination
Agreements, the Company’s employment agreements with each of Michael S. Egan,
Edward A. Cespedes and Robin Segaul Lebowitz, the Chief Executive Officer,
President and Vice President of Finance, all dated August 1, 2003, respectively,
were terminated.  Notwithstanding the termination of these employment
agreements, each of Messrs. Egan, Cespedes and Ms. Lebowitz remains as an
officer and director of the Company.





In
connection with the closing of the Purchase Transaction, the Company entered
into a Master Services Agreement (“Services Agreement”) with Dancing Bear
Investments, Inc. (“Dancing Bear”), an entity which is controlled by Mr.
Egan.  Under the terms of the Services Agreement, for a fee of $20
thousand per month ($240 thousand per annum), Dancing Bear provides personnel
and services to the Company so as to enable it to continue its existence as a
public company without the necessity of any full-time employees of its
own.  The Services Agreement had an initial term of one year and was
renewed for a second one year term during 2009.  Services under the
Services Agreement include, without limitation, accounting, assistance with
financial reporting, accounts payable, treasury/financial planning, record
retention and secretarial and investor relations functions.





OUR
FORMER INTERNET SERVICES BUSINESS





On May 9,
2005, we exercised a purchase option and acquired all of the outstanding capital
stock of Tralliance.  From the date of acquisition until the sale of
the Tralliance business to Tralliance Registry Management on September 29, 2008,
theglobe operated Tralliance as its Internet Services line of
business.  The following discussion of the Tralliance business and its
contractual relationships relates to the period prior to such sale.





Tralliance
was incorporated in 2002 to develop products and services to enhance online
commerce between consumers and the travel and tourism industries, including
administration of the “.travel” top-level domain.  On May 5, 2005, the
Internet Corporation for Assigned Names and Numbers (“ICANN”) and Tralliance
entered into a contract whereby Tralliance was designated as the exclusive
registry for the “.travel” top-level domain (the “Registry”) for an initial
period of ten years.  Renewal of the ICANN contract beyond the initial
ten year term was then conditioned upon the negotiation of renewal terms
reasonably acceptable to ICANN.  Additionally, ICANN had the right to
immediately terminate the contract in the event of a material and fundamental
breach of the contract by the Registry and failure to cure such breach within
thirty days of notice.





The
establishment of the “.travel” top-level domain enables businesses,
organizations, governmental agencies and other enterprises that operate within
the travel and tourism industry to establish a unique Internet domain name from
which to communicate and conduct commerce.  An Internet domain name is
made up of a top-level domain and a second-level domain.  For example,
in the domain name “companyX.travel”, “companyX” is the second-level domain and
“.travel” is the top-level domain.  The Registry for the “.travel”
top-level domain is responsible for maintaining the master database of all
second-level “.travel” domain names and their corresponding Internet Protocol
(“IP”) addresses.





To
facilitate the “.travel” domain name registration process, the Registry entered
into contracts with a number of registrars.  The registrars acted as
intermediaries between the Registry and customers (referred to as registrants)
seeking to register “.travel” domain names.  The registrars handled
the billing and collection of registration fees, customer service and technical
management of the registration database.  Registrants were able to
register “.travel” domain names for terms of one year (minimum) up to 10 years
(maximum).  For standard name registration transactions, registrars
retained a portion of the registration fee collected by them as their
compensation and remitted the remainder, $80 per domain name per year, of the
registration fee to the Registry.








In order
to register a “.travel” domain name, a registrant first had to be verified as
being eligible (“authenticated”) by virtue of being a valid participant in the
travel industry.  Additionally, eligibility data was required to be
updated and reviewed annually, subsequent to initial
registration.  Once authenticated, a registrant was only permitted to
register “.travel” domain names that were associated with the registrant’s
business or organization.  The Registry entered into contracts with a
number of travel associations and other independent organizations
(“authentication providers”) whereby, in consideration for the payment of fixed
and/or variable fees, all required authentication procedures were performed by
such authentication providers.  The Registry had also outsourced
various other registry operations, database maintenance and policy formulation
functions to certain other independent businesses or organizations in
consideration for the payment of certain fixed and/or variable
fees.


2





Commensurate
with the closing of the sale of the Tralliance business to Tralliance Registry
Management on September 29, 2008, all existing contracts relevant to the
operation of the “.travel” registry, including the ICANN contract and contracts
with entities who performed registry operations, authentication and registrar
functions, were assigned by Tralliance to Tralliance Registry
Management.  As discussed earlier in this Report, subsequent to the
sale of its Tralliance business, the Company’s sole interest in the “.travel”
registry relates to the Earn-out payable from Tralliance Registry Management to
the Company based upon net revenues derived from “.travel” names registered by
Tralliance Registry Management from September 29, 2008 through May 5,
2015.





OUR
DISCONTINUED OPERATIONS





COMPUTER
GAMES BUSINESS





In
February 2000, the Company entered the computer games business by acquiring
Computer Games Magazine, a print publication for personal computer (“PC”)
gamers; CGOnline, the online counterpart to Computer Games Magazine; and Chips
& Bits, an e-commerce games distribution business.  Historically,
content of Computer Games Magazine and CGOnline focused primarily on the PC
games market niche.





From 2001
through 2006, based upon a trend of decreasing net revenue, the profitability of
our Computer Games business also decreased.  Also, due in part to
unsuccessful attempts to diversify and expand its business beyond games and into
other areas of the entertainment industry, the Computer Games business incurred
significant operating losses during 2004, 2005 and 2006.





In March
2007, management and the Board of Directors of the Company made the decision to
cease all activities related to its Computer Games businesses, including
discontinuing the operations of its magazine publications, game distribution
business and related websites.  The Company’s decision to shutdown its
Computer Games businesses was based primarily on the historical losses sustained
by these businesses during 2004 through 2006 and management’s expectations of
continued future losses.  As of December 31, 2009, all elements of its
computer games business shutdown plan have been completed by the
Company.





VOIP
TELEPHONY SERVICES BUSINESS





In
November 2002 and May 2003, the Company acquired certain Voice over Internet
Protocol (“VoIP”) assets and businesses and entered the VoIP telephony market
place.  During the third quarter of 2003, the Company launched its
first suite of consumer and business level VoIP services.  The Company
launched its browser-based VoIP product during the first quarter of
2004.  These services allowed customers to communicate using VoIP
technology for dramatically reduced pricing compared to traditional telephony
networks.  The services also offered traditional telephony features
such as voicemail, caller ID, call forwarding, and call waiting for no
additional cost to the customer, as well as incremental services that were not
then supported by the public switched telephone network (“PSTN”) like the
ability to use numbers remotely and voicemail to email services.





From the
initial launch of its VoIP services in 2003 through 2005, the Company continued
to expand its VoIP network, which was comprised of switching hardware and
software, services, billing and inventory systems, and telecommunication carrier
contractual relationships.  During this same period of time, the
Company attempted to market and distribute its VoIP retail products through
various direct and indirect sales channels.  None of the marketing and
sales programs implemented during these years were successful in generating a
significant number of customers or revenue.  As a result, the capacity
of the Company’s VoIP network greatly exceeded its usage, and the VoIP telephony
services business incurred substantial operating losses during this time
period.  During 2006, the Company developed and implemented a plan to
reconfigure, phase out and eliminate certain components of its VoIP network in
order to reduce network excess capacity and operating costs.





In March
2007, management and the Board of Directors decided to discontinue the
operating, research and development activities of its VoIP telephony services
business and terminate all of the remaining employees of the
business.   The Company’s decision to discontinue the operations of
its VoIP telephony services business was based primarily on the historical
losses sustained by the business during 2003 through 2006, management’s
expectations of continued losses for the foreseeable future and estimates of the
amount of capital required to attempt to successfully monetize its
business.  As of December 31, 2009, all significant elements of its
VoIP telephony services business shutdown plan have been completed by the
Company, except for the resolution of certain vendor disputes and the payment of
remaining outstanding vendor payables, aggregating approximately $1.7 million at
December 31, 2009.





MARKETING
SERVICES BUSINESS





In
September 2004, the company acquired SendTec, Inc. (“SendTec”), a direct
response marketing services and technology company.  From date of
acquisition until the time of the sale of SendTec in October 2005, the Company
operated SendTec as its Marketing Services division.  During 2009, the
Company settled and paid to a state taxing authority approximately $88 thousand
in income taxes and interest due in connection with audits of SendTec for the
time period that it was operated by the Company.  The Company is not
currently aware of any other pending or unsettled Marketing Services business
liabilities at this time.


3





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





EMPLOYEES





As of
March 13, 2010, we had no employees other than our executive
officers.  Each of our executive officers are officers or directors of
other companies, certain of which have ongoing business relationships with the
Company.  Our executive officers currently devote very limited time to
our business and receive no compensation from us.





The
business of the Company is currently managed by Dancing Bear Investments, Inc.,
an entity which is controlled by our Chairman and Chief Executive Officer, under
a Master Services Agreement entered into on September 29,
2008.  Services under the Master Services Agreement include, without
limitation, assistance with accounting, financial reporting, treasury/financial
planning, record retention and secretarial and investor relations
functions.





ITEM
1A. RISK FACTORS





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





RISKS
RELATING TO OUR BUSINESS GENERALLY





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





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





During
its recent past, the Company was able to continue operating as a going concern
due principally to funding of $500 thousand received during 2008 under a
Revolving Loan Agreement with an entity controlled by Michael S. Egan, its
Chairman and Chief Executive Officer (See Note 6, “Debt” in the accompanying
Notes to Consolidated Financial Statements for further details) and proceeds of
approximately $421 thousand received during 2009 under an Earn-out Agreement
with an entity also controlled by Mr. Egan (See Note 3, “Sale of Tralliance and
Share Issuance” in the accompanying Notes to Consolidated Financial Statements
for further details).





At
December 31, 2009, the Company had a net working capital deficit of
approximately $3.1 million.  Such working capital deficit included (i)
a total of approximately $573 thousand in principal and accrued interest owed
under the aforementioned Revolving Loan Agreement; (ii) a total of $120 thousand
in management service fees owed under a Master Services Agreement to an entity
controlled by Mr. Egan, and (iii) an aggregate of approximately $2.4 million in
unsecured accounts payable and accrued expenses owed to vendors and other
non-related third parties (of which approximately $1.7 million relates to
liabilities of our VoIP telephony service discontinued business, with a
significant portion of such liabilities related to charges which have been
disputed by theglobe). theglobe believes that its ability to continue as a going
concern for any significant length of time in the future will be heavily
dependent, among other things, on its ability to prevail and avoid making any
payments with respect to such disputed vendor charges and/or to negotiate
favorable settlements (including deeply discounted payment and/or payment term
concessions) with the aforementioned creditors.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
29, 2008, the Company (i) sold the business and substantially all of the assets
of its Tralliance Corporation subsidiary to Tralliance Registry Management, and
(ii) issued 229 million shares of its Common Stock (the “Shares”) to Registry
Management (the “Purchase Transaction”). Tralliance Registry Management and
Registry Management are entities controlled by Michael S. Egan. The closing of
the Purchase Transaction resulted in the cancellation of all of the Company’s
remaining Convertible Debt, related accrued interest and rent and accounts
payable owed to entities controlled by Mr. Egan as of the date of closing
(totaling approximately $6.4 million). However, the Company continues to be
obligated to repay its principal borrowings totaling $500 thousand, plus accrued
interest at the rate of 10% per annum (approximately $73 thousand as of December
31, 2009), due to an entity controlled by Mr. Egan under the aforementioned
Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
Agreement, as amended on May 7, 2009 (See Note 6, “Debt”), including accrued
interest, are due and payable by the Company in one lump sum on the earlier of
(i) five business days following demand for payment, which demand can be made at
anytime, or (ii) the occurrence of an event of default as defined in the
Revolving Loan Agreement. The Company currently has no ability to repay this
loan should a demand for payment be made by the noteholder.  All
borrowings under the Revolving Loan Agreement are secured by a pledge of all of
the assets of the Company and its subsidiaries. After giving effect to the
closing of the Purchase Transaction and the issuance of the Shares thereunder,
Mr. Egan beneficially owns approximately 76% of the Company’s Common Stock at
December 31, 2009.


4


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





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




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





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





It is the
Company’s preference to avoid filing for protection under the U.S. Bankruptcy
Code. However, based upon the Company’s current financial condition as discussed
above, management believes that additional debt or equity capital will need to
be raised in order for theglobe to continue to operate as a going concern on a
long-term basis. Such capital will be needed both to (i) fund its expected
limited future net losses and (ii) repay the $573 thousand of secured debt and
related accrued interest due under the Revolving Loan Agreement and the $120
thousand of management services fees due under the Master Services Agreement,
and a portion of the approximate $2.4 million unsecured indebtedness (assuming
theglobe is successful in favorably resolving and settling certain disputed and
non-disputed vendor charges related to such unsecured
indebtedness).  Any such capital would likely come from Mr. Egan, or
affiliates of Mr. Egan, as the Company currently has no access to credit
facilities and had traditionally relied upon borrowings from related parties to
meet short-term liquidity needs.  Any such capital raised would likely
result in very substantial dilution in the number of outstanding shares of the
Company’s Common Stock.





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





WE
MAY NOT BE SUCCESSFUL IN SETTLING DISPUTED VENDOR CHARGES.





Our
balance sheet at December 31, 2009 includes certain material estimated
liabilities related to disputed vendor charges incurred primarily as the result
of the failure and subsequent shutdown of our discontinued VoIP telephony
services business. Although we are seeking to resolve and settle these disputed
charges for amounts substantially less than recorded amounts, there can be no
assurances that we will be successful in this regard. Additionally, the legal
and administrative costs of resolving these disputed charges may be expensive.
An adverse outcome in any of these matters could materially and adversely affect
our financial position, utilize a significant portion of our cash resources
and/or require additional capital to be infused into the Company, and adversely
affect our ability to continue to operate as a going concern. See Note 4,
“Discontinued Operations” in the Notes to Consolidated Financial Statements for
future details.





OUR
NET OPERATING LOSS CARRYFORWARDS MAY BE SUBSTANTIALLY LIMITED.





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


5


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





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





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





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





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





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





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





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





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





RISKS
RELATING TO OUR COMMON STOCK





WE
ARE CONTROLLED BY OUR CHAIRMAN.





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


6


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





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




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





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





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





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





ITEM
1B. UNRESOLVED STAFF COMMENTS





Not
applicable.




ITEM
2. PROPERTIES





The
Company does not own or lease any property.  We currently use the
offices of Dancing Bear Investments, Inc., an entity controlled by our Chairman,
at no cost to us except for amounts included within the management services fees
charged to us by Dancing Bear Investments, Inc. under the Master Services
Agreement entered into on September 29, 2008.





ITEM 3. LEGAL PROCEEDINGS





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





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


7





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





The
parties in the approximately 300 coordinated cases, including ours, reached a
settlement. The insurers for the issuer defendants in the coordinated cases will
make the settlement payment on behalf of the issuers, including
theglobe.  On October 5, 2009, the Court granted final approval of the
settlement.  The thirty day deadline to appeal the final approval
order will start to run when the judgment is filed.  The judgment has
not yet been filed.  A group of three objectors has filed a petition
to the Second Circuit seeking permission to appeal the District Court’s final
approval order on the basis that the settlement class is broader than the class
previously rejected by the Second Circuit in its December 5, 2006 order vacating
the District Court’s order certifying classes in the focus
cases.  Plaintiffs have filed an opposition to the
petition.  Two notices of appeal to the Second Circuit have also been
filed by different groups of objectors.





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





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





ITEM
4. REMOVED AND RESERVED





PART
II





ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES





MARKET
INFORMATION





The
shares of our Common Stock trade in the over-the-counter market on what is
commonly referred to as the electronic bulletin board, under the symbol
"TGLO.OB". The following table sets forth the range of high and low bid prices
of our Common Stock for the periods indicated as reported by the
over-the-counter market (the electronic bulletin board). The quotations below
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions (prices are rounded to the nearest
cent):





2009
                  
                  
                  2008High
                  
                  
                  Low
                  
                  
                  High
                  
                  
                  LowFourth
      Quarter
                  
                  $
                  0.01
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.02
                  
                  
                  $
                  0.01Third
      Quarter
                  
                  $
                  0.01
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.03
                  
                  
                  $
                  0.01Second
      Quarter
                  
                  $
                  0.01
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.03
                  
                  
                  $
                  0.01First
      Quarter
                  
                  $
                  0.01
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.03
                  
                  
                  $
                  0.01





HOLDERS
OF COMMON STOCK





We had
approximately 663 holders of record of Common Stock as of March 1, 2010. This
does not reflect persons or entities that hold Common Stock in nominee or
"street" name through various brokerage firms.





DIVIDENDS





We have
not paid any cash dividends on our Common Stock since our inception and do not
intend to pay dividends in the foreseeable future. Our board of directors will
determine if we pay any future dividends.


8





SECURITIES AUTHORIZED FOR ISSUANCE
UNDER EQUITY COMPENSATION PLANS AS OF DECEMBER 31, 2009




Plan Category
                
                Number of
                  securities to be
                  issued upon
                  exercise of
                  outstanding
                  options,
                  warrants and
                  rights
                
                
                Weighted-average
                  exercise price of
                  outstanding options,
                  warrants and rights
                
                
                Number of
                  securities
                  remaining
                  available for
                  future issuance
                  under equity
                  compensation
                  plansEquity
      Compensation plans approved by security holders
                
                
                7,056,580
                
                
                $
                .30
                
                
                
                4,862,640Equity
      Compensation plans not approved by security holders
                
                
                6,540,000
                
                
                $
                .05
                
                
                
                4,525,141Total
                
                
                13,596,580
                
                
                $
                .18
                
                
                
                9,387,781





Equity
compensation plans not approved by security holders consist of the
following:




·
            1,750,000 shares of Common Stock
      of theglobe.com, inc., to be issued to Edward A. Cespedes upon exercise of
      stock options pursuant to the Non-Qualified Stock Option Agreement dated
      August 12, 2002 at an exercise price of $0.02 per share. These stock
      options vested immediately and have a life of ten years from date of
      grant.




·
              2,500,000 shares of Common Stock
      of theglobe.com, inc., to be issued to Michael S. Egan upon exercise of
      stock options pursuant to the Non-Qualified Stock Option Agreement dated
      August 12, 2002 at an exercise price of $0.02 per share. These stock
      options vested immediately and have a life of ten years from date of
      grant.




·
              500,000 shares of Common Stock of
      theglobe.com, inc., to be issued to Robin S. Lebowitz upon exercise of
      stock options pursuant to the Non-Qualified Stock Option Agreement dated
      August 12, 2002 at an exercise price of $0.02 per share. These stock
      options vested immediately and have a life of ten years from date of
      grant.





·
            In September 2003, the Company
      established the 2003 Sales Representative Stock Option Plan (the “2003
      Plan”) and in August 2004 the Company established the 2004 Stock Incentive
      Plan (the “2004 Plan”).  A total of 1,790,000 shares of Common Stock
      of theglobe.com, inc. are issuable to a former employee upon exercise of
      stock options granted under the 2003 and 2004 Plans.  See Note 7,
      “Stock Option Plans” in the accompanying Notes to Consolidated Financial
      Statements for a description of the material features of the 2003 and 2004
      Plans.




STOCK
PERFORMANCE GRAPH





As a
“smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, we
have elected scaled disclosure reporting and therefore are not required to
provide the stock performance graph.





RECENT
SALES OF UNREGISTERED SECURITIES





(a)  Unregistered
Sales of Equity Securities.





There
were no unregistered sales of equity securities during the year ended December
31, 2009.





(b)  Use
of Proceeeds from Sales of Registered Securities.





Not
applicable.





ITEM
6. SELECTED FINANCIAL DATA





As a
“smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, we
have elected scaled disclosure reporting and therefore are not required to
provide the information required by this Item.


9


ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




OVERVIEW





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





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





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





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





SALE
OF TRALLIANCE AND SHARE ISSUANCE





On
September 29, 2008, the Company (i) sold the business and substantially all of
the assets of its Tralliance Corporation subsidiary to Tralliance Registry
Management and (ii) issued 229 million shares of its Common Stock (the “Shares”)
to Registry Management (the “Purchase Transaction”) (see Note 3, “Sale of
Tralliance and Share Issuance” in the accompanying Notes to Consolidated
Financial Statements). Tralliance Registry Management and Registry Management
are entities directly or indirectly controlled by Michael S. Egan, our Chairman
and Chief Executive Officer and principal stockholder, and each of our two
remaining executive officers and Board members, Edward A. Cespedes, our
President, and Robin Segaul Lebowitz, our Vice President of Finance, own a
minority interest in Registry Management. After giving effect to the closing of
the Purchase Transaction and the issuance of the Shares thereunder, Mr. Egan
beneficially owns approximately 76% of the Company’s Common Stock at December
31, 2009.





In
connection with the Purchase Transaction, the Company received (i) consideration
totaling approximately $6.4 million which consisted of the surrender to theglobe
and satisfaction of secured demand convertible promissory notes issued by
theglobe and held by Registry Management in the aggregate principal amount of
$4.25 million, together with all accrued and unpaid interest of approximately
$1.3 million through the date of closing of the Purchase Transaction and
satisfaction of approximately $870 thousand in outstanding rent and
miscellaneous fees due and unpaid to the Registry Management through the date of
closing of the Purchase Transaction, and (ii) an earn-out equal to 10% (subject
to certain minimums) of Tralliance Registry Management’s “net revenue” (as
defined) derived from “.travel” names registered by Tralliance Registry
Management from September 29, 2008 through May 5, 2015 (the “Earn-out”). The
minimum Earn-out payable by Tralliance Registry Management to theglobe was $300
thousand in the first year of the Earn-out Agreement, and will increase by $25
thousand in each subsequent year (pro-rated for the final year of the
Earn-out).





Commensurate
with the closing of the Purchase Transaction, on September 29, 2008, the Company
also entered into Termination Agreements with each of its executive officers
(each a “Termination Agreement”). Pursuant to the Termination Agreements, the
Company’s employment agreements with each of Michael S. Egan, Edward A. Cespedes
and Robin Segaul Lebowitz, the Chief Executive Officer, President and Vice
President of Finance, all dated August 1, 2003, respectively, were terminated.
Notwithstanding the termination of these employment agreements, each of Messrs.
Egan, Cespedes and Ms. Lebowitz remains as an officer and director of the
Company.


10


In
connection with the closing of the Purchase Transaction, the Company entered
into a Master Services Agreement (“Services Agreement”) with Dancing Bear
Investments, Inc. (“Dancing Bear”), an entity which is controlled by Mr. Egan.
Under the terms of the Services Agreement, for a fee of $20 thousand per month
($240 thousand per annum), Dancing Bear provides personnel and services to the
Company so as to enable it to continue its existence as a public company without
the necessity of any full-time employees of its own.  The Services
Agreement had an initial term of one year and was renewed for a second one year
term during 2009.  Services under the Services Agreement include,
without limitation, accounting, assistance with financial reporting, accounts
payable, treasury/financial planning, record retention and secretarial and
investor relations functions.




BASIS
OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS; GOING CONCERN





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





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





Subsequent
to the sale of our Tralliance business on September 29, 2008, we have had no
continuing business operations.  Accordingly, the results of our
operations for year ended December 31, 2009 and the year ended December 31, 2008
are not necessarily comparable.





YEAR
ENDED DECEMBER 31, 2009 COMPARED TO YEAR ENDED DECEMBER 31, 2008





CONTINUING
OPERATIONS





NET
REVENUE.  Net revenue totaled $0 for the year ended December 31, 2009
as compared to approximately $3.2 million for the year ended December 31, 2008.
Net revenue for the year ended 2008 included approximately $1.5 million related
to the write-off of the remaining balance of deferred revenue as a result of the
sale of the Company’s Tralliance business on September 29, 2008.  As a
result of the aforementioned Tralliance sale, no revenue was recognized during
the year ended December 31, 2009.





COST OF
REVENUE.  Cost of revenue totaled $0 for the year ended December 31,
2009 as compared to approximately $233 thousand for the year ended December 31,
2008.  Cost of revenue for the year ended December 31, 2008 included
approximately $101 thousand related to the write off of prepaid registration
fees which were deemed to be of no further value as a result of the sale of the
Company’s Tralliance business.





SALES AND
MARKETING.  As the result of the adjustment of estimated accruals,
sales and marketing expenses for the year ended December 31, 2009 totaled
approximately $(23) thousand compared to expenses of approximately $390 thousand
for the year ended December 31, 2008.





GENERAL
AND ADMINISTRATIVE.  Prior to the sale of Tralliance on September 29,
2008, general and administrative expenses consisted primarily of salaries and
other personnel costs related to management, finance and accounting functions,
facilities, outside legal and audit fees, insurance, and general corporate
overhead costs. Subsequent to the sale of Tralliance, general and administrative
expenses include only those customary public company expenses, including outside
legal and audit fees, insurance and other related public company
costs.  Expenses relating to management, finance and accounting
functions that were previously included within the general and administrative
expense caption are now included within the related party transactions expense
caption.  General and administrative expenses totaled approximately
$99 thousand for the year ended December 31, 2009 as compared to approximately
$1.6 million for the year ended December 31, 2008.





RELATED
PARTY TRANSACTIONS.  Related party transaction expense totaled $240
thousand for the year ended December 31, 2009 as compared to approximately $449
thousand for the year ended December 31, 2008.  Subsequent to the sale
of Tralliance on September 29, 2008, the Company’s related party expenses
consisted of management services fees payable to Dancing Bear for accounting,
finance, administrative and managerial support.  During 2008, the
Company’s related party expenses also consisted of related party charges for the
leasing of office space, and the outsourcing of customer service, human
resources and payroll processing function incurred prior to the sale of
Tralliance.





DEPRECIATION
AND AMORTIZATION.  Depreciation and amortization expense was $0 for
the year ended December 31, 2009 as compared to approximately $399 thousand for
the year ended December 31, 2008.  Approximately $250 thousand related
to the write-off of the remaining net book value of intangible assets which were
deemed to have no future value as the result of the sale of the Company’s
Tralliance business on September 29, 2008 were included in amortization expense
for the year ended December 31, 2008.






11





GAIN ON
TRALLIANCE ASSET SALE.  During the year ended December 31, 2008, the
Company recorded a gain of approximately $2.5 million related to the sale of its
Tralliance business on September 29, 2008.





RELATED
PARTY INTEREST EXPENSE.  Related party interest expense for the year
ended December 31, 2009 was $50 thousand as compared to approximately $359
thousand for the year ended December 31, 2008, reflecting the decrease in
outstanding related party debt resulting from the Sale of Tralliance and Share
Issuance.





INTEREST
INCOME (EXPENSE), NET.  Net interest expense of approximately $2
thousand was reported for the year ended December 31, 2009 compared to total net
interest income of approximately $3 thousand reported for the year ended
December 31, 2008.





RELATED
PARTY OTHER INCOME.   Related party other income consists of the
minimum Earn-Out payable quarterly by Tralliance Registry Management to the
Company as further discussed in Note 3, “Sale of Tralliance and Share Issuance”
in the accompanying Notes to Consolidated Financial
Statements.  Related party other income for the year ended December
31, 2009 was approximately $306 thousand as compared to $75 thousand for the
year ended December 31, 2008.





INCOME
TAXES.  The provision for income taxes for the year ended
December 31, 2009 was a benefit of approximately $2 thousand as compared to an
expense of approximately $16 thousand for the year ended December 31,
2008.




DISCONTINUED
OPERATIONS





Income
from discontinued operations before income taxes totaled approximately $14
thousand for the year ended December 31, 2009 as compared to a loss of
approximately $14 thousand for the year ended December 31, 2008, and is
summarized as follows:





Year Ended December 31,2009
                    
                    
                    2008(Loss)
      Income from discontinued operations, net of tax:Computer
      Games
                    
                    $
                    37,459
                    
                    
                    $
                    48,751VoIP
      Telephony Services
                    
                    
                    (774
                    )
                    
                    
                    1,669Marketing
      Services
                    
                    $
                    (22,778
                    )
                    
                    $
                    (64,000
                    )Total
      (Loss) Income from discontinued operations, net of tax
                    
                    $
                    13,907
                    
                    
                    $
                    (13,580
                    )





The
results of the Company’s discontinued operations for the year ended December 31,
2008 include a $64,000 provision for income taxes related to taxes due in
connection with a prior year audit of the Company’s former Marketing Services
subsidiary.  In December 2009, the Company paid approximately $88
thousand in income taxes and interest to a state taxing authority in settlement
of the prior year audit.





LIQUIDITY
AND CAPITAL RESOURCES





FUTURE
AND CRITICAL NEED FOR CAPITAL





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





During
its recent past, the Company was able to continue operating as a going concern
due principally to funding of $500 thousand received during 2008 under a
Revolving Loan Agreement with an entity controlled by Michael S. Egan, its
Chairman and Chief Executive Officer (See Note 6, “Debt”  in the
accompanying Notes to Consolidated Financial Statements for further details) and
proceeds of $421 thousand received during 2009 under an Earn-out Agreement with
an entity also controlled by Mr. Egan (See Note 3, “Sale of Tralliance and Share
Issuance” in the accompanying Notes to Consolidated Financial Statements for
further details).


12


At
December 31, 2009, the Company had a net working capital deficit of
approximately $3.1 million.  Such working capital deficit included (i)
a total of approximately $573 thousand in principal and accrued interest owed
under the aforementioned Revolving Loan Agreement; (ii) a total of $120 thousand
in management service fees owed under a Master Services Agreement to an entity
controlled by Mr. Egan, and (iii) an aggregate of approximately $2.4 million in
unsecured accounts payable and accrued expenses owed to vendors and other
non-related third parties (of which approximately $1.7 million relates to
liabilities of our VoIP telephony service discontinued business, with a
significant portion of such liabilities related to charges which have been
disputed by theglobe). theglobe believes that its ability to continue as a going
concern for any significant length of time in the future will be heavily
dependent, among other things, on its ability to prevail and avoid making any
payments with respect to such disputed vendor charges and/or to negotiate
favorable settlements (including deeply discounted payment and/or payment term
concessions) with the aforementioned creditors.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
29, 2008, the Company (i) sold the business and substantially all of the assets
of its Tralliance Corporation subsidiary to Tralliance Registry Management, and
(ii) issued 229 million shares of its Common Stock (the “Shares”) to Registry
Management (the “Purchase Transaction”). Tralliance Registry Management and
Registry Management are entities controlled by Michael S. Egan. The closing of
the Purchase Transaction resulted in the cancellation of all of the Company’s
remaining Convertible Debt, related accrued interest and rent and accounts
payable owed to entities controlled by Mr. Egan as of the date of closing
(totaling approximately $6.4 million). However, the Company continues to be
obligated to repay its principal borrowings totaling $500 thousand, plus accrued
interest at the rate of 10% per annum (approximately $73 thousand as of December
31, 2009), due to an entity controlled by Mr. Egan under the aforementioned
Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
Agreement, as amended on May 7, 2009 (See Note 6, “Debt”), including accrued
interest, are due and payable by the Company in one lump sum on the earlier of
(i) five business days following demand for payment, which demand can be made at
anytime, or (ii) the occurrence of an event of default as defined in the
Revolving Loan Agreement. The Company currently has no ability to repay this
loan should a demand for payment be made by the noteholder.  All
borrowings under the Revolving Loan Agreement are secured by a pledge of all of
the assets of the Company and its subsidiaries. After giving effect to the
closing of the Purchase Transaction and the issuance of the Shares thereunder,
Mr. Egan beneficially owns approximately 76% of the Company’s Common Stock at
December 31, 2009.





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





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




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





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





It is the
Company’s preference to avoid filing for protection under the U.S. Bankruptcy
Code. However, based upon the Company’s current financial condition as discussed
above, management believes that additional debt or equity capital will need to
be raised in order for theglobe to continue to operate as a going concern on a
long-term basis. Such capital will be needed both to (i) fund its expected
limited future net losses and (ii) repay the $573 thousand of secured debt and
related accrued interest due under the Revolving Loan Agreement and the $120
thousand of management services fees due under the Master Services Agreement,
and a portion of the $2.4 million unsecured indebtedness (assuming theglobe is
successful in favorably resolving and settling certain disputed and non-disputed
vendor charges related to such unsecured indebtedness).  Any such
capital would likely come from Mr. Egan, or affiliates of Mr. Egan, as the
Company currently has no access to credit facilities and had traditionally
relied upon borrowings from related parties to meet short-term liquidity
needs.  Any such capital raised would likely result in very
substantial dilution in the number of outstanding shares of the Company’s Common
Stock.





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


13


CASH
FLOW ITEMS





YEAR
ENDED DECEMBER 31, 2009 COMPARED TO YEAR ENDED DECEMBER 31, 2008




As of
December 31, 2009, theglobe had approximately $1 thousand in cash and cash
equivalents as compared to approximately $90 thousand as of December 31,
2008.  Net cash flows provided from operating activities of continuing
operations totaled approximately $67 thousand for the year ended December 31,
2009 as compared to net cash flow usage of approximately $859 thousand for the
year ended December 31, 2008, an increase of approximately $926
thousand.  Such increase was attributable primarily to an absence of
Tralliance cash flow usage during 2009 as a result of the sale of Tralliance on
September 29, 2008.





Approximately
$156 thousand in net cash flows were used in operating activities of
discontinued operations during the year ended December 31, 2009 as compared to a
net cash flow provision of approximately $6 thousand during the prior
year.




Net cash
flows from investing activities and net cash flows from financing activities for
the year ended December 31, 2009 were $0; as compared to net cash flows from
investing activities and net cash flows from financing activities for the year
ended December 31, 2008 which included allocations of $79 thousand and $113
thousand, respectively, related to transaction costs incurred in connection with
the Purchase Transaction that was consummated on September 29, 2008.  Net
cash flows from financing activities for the year ended December 31, 2008
included proceeds of $500 thousand borrowed under a Revolving Loan Agreement
with Dancing Bear Investments, Inc., an entity controlled by the Company’s
Chairman and Chief Executive Officer.





CONTRACTUAL
OBLIGATIONS





As a
“smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, we
have elected scaled disclosure reporting and therefore are not required to
provide the table required by (a)(5) of this Item.





OFF-BALANCE
SHEET ARRANGEMENTS





As of
December 31, 2009, we did not have any material off-balance sheet arrangements
that have or are reasonably likely to have a material effect on our current or
future financial condition, revenues or expenses, results of operations,
liquidity, or capital resources.





EFFECTS
OF INFLATION





Management
believes that inflation has not had a significant effect on our results of
operations during 2009 and 2008.





MANAGEMENT'S
DISCUSSION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES





The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. At December 31, 2009, a significant portion of our net liabilities of
discontinued operations relate to charges that have been disputed by the Company
and for which estimates have been required.  Additionally, certain
liabilities of our continuing operations, including federal and state income
taxes payable, have required the use of estimates.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance” in the
accompanying Notes to Consolidated Financial Statements, significant estimates
related to the fair value of the Tralliance business and theglobe’s Common
Stock, as of the date of closing of the Purchase Transaction, were required in
order to allocate the total purchase price and related transaction costs between
the Tralliance Asset Sale and the Share Issuance.





Our
estimates, judgments and assumptions are continually evaluated based on
available information and experience. Because of the use of estimates inherent
in the financial reporting process, actual results could differ from those
estimates.





Certain
of our accounting policies require higher degrees of judgment than others in
their application. These include estimates of collectability of accounts
receivable, the impairments of intangible assets, valuations of accounts payable
and accrued expenses and valuation of the fair values of stock
options.  Our accounting policies and procedures related to these
areas are summarized in Note 1, “Organization and Summary of Significant
Accounting Policies” in the accompanying Notes to Consolidated Financial
Statements.


14





IMPACT
OF RECENTLY ISSUED ACCOUNTING STANDARDS





In
August 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05
Measuring Liabilities at Fair Value to provide guidance on measuring the fair
value of liabilities under ASC Topic 820. This ASU clarifies the fair value
measurements for a liability in an active market and the valuation techniques in
the absence of a Level 1 measurement. This ASU is effective for the interim
period beginning October 1, 2009. The adoption of this ASU did not have a
material impact on the Company’s consolidated financial statements.




In the
second quarter of 2009, the Company adopted a new accounting standard included
in FASB Accounting Standards Codification (“ASC”) Topic 820 Fair Value
Measurements and Disclosure(“ASC Topic 820”) that
provides guidance on how to determine the fair value of assets and liabilities
in the current economic environment and reemphasizes that the objective of a
fair value measurement remains the determination of an exit price. If the
Company were to conclude that there has been a significant decrease in the
volume and level of activity of the asset or liability in relation to normal
market activities, quoted market values may not be representative of fair value
and we may conclude that a change in valuation technique or the use of multiple
valuation techniques may be appropriate. The adoption did not have a material
impact on the Company’s consolidated financial statements.





In the
second quarter of 2009, the Company adopted a new accounting standard included
in FASB ASC Topic 320 Investments—Debt and Equity Securities that modifies the
requirements for recognizing other-than-temporarily impaired debt securities and
revises the existing impairment model for such securities by modifying the
current intent and ability indicator in determining whether a debt security is
other-than-temporarily impaired. The adoption did not have a material impact on
our consolidated financial statements.





In the
second quarter of 2009, the Company adopted a new accounting standard included
in FASB ASC Topic 825 Financial Instruments that requires disclosures about the
fair value of financial instruments in interim financial statements as well as
in annual financial statements; it also requires those disclosures in all
interim financial statements. Reporting entities are required to disclose the
fair value of all financial instruments for which it is practicable to estimate
that value, the method and significant assumptions used to estimate the fair
value and a discussion of changes in methods and significant assumptions during
the period. The adoption did not have a material impact on the Company’s
consolidated financial statements.





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





During
the first quarter of 2009, the Company adopted ASC Topic 805 “Business
Combinations” (ASC 805) which requires an acquirer to recognize the assets
acquired, the liabilities assumed, and any non-controlling interest in the
acquiree at the acquisition date, measured at their fair values as of that
date.  ASC 805 requires, among other things, that in a business
combination achieved through stages (sometimes referred to as a “step
acquisition”) that the acquirer recognize the identifiable assets and
liabilities, as well as the non-controlling interest in the acquiree, at the
full amounts of their fair values (or other amounts determined in accordance
with this guidance).  ASC 805 also requires the acquirer to recognize
goodwill as of the acquisition date, measured as a residual, which in most types
of business combinations will result in measuring goodwill as the excess of the
consideration transferred plus the fair market value of any non-controlling
interest in the acquiree at the acquisition date over the fair values of the
identifiable net assets acquired.  ASC 805 will have an impact on the
Company’s accounting for future business combinations, but the effect is
dependent upon acquisitions that may be made in the future.





In the
first quarter of 2009, the Company adopted ASC Topic 810-10-65-1,
“Non-controlling Interests in Consolidated Financial
Statements.”  This guidance changes the way the consolidated income
statement is presented and requires consolidated net income to be reported at
amounts that include the amounts attributable to both the parent and the
non-controlling interest.  It also requires disclosure, on the face of
the consolidated statement of income, of the amounts of consolidated net income
attributable to the parent and to the non-controlling interest. Currently, net
income attributable to the non-controlling interest generally is reported as an
expense or other deduction in arriving at consolidated net income.  It
also is often presented in combination with other financial statement
amounts.  This guidance results in more transparent reporting of the
net income attributable to the non-controlling interest.  The adoption
of this guidance did not have a material impact on the Company’s consolidated
financial statements.





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





ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK





As a
“smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, we
have elected scaled disclosure reporting and therefore are not required to
provide the information required by this Item.


15





ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




CONSOLIDATED
FINANCIAL STATEMENTS




THEGLOBE.COM,
INC. AND SUBSIDIARIES




INDEX
TO FINANCIAL STATEMENTS




PAGEREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                
                
                F-2CONSOLIDATED
      FINANCIAL STATEMENTSBALANCE
      SHEETS
                
                
                F-3STATEMENTS
      OF OPERATIONS
                
                
                F-4STATEMENTS
      OF STOCKHOLDERS' EQUITY (DEFICIT)
                
                
                F-5STATEMENTS
      OF CASH FLOWS
                
                
                F-6NOTES
      TO FINANCIAL STATEMENTS
                
                
                F-8


F-1




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Board of
Directors and Stockholders


theglobe.com,
inc. and Subsidiaries





We have
audited the accompanying consolidated balance sheets of theglobe.com, inc. and
Subsidiaries as of December 31, 2009 and 2008, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the two-year period ended December 31, 2009. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of theglobe.com,
inc. and Subsidiaries as of December 31, 2009 and 2008, and the consolidated
results of its operations and its cash flows for each of the years in the
two-year period ended December 31, 2009, in conformity with accounting
principles generally accepted in the United States of America.





The
accompanying 2009 consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has historically suffered
significant net losses, has an accumulated deficit of approximately $298 million
and has sold its last remaining operating business.  These factors
raise substantial doubt about its ability to continue as a going concern.
Management’s plans in regard to these matters are also described in Note 2. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.





MARCUM
RACHLIN


a
division of Marcum LLP





Fort
Lauderdale, Florida


March 26,
2010


F-2




THEGLOBE.COM,
      INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETS




December
      31,
                            
                            
                            December
      31,2009
                            
                            
                            2008ASSETSCurrent
      Assets:Cash
      and cash equivalents
                            
                            $
                            1,259
                            
                            
                            $
                            89,754Accounts
      receivable from related party
                            
                            
                            —
                            
                            
                            
                            75,000Prepaid
      expenses
                            
                            
                            6,972
                            
                            
                            
                            19,576Total
      current assets
                            
                            
                            8,231
                            
                            
                            
                            184,330Intangible
      assets
                            
                            
                            —
                            
                            
                            
                            40,000Total
      assets
                            
                            $
                            8,231
                            
                            
                            $
                            224,330LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      Liabilities:Accounts
      payable due to related party
                            
                            $
                            120,000
                            
                            
                            $
                            40,667Accounts
      payable
                            
                            
                            184,479
                            
                            
                            
                            200,385Accrued
      expenses and other current liabilities
                            
                            
                            449,862
                            
                            
                            
                            567,182Accrued
      interest due to related party
                            
                            
                            73,233
                            
                            
                            
                            23,233Notes
      payable due to related party
                            
                            
                            500,000
                            
                            
                            
                            500,000Deferred
      income – related party
                            
                            
                            40,000
                            
                            
                            
                            —Liabilities
      of discontinued operations
                            
                            
                            1,729,556
                            
                            
                            
                            1,899,110Total
      current liabilities
                            
                            
                            3,097,130
                            
                            
                            
                            3,230,577Total
      liabilities
                            
                            
                            3,097,130
                            
                            
                            
                            3,230,577Stockholders'
      Deficit:Common
      stock, $0.001 par value; 500,000,000 shares authorized; 441,484,838 shares
      issued at December 31, 2009 and December 31, 2008
                            
                            
                            441,485
                            
                            
                            
                            441,485Additional
      paid in capital
                            
                            
                            294,301,845
                            
                            
                            
                            294,298,990Accumulated
      deficit
                            
                            
                            (297,832,229
                            )
                            
                            
                            (297,746,722
                            )Total
      stockholders' deficit
                            
                            
                            (3,088,899
                            )
                            
                            
                            (3,006,247
                            )Total
      liabilities and stockholders' deficit
                            
                            $
                            8,231
                            
                            
                            $
                            224,330





See notes
to consolidated financial statements.


F-3




THEGLOBE.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS




Year Ended December 31,2009
                                        
                                        
                                        2008Net
      Revenue
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        3,165,587Operating
      Expenses:Cost
      of revenue
                                        
                                        
                                        —
                                        
                                        
                                        
                                        232,664Sales
      and marketing
                                        
                                        
                                        (23,130
                                        )
                                        
                                        
                                        389,519General
      and administrative
                                        
                                        
                                        98,938
                                        
                                        
                                        
                                        1,627,511Related
      party transactions
                                        
                                        
                                        240,000
                                        
                                        
                                        
                                        448,806Depreciation
      and amortization
                                        
                                        
                                        —
                                        
                                        
                                        
                                        30,379Intangible
      asset amortization
                                        
                                        
                                        —
                                        
                                        
                                        
                                        368,777Impairment
      charge
                                        
                                        
                                        40,000
                                        
                                        
                                        
                                        —Total
      Operating Expenses
                                        
                                        
                                        355,808
                                        
                                        
                                        
                                        3,097,656Operating
      (Loss) Income from Continuing Operations
                                        
                                        
                                        (355,808
                                        )
                                        
                                        
                                        67,931Other
      Income (Expense), net:Gain
      on Tralliance Asset Sale
                                        
                                        
                                        —
                                        
                                        
                                        
                                        2,510,638Related
      party interest expense
                                        
                                        
                                        (50,000
                                        )
                                        
                                        
                                        (358,754
                                        )Interest
      income (expense), net
                                        
                                        
                                        (1,656
                                        )
                                        
                                        
                                        2,789Related
      party other income
                                        
                                        
                                        306,250
                                        
                                        
                                        
                                        75,000Other
      income
                                        
                                        
                                        264
                                        
                                        
                                        
                                        247254,858
                                        
                                        
                                        
                                        2,229,920(Loss)
      Income from Continuing Operations Before Income Tax Provision
      (Benefit)
                                        
                                        
                                        (100,950
                                        )
                                        
                                        
                                        2,297,851Income
      Tax Provision  (Benefit)
                                        
                                        
                                        (1,536
                                        )
                                        
                                        
                                        15,675(Loss)
      Income from Continuing Operations
                                        
                                        
                                        (99,414
                                        )
                                        
                                        
                                        2,282,176(Loss)
      Income from Discontinued Operations, net of tax
                                        
                                        
                                        13,907
                                        
                                        
                                        
                                        (13,580
                                        )Net
      (Loss ) Income
                                        
                                        $
                                        (85,507
                                        )
                                        
                                        $
                                        2,268,596Net
      Income Per Share:Basic
      and Diluted:Continuing
      Operations
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        0.01Discontinued
      Operations
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —Net
      Income Per Share
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        0.01Weighted
      Average Common Shares Outstanding
                                        
                                        
                                        441,484,838
                                        
                                        
                                        
                                        252,968,360




See notes
to consolidated financial statements.


F-4




THEGLOBE.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)





AdditionalCommon Stock
                          
                          
                          Paid-in
                          
                          
                          AccumulatedShares
                          
                          
                          Amount
                          
                          
                          Capital
                          
                          
                          Deficit
                          
                          
                          TotalBalance,
      December 31, 2007
                          
                          
                          172,484,838
                          
                          
                          $
                          172,485
                          
                          
                          $
                          290,486,232
                          
                          
                          $
                          (300,015,318
                          )
                          
                          $
                          (9,356,601
                          )Year
      Ended December 31, 2008:Net
      income
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          2,268,596
                          
                          
                          
                          2,268,596Employee
      stock-based compensation
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          21,858
                          
                          
                          
                          —
                          
                          
                          
                          21,858Stock
      compensation to non-employees
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          1,704
                          
                          
                          
                          —
                          
                          
                          
                          1,704Conversion
      of Convertible Notes
                          
                          
                          40,000,000
                          
                          
                          
                          40,000
                          
                          
                          
                          360,000
                          
                          
                          
                          —
                          
                          
                          
                          400,000Share
      Issuance
                          
                          
                          229,000,000
                          
                          
                          
                          229,000
                          
                          
                          
                          3,429,196
                          
                          
                          
                          —
                          
                          
                          
                          3,658,196Balance,
      December 31, 2008
                          
                          
                          441,484,838
                          
                          
                          
                          441,485
                          
                          
                          
                          294,298,990
                          
                          
                          
                          (297,746,722
                          )
                          
                          
                          (3,006,247
                          )Year
      Ended December 31, 2009:Net
      (loss)
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          (85,507
                          )
                          
                          
                          (85,507
                          )Employee
      stock-based compensation expense
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          2,429
                          
                          
                          
                          —
                          
                          
                          
                          2,429Stock
      compensation to non-employees
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          426
                          
                          
                          
                          —
                          
                          
                          
                          426Balance,
      December 31, 2009
                          
                          
                          441,484,838
                          
                          
                          $
                          441,485
                          
                          
                          $
                          294,301,845
                          
                          
                          $
                          (297,832,229
                          )
                          
                          $
                          (3,088,899
                          )





See notes
to consolidated financial statements.


F-5





THEGLOBE.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS




Year ended December 31,2009
                                            
                                            
                                            2008Cash
      Flows from Operating Activities:Net
      (loss) income
                                            
                                            $
                                            (85,507
                                            )
                                            
                                            $
                                            2,268,596(Income)
      Loss from discontinued operations
                                            
                                            
                                            (13,907
                                            )
                                            
                                            
                                            13,580Net
      (loss) income from continuing operations
                                            
                                            
                                            (99,414
                                            )
                                            
                                            
                                            2,282,176Adjustments
      to reconcile net (loss) income from continuing operationsto
      net cash flows used in operating activities:Gain
      on Tralliance Asset Sale
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (2,510,638
                                            )Depreciation
      and amortization
                                            
                                            
                                            —
                                            
                                            
                                            
                                            399,156Employee
      stock compensation expense
                                            
                                            
                                            2,429
                                            
                                            
                                            
                                            21,858Stock
      compensation to non-employees
                                            
                                            
                                            426
                                            
                                            
                                            
                                            1,704Impairment
      charge
                                            
                                            
                                            40,000
                                            
                                            
                                            
                                            —Changes
      in operating assets and liabilities:Accounts
      receivable from related party
                                            
                                            
                                            75,000
                                            
                                            
                                            
                                            341,566Accounts
      receivable
                                            
                                            
                                            —
                                            
                                            
                                            
                                            12,213Prepaid
      and other current assets
                                            
                                            
                                            12,604
                                            
                                            
                                            
                                            118,007Accounts
      payable to related party
                                            
                                            
                                            79,333
                                            
                                            
                                            
                                            410,539Accounts
      payable
                                            
                                            
                                            (15,906
                                            )
                                            
                                            
                                            (63,298
                                            )Accrued
      expenses and other current liabilities
                                            
                                            
                                            (117,320
                                            )
                                            
                                            
                                            (386,644
                                            )Accrued
      interest due to related party
                                            
                                            
                                            50,000
                                            
                                            
                                            
                                            358,753Deferred
      income – related party
                                            
                                            
                                            40,000
                                            
                                            
                                            
                                            (1,844,837
                                            )Net
      cash flows provided by (used in) operating activities of continuing
      operations
                                            
                                            
                                            67,152
                                            
                                            
                                            
                                            (859,445
                                            )Net
      cash flows provided by (used in) operating activities of discontinued
      operations
                                            
                                            
                                            (155,647
                                            )
                                            
                                            
                                            6,186Net
      cash flows used in operating activities
                                            
                                            
                                            (88,495
                                            )
                                            
                                            
                                            (853,259
                                            )Cash
      Flows from Investing Activities:Tralliance
      Asset Sale transaction costs
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (78,992
                                            )Purchases
      of property and equipment
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (3,301
                                            )Net
      cash flows used in investing activities of continuing
      operations
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (82,293
                                            )Net
      cash flows provided by investing activities of discontinued
      operations:Proceeds
      from the sale of property and equipment
                                            
                                            
                                            —
                                            
                                            
                                            
                                            7,000Net
      cash flows used in investing activities
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (75,293
                                            )Cash
      Flows from Financing Activities:Borrowing
      on notes payable – related party
                                            
                                            
                                            —
                                            
                                            
                                            
                                            500,000Share
      Issuance transaction costs
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (112,892
                                            )Net
      cash flows provided by financing activities
                                            
                                            
                                            —
                                            
                                            
                                            
                                            387,108Net
      change in cash & cash equivalents
                                            
                                            
                                            (88,495
                                            )
                                            
                                            
                                            (541,444
                                            )Cash
      & cash equivalents at beginning of period
                                            
                                            
                                            89,754
                                            
                                            
                                            
                                            631,198Cash
      & cash equivalents at end of period
                                            
                                            $
                                            1,259
                                            
                                            
                                            $
                                            89,754





See notes to consolidated financial
statements.


F-6




THEGLOBE.COM,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS




(Continued)Year Ended December 31,2009
                      
                      2008Supplemental
      Disclosure of Cash Flow Information:Cash
      paid during the period for:Interest
                      
                      $
                      —
                      
                      
                      $
                      470Supplemental
      Disclosure of Non-Cash Investing and Financing Activities:Conversion
      of debt securities into common stock
                      
                      $
                      —
                      
                      
                      $
                      400,000Cancellation
      of debt and other liabilities related to Purchase
    Transaction
                      
                      $
                      —
                      
                      
                      $
                      6,409,818Issuance
      of Common Stock related to Purchase Transaction
                      
                      $
                      —
                      
                      
                      $
                      3,771,088




See notes
to consolidated financial statements.


F-7




THEGLOBE.COM,
INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2009 and 2008




(1)
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





DESCRIPTION
OF THE COMPANY





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





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





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





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





PRINCIPLES
OF CONSOLIDATION





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




USE
OF ESTIMATES





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. These estimates and assumptions relate to estimates of collectability of
accounts receivable, the valuations of fair values of our Common Stock, and our
former Tralliance business, the valuation of fair values of stock options, the
impairment of intangible assets, valuations of accounts payable and accrued
expenses and other factors.  At December 31, 2009 and 2008, a
significant portion of our liabilities of discontinued operations relate to
charges that have been disputed by the Company and for which estimates have been
required.  Actual results could differ from those estimates. In
addition, the accompanying consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business (See
Note 2, “Liquidity and Going Concern Considerations”).




CASH
AND CASH EQUIVALENTS





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


F-8




ACCOUNTS
RECEIVABLE FROM RELATED PARTY





Accounts
receivable from related party at December 31, 2008 consists of a $75,000 minimum
Earn-out quarterly payment due from Tralliance Registry Management under an
Earn-out Agreement related to the sale of the Company’s Tralliance business on
September 29, 2008.  Such receivable was collected in full by the
Company in January 2009.





PREPAID
EXPENSES





Prepaid
expenses at December 31, 2009 and 2008 consist primarily of prepaid insurance
and government regulatory costs, which are amortized to expense based upon usage
of the underlying service.





FAIR
VALUE OF FINANCIAL INSTRUMENTS





FASB
Accounting Standards Codification Topic on Fair Value Measurements and
Disclosure (“ASC 820”) requires that the Company disclose estimated fair values
of its financial instruments.  The carrying amount of certain of the
Company's financial instruments, including cash, cash equivalents, accounts
receivable, accounts payable and accrued expenses, are a reasonable estimate of
their fair values at December 31, 2009 and 2008, respectively, due to their
short maturities.




INTANGIBLE
ASSETS





Intangible
assets at December 31, 2009 and 2008 consist of certain Internet Protocol
Address rights (“IP Addresses”) which were acquired in fiscal 2005 by the
Company for a total cost of $40,000.  Because the benefits of owning
the IP Addresses were expected to continue indefinitely, such intangible assets
have been deemed by the Company to have indefinite useful lives.  In
accordance with FASB, ASC Topic 350, “Intangibles - Goodwill and Other,” such
intangible assets are not amortized but rather are tested for impairment at
least annually by comparing their carrying value to their fair
value.  Any excess of carrying value over fair value is recognized as
an impairment loss during that reporting period.  Additionally, such
intangible assets are reviewed by the Company at least annually to determine
whether their useful lives are still indefinite. At December 31, 2009, the
Company performed an evaluation of the recoverability of the intangible assets.
The evaluation indicated that the carrying value exceeded the fair value of such
assets. As a result, the Company recorded an impairment charge of $40,000 in the
accompanying statement of operations for the year ended December 31,
2009.





Upon the
acquisition of Tralliance on May 9, 2005, the then existing CEO and CFO of
Tralliance entered into employment agreements which included certain non-compete
provisions as specified by the agreements.  In connection with the
Company’s sale of its Tralliance business on September 29, 2008, the remaining
net book value of the non-compete intangible assets at the date of closing,
totaling $250,241, was written off to intangible asset amortization
expense.  Inclusive of such write-off, intangible asset amortization
expense related to the non-compete agreements totaled $368,777 for the year
ended December 31, 2008.





REVENUE
RECOGNITION





Prior to
the sale of its Tralliance business on September 29, 2008, the Company’s revenue
from continuing operations consisted of registration fees for Internet domain
registrations, which generally had terms of one year, but were up to ten years.
Such registration fees had been reported net of transaction fees paid to an
unrelated third party which served as the registry operator for the Company.
Payments of registration fees had been deferred when initially received and
recognized as revenue on a straight-line basis over the registrations’
terms.  In connection with the Company’s sale of its Tralliance
business, the remaining balance of deferred revenue related to such registration
fees at the date of closing, totaling $1,527,697, was written off and was
included as a component of net revenue during the quarter ended September 30,
2008.





STOCK-BASED
COMPENSATION





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





INCOME
TAXES





The
Company accounts for income taxes using the asset and liability method. Under
this method, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases for operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the consolidated results
of operations in the period that the tax change occurs. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.


F-9





NET
INCOME PER COMMON SHARE





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




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





December 31,2009
                              
                              
                              2008Options
      to purchase common stock
                              
                              
                              13,597,000
                              
                              
                              
                              14,964,000Common
      shares issuable upon exercise of Warrants
                              
                              
                              7,725,000
                              
                              
                              
                              13,439,000Total
                              
                              
                              21,322,000
                              
                              
                              
                              28,403,000





F-10




RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS





In
      August 2009, the FASB issued Accounting Standards Update (“ASU”)
      2009-05 Measuring Liabilities at Fair Value to provide guidance on
      measuring the fair value of liabilities under ASC Topic 820. This ASU
      clarifies the fair value measurements for a liability in an active market
      and the valuation techniques in the absence of a Level 1 measurement. This
      ASU is effective for the interim period beginning October 1, 2009.
      The adoption of this ASU did not have a material impact on the Company’s
      consolidated financial statements.





In
      the second quarter of 2009, the Company adopted a new accounting standard
      included in FASB Accounting Standards Codification (“ASC”) Topic 820 Fair
      Value Measurements and Disclosure (“ASC Topic 820”) that provides guidance
      on how to determine the fair value of assets and liabilities in the
      current economic environment and reemphasizes that the objective of a fair
      value measurement remains the determination of an exit price. If the
      Company were to conclude that there has been a significant decrease in the
      volume and level of activity of the asset or liability in relation to
      normal market activities, quoted market values may not be representative
      of fair value and we may conclude that a change in valuation technique or
      the use of multiple valuation techniques may be appropriate. The adoption
      did not have a material impact on the Company’s consolidated financial
      statements.





In
      the second quarter of 2009, the Company adopted a new accounting standard
      included in FASB ASC Topic 320 Investments—Debt and Equity Securities that
      modifies the requirements for recognizing other-than-temporarily impaired
      debt securities and revises the existing impairment model for such
      securities by modifying the current intent and ability indicator in
      determining whether a debt security is other-than-temporarily impaired.
      The adoption did not have a material impact on the Company’s consolidated
      financial statements.





In
      the second quarter of 2009, the Company adopted a new accounting standard
      included in FASB ASC Topic 825 Financial Instruments that requires
      disclosures about the fair value of financial instruments in interim
      financial statements as well as in annual financial statements; it also
      requires those disclosures in all interim financial statements. Reporting
      entities are required to disclose the fair value of all financial
      instruments for which it is practicable to estimate that value, the method
      and significant assumptions used to estimate the fair value and a
      discussion of changes in methods and significant assumptions during the
      period. The adoption did not have a material impact on the Companys’
      consolidated financial statements.





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





During
the first quarter of 2009, the Company adopted ASC Topic 805 “Business
Combinations” (ASC 805) which requires an acquirer to recognize the assets
acquired, the liabilities assumed, and any non-controlling interest in the
acquiree at the acquisition date, measured at their fair values as of that
date.  ASC 805 requires, among other things, that in a business
combination achieved through stages (sometimes referred to as a “step
acquisition”) that the acquirer recognize the identifiable assets and
liabilities, as well as the non-controlling interest in the acquiree, at the
full amounts of their fair values (or other amounts determined in accordance
with this guidance).  ASC 805 also requires the acquirer to recognize
goodwill as of the acquisition date, measured as a residual, which in most types
of business combinations will result in measuring goodwill as the excess of the
consideration transferred plus the fair value of any non-controlling interest in
the acquiree at the acquisition date over the fair values of the identifiable
net assets acquired.   ASC 805 will have an impact on the
Company’s accounting for future business combinations, but the effect is
dependent upon acquisitions that may be made in the future.





In the
first quarter of 2009, the Company adopted ASC Topic 810-10-65-1,
“Non-controlling Interests in Consolidated Financial
Statements.”  This guidance changes the way the consolidated income
statement is presented and requires consolidated net income to be reported at
amounts that include the amounts attributable to both the parent and the
non-controlling interest. It also requires disclosure, on the face of the
consolidated statement of income, of the amounts of consolidated net income
attributable to the parent and to the non-controlling interest. Currently, net
income attributable to the non-controlling interest generally is reported as an
expense or other deduction in arriving at consolidated net income. It also is
often presented in combination with other financial statement
amounts.  This guidance results in more transparent reporting of the
net income attributable to the non-controlling interest. The adoption of this
guidance did not have a material impact on the Company’s consolidated financial
statements.





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





RECLASSIFICATIONS





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


F-11





(2)
LIQUIDITY AND GOING CONCERN CONSIDERATIONS





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





During
its recent past, the Company was able to continue operating as a going concern
due principally to funding of $500,000 received during 2008 under a Revolving
Loan Agreement with an entity controlled by Michael S. Egan, its Chairman and
Chief Executive Officer (See Note 6, “Debt” for further details) and proceeds of
approximately $421,000 received during 2009 under an Earn-out Agreement with an
entity also controlled by Mr. Egan (See Note 3, “Sale of Tralliance and Share
Issuance” for further details).





At
December 31, 2009, the Company had a net working capital deficit of
approximately $3,100,000.  Such working capital deficit included (i) a
total of approximately $573,000 in principal and accrued interest owed under the
aforementioned Revolving Loan Agreement; (ii) a total of $120,000 in management
service fees owed under a Master Services Agreement to an entity controlled by
Mr. Egan, and (iii) an aggregate of approximately $2,400,000 in unsecured
accounts payable and accrued expenses owed to vendors and other non-related
third parties (of which approximately $1,700,000 relates to liabilities of our
VoIP telephony service discontinued business, with a significant portion of such
liabilities related to charges which have been disputed by theglobe). theglobe
believes that its ability to continue as a going concern for any significant
length of time in the future will be heavily dependent, among other things, on
its ability to prevail and avoid making any payments with respect to such
disputed vendor charges and/or to negotiate favorable settlements (including
deeply discounted payment and/or payment term concessions) with the
aforementioned creditors.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
29, 2008, the Company (i) sold the business and substantially all of the assets
of its Tralliance Corporation subsidiary to Tralliance Registry Management, and
(ii) issued 229,000,000 shares of its Common Stock (the “Shares”) to Registry
Management (the “Purchase Transaction”). Tralliance Registry Management and
Registry Management are entities controlled by Michael S. Egan. The closing of
the Purchase Transaction resulted in the cancellation of all of the Company’s
remaining Convertible Debt, related accrued interest and rent and accounts
payable owed to entities controlled by Mr. Egan as of the date of closing
(totaling approximately $6,400,000). However, the Company continues to be
obligated to repay its principal borrowings totaling $500,000, plus accrued
interest at the rate of 10% per annum (approximately $73 thousand as of December
31, 2009), due to an entity controlled by Mr. Egan under the aforementioned
Revolving Loan Agreement. All unpaid borrowings under the Revolving Loan
Agreement, as amended on May 7, 2009 (See Note 6, “Debt”), including accrued
interest, are due and payable by the Company in one lump sum on the earlier of
(i) five business days following demand for payment, which demand can be made at
anytime, or (ii) the occurrence of an event of default as defined in the
Revolving Loan Agreement. The Company currently has no ability to repay this
loan should a demand for payment be made by the noteholder.  All
borrowings under the Revolving Loan Agreement are secured by a pledge of all of
the assets of the Company and its subsidiaries. After giving effect to the
closing of the Purchase Transaction and the issuance of the Shares thereunder,
Mr. Egan beneficially owns approximately 76% of the Company’s common Stock at
December 31, 2009.





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





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




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




F-12


MANAGEMENT’S
PLANS





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





It is the
Company’s preference to avoid filing for protection under the U.S. Bankruptcy
Code. However, based upon the Company’s current financial condition as discussed
above, management believes that additional debt or equity capital will need to
be raised in order for theglobe to continue to operate as a going concern on a
long-term basis. Such capital will be needed both to (i) fund its expected
limited future net losses and (ii) repay the $573,000 of secured debt and
related accrued interest due under the Revolving Loan Agreement and the $120,000
of management services fees due under the Master Services Agreement, and a
portion of the $2,400,000 unsecured indebtedness (assuming theglobe is
successful in favorably resolving and settling certain disputed and non-disputed
vendor charges related to such unsecured indebtedness).  Any such
capital would likely come from Mr. Egan, or affiliates of Mr. Egan, as the
Company currently has no access to credit facilities and had traditionally
relied upon borrowings from related parties to meet short-term liquidity
needs.  Any such capital raised would likely result in very
substantial dilution in the number of outstanding shares of the Company’s Common
Stock.





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





(3)  SALE
OF TRALLIANCE AND SHARE ISSUANCE





On
September 29, 2008, theglobe closed upon a Purchase Agreement (the “Purchase
Agreement”), by and between theglobe.com, its subsidiary, Tralliance, Registry
Management and Tralliance Registry Management, a wholly-owned subsidiary of
Registry Management.  In connection with the closing, Registry
Management assigned certain of its rights and obligations with respect to the
purchased assets of Tralliance to Tralliance Registry
Managment.  Pursuant to the provisions of the Purchase Agreement,
theglobe (i) issued two hundred twenty nine million (229,000,000) shares of its
Common Stock (the “Shares”) (the “Share Issuance”) and (ii) sold the business
and substantially all of the assets of its subsidiary, Tralliance to Tralliance
Registry Management (the “Tralliance Asset Sale” and, together with the Share
Issuance, the “Sale” or “Purchase Transaction”) for (i) consideration totaling
approximately $6,409,800 and consisting of surrender to theglobe and
satisfaction of secured demand convertible promissory notes issued by theglobe
and held by the Registry Management in the aggregate principal amount of
$4,250,000, together with all accrued and unpaid interest of approximately
$1,290,300 through the date of the closing of the Purchase Transaction and
satisfaction of approximately $869,500 in outstanding rent and miscellaneous
fees due and unpaid to Registry Management through the date of closing of the
Purchase Transaction, and (ii) an earn-out equal to 10% of Tralliance Registry
Management’s “net revenue” (as defined) derived from “.travel” names registered
by Tralliance Registry Management from September 29, 2008 through May 5, 2015
(the “Earn-out”).  Registry Management and Tralliance Registry
Management are directly or indirectly controlled by Michael S. Egan, our
Chairman and Chief Executive Officer and principal stockholder and each of our
two remaining Board members own a minority interest in Registry
Management.  After giving effect to the closing of the Purchase
Transaction, and the issuance of the Shares thereunder, Mr. Egan beneficially
owns approximately 76% of the Company’s Common Stock as of December 31,
2009.





The
consideration of $6,409,800 received by theglobe has been allocated between the
Share Issuance and the Tralliance Asset Sale based upon proportionate estimated
fair values as of the date of closing of the Purchase
Transaction.  Additionally, transaction costs consisting primarily of
legal, accounting and other professional fees, totaling approximately $192,000,
were also incurred in connection with the Purchase Transaction and allocated
between the Share Issuance and the Tralliance Asset Sale on the same
proportionate fair value basis.  Such allocations resulted in a net
allocation of approximately $3,658,000 to the Share Issuance, which has been
credited to the Company’s Common Stock and additional paid in capital accounts
in its Consolidated Balance Sheet as of December 31, 2008, and a net allocation
of approximately $2,560,000 to the Tralliance Asset Sale.  As a result
of such allocations and the related write-off of assets sold to Tralliance
Registry Management of approximately $49,000, the Company recorded a gain on the
Tralliance Asset Sale of approximately $2,511,000 in its Consolidated Statement
of Operations for the year ended December 31, 2008.   The
Company’s operating results for the year ended December 31, 2008 also reflect a
net benefit of approximately $1,176,000 related to the write-off of certain
assets and liabilities, including prepaid assets, intangible assets and deferred
revenue, which although not transferred to Tralliance Registry Management, were
deemed to have either no future value to the Company or require no future
obligations by the Company subsequent to the Tralliance Asset Sale.





Due to
various factors related to the collectability of Earn-out payments from
Tralliance Registry Management, including the current weak financial condition
of Tralliance Registry Management, the uncertainty of its ability to become
profitable in the future, and the fact that such Earn-out payments are payable
to theglobe over an extended period of time (approximately 6 1⁄2 years), no
portion of the Earn-out was included in the purchase price for the Purchase
Transaction.  Instead, the Company has chosen to recognize income
related to the Earn-out on a prospective basis as and to the extent that future
Earn-out payment are collected.  During January 2009, the Company
received its initial minimum Earn-out installment payment from Tralliance
Registry Management in the amount of $75,000, which was recorded as a credit to
Related Party Other Income in the Consolidated Statement of Operations for the
year ended December 31, 2008.  The Company received additional minimum
Earn-Out payments from Tralliance Registry Management during the period from
March to December 2009 totalling $346,250, of which $306,250 was recorded as a
credit to Related Party Other Income in the Consolidated Statement of Operations
for the year ended December 31, 2009 and $40,000 was recorded as Deferred
Income-Related Party on the Company’s Balance Sheet at December 31,
2009.


F-13





Commensurate
with the closing of the Purchase Agreement on September 29, 2008, the Company
also entered into several ancillary agreements.  These agreements
included an Earn-out Agreement pursuant to which the aforementioned “net
revenue” Earn-out would be paid (the “Earn-out Agreement”), and Termination
Agreements with each of our executive officers (each a “Termination
Agreement”).  The minimum Earn-out amount payable under the Earn-out
Agreement was $300,000 in the first year of the Earn-out Agreement and will
increase by $25,000 in each subsequent year (pro-rated for the final year of the
Earn-out) with incremental Earn-out payments to be determined and paid to the
Company on an annual basis to the extent that 10% of Tralliance Registry
Management’s “net revenue” (as defined) exceeds the minimum Earn-out amount
payable for such year.  Pursuant to the Termination Agreements, the
Company’s employment agreements with each of Michael S. Egan, Edward A. Cespedes
and Robin Segaul Lebowitz, the Company’s Chief Executive Officer, President and
Vice President of Finance, all dated August 1, 2003, respectively, were
terminated.  Notwithstanding the termination of these employment
agreements, each of Messrs. Egan, Cespedes and Ms. Lebowitz remains as an
officer and director of the Company.





In
connection with the closing of the Purchase Agreement, the Company also entered
into a Master Services Agreement (“Services Agreement”) with Dancing Bear
Investments, Inc. (“Dancing Bear”), which is controlled by Mr.
Egan.  Under the terms of the Services Agreement, for a fee of $20,000
per month ($240,000 per annum), Dancing Bear provides personnel and services to
the Company so as to enable it to continue its existence as a public company
without the necessity of any full-time employees of its own.  Services
under the Services Agreement include, without limitation, accounting, assistance
with financial reporting, accounts payable, treasury/financial planning, record
retention and secretarial and investor relations functions. A total of $240,000
and $60,667 related to the Services Agreement has been charged to Related Party
Transactions Expense during the years ended December 31, 2009 and 2008,
respectively, with $120,000 remaining unpaid and accrued at December 31,
2009.





After
giving effect to the closing of the Purchase Transaction, theglobe has no
material operations or assets and no source of revenue other than the
Earn-out.  The Purchase Transaction was not intended to result in
theglobe “going private” and theglobe presently intends to continue as a public
company and make all requisite filings under the Securities and Exchange Act of
1934 to remain a public company.





(4)
DISCONTINUED OPERATIONS





In March
2007, management and the Board of Directors of the Company made the decision to
cease all activities related to its Computer Games businesses, including
discontinuing the operations of its magazine publications, games distribution
business and related websites. The Company’s decision to shutdown its computer
games businesses was based primarily on the historical losses sustained by these
businesses during the recent past and management’s expectations of continued
future losses. As of December 31, 2009, all significant elements of its computer
games business shutdown plan have been completed by the Company.





In
addition, in March 2007, management and the Board of Directors of the Company
decided to discontinue the operating, research and development activities of its
VoIP telephony services business and terminate all of the remaining employees of
the business.  The
Company’s decision to discontinue the operations of its VoIP telephony services
business was based primarily on the historical losses sustained by the business
during the past several years, management’s expectations of continued losses for
the foreseeable future and estimates of the amount of capital required to
attempt to successfully monetize its business. As of December 31, 2009, all
significant elements of its VoIP telephony services business shutdown plan have
been completed by the Company, except for the resolution of certain vendor
disputes and the payment of remaining outstanding vendor payables.





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





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


F-14





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


December
      31,
                            
                            December 31,2009
                            
                            2008Net
      liabilities of discontinued operations:Computer
      Games
                            $
                            
                            —
                            
                            
                            $
                            40,555VoIP
      Telephony Services
                            
                            
                            1,729,556
                            
                            
                            
                            1,794,555Marketing
      Services
                            
                            
                            —
                            
                            
                            
                            64,000Total
      net liabilities of discontinued operations
                            $
                            
                            1,729,556
                            
                            
                            $
                            1,899,110





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




Year
      Ended December 312009
                            
                            
                            2008(Loss)
      Income from discontinued operations, net of tax:Computer
      Games
                            
                            $
                            37,459
                            
                            
                            $
                            48,751VoIP
      Telephony Services
                            
                            
                            (774
                            )
                            
                            
                            1,669Marketing
      Services
                            
                            $
                            (22,778
                            )
                            
                            $
                            (64,000
                            )Total
      (Loss) Income from discontinued operations, net of tax
                            
                            $
                            13,907
                            
                            
                            $
                            (13,580
                            )




(5)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES





Accrued
expenses and other current liabilities consisted of the following:




December 31,2009
                                          
                                          
                                          2008Accrued
      registry transaction fees
                                          
                                          $
                                          183,612
                                          
                                          
                                          $
                                          221,512Other
                                          
                                          
                                          266,250
                                          
                                          
                                          
                                          345,670$
                                          449,862
                                          
                                          
                                          $
                                          567,182




(6)
DEBT





Debt
consists of notes payable due to a related party, as summarized
below:




December 31, 2009
                      
                      
                      December 31, 20082008
      Revolving Loan Notes due to a related party; due on demand
                      
                      $
                      500,000
                      
                      
                      $
                      500,000





On June
6, 2008, the Company and its subsidiaries, as guarantors, entered into a
Revolving Loan Agreement with Dancing Bear Investments, Inc. (“Dancing Bear”),
pursuant to which Dancing Bear may loan up to $500,000 to the Company on a
revolving basis (the “Credit Line”).  In connection with its entry
into the Credit Line, the Company borrowed $100,000 under the Credit
Line.  Subsequently, during the remainder of 2008, the Company made
additional borrowings totaling the final $400,000 available under the Credit
Line.  As of December 31, 2009 and 2008, outstanding principal of
$500,000 and accrued interest of $73,233 and $23,233, respectively, related to
this Credit Line have been reflected as current liabilities in our Consolidated
Balance Sheet.  Related Party Interest Expense related to the Credit
Line of $50,000 and $23,233 was recognized during the years ended December 31,
2009 and 2008, respectively.


F-15





On May 7,
2009, the Company entered into a Note and Modification Agreement with Dancing
Bear Investments, Inc. which amended the repayment terms of the Revolving Loan
Agreement.  Under the terms of the Note Modification Agreement, from
and after June 6, 2009 (the original maturity date of the Credit Line), all
amounts due under the Revolving Loan Agreement, including principal and accrued
interest, will be due and payable on the earlier of (i) five (5) business days
following any demand for payment, which demand can be made by Dancing Bear at
any time; or (ii) upon the occurrence of an event of default, as defined in the
Revolving Loan Agreement.  All funds borrowed under the Credit Line
may be prepaid in whole or in part, without penalty, at any time during the term
of the Credit Line.  The Company currently has no ability to repay
this loan should Dancing Bear demand payment.





Dancing
Bear is controlled by Michael S. Egan, our Chairman and Chief Executive
Officer.  In connection with the Credit Line, the Company executed and
delivered a promissory note to Dancing Bear in the amount of $500,000 bearing
interest at ten percent (10%) per annum on the principal amount then
outstanding.  The Company’s subsidiaries unconditionally guaranteed
the Credit Line by entering into an Unconditional Guaranty
Agreement.  All amounts outstanding from time to time under the Credit
Line are secured by a lien on all assets of the Company and its subsidiaries
pursuant to a Security Agreement with Dancing Bear.





On June
10, 2008, Dancing Bear converted an aggregate of $400,000 of then outstanding
2007 Convertible Notes due to them by the Company into an aggregate of
40,000,000 shares of the Company’s Common Stock.  Additionally, as
more fully described in Note 3, “Sale of Tralliance and Stock Issuance,” on
September 29, 2008, the Company closed upon a Purchase Transaction with certain
entities controlled by Mr. Egan whereby the Company (i) sold the business and
substantially all of the assets of its Tralliance Corporation subsidiary and
(ii) issued 229,000,000 shares of its Common Stock to such
entities.  As part of the consideration for the Purchase Transaction,
the Company’s obligation to repay all remaining outstanding principal and
accrued interest due under secured demand convertible promissory notes to
entities controlled by Mr. Egan through the date of closing of the Purchase
Transaction, including outstanding principal and accrued interest related to the
2007 Convertible Notes of $850,000 and $139,850, respectively, and outstanding
principal and accrued interest related to the 2005 Convertible Notes of
$3,400,000 and $1,150,465, respectively, were terminated.  Total
Related Party Interest Expense related to the 2007 and 2005 Convertible Notes of
$335,521 was recognized during 2008.





(7)
STOCK OPTION PLANS





During
1995, the Company established the 1995 Stock Option Plan, which was amended (the
"Amended Plan") by the Board of Directors in December 1996 and August 1997.
Under the Amended Plan, a total of 1,582,000 common shares were reserved for
issuance. Any incentive stock options granted under the Amended Plan were
required to be granted at the fair market value of the Company's Common Stock at
the date the option was issued.





Under the
Company's 1998 Stock Option Plan (the "1998 Plan") a total of 3,400,000 common
shares were reserved for issuance and 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 and its subsidiaries are eligible to receive grants
under the 1998 Plan.





In
January 2000, the Board adopted the 2000 Broad Based Employee Stock Option Plan
(the "Broad Based Plan"). Under the Broad Based Plan, 850,000 shares of Common
Stock were reserved for issuance. The intention of the Broad Based Plan is that
at least 50% of the options granted will be to individuals who are not managers
or officers of theglobe. In April 2000, the Company's 2000 Stock Option Plan
(the "2000 Plan") was adopted by the Board of Directors and approved by the
stockholders of the Company. The 2000 Plan authorized the issuance of 500,000
shares of Common Stock, subject to adjustment as provided in the 2000 Plan. The
Broad Based Plan and the 2000 Plan provide 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 Broad Based Plan and the 2000 Plan. Directors,
officers, employees and consultants of the Company and its subsidiaries are
eligible to receive grants under the Broad Based Plan and the 2000
Plan.




In
September 2003, the Board adopted the 2003 Sales Representative Stock Option
Plan (the "2003 Plan") which authorized the issuance of up to 1,000,000
non-qualified stock options to purchase the Company's Common Stock to sales
representatives who are not employed by the Company or its subsidiaries. In
January 2004, the Board amended the 2003 Plan to include certain employees and
consultants of the Company.





The
Company's Board of Directors adopted a new benefit plan entitled the 2004 Stock
Incentive Plan (the "2004 Plan") on August 31, 2004. An aggregate of 7,500,000
shares of the Company's Common Stock may be issued pursuant to the 2004 Plan.
Employees, consultants, and prospective employees and consultants of theglobe
and its affiliates and non-employee directors of theglobe are eligible for
grants of non-qualified stock options, stock appreciation rights, restricted
stock awards, performance awards and other stock-based awards under the 2004
Plan.





On
December 1, 2004, based upon approval of the stockholders of the Company, the
2000 Plan was amended and restated to (i) increase the number of shares reserved
for issuance under the 2000 Plan by 7,500,000 shares to a total of 8,000,000
shares and (ii) to remove a previous plan provision that limited the number of
options that may be awarded to any one individual.


F-16





In
accordance with the provisions of the Company's stock option plans, nonqualified
stock options may be granted to officers, directors, other employees,
consultants and advisors of the Company. The option price for nonqualified stock
options shall be at least 85% of the fair market value of the Company's Common
Stock. In general, options granted under the Company's stock option plans expire
after a ten-year period and in certain circumstances options, under the 1995 and
1998 plans, are subject to the acceleration of vesting. Incentive options
granted to stockholders who own greater than 10% of the total combined voting
power of all classes of stock of the Company must be issued at 110% of the fair
market value of the stock on the date the options are granted. A committee
selected by the Company's Board of Directors has the authority to approve
optionees and the terms of the stock options granted, including the option price
and the vesting terms. Stock option awards are generally granted with an
exercise price equal to the market price of theglobe’s Common Stock at the date
of grant with 25% of the stock option grant vesting immediately and the
remainder vesting equally over the next twelve quarters.





No stock
options were granted by the Company or exercised during the years ended December
31, 2009 and 2008.





Stock
option activity during the years ended December 31, 2009 and December 31, 2008
was as follows:





Number of
                          Options
                        
                        
                        Weighted
                          Average Exercise
                          Price
                        
                        Weighted
                          Average
                          Remaining
                          Contractual
                          Term
                        
                        Aggregate Intrinsic
                          ValueOutstanding
      at December 31, 2008
                        
                        
                        14,963,660
                        
                        
                        $
                        0.33Granted
                        
                        
                        —
                        
                        
                        
                        —Exercised
                        
                        
                        —
                        
                        
                        
                        —Canceled
                        
                        
                        (1,367,080
                        )
                        
                        
                        1.74Outstanding
      at December 31, 2009
                        
                        
                        13,596,580
                        
                        
                        $
                        0.18
                        
                        4.3 years
                        
                        $
                        —Exercisable
      at December 31, 2009
                        
                        
                        13,596,580
                        
                        
                        $
                        0.18
                        
                        4.3 years
                        
                        $
                        —Options
      available at December 31, 2009
                        
                        
                        9,387,781





Number of
                          Options
                        
                        
                        Weighted
                          Average
                          Exercise
                          Price
                        
                        Weighted
                          Average
                          Remaining
                          Contractual
                          Term
                        
                        Aggregate Intrinsic
                          ValueOutstanding
      at December 31, 2007
                        
                        
                        16,340,660
                        
                        
                        $
                        0.40Granted
                        
                        
                        —
                        
                        
                        
                        —Exercised
                        
                        
                        —
                        
                        
                        
                        —Canceled
                        
                        
                        (1,377,000
                        )
                        
                        
                        1.27Outstanding
      at December 31, 2008
                        
                        
                        14,963,660
                        
                        
                        $
                        0.33
                        
                        5.3 years
                        
                        $
                        —Exercisable
      at December 31, 2008
                        
                        
                        14,868,669
                        
                        
                        $
                        0.33
                        
                        5.3 years
                        
                        $
                        —Options
      available at December 31, 2008
                        
                        
                        8,020,701




A total
of $2,429 and $21,858 of employee stock compensation expense was charged to
operating expenses during the years ended December 31, 2009 and 2008,
respectively.





Compensation
cost charged to operating expenses of continuing operations in connection with
stock options granted in recognition of services rendered by non-employees was
$426 and $1,704 for the years ended December 31, 2009 and 2008,
respectively.


F-17





At
December 31, 2009, there was no unrecognized compensation expense related to
unvested stock options.




(8)
INCOME TAXES





The
provision (benefit) for income taxes is summarized as follows:


Year Ended December 31,2009
                        
                        
                        2008Continuing
      operations
                        
                        $
                        (1,536
                        )
                        
                        $
                        15,675Discontinued
      operations
                        
                        
                        (222
                        )
                        
                        
                        64,000$
                        (1,758
                        )
                        
                        $
                        79,675




The
provision (benefit) for income taxes attributable to continuing operations was
as follows:


Year Ended December 31,2009
                                      
                                      
                                      2008Current
      :Federal
                                      
                                      $
                                      (1,536
                                      )
                                      
                                      $
                                      15,000State
                                      
                                      
                                      —
                                      
                                      
                                      
                                      675$
                                      (1,536
                                      )
                                      
                                      $
                                      15,675Deferred:Federal
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —State
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —Provision
      for income taxes
                                      
                                      $
                                      (1,536
                                      )
                                      
                                      $
                                      15,675




The
following is a reconciliation of the federal income tax provision at the federal
statutory rate to the Company’s tax provision attributable to continuing
operations:


Year Ended December 31,2009
                        
                        
                        2008Statutory
      federal income tax rate
                        
                        
                        34.00
                        %
                        
                        
                        34.00
                        %Beneficial
      conversion interest
                        
                        
                        
                        
                        
                        
                        —Nondeductible
      items
                        
                        
                        (0.01
                        )
                        
                        
                        0.16State
      income taxes, net of federal benefit
                        
                        
                        3.96
                        
                        
                        
                        3.95Change
      in valuation allowance
                        
                        
                        (42.05
                        )
                        
                        
                        (40.43
                        )AMT
      tax credit adjustment
                        
                        
                        1.51
                        
                        
                        
                        —Other
                        
                        
                        4.11
                        
                        
                        
                        3.00Effective
      tax rate
                        
                        
                        1.52
                        %
                        
                        
                        0.68
                        %




The tax
effects of temporary differences that give rise to significant portions of the
deferred tax assets and deferred tax liabilities at December 31, 2009 and 2008
are presented below.


December 31,
                    
                    
                    December 31,2009
                    
                    
                    2008Deferred
      tax assets (liabilities):Net
      operating loss carryforwards
                    
                    $
                    62,899,000
                    
                    
                    $
                    62,869,000Issuance
      of warrants
                    
                    
                    1,447,000
                    
                    
                    
                    1,447,000Allowance
      for doubtful accounts
                    
                    
                    —
                    
                    
                    
                    11,000AMT
      and other tax credits
                    
                    
                    352,000
                    
                    
                    
                    328,000Accrued
      expenses
                    
                    
                    814,000
                    
                    
                    
                    806,000Depreciation
      and amortization
                    
                    
                    44,000
                    
                    
                    
                    37,000Other
                    
                    
                    12,000
                    
                    
                    
                    33,000Total
      gross deferred tax assets
                    
                    
                    65,568,000
                    
                    
                    
                    65,531,000Less:
      valuation allowance
                    
                    
                    (65,568,000
                    )
                    
                    
                    (65,531,000
                    )Total
      net deferred tax assets
                    
                    $
                    —
                    
                    
                    $
                    —




F-18




Because
of the Company's lack of earnings history, the net deferred tax assets have been
fully offset by a 100% valuation allowance. The valuation allowance for net
deferred tax assets was $65.6 million and $65.5 million as of December 31, 2009
and 2008, respectively. The net change in the total valuation allowance was $37
thousand and $948 thousand for the years ended December 31, 2009 and 2008,
respectively.





In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets, which
consist of tax benefits primarily from net operating loss carryforwards, is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment. Of the total valuation
allowance of $65.6 million as of December 31, 2009, subsequently recognized tax
benefits, if any, in the amount of $6.4 million will be applied directly to
contributed capital.





At
December 31, 2009, the Company had net operating loss carryforwards available
for U.S. tax purposes of approximately $166 million. These carryforwards expire
through 2029. Under Section 382 of the Internal Revenue Code of 1986, as amended
(the "Code"), the utilization of net operating loss carryforwards may be limited
under the change in stock ownership rules of the Code. Due to various
significant changes in our ownership interests, as defined in the Internal
Revenue Code of 1986, as amended, the Company has substantially limited the
availability of its net operating loss carryforwards. There can be no assurance
that the Company will be able to avail itself of any net operating loss
carryforwards.





During
the year ended December 31, 2008, a provision for income taxes of $64,000 was
recorded for discontinued operations. Such provision related to the Company’s
estimate of amounts payable in connection with a prior year tax audit of its
former Marketing Services Business subsidiary.  In December 2009, the
Company paid to a state taxing authority approximately $88,000 in taxes and
accrued interest in full settlement of this liability.




(9)
LITIGATION





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





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





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





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





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


F-19





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





(10)
RELATED PARTY TRANSACTIONS





Certain
directors of the Company also serve as officers and directors of and own
controlling interests in Dancing Bear Investments, Inc., E&C Capital
Partners LLLP, E&C Capital Partners II, LLLP, The Registry Management
Company, LLC, Tralliance Registry Management Company, LLC, Labigroup Holdings,
LLC and Search.Travel LLC.  Dancing Bear Investments, Inc., E&C
Capital Partners, LLLP and E&C Capital Partners II, LLLP are stockholders of
the Company and are entities controlled by our Chairman.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” on September
29, 2008, the Company (i) sold the business and substantially all of the assets
of its Tralliance Corporation subsidiary to Tralliance Registry Management
Company LLC (“Tralliance Registry Management”) and (ii) issued 229,000,000
shares of its Common Stock (the “Shares”) to The Registry Management Company,
LLC (“Registry Management”) (the “Purchase Transaction”).  Tralliance
Registry Management and Registry Management are entities directly or indirectly
controlled by Michael S. Egan, our Chairman and Chief Executive Officer and
principal stockholder, and each of our two remaining executive officers and
Board members, Edward A. Cespedes, our President, and Robin Segaul Lebowitz, our
Vice President of Finance, own a minority interest in Registry
Management.  After giving effect to the closing of the Purchase
Transaction and the issuance of the Shares thereunder, Mr. Egan beneficially
owns approximately 76% of the Company’s Common Stock at December 31,
2009.





In
connection with the Purchase Transaction, the Company received (i) consideration
totaling approximately $6,409,800 and consisting of the surrender to theglobe
and satisfaction of secured demand convertible promissory notes issued by
theglobe and held by Registry Management in the aggregate principal amount of
$4,250,000, together with all accrued and unpaid interest of approximately
$1,290,300 through the date of closing of the Purchase Transaction and
satisfaction of approximately $869,500 in outstanding rent and miscellaneous
fees due and unpaid to the Registry Management through the date of closing of
the Purchase Transaction, and (ii) an earn-out equal to 10% (subject to certain
minimums) of Tralliance Registry Management’s “net revenue” (as defined) derived
from “.travel” names registered by Tralliance Registry Management from September
29, 2008 through May 5, 2015 (the “Earn-out”).  The minimum Earn-out
payable by Tralliance Registry Management to theglobe was $300,000 in the first
year of the Earn-out Agreement, and will increase by $25,000 in each subsequent
year (pro-rated for the final year of the Earn-out).  During 2009, the
Company received Earn-out installment payments totaling $421,250 from Tralliance
Registry Management.





Commensurate
with the closing of the Purchase Transaction, on September 29, 2008, the Company
also entered into Termination Agreements with each of its executive officers
(each a “Termination Agreement”).  Pursuant to the Termination
Agreements, the Company’s employment agreements with each of Michael S. Egan,
Edward A. Cespedes and Robin Segaul Lebowitz, the Chief Executive Officer,
President and Vice President of Finance, all dated August 1, 2003, respectively,
were terminated.  Notwithstanding the termination of these employment
agreements, each of Messrs. Egan, Cespedes and Ms. Lebowitz remains as an
officer and director of the Company.





In
connection with the closing of the Purchase Transaction, the Company also
entered into a Master Services Agreement (“Services Agreement”) with Dancing
Bear Investments, Inc. (“Dancing Bear”), an entity which is controlled by Mr.
Egan.  Under the terms of the Services Agreement, for a fee of $20,000
per month ($240,000 per annum), Dancing Bear provides personnel and services to
the Company so as to enable it to continue its existence as a public company
without the necessity of any full-time employees of its own.  The
Services Agreement had an initial term of one year and was renewed for a second
one year term during 2009.  The Services Agreement may be terminated
under certain events.  Services under the Services Agreement include,
without limitation, accounting, assistance with financial reporting, accounts
payable, treasury/financial planning, record retention and secretarial and
investor relations functions.  A total of $160,667 and $20,000 related
to the Services Agreement was paid by the Company to Dancing Bear in 2009 and
2008, respectively.  A balance of $120,000 related to the Services
Agreement is owed by the Company to Dancing Bear and is accrued on our Balance
Sheet at December 31, 2009.





As more
fully discussed in Note 6 “Debt,” on June 6, 2008, the Company and its
subsidiaries, as guarantors, entered into a Revolving Loan Agreement with
Dancing Bear, pursuant to which Dancing Bear may loan up to $500,000 to the
Company on a revolving basis (the “Credit Line”).  In connection with
its entry into the Credit Line, the Company borrowed $100,000 under the Credit
Line.  Subsequently, during the remainder of 2008, the Company made
additional borrowings totaling $400,000 under the Credit Line.  In
accordance with the terms of a Note Modification Agreement entered into on May
7, 2009, all borrowings under the Credit Line, including accrued interest on
borrowed funds at the rate of 10% per annum, are due and payable upon demand by
Dancing Bear, or sooner upon the occurrence of an event of default under the
loan documentation.  All amounts outstanding from time to time under
the Credit Line are secured by a lien on all of the assets of the Company and
its subsidiaries.  A total of $50,000 and $23,233 related to the
Credit Line was recorded as Related Party Interest Expense during 2009 and 2008,
respectively, and a balance of $73,233 in accrued interest is included on our
Balance Sheet at December 31, 2009.


F-20





Also, as
more fully described in Note 6, “Debt,” on June 10, 2008 Dancing Bear converted
an aggregate of $400,000 of outstanding 2007 Convertible Notes due to them by
the Company into an aggregate of 40,000,000 shares of the Company’s Common
Stock.





Total
Related Party Interest Expense related to 2007 and 2005 Convertible Notes, prior
to their surrender and cancellation on September 29, 2008 as part of the
consideration for the Purchase Transaction, of $335,521, was recognized during
2008.





On
December 20, 2007, Tralliance entered into a Bulk Registration Co-Marketing
Agreement (the “Co-Marketing Agreement”) with Labigroup Holdings, LLC
(“Labigroup”), under Tralliance’s bulk purchase program. Labigroup is a private
entity controlled by the Company’s Chairman and our remaining directors own a
minority interest in Labigroup. Under the Co-Marketing Agreement, Labigroup
committed to purchase a predetermined minimum number of “.travel” domain names
on a bulk basis from an accredited “.travel” registrar of its own choosing and
to establish a predetermined minimum number of related “.travel” websites. As
consideration for the “.travel” domain names to be purchased under the
Co-Marketing Agreement, Labigroup agreed to pay certain fixed fees and make
certain other payments including, but not limited to, an ongoing royalty
calculated as a percentage share of its net revenue, as defined in the
Co-Marketing Agreement (the “Labigroup Royalties”), to
Tralliance.  During the year ended December 31, 2008, Labigroup
registered a total of 10,595 “.travel” domain names and paid a total of $454,430
in fees and costs to Tralliance under the Co-Marketing
Agreement.  Such fees and costs, which are equal to the amount of
incremental fees and costs incurred by Tralliance in registering these bulk
purchase names, have been treated as a reimbursement of these incremental fees
and costs in the Company’s financial statements.   As part of the
sale of its Tralliance business on September 29, 2008, all of the Company’s
rights and obligations under the Co-Marketing Agreement were assigned to
Tralliance Registry Management.





Several
entities controlled by the Company’s Chairman and Chief Executive Officer (the
“Related Entities”) have provided services to the Company, including: the lease
of office space; and the outsourcing of customer services, human resources and
payroll processing functions. During the year ended December 31, 2008,
approximately $354,000 of expense related to these services was
recorded.





An entity
owned solely by the sister of the Company’s President, Treasurer and Chief
Financial Officer and Director provided certain administrative services to the
Company.  During the year ended December 31, 2008, $33,350 of expense
related to these services was recorded.





(11)
SUBSEQUENT EVENTS





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




F-21





ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE





None.





ITEM
9A (T). CONTROLS AND PROCEDURES





Disclosure
Controls and Procedures


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





Our Chief
Executive Officer and Chief Financial Officer have evaluated the effectiveness
of our disclosure controls and procedures as of December 31, 2009. Based on that
evaluation, our Chief Executive Officer and our Chief Financial Officer have
concluded that our disclosure controls and procedures are effective in alerting
them in a timely manner to material information regarding us (including our
consolidated subsidiaries) that is required to be included in our periodic
reports to the SEC.





Management’s
Annual Report on Internal Control and Financial Reporting





The
Company’s management, under the supervision of the Chief Executive Officer and
the Chief Financial Officer, is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rules 13a -
15(f) and 15d - 15(f) under the Exchange Act). Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP. Internal control over financial
reporting includes policies and procedures that:





(i)
            pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;





(ii)
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with GAAP, and that
      receipts and expenditures of the Company are being made only in accordance
      with authorizations of management and directors of the Company;
      and





(iii)
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use, or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with existing policies or procedures may deteriorate.





Under the
supervision of the Chief Executive Officer and the Chief Financial Officer, the
Company’s management conducted an evaluation of the Company’s internal control
over financial reporting as of December 31, 2009 in accordance with the
interpretive guidance published in the SEC’s “Commission Guidance Regarding
Management’s Report on Internal Control Over Financial Reporting Under Section
13(a) or 15(d) of the Securities Exchange Act of 1934” dated and effective on
June 27, 2007. Such evaluation was based on the framework and criteria
established in “Internal Control - Integrated Framework” issued by the Committee
of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this
evaluation and management’s assessment, management has concluded that internal
control over financial reporting was effective as of December 31,
2009.





Because
we are a smaller public company, we are not yet required to provide an
independent public accountant’s attestation report covering our assessment of
internal control over financial reporting. At the present time, such attestation
report will be first required in connection with our annual report as of
December 31, 2010.




Changes
in Internal Control over Financial Reporting





Our
management, with the participation of our Chief Executive Officer, have
evaluated any change in our internal control over financial reporting that
occurred during the quarter ended December 31, 2009 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting, and have determined there to be no reportable
changes.


16




ITEM
9B. OTHER INFORMATION





None.





PART
III




ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





The
following table sets forth the names, ages and current positions with the
Company held by our Directors and Executive Officers. There is no immediate
family relationship between or among any of the Directors or Executive Officers,
and the Company is not aware of any arrangement or understanding between any
Director or Executive Officer and any other person pursuant to which he was
elected to his current position. Each of the following persons are Directors of
the Company.





NAME
                      
                      AGE
                      
                      POSITION
      OR OFFICE WITH THE COMPANY
                      
                      DIRECTOR SINCEMichael
      S. Egan
                      
                      69
                      
                      Chairman
      and Chief Executive Officer
                      
                      1997Edward
      A. Cespedes
                      
                      44
                      
                      President,
      Treasurer and Chief Financial Officer and Director
                      
                      1997Robin
      S. Lebowitz
                      
                      45
                      
                      Vice
      President of Finance and Director
                      
                      2001





Michael
S. Egan. Michael Egan has served as theglobe’s Chairman since 1997 and as its
Chief Executive Officer since June 1, 2002. Since 1996, Mr. Egan has been the
controlling investor of Dancing Bear Investments, Inc., a privately held
investment company. Additionally, Mr. Egan is the controlling investor of
E&C Capital Partners LLLP and E&C Capital Partners II, LLLP, privately
held investment partnerships, and Search.Travel, LLC, Labigroup Holdings, LLC,
The Registry Management Company, LLC and Tralliance Registry Management, LLC,
entities that are involved in the Internet domain name registration business.
Mr. Egan is also Chairman of Certified Vacations, a privately held travel and
tourism company which was founded in 1980.  Mr. Egan spent over 30
years in the rental car business.  He began with Alamo
Rent-A-Car in 1973, became an owner in 1979, and became Chairman and majority
owner from January 1986 until November 1996 when he sold the company to
AutoNation, Inc.  In 2000, AutoNation, Inc. spun off the rental
division, ANC Rental Corporation (Other OTC: ANCXZ.PK), and Mr. Egan served as
Chairman until October 2003. Prior to acquiring Alamo, he held various
administration positions at Yale University and taught at the University of
Massachusetts at Amherst. Mr. Egan is a graduate of Cornell University where he
received his Bachelor’s degree in Hotel Administration.





Edward A.
Cespedes. Edward Cespedes has served as a director of theglobe since 1997, as
President of theglobe since June 1, 2002 and as Treasurer and Chief Financial
Officer of theglobe since February 1, 2005. Mr. Cespedes is also the President
of E&C Capital Ventures, Inc., the general partner of E&C Capital
Partners LLLP and an executive officer and director of Search.Travel, LLC,
Labigroup Holdings, LLC, The Registry Management Company, LLC and Tralliance
Registry Management Company, LLC. Mr. Cespedes served as the Vice Chairman of
Prime Ventures, LLC, from May 2000 to February 2002. From August 2000 to August
2001, Mr. Cespedes served as the President of the Dr. Koop Lifecare Corporation
and was a member of the Company’s Board of Directors from January 2001 to
December 2001. From 1996 to 2000, Mr. Cespedes was a Managing Director of
Dancing Bear Investments, Inc. Concurrent with his position at Dancing Bear
Investments, Inc., from 1998 to 2000, Mr. Cespedes also served as Vice President
for corporate development for theglobe where he had primary responsibility for
all mergers, acquisitions, and capital markets activities. In 1996, prior to
joining Dancing Bear Investments, Inc., Mr. Cespedes was the Director of
Corporate Finance for Alamo Rent-A-Car. From 1988 to 1996, Mr. Cespedes worked
in the Investment Banking Division of J.P. Morgan and Company, where he most
recently focused on mergers and acquisitions. In his capacity as a venture
capitalist, Mr. Cespedes has served as a member of the board of directors of
various portfolio companies. Mr. Cespedes is the founder of the Columbia
University Hamilton Associates, a foundation for university academic endowments.
In 1988 Mr. Cespedes received a Bachelor’s degree in International Relations
from Columbia University.





Robin S.
Lebowitz. Robin Lebowitz has served as a director of theglobe since December
2001, as Secretary of theglobe since June 1, 2002, and as Vice President of
Finance of theglobe since February 23, 2004. Ms. Lebowitz also served as
Treasurer of theglobe from June 1, 2002 until February 23, 2004 and as Chief
Financial Officer of theglobe from July 1, 2002 until February 23, 2004. Ms.
Lebowitz has worked in various capacities for the Company’s Chairman, Michael
Egan, for fifteen years. She is the Controller/Managing Director of Dancing Bear
Investments, Inc., Mr. Egan’s privately held investment management and holding
company, and is an executive officer of Search.Travel, LLC, Labigroup Holdings,
LLC, The Registry Management Company, LLC and Tralliance Registry Management
Company, LLC. Previously, Ms. Lebowitz served on the Board of Directors of
theglobe from August 1997 to October 1998. At Alamo Rent-A-Car, she served as
Financial Assistant to the Chairman (Mr. Egan). Prior to joining Alamo, Ms.
Lebowitz was the Corporate Tax Manager at Blockbuster Entertainment Group where
she worked from 1991 to 1994. From 1986 to 1989, Ms. Lebowitz worked in the
audit and tax departments of Arthur Andersen & Co. Ms. Lebowitz received a
Bachelor of Science in Economics from the Wharton School of the University of
Pennsylvania; a Masters in Business Administration from the University of Miami
and is a Certified Public Accountant.


17





INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS





Michael
Egan, theglobe.com’s Chairman and CEO, was Chairman of ANC Rental Corporation
from late 2000 until October 2003 and was Chief Executive Officer of ANC Rental
Corporation from late 2000 until April 4, 2002.  In November 2001, ANC
Rental Corporation filed voluntary petitions for relief under Chapter 11 or
Title 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware (Case No. 01-11200).





Edward
Cespedes, a director and the President, Treasurer and Chief Financial Officer of
theglobe.com, was also a director of Dr. Koop Lifecare Corporation from January
2001 to December 2001.  In December 2001, Dr. Koop Lifecare
Corporation filed petitions seeking relief under Chapter 7 of the United States
Bankruptcy Code.





COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT





Section
16(a) of the Securities and Exchange Act of 1934 requires our officers and
directors, and persons who own more than ten percent (10%) of a registered class
of our equity securities, to file certain reports regarding ownership of, and
transactions in, our securities with the SEC and with The NASDAQ Stock Market,
Inc. Such officers, directors, and 10% stockholders are also required to furnish
theglobe with copies of all Section 16(a) forms that they file.





Based
solely on our review of copies of Forms 3 and 4 and any amendments furnished to
us pursuant to Rule 16a-3(e) and any written representations referred to in Item
405(b)(2)(i) of Regulation S-K stating that no Forms 5 were required, we believe
that, during the 2009 fiscal year, our officers, directors and all persons
owning more than 10% of a registered class of our equity securities have
complied with all Section 16(a) applicable filing requirements.




CODE
OF ETHICS





The
Company has adopted a Code of Ethics applicable to its officers, including its
principal executive officer, principal financial officer, principal accounting
officer or controller and any other persons performing similar functions. The
Code of Ethics will be provided free of charge by the Company to interested
parties upon request. Requests should be made in writing and directed to the
Company at the following address: 110 East Broward Boulevard; Suite 1400; Fort
Lauderdale, Florida 33301.





BOARD
MEETINGS AND COMMITTEES OF THE BOARD





Including
unanimous written actions of the Board, the Board of Directors met 2 times in
2009. No incumbent director who was on the Board for the entire year attended
less than 75% of the total number of all meetings of the Board and any
committees of the Board on which he or she served, if any, during 2009.





The Board
of Directors has a standing Audit and Compensation Committee but no standing
Nominating Committee.





Audit Committee. The Audit
Committee, which was formed in July 1998, reviews, acts on and reports to the
Board of Directors with respect to various auditing and accounting matters,
including the selection of our independent auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of our auditors and our
accounting practices and internal controls. The Audit Committee operates
pursuant to a written charter, as amended, adopted by the Board of Directors on
June 12, 2000. The current members of the Audit Committee are Messrs. Egan and
Cespedes and Ms. Lebowitz, all of whom are employee directors. None of the
current committee members are considered “independent” within the meaning of
applicable NASD rules. Ms. Lebowitz serves as the “audit committee financial
expert” within the meaning of applicable SEC rules, but is not considered
“independent” within the meaning of applicable NASD rules. Including unanimous
written actions of the Committee, the Audit Committee held 6 meetings in
2009.





Compensation Committee. The
Compensation Committee establishes salaries, incentives and other forms of
compensation for officers and other employees of theglobe.  Insomuch
as the Company currently has no operations and its executive officers do not
receive a salary, the Compensation Committee did not meet in
2009.  The Compensation Committee (as well as the entire Board of
Directors) also approves option grants under all of our outstanding stock based
incentive plans. The current members of the Compensation Committee are Messrs.
Egan and Cespedes.





Nominating Committee. The
Board of Directors does not have a separate nominating committee. Rather, the
entire Board of Directors acts as nominating committee. Based on the Company’s
Board currently consisting only of employee directors, the Board of Directors
does not believe the Company would derive any significant benefit from a
separate nominating committee. Due primarily to their status as employees of the
Company, none of the members of the Board are “independent” as defined in the
NASD listing standards. The Company does not have a Nominating Committee
charter.





In
recommending director candidates in the future (including director candidates
recommended by stockholders), the Board intends to take into consideration such
factors as it deems appropriate based on the Company’s current needs. These
factors may include diversity, age, skills, decision-making ability,
inter-personal skills, experience with businesses and other organizations of
comparable size, community activities and relationships, and the
interrelationship between the candidate’s experience and business background,
and other Board members’ experience and business background, whether such
candidate would be considered “independent”, as such term is defined in the NASD
listing standards, as well as the candidate’s ability to devote the required
time and effort to serve on the Board.


18




The Board
will consider for nomination by the Board director candidates recommended by
stockholders if the stockholders comply with the following requirements. Under
our By-Laws, if a stockholder wishes to nominate a director at the Annual
Meeting, we must receive the stockholder’s written notice not less than 60 days
nor more than 90 days prior to the date of the annual meeting, unless we give
our stockholders less than 70 days’ notice of the date of our Annual Meeting. If
we provide less than 70 days’ notice, then we must receive the stockholder’s
written notice by the close of business on the 10th day after we provide notice
of the date of the Annual Meeting. The notice must contain the specific
information required in our By-Laws. A copy of our By-Laws may be obtained by
writing to the Corporate Secretary. If we receive a stockholder’s proposal
within the time periods required under our By-Laws, we may choose, but are not
required, to include it in our proxy statement. If we do, we may tell the other
stockholders what we think of the proposal, and how we intend to use our
discretionary authority to vote on the proposal. All proposals should be made in
writing and sent via registered, certified or express mail, to our executive
offices, 110 East Broward Boulevard, Suite 1400, Fort Lauderdale, Florida 33301,
Attention: Robin S. Lebowitz, Corporate Secretary.





Shareholder Communications with the
Board of Directors. Any shareholder who wishes to send communications to
the Board of Directors should mail them addressed to the intended recipient by
name or position in care of: Corporate Secretary, theglobe.com, inc., 110 East
Broward Boulevard, Suite 1400, Fort Lauderdale, Florida, 33301. Upon receipt of
any such communications, the Corporate Secretary will determine the identity of
the intended recipient and whether the communication is an appropriate
shareholder communication. The Corporate Secretary will send all appropriate
shareholder communications to the intended recipient. An "appropriate
shareholder communication" is a communication from a person claiming to be a
shareholder in the communication, the subject of which relates solely to the
sender’s interest as a shareholder and not to any other personal or business
interest.





In the
case of communications addressed to the Board of Directors, the Corporate
Secretary will send appropriate shareholder communications to the Chairman of
the Board. In the case of communications addressed to any particular directors,
the Corporate Secretary will send appropriate shareholder communications to such
director. In the case of communications addressed to a committee of the Board,
the Corporate Secretary will send appropriate shareholder communications to the
Chairman of such committee.





ATTENDANCE
AT ANNUAL MEETINGS





The Board
of Directors encourages, but does not require, its directors to attend the
Company’s annual meeting of stockholders. The Company did not hold an annual
meeting last year.





ITEM
11. EXECUTIVE COMPENSATION





OVERVIEW





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance” of the
accompanying Notes to Consolidated Financial Statements, on September 29, 2008
the Company sold its last remaining operating business,
Tralliance.  Commensurate with the sale of its Tralliance business on
September 29, 2008, the Company also entered into Termination Agreements with
each of its Named Executive Officers (each a “Termination
Agreement”).  Pursuant to the Termination Agreements, the Company’s
employment agreements with each of Michael S. Egan, Edward A. Cespedes and Robin
S. Lebowitz, the Company’s Chief Executive Officer, President and Vice President
of Finance, all dated August 1, 2003, respectively, were
terminated.  Notwithstanding the termination of these employment
agreements, each of Messrs Egan and Cespedes and Ms. Lebowitz remain in their
previous positions as officers and directors of the Company, however they now
receive no compensation from the Company.  Additionally, on September
29, 2008 the Company entered into a Master Services Agreement with Dancing Bear
Investments, Inc., an entity controlled by our Chairman Michael S. Egan, to
provide management resources and other services to the Company.





EMPLOYMENT
AGREEMENTS





On August
1, 2003, we entered into separate employment agreements with each of our named
executive officers, each of which was terminated on September 29, 2008. The
employment agreements with the Chief Executive Officer and President each
provided for an annual base salary of $250,000 with eligibility to receive
annual increases as determined in the sole discretion of the Board of Directors
and an annual cash bonus, which would be awarded upon the achievement of
specified pre-tax operating income, not to be less than $50,000 per year.
Effective October 1, 2007, these employment agreements were amended so as to
irrevocably terminate the Company’s obligation to pay guaranteed annual minimum
bonuses of $50,000 to these officers in the future. The employment agreement, as
amended, with the Vice President of Finance provided for an annual base salary
of $140,000 and a discretionary annual cash bonus, awarded at the discretion of
the Board of Directors.





Additionally,
each of the employment agreements with the named executive officers provided for
(i) employment as one of our executives; (ii) participation in all welfare,
benefit and incentive plans, including equity based compensation plans, offered
to senior management; and (iii) a term of employment which commenced on August
1, 2003 through the first anniversary thereof, and which automatically extends
for one day each day unless either the Company or the executive provides written
notice to the other not to further extend. Each of the employment agreements
also provided for payments to be made to the executive officers if they were
terminated “without cause” or if the executive terminated with “good reason,” or
in the event that the executive officer’s employment was terminated as a result
of disability or death, or in the event of a change in control of the
Company.


19




As
discussed earlier, the Company’s August 1, 2003 employment agreements (as
amended) with Messrs Egan and Cespedes and Ms. Lebowitz were terminated on
September 29, 2008.





SUMMARY
COMPENSATION TABLE





The
following table sets forth information concerning compensation for services in
all capacities awarded to, earned by or paid by us to those persons serving as
the principal executive officer and principal financial officer at any time
during the last calendar year and our other executive officer for the years
ended December 31, 2009 and 2008 (collectively, the "Named Executive
Officers"):




Name
      and Principal Position
                                        
                                        Year
                                        
                                        
                                        Salary
                                        
                                        
                                        Bonus
                                        
                                        
                                        Option
                                          Awards (2)
                                        
                                        
                                        All
      Other (3)
                                        
                                        
                                        TotalMichael
      S. Egan,
                                        
                                        2009
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —Chairman,
      Chief Executive Officer (4)
                                        
                                        2008
                                        (1)
                                        
                                        
                                        193,678
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        496
                                        
                                        
                                        
                                        194,174Edward
      A. Cespedes,
                                        
                                        2009
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —President,
      Treasurer and Chief
                                        
                                        2008
                                        (1)
                                        
                                        
                                        193,678
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        15,036
                                        
                                        
                                        
                                        208,713Financial
      Officer (5)Robin
      S. Lebowitz,
                                        
                                        2009
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —Former
      Chief Financial Officer;
                                        
                                        2008
                                        (1)
                                        
                                        
                                        108,459
                                        
                                        
                                        
                                        2,500
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        14,602
                                        
                                        
                                        
                                        125,561Vice
      President of Finance (6)





(1)
Reflects amounts awarded to, earned by or paid by us through September 29, 2008,
the termination date of the Employment Agreements with the Named Executive
Officers.





(2) No
stock options were granted to any of the Named Executive Officers during 2009 or
2008.





(3) Other
compensation includes the cost of life, disability and accidental death and
dismemberment insurance premiums paid on behalf of the Named Executive
Officers.  In the case of the President and Vice President of Finance
other compensation also includes the cost of medical and dental insurance
coverage for the named executive officer, their spouse and dependents, as
applicable.





(4) Mr.
Egan became an executive officer in July 1998.  We began paying Mr.
Egan a base salary in July 2003.  The amount reported in 2008 includes
$107,139 of accrued and unpaid salary.





(5)
Cespedes became President in June 2002 and Treasurer and Chief Financial Officer
in February 2005.





(6) Ms.
Lebowitz became an officer of the Company in June 2002 and Chief Financial
Officer in July 2002. In February 2004, Ms. Lebowitz resigned her position as
Chief Financial Officer and became Vice President of
Finance.


20





OUTSTANDING
EQUITY AWARDS AT FISCAL 2009 YEAR-END





Number
      of Securities
                                                                  Underlying
      Unexercised Options (1)
                                                                
                                                                Option
                                                                  Exercise
                                                                
                                                                Option
                                                                  ExpirationName
                                                                
                                                                Exercisable
      (#)
                                                                
                                                                Unexercisable
      (#)
                                                                
                                                                Price
      ($)
                                                                
                                                                DateMichael
      S. Egan
                                                                
                                                                
                                                                10,000
                                                                
                                                                —
                                                                
                                                                $
                                                                6.69
                                                                
                                                                2/17/20107,500
                                                                
                                                                —
                                                                
                                                                
                                                                .23
                                                                
                                                                6/27/20117,500
                                                                
                                                                —
                                                                
                                                                
                                                                .04
                                                                
                                                                6/21/20122,500,000
                                                                
                                                                —
                                                                
                                                                
                                                                .02
                                                                
                                                                8/13/20121,000,000
                                                                
                                                                —
                                                                
                                                                
                                                                .56
                                                                
                                                                5/22/20131,750,000
                                                                
                                                                —
                                                                
                                                                
                                                                .12
                                                                
                                                                4/7/2015Edward
      A. Cespedes
                                                                
                                                                
                                                                15,000
                                                                
                                                                —
                                                                
                                                                $
                                                                6.69
                                                                
                                                                2/17/201020,000
                                                                
                                                                —
                                                                
                                                                
                                                                2.50
                                                                
                                                                4/18/20107,500
                                                                
                                                                —
                                                                
                                                                
                                                                2.38
                                                                
                                                                6/8/20107,500
                                                                
                                                                —
                                                                
                                                                
                                                                .23
                                                                
                                                                6/27/20117,500
                                                                
                                                                —
                                                                
                                                                
                                                                .04
                                                                
                                                                6/21/20121,750,000
                                                                
                                                                —
                                                                
                                                                
                                                                .02
                                                                
                                                                8/13/2012550,000
                                                                
                                                                —
                                                                
                                                                
                                                                .56
                                                                
                                                                5/22/20131,750,000
                                                                
                                                                —
                                                                
                                                                
                                                                .12
                                                                
                                                                4/7/2015Robin
      S. Lebowitz
                                                                
                                                                
                                                                1,580
                                                                
                                                                —
                                                                
                                                                $
                                                                1.59
                                                                
                                                                5/31/201025,000
                                                                
                                                                —
                                                                
                                                                
                                                                0.05
                                                                
                                                                12/14/20117,500
                                                                
                                                                —
                                                                
                                                                
                                                                0.04
                                                                
                                                                6/21/2012500,000
                                                                
                                                                —
                                                                
                                                                
                                                                0.02
                                                                
                                                                8/13/2012100,000
                                                                
                                                                —
                                                                
                                                                
                                                                0.56
                                                                
                                                                5/22/2013400,000
                                                                
                                                                —
                                                                
                                                                
                                                                0.12
                                                                
                                                                4/7/2015100,000
                                                                
                                                                —
                                                                
                                                                
                                                                0.14
                                                                
                                                                8/16/2016




(1) All
stock option awards included in the above table are fully vested. None of the
Named Executive Officers exercised any stock options during the year ended
December 31, 2009.





COMPENSATION
OF DIRECTORS





Directors
who are also our employees receive no compensation for serving on our Board or
committees. We reimburse non-employee directors for all travel and other
expenses incurred in connection with attending Board and committee meetings.
Non-employee directors are also eligible to receive automatic stock option
grants under our 1998 Stock Option Plan, as amended and restated. As of December
31, 2009 there were no directors who met this definition.





Each
director who becomes an eligible non-employee director for the first time
receives an initial grant of options to acquire 25,000 shares of our Common
Stock. In addition, each eligible non-employee director will receive an annual
grant of options to acquire 7,500 shares of our Common Stock on the first
business day following each annual meeting of stockholders that occurs while the
1998 Stock Option Plan or 2000 Stock Option Plan is in effect. These stock
options will be granted with per share exercise prices equal to the fair market
value of our common stock as of the date of grant.




ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS





The
following table sets forth certain information regarding beneficial ownership of
our Common Stock as of March 10, 2010 (except as otherwise indicated) by (i)
each person who owns beneficially more than 5% of our Common Stock, (ii) each of
our directors, (iii) each of our "Named Executive Officers" and (iv) all
directors and executive officers as a group. A total of 441,484,838 shares of
theglobe’s Common Stock were issued and outstanding on March 10,
2010.





The
amounts and percentage of common stock beneficially owned are reported on the
basis of regulations of the Securities and Exchange Commission ("SEC") governing
the determination of beneficial ownership of securities. Under the rules of the
SEC, a person is deemed to be a "beneficial owner" of a security if that person
has or shares "voting power," which includes the power to vote or to direct the
voting of such security, or "investment power," which includes the power to
dispose of or to direct the disposition of such security. A person is also
deemed to be a beneficial owner of any securities of which that person has a
right to acquire beneficial ownership within 60 days. Under these rules, more
than one person may be deemed a beneficial owner of the same securities and a
person may be deemed to be a beneficial owner of securities as to which such
person has no economic interest. Unless otherwise indicated below, the address
of each person named in the table below is in care of theglobe.com, inc., P.O.
Box 029006, Fort Lauderdale, Florida 33302.


21




SHARES
      BENEFICIALLY OWNEDDIRECTORS,
      NAMED EXECUTIVE OFFICERS AND 5%
                              STOCKHOLDERS
                            
                            NUMBER
                            
                            PERCENT
                            
                            
                            TITLE
                              OFCLASSDancing
      Bear Investments, Inc. (1)
                            
                            
                            48,303,148
                            
                            10.9
                            %
                            
                            CommonMichael
      S. Egan (1)(2)(6)(7)(8)(9)
                            
                            
                            345,164,952
                            
                            76.4
                            %
                            
                            CommonEdward
      A. Cespedes (3)
                            
                            
                            4,092,500
                            
                            *
                            
                            
                            CommonRobin
      S. Lebowitz (4)
                            
                            
                            1,134,080
                            
                            *
                            
                            
                            CommonCarl
      Ruderman (5)
                            
                            
                            5,000,000
                            
                            1.1
                            %
                            
                            CommonE&C
      Capital Partners, LLLP (6)(8)
                            
                            
                            43,469,012
                            
                            9.7
                            %
                            
                            CommonE&C
      Capital Partners II, LLLP(7)
                            
                            
                            6,000,000
                            
                            1.4
                            %
                            
                            CommonThe
      Registry Management Company, LLC (9)
                            
                            
                            229,000,000
                            
                            51.9
                            %
                            
                            CommonAll
      directors and executive officersas
      a group (3 persons)
                            
                            
                            350,391,532
                            
                            76.7
                            %
                            
                            Common







* less
than 1%





(1) Mr.
Egan owns Dancing Bear Investments, Inc.





(2)
Includes the shares that Mr. Egan is deemed to beneficially own as the
controlling investor of Dancing Bear Investments, Inc., E&C Capital
Partners, LLLP, and E&C Capital Partners II, LLLP and as the Trustee of the
Michael S. Egan Grantor Retained Annuity Trusts for the benefit of his children.
Also includes (i) 5,265,000 shares of our Common Stock issuable upon exercise of
options that are currently exercisable; and (ii) 3,541,337 shares of our Common
Stock held by Mr. Egan's wife, as to which he disclaims beneficial
ownership.





(3)
Consists of 4,092,500 shares of our Common Stock issuable upon exercise of
options that are currently exercisable.





(4)
Consists of 1,134,080 shares of our Common Stock issuable upon exercise of
options that are currently exercisable.





(5)
Consists of 5,000,000 shares of Common Stock issuable upon the exercise of
warrants at $0.15 per share.





(6)
E&C Capital Partners, LLLP is a privately held investment vehicle controlled
by our Chairman, Michael S. Egan. Our President, Edward A. Cespedes, has a
minority, non-controlling interest in E&C Capital Partners,
LLLP.  Includes 5,000,000 shares of Common Stock if and to the extent
issued upon exercise of the warrants described in footnote (5) over which
E&C holds an irrevocable proxy pursuant to the Stockholders’ Agreement
described in footnote (8) below.





(7)
E&C Capital Partners II, LLLP is a privately held investment vehicle
controlled by our Chairman, Michael S. Egan.





(8) In connection with
certain Marketing Services Agreements entered with Universal Media of Miami,
Inc. and Trans Digital Media, LLC on November 22, 2006, the Company entered into
a warrant purchase agreement with Carl Ruderman, the controlling shareholder of
such entities. In connection with the issuance of the warrants, Mr. Ruderman
entered into a Stockholders’ Agreement with our Chairman and Chief Executive
Officer, Michael S. Egan, our President, Edward A. Cespedes, and certain of
their affiliates. Pursuant to the Stockholders’ Agreement, Mr. Ruderman granted
an irrevocable proxy over the shares issuable upon exercise of the warrants to
E&C Capital Partners, LLLP and granted a right of first refusal over his
shares to all of the other parties to the Stockholders’ Agreement. Mr. Ruderman
also agreed to sell his shares under certain circumstances in which the other
parties to the Stockholders’ Agreement have agreed to sell their respective
shares. Mr. Ruderman was granted the right to participate in certain sales of
the Company’s Common Stock by the other parties to the Stockholders’ Agreement.
The amount set forth in the table includes 5,000,000 shares of Common Stock if
and to the extent issued upon exercise of the warrants described in footnote (5)
over which E&C holds such irrevocable proxy.


22





(9)  The
Registry Management Company, LLC is a privately held investment vehicle
controlled by our Chairman, Michael S. Egan.  Our President, Edward A.
Cespedes and our Vice President of Finance, Robin S. Lebowitz, have minority,
non-controlling interests in The Registry Management Company, LLC.





ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE





Transactions with Related
Persons





Certain
directors of the Company also serve as officers and directors of and own
controlling interests in Dancing Bear Investments, Inc., E&C Capital
Partners LLLP, E&C Capital Partners II, LLLP, The Registry Management
Company, LLC, Tralliance Registry Management Company, LLC, Labigroup Holdings,
LLC and Search.Travel LLC.  Dancing Bear Investments, Inc., E&C
Capital Partners, LLLP and E&C Capital Partners II, LLLP are stockholders of
the Company and are entities controlled by our Chairman.





As more
fully discussed in Note 3, “Sale of Tralliance and Share Issuance,” in the
accompanying Notes to Consolidated Financial Statements on September 29, 2008,
the Company closed upon a definitive agreement whereby it (i) sold the business
and substantially all of the assets of its Tralliance Corporation subsidiary to
Tralliance Registry Management Company LLC (“Tralliance Registry Management”)
and (ii) issued 229,000,000 shares of its Common Stock (the “Shares”) to The
Registry Management Company, LLC (“Registry Management”) (the “Purchase
Transaction”).  Tralliance Registry Management and Registry Management
are entities directly or indirectly controlled by Michael S. Egan, our Chairman
and Chief Executive Officer and principal stockholder, and each of our two
remaining executive officers and Board members, Edward A. Cespedes, our
President, and Robin Segaul Lebowitz, our Vice President of Finance, own a
minority interest in Registry Management.  After giving effect to the
closing of the Purchase Transaction and the issuance of the Shares thereunder,
Mr. Egan beneficially owns approximately 76% of the Company’s Common Stock at
December 31, 2009.





In
connection with the Purchase Transaction, the Company received (i) consideration
totaling approximately $6,409,800 and consisting of the surrender to theglobe
and satisfaction of secured demand convertible promissory notes issued by
theglobe and held by Registry Management in the aggregate principal amount of
$4,250,000, together with all accrued and unpaid interest of approximately
$1,290,300 through the date of closing of the Purchase Transaction and
satisfaction of approximately $869,500 in outstanding rent and miscellaneous
fees due and unpaid to the Registry Management through the date of closing of
the Purchase Transaction, and (ii) an earn-out equal to 10% (subject to certain
minimums) of Tralliance Registry Management’s “net revenue” (as defined) derived
from “.travel” names registered by Tralliance Registry Management from September
29, 2008 through May 5, 2015 (the “Earn-out”).  The minimum Earn-out
payable by Tralliance Registry Management to theglobe was $300,000 in the first
year of the Earn-out Agreement, and will increase by $25,000 in each subsequent
year (pro-rated for the final year of the Earn-out).  During January
2009, the Company received its initial minimum Earn-out installment payment in
the amount of $75,000 from Tralliance Registry Management.





Commensurate
with the closing of the Purchase Transaction, on September 29, 2008, the Company
also entered into Termination Agreements with each of its executive officers
(each a “Termination Agreement”).  Pursuant to the Termination
Agreements, the Company’s employment agreements with each of Michael S. Egan,
Edward A. Cespedes and Robin Segaul Lebowitz, the Chief Executive Officer,
President and Vice President of Finance, all dated August 1, 2003, respectively,
were terminated.  Notwithstanding the termination of these employment
agreements, each of Messrs. Egan, Cespedes and Ms. Lebowitz remains as an
officer and director of the Company.





In
connection with the closing of the Purchase Transaction, the Company also
entered into a Master Services Agreement (“Services Agreement”) with Dancing
Bear Investments, Inc. (“Dancing Bear”), an entity which is controlled by Mr.
Egan.  Under the terms of the Services Agreement, for a fee of $20,000
per month ($240,000 per annum), Dancing Bear will provide personnel and services
to the Company so as to enable it to continue its existence as a public company
without the necessity of any full-time employees of its own.  The
Services Agreement had an initial term of one year and was renewed for an second
one year term during 2009.  Services under the Services Agreement
include, without limitation, accounting, assistance with financial reporting,
accounts payable, treasury/financial planning, record retention and secretarial
and investor relations functions.  A total of $160,667 and $20,000
related to the Services Agreement was paid by the Company to Dancing Bear in
2009 and 2008, respectively.  A balance of $120,000 related to the
Services Agreement is owed by the Company to Dancing Bear and is accrued on our
Balance Sheet at December 31, 2009.





As more
fully discussed in Note 6, “Debt” in the accompanying Notes to Consolidated
Financial Statements, on June 6, 2008, the Company and its subsidiaries, as
guarantors, entered into a Revolving Loan Agreement with Dancing Bear, pursuant
to which Dancing Bear may loan up to $500,000 to the Company on a revolving
basis (the “Credit Line”).  In connection with its entry into the
Credit Line, the Company borrowed $100,000 under the Credit
Line.  Subsequently, during the remainder of 2008, the Company made
additional borrowings totaling $400,000 under the Credit Line.  In
accordance with the terms of a Note Modification Agreement entered into on May
7, 2009, all borrowings under the Credit Line, including interest on borrowed
funds at the rate of 10% per annum, are due and payable upon demand by Dancing
Bear, or sooner upon the occurrence of an event of default under the loan
documentation.  All amounts outstanding from time to time under the
Credit Line are secured by a lien on all of the assets of the Company and its
subsidiaries.  A total of $50,000 and $23,233 related to the Credit
Line was recorded as Related Party Interest Expense during 2009 and 2008,
respectively, and a balance of $73,233 in accrued interest is included on our
Balance Sheet at December 31, 2009.


23





Also, as
more fully described in Note 6, “Debt,” on June 10, 2008 Dancing Bear converted
an aggregate of $400,000 of outstanding 2007 Convertible Notes due to them by
the Company into an aggregate of 40,000,000 shares of the Company’s Common
Stock.





Total
Related Party Interest Expense related to 2007 and 2005 Convertible Notes, prior
to their surrender and cancellation on September 29, 2008 as part of the
consideration for the Purchase Transaction, of 335,521, was recognized during
2008.





On
December 20, 2007, Tralliance entered into a Bulk Registration Co-Marketing
Agreement (the “Co-Marketing Agreement”) with Labigroup Holdings, LLC
(“Labigroup”), under Tralliance’s bulk purchase program. Labigroup is a private
entity controlled by the Company’s Chairman and our remaining directors own a
minority interest in Labigroup. Under the Co-Marketing Agreement, Labigroup
committed to purchase a predetermined minimum number of “.travel” domain names
on a bulk basis from an accredited “.travel” registrar of its own choosing and
to establish a predetermined minimum number of related “.travel” websites. As
consideration for the “.travel” domain names to be purchased under the
Co-Marketing Agreement, Labigroup agreed to pay certain fixed fees and make
certain other payments including, but not limited to, an ongoing royalty
calculated as a percentage share of its net revenue, as defined in the
Co-Marketing Agreement (the “Labigroup Royalties”), to
Tralliance.  During the year ended December 31, 2008, Labigroup
registered a total of 10,595 “.travel” domain names and paid a total of $454,430
in fees and costs to Tralliance under the Co-Marketing
Agreement.  Such amounts, which are equal to the amount of incremental
fees and costs incurred by Tralliance in registering these bulk purchase names,
have been treated as a reimbursement of these incremental fees and costs in the
Company’s financial statements.   As part of the sale of its
Tralliance business on September 29, 2008, all of the Company’s rights and
obligations under the Co-Marketing Agreement were assigned to Tralliance
Registry Management.





Several
entities controlled by the Company’s Chairman and Chief Executive Officer (the
“Related Entities”) have provided services to the Company, including: the lease
of office space; and the outsourcing of customer services, human resources and
payroll processing functions. During the year ended December 31, 2008,
approximately $354,000 of expense related to these services was
recorded.





An entity
owned solely by the sister of the Company’s President, Treasurer and Chief
Financial Officer and Director provided certain administrative services to the
Company.  During the year ended December 31, 2008, $33,350 of expense
related to these services was recorded.





Director
Independence. None of the current members of the Company’s Board of
Directors are considered “independent” within the meaning of applicable NASD
rules





ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES





Audit Fees. The
aggregate fees billed by MarcumRachlin, a division of Marcum LLP (“Rachlin”),
independent public accountants, for professional services rendered for the audit
of our annual financial statements during 2009 and 2008 and the reviews of the
financial statements included in our Forms 10-Q and 10-K, as appropriate, were
$48,217 and $83,856, respectively.





Audit-Related Fees.
During the last two fiscal years, Rachlin provided the Company with the
following services that are reasonably related to the performance of the audit
of our financial statements:





Aggregate
fees billed during 2008 for assurance and related services related to the filing
of an Information Statement in connection with the Tralliance Asset Sale and
Share Issuance were $28,963.  No such audit-related fees were incurred
during 2009.





Other
services relating to research of various accounting pronouncements and technical
issues were $180 for 2009 and $170 for 2008.





Tax Fees. The
aggregate fees billed for tax services provided by Rachlin in connection with
tax compliance, tax consulting and tax planning services during 2009 and 2008,
were $33,294 and $67,751, respectively.





All Other Fees.
Except as described above, the Company had no other fees for services provided
by Rachlin during 2009 and 2008.





Pre-Approval of Services by
the External Auditor. In April 2004, the Audit Committee adopted a policy
for pre-approval of audit and permitted non-audit services by the Company’s
external auditor. The Audit Committee will consider annually and, if
appropriate, approve the provision of audit services by its external auditor and
consider and, if appropriate, pre-approve the provision of certain defined audit
and non-audit services. The Audit Committee will also consider on a case-by-case
basis and, if appropriate, approve specific engagements that are not otherwise
pre-approved. The Audit Committee pre-approved the audit related engagements and
tax services billed by the amounts described above.


24


PART
IV





ITEM 15. EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES




(a).
              
              List
      of all documents filed as part of this report.(1)
              
              Financial
      statements are listed in the index to the consolidated financial
      statements on page F-1 of this Report.(2)
              
              No
      financial statement schedules are included because they are not applicable
      or are not required or the information required to be set forth therein is
      included in the consolidated financial statements or notes
      thereto.(3)
              
              Exhibit
      Index3.1
              
              Form
      of Fourth Amended and Restated Certificate of Incorporation of the Company
      (3).3.2
              
              Certificate
      of Amendment to Fourth Amended and Restated Certificate of Incorporation
      (13).3.3
              
              Certificate
      of Amendment to Fourth Amended and Restated Certificate of Incorporation
      filed with the Secretary of State of Delaware on July 29, 2003
      (13).3.4
              
              Certificate
      relating to Previously Outstanding Series of Preferred Stock and Relating
      to the Designation, Preferences and Rights of the Series F Preferred Stock
      (10).3.5
              
              Certificate
      of Amendment Relating to the Designation Preferences and Rights of the
      Junior Participating Preferred Stock (11).3.6
              
              Form
      of By-Laws of the Company (13).3.7
              
              Certificate
      of Amendment Relating to the Designation Preferences and Rights of the
      Series H Automatically Converting Preferred Stock (12).3.8
              
              Certificate
      of Amendment to Fourth Amended and Restated Certificate of Incorporation
      filed with the Secretary of State of Delaware on December 1, 2004
      (15).4.1
              
              Specimen
      certificate representing shares of Common Stock of the Company
      (4).4.2
              
              Amended
      and Restated Warrant to Acquire Shares of Common Stock
  (2).4.3
              
              Form
      of Rights Agreement, by and between the Company and American Stock
      Transfer & Trust Company as Rights Agent (3).4.4
              
              Form
      of Warrant dated November 12, 2002 to acquire shares of Common Stock
      (7).4.5
              
              Form
      of Warrant dated May 28, 2003 to acquire an aggregate of 500,000 shares of
      theglobe.com Common Stock (8).4.6
              
              Warrant
      to Acquire 5,000,000 shares of theglobe.com, inc. dated as of November 22,
      2006 to Carl Ruderman (17).*10.1
              
              Form of Indemnification Agreement
      between the Company and each of its Directors and Executive Officers
      (1).10.2
              
              2000 Broad Based Stock Option
      Plan (6).**10.3
              
              1998 Stock Option Plan, as
      amended (5).**10.4
              
              1995 Stock Option Plan
      (1).**10.5
              
              Amended & Restated
      Non-Qualified Stock Option Agreement effective as of August 12, 2002
      between theglobe.com, inc. and Michael S. Egan (9).**10.6
              
              Amended & Restated
      Non-Qualified Stock Option Agreement effective as of August 12, 2002
      between theglobe.com, inc. and Edward A. Cespedes (9).**10.7
              
              Amended & Restated
      Non-Qualified Stock Option Agreement effective as of August 12, 2002
      between theglobe.com, inc. and Robin Segaul Lebowitz (9).**


25





10.8
              
              2003 Amended and Restated
      Non-Qualified Stock Option Plan (16).**10.9
              
              theglobe.com 2004 Amended and
      Restated Stock Option Plan (14).10.10
              
              Warrant Purchase Agreement dated
      as of November 22, 2006 by and between theglobe.com, inc. and Carl
      Ruderman (17).*10.11
              
              Stockholders’ Agreement dated as
      of November 22, 2006 by and among theglobe.com, inc., Michael S. Egan,
      Edward A. Cespedes, E&C Capital Partners, LLLP, E&C Capital
      Partners II, Ltd., Dancing Bear Investments, Inc. and Carl Ruderman
      (17).10.12
              
              Revolving Loan Agreement dated as
      of June 6, 2008 by and between theglobe.com, inc. and Dancing Bear
      Investments, Inc. (18).10.13
              
              $500,000 Promissory Note dated
      June 6, 2008 (18).10.14
              
              Unconditional Guaranty Agreement
      dated June 6, 2008 (18).10.15
              
              Security Agreement dated June 6,
      2008 (18).10.16
              
              Purchase Agreement dated as of
      June 10, 2008 by and between theglobe.com, inc., Tralliance Corporation
      and The Registry Management Company, LLC (19).10.17
              
              Earn-out Agreement dated
      September 29, 2008 by and between theglobe.com. inc. and Tralliance
      Registry Management Company, LLC (20).10.18
              
              Management Services Agreement
      dated September 29, 2008 with Dancing Bear Investments, Inc. (20).10.19
              
              Termination Agreement dated
      September 29, 2008 with Michael S. Egan (20).10.20
              
              Termination Agreement dated
      September 29, 2008 with Edward A. Cespedes (20).10.21
              
              Termination Agreement dated
      September 29, 2008 with Robin Segaul-Lebowitz (20).10.22
              
              Note
      Modification Agreement dated as of May 7, 2009 between Dancing Bear
      Investments, Inc. and theglobe.com, inc. (21)21.
              
              Subsidiaries31.1
              
              Certification of the Chief
      Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).31.2
              
              Certification of the Chief
      Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).32.1
              
              Certification of the Chief
      Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of 2002.32.2
              
              Certification of the Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of 2002.




EXHIBIT
INDEX


NO.
ITEM




1.
Incorporated by reference from our registration statement on Form S-1 filed July
24, 1998 (Registration No. 333-59751).





2.
Incorporated by reference from our Form S-1/A filed August 20,
1998.





3.
Incorporated by reference from our Form S-1/A filed September 15,
1998.





4.
Incorporated by reference from our Form S-1/A filed October 14,
1998.


26





5.
Incorporated by reference from our Form S-1 filed April 13, 1999.





6.
Incorporated by reference from our Form 10-Q for the quarter ended March 31,
2000 dated May 15, 2000.





7.
Incorporated by reference from our Form 8-K filed on November 26,
2002.





8.
Incorporated by reference from our Form 8-K filed on June 6, 2003.





9.
Incorporated by reference from our Form 10-QSB filed on November 14,
2003.





10.
Incorporated by reference from our Form 10-K filed on March 31,
2003.





11.
Incorporated by reference from our Registration Statement on Form SB-2 filed on
April 16, 2004 (Registration No. 333-114556).





12.
Incorporated by reference from our Form 8-K filed September 7,
2004.




13.
Incorporated by reference from our Form SB-2 filed April 16, 2004.





14.
Incorporated by reference from our S-8 filed October 13, 2004.





15.
Incorporated by reference from our Form 8-K filed on December 2,
2004.





16.
Incorporated by reference from our Form S-8 filed January 22, 2004.





17.
Incorporated by reference from our Form 10-K filed on March 30,
2007.





18.
Incorporated by reference from our Form 8-K filed on June 11, 2008.





19.
Incorporated by reference from our Form 8-Kfiled on June 13, 2008.





20.
Incorporated by reference from our Form 8-K filed on October 3,
2008.





21.
Incorporated by reference from our Form 10-Q filed on May 8, 2009.





*
Confidential portions of this exhibit have been omitted and filed separately
with the Commission pursuant to a request for confidential
treatment.




**
Management contract or compensatory plan or arrangement.




27




SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




theglobe.com,
      inc.Dated:
      March 26, 2010
              By:
              /s/ 
      Michael S.
      EganMichael
      S. EganChief
      Executive Officer
                (Principal
      Executive Officer)





By:
                /s/ 
      Edward A.
      CespedesEdward
      A. CespedesPresident,
      Chief Financial Officer
                  (Principal
      Financial Officer)




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the Registrant in the capacities
and on the dates indicated.




/s/
      Michael S. Egan
                    
                    March 26,
      2010Michael
      S. EganChairman,
      Director/s/
      Edward A. Cespedes
                    
                    March 26,
      2010Edward
      A. CespedesDirector/s/
      Robin Lebowitz
                    
                    March 26,  2010Robin
      LebowitzDirector




28




EXHIBIT
INDEX





NO.
ITEM


3.1
                
                Form
      of Fourth Amended and Restated Certificate of Incorporation of the Company
      (3).3.2
                
                Certificate
      of Amendment to Fourth Amended and Restated Certificate of Incorporation
      (13).3.3
                
                Certificate
      of Amendment to Fourth Amended and Restated Certificate of Incorporation
      filed with the Secretary of State of Delaware on July 29, 2003
      (13).3.4
                
                Certificate
      relating to Previously Outstanding Series of Preferred Stock and Relating
      to the Designation, Preferences and Rights of the Series F Preferred Stock
      (10).3.5
                
                Certificate
      of Amendment Relating to the Designation Preferences and Rights of the
      Junior Participating Preferred Stock (11).3.6
                
                Form
      of By-Laws of the Company (13).3.7
                
                Certificate
      of Amendment Relating to the Designation Preferences and Rights of the
      Series H Automatically Converting Preferred Stock (12).3.8
                
                Certificate
      of Amendment to Fourth Amended and Restated Certificate of Incorporation
      filed with the Secretary of State of Delaware on December 1, 2004
      (15).4.1
                
                Specimen
      certificate representing shares of Common Stock of the Company
      (4).4.2
                
                Amended
      and Restated Warrant to Acquire Shares of Common Stock
  (2).4.3
                
                Form
      of Rights Agreement, by and between the Company and American Stock
      Transfer & Trust Company as Rights Agent (3).4.4
                
                Form
      of Warrant dated November 12, 2002 to acquire shares of Common Stock
      (7).4.5
                
                Form
      of Warrant dated May 28, 2003 to acquire an aggregate of 500,000 shares of
      theglobe.com Common Stock (8).4.6
                
                Warrant
      to Acquire 5,000,000 shares of theglobe.com, inc. dated as of November 22,
      2006 to Carl Ruderman (17).*10.1
                
                Form of Indemnification Agreement
      between the Company and each of its Directors and Executive Officers
      (1).10.2
                
                2000 Broad Based Stock Option
      Plan (6).**10.3
                
                1998 Stock Option Plan, as
      amended (5).**10.4
                
                1995 Stock Option Plan
      (1).**10.5
                
                Amended & Restated
      Non-Qualified Stock Option Agreement effective as of August 12, 2002
      between theglobe.com, inc. and Michael S. Egan (9).**10.6
                
                Amended & Restated
      Non-Qualified Stock Option Agreement effective as of August 12, 2002
      between theglobe.com, inc. and Edward A. Cespedes (9).**10.7
                
                Amended & Restated
      Non-Qualified Stock Option Agreement effective as of August 12, 2002
      between theglobe.com, inc. and Robin Segaul Lebowitz (9).**10.8
                
                2003 Amended and Restated
      Non-Qualified Stock Option Plan (16).**10.9
                
                theglobe.com 2004 Amended and
      Restated Stock Option Plan (14).10.10
                
                Warrant Purchase Agreement dated
      as of November 22, 2006 by and between theglobe.com, inc. and Carl
      Ruderman (17).*10.11
                
                Stockholders’ Agreement dated as
      of November 22, 2006 by and among theglobe.com, inc., Michael S. Egan,
      Edward A. Cespedes, E&C Capital Partners, LLLP, E&C Capital
      Partners II, Ltd., Dancing Bear Investments, Inc. and Carl Ruderman
      (17).


29


10.12
                    
                    Revolving Loan Agreement dated as
      of June 6, 2008 by and between theglobe.com, inc. and Dancing Bear
      Investments, Inc. (18).10.13
                    
                    $500,000 Promissory Note dated
      June 6, 2008 (18).10.14
                    
                    Unconditional Guaranty Agreement
      dated June 6, 2008 (18).10.15
                    
                    Security Agreement dated June 6,
      2008 (18).10.16
                    
                    Purchase Agreement dated as of
      June 10, 2008 by and between theglobe.com, inc., Tralliance Corporation
      and The Registry Management Company, LLC (19).10.17
                    
                    Earn-out Agreement dated
      September 29, 2008 by and between theglobe.com. inc. and Tralliance
      Registry Management Company, LLC (20).10.18
                    
                    Management Services Agreement
      dated September 29, 2008 with Dancing Bear Investments, Inc. (20).10.19
                    
                    Termination Agreement dated
      September 29, 2008 with Michael S. Egan (20).10.20
                    
                    Termination Agreement dated
      September 29, 2008 with Edward A. Cespedes (20).10.21
                    
                    Termination Agreement dated
      September 29, 2008 with Robin Segaul-Lebowitz (20).10.22
                    
                    Note
      Modification Agreement dated as of May 7, 2009 between Dancing Bear
      Investments, Inc. and theglobe.com, inc. (21)21.
                    
                    Subsidiaries31.1
                    
                    Certification of the Chief
      Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).31.2
                    
                    Certification of the Chief
      Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).32.1
                    
                    Certification of the Chief
      Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of 2002.32.2
                    
                    Certification of the Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
      to Section 906 of The Sarbanes-Oxley Act of 2002.





EXHIBIT
INDEX


NO.
ITEM




1.
Incorporated by reference from our registration statement on Form S-1 filed July
24, 1998 (Registration No. 333-59751).





2.
Incorporated by reference from our Form S-1/A filed August 20,
1998.





3.
Incorporated by reference from our Form S-1/A filed September 15,
1998.





4.
Incorporated by reference from our Form S-1/A filed October 14,
1998.





5.
Incorporated by reference from our Form S-1 filed April 13, 1999.





6.
Incorporated by reference from our Form 10-Q for the quarter ended March 31,
2000 dated May 15, 2000.





7.
Incorporated by reference from our Form 8-K filed on November 26,
2002.





8.
Incorporated by reference from our Form 8-K filed on June 6,
2003.


30





9.
Incorporated by reference from our Form 10-QSB filed on November 14,
2003.





10.
Incorporated by reference from our Form 10-K filed on March 31,
2003.





11.
Incorporated by reference from our Registration Statement on Form SB-2 filed on
April 16, 2004 (Registration No. 333-114556).





12.
Incorporated by reference from our Form 8-K filed September 7,
2004.




13.
Incorporated by reference from our Form SB-2 filed April 16, 2004.





14.
Incorporated by reference from our S-8 filed October 13, 2004.





15.
Incorporated by reference from our Form 8-K filed on December 2,
2004.





16.
Incorporated by reference from our Form S-8 filed January 22, 2004.





17.
Incorporated by reference from our Form 10-K filed on March 30,
2007.





18.
Incorporated by reference from our Form 8-K filed on June 11, 2008.





19.
Incorporated by reference from our Form 8-Kfiled on June 13, 2008.





20.
Incorporated by reference from our Form 8-K filed on October 3,
2008.





21.
Incorporated by reference from our Form 10-Q filed on May 8, 2009.





*
Confidential portions of this exhibit have been omitted and filed separately
with the Commission pursuant to a request for confidential
treatment.




**
Management contract or compensatory plan or arrangement.




31