UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 10-Q

 

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

 

For the quarterly period ended September 30, 2020 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 NUMBER: 0-25053

 

THEGLOBE.COM, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

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

 

5949 SHERRY LANE, SUITE 950, DALLAS, TX 75225

c/o Toombs Hall and Foster

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES 

 

(214) 369-5695

(Registrant’s telephone number, including area code) 

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

Title of each class Trading Symbol(s) Name of each exchange on which
registered
Common Stock, par value $.001 per share tglo None

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

 

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes ¨ No x

 

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

 

¨ Large accelerated filer ¨ Accelerated filer
x Non-accelerated filer x Smaller reporting company
¨ Emerging growth company  

 

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

 

The number of shares outstanding of the Registrant’s Common Stock, $.001 par value (the “Common Stock”) as of October 30, 2020 was 441,480,473.

 

 

 

 

 

 

THEGLOBE.COM, INC.

FORM 10-Q

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION 2
   
ITEM 1. FINANCIAL STATEMENTS 2
  CONDENSED BALANCE SHEETS AT SEPTEMBER 30, 2020 (UNAUDITED) AND DECEMBER 31, 2019 2
  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 3
  UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 4
  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 5
  NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS 6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 10
ITEM 4. CONTROLS AND PROCEDURES 11
     
PART II - OTHER INFORMATION 11
     
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. MINE SAFETY DISCLOSURES 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS 12
     
SIGNATURES   13

 

 

 

 

PART I - FINANCIAL INFORMATION

 

  ITEM 1.

CONDENSED FINANCIAL

STATEMENTS

 

THEGLOBE.COM, INC.

 

CONDENSED BALANCE SHEETS

 

    SEPTEMBER 30,
2020
(Unaudited)
    DECEMBER 31,
2019
 
ASSETS                
Current Assets:                
Cash   $ 27,526     $ 86,961  
Total current assets   $ 27,526     $ 86,961  
LIABILITIES AND  STOCKHOLDERS’  DEFICIT                
Current Liabilities:                
Accounts payable   $     $ 9,078  
Accrued expenses and other current liabilities     25,550       24,000  
Accrued interest due to related party     76,803       43,224  
Notes payable due to related party     600,000       554,100  
Total current liabilities     702,353       630,402  
                 
Stockholders’ Deficit:                
Common stock, $0.001 par value; 500,000,000 shares authorized; 441,480,473 shares issued at September 30, 2020 and December 31, 2019     441,480       441,480  
Preferred stock, $0.001 par value; 3,000,000 shares authorized; 0 shares issued at September 30, 2020 and December 31, 2019            
Additional paid in capital     296,594,042       296,594,042  
Accumulated deficit     (297,710,349 )     (297,578,963 )
Total stockholders’ deficit     (674,827 )     (543,441 )
Total liabilities and stockholders’ deficit   $ 27,526     $ 86,961  

 

See notes to unaudited condensed financial statements

 

2 

 

 

THEGLOBE.COM, INC.

 

CONDENSED STATEMENTS OF OPERATIONS

 

    Three Months Ended Sept 30,     Nine Months Ended Sept 30,  
    2020     2019     2020     2019  
    (UNAUDITED)     (UNAUDITED)  
Net Revenue   $     $     $     $  
                                 
Operating Expenses:                                
General and administrative     30,517       53,996       97,808       151,099  
Operating Loss     (30,517 )     (53,996 )     (97,808 )     (151,099 )
                                 
Other (Income)/Loss:                                
Other Misc Income           (335 )           (335 )
Related party interest expense     11,475       9,376       33,578       23,804  
                                 
Loss from Operations Before Income Tax     (41,992 )     (63,037 )     (131,386 )     (174,568 )
                                 
Income Tax Provision                        
Loss from Operations     (41,992 )     (63,037 )     (131,386 )     (174,568 )
                                 
Net Loss   $ (41,992 )   $ (63,037 )   $ (131,386 )   $ (174,568 )
                                 
Loss Per Share:                                
Basic and Diluted:                                
Operations   $     $     $     $  
Weighted Average Common Shares Outstanding   $ 441,480,473     $ 441,480,473     $ 441,480,473     $ 441,480,473  

 

See notes to unaudited condensed financial statements

 

3 

 

  

THEGLOBE.COM, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

 

Nine Month Period Ended September 30, 2020

(UNAUDITED)

 

    Common Stock     Additional     Accumulated        
    Shares     Amount     Paid-in Capital     Deficit     Total  
Balance, January 1, 2020     441,480,473       441,480       296,594,042       (297,578,963 )     (543,441 )
                                         
Net Loss                       (131,386 )     (131,386 )
Balance, September 30, 2020     441,480,473     $ 441,480     $ 296,594,042     $ (297,710,349 )   $ (674,827 )

 

Nine Month Period Ended September 30, 2019

(UNAUDITED)

 

    Common Stock     Additional     Accumulated        
    Shares     Amount     Paid-in Capital     Deficit     Total  
Balance, January 1, 2019     441,480,473       441,480       296,594,042       (297,367,589 )     (332,067 )
                                         
Net Loss                       (174,568 )     (174,568 )
Balance, September 30, 2019     441,480,473     $ 441,480     $ 296,594,042     $ (297,542,157 )   $ (506,635 )

 

Three Month Period Ended September 30, 2020

(UNAUDITED)

 

    Common Stock     Additional     Accumulated        
    Shares     Amount     Paid-in Capital     Deficit     Total  
Balance, June 30, 2020     441,480,473       441,480       296,594,042       (297,668,357 )     (632,835 )
                                         
Net Loss                       (41,992 )     (41,992 )
Balance, September 30, 2020     441,480,473     $ 441,480     $ 296,594,042     $ (297,710,349 )   $ (674,827 )

 

Three Month Period Ended September 30, 2019

(UNAUDITED)

 

    Common Stock     Additional     Accumulated        
    Shares     Amount     Paid-in Capital     Deficit     Total  
Balance, June 30, 2019     441,480,473       441,480       296,594,042       (297,479,120 )     (443,598 )
                                         
Net Loss                       (63,037 )     (63,037 )
Balance, September 30, 2019     441,480,473     $ 441,480     $ 296,594,042     $ (297,542,157 )   $ (506,635 )

 

See notes to unaudited condensed financial statements

 

4 

 

 

THEGLOBE.COM, INC.

 

CONDENSED STATEMENTS OF CASH FLOWS

 

   

Nine Months Ended September

30,

 
    2020     2019  
    (UNAUDITED)     (UNAUDITED)  
Cash Flows from Operating Activities                
Net Loss   $ (131,386 )   $ (174,568 )
                 
Adjustments to reconcile net loss to net cash flows used in operating activities                
Changes in operating assets and liabilities                
                 
                 
Accounts payable     (9,078 )     3,833  
Accrued expenses and other current liabilities     1,550       2,857  
Accrued interest due to related party     33,579       23,804  
                 
Net cash flows used in operating activities     (105,335 )     (144,074 )
                 
Cash Flows from Financing Activities                
Borrowings on notes payable     45,900       164,638  
Net cash flows provided by financing activities     45,900       164,638  
                 
Net Increase/(Decrease) in Cash     (59,435 )     20,564  
Cash at beginning of period     86,961       5,895  
Cash at end of period   $ 27,526     $ 26,459  

 

See notes to unaudited condensed financial statements.

 

5 

 

 

THEGLOBE.COM, INC.

 

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS 

 

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

DESCRIPTION OF THEGLOBE.COM 

 

theglobe.com, inc. (the “Company,” “theglobe,” “we” or “us”) was incorporated on May 1, 1995 and commenced operations on that date. Originally, we were an online community with registered members and users in the United States and abroad. On September 29, 2008, we consummated the sale of the business and substantially all of the assets of our subsidiary, Tralliance Corporation (“Tralliance”), to Tralliance Registry Management Company, LLC, an entity controlled by Michael S. Egan, our former Chairman and Chief Executive Officer. As a result of and on the effective date of the sale of our Tralliance business, which was our last remaining operating business, we became a “shell company,” as that term is defined in Rule 12b-2 of the Exchange Act, with no material operations or assets.

 

On December 20, 2017, Delfin Midstream LLC (“Delfin”) entered into a Common Stock Purchase Agreement with certain of our stockholders for the purchase of a total of 312,825,952 shares of our Common Stock, par value $0.001 per share (“Common Stock”), representing approximately 70.9% of our Common Stock (the “Purchase Agreement”). On December 31, 2017 (the “Closing Date”), the former officers and directors, including Mr. Egan, resigned from their respective positions with the Company. William “Rusty” Nichols was appointed the sole member of our Board and our sole executive officer. Effective June 29, 2018, our Board of Directors (the Board) appointed Mr. Frederick Jones as President, Chief Executive Officer, Chief Financial Officer, and Director of the Company, and Mr. Nichols resigned from his positions of President, Chief Executive Officer, Chief Financial Officer, Director, and any other directorships, offices or other positions with the Company.

 

As a shell company, our operating expenses have consisted primarily of, and we expect them to continue to consist primarily of, customary public company expenses, including personnel, accounting, financial reporting, legal, audit and other related public company costs.

 

As of September 30, 2020, as reflected in our accompanying balance sheet, our current liabilities exceed our total assets. We prefer to avoid filing for protection under the U.S. Bankruptcy Code. However, unless we are successful in raising additional funds through the offering of debt or equity securities, we may not be able to continue to operate as a going concern beyond the next twelve months. Notwithstanding the above, we currently intend to continue operating as a public company and making all the requisite filings under the Exchange Act.

 

UNAUDITED INTERIM CONDENSED FINANCIAL INFORMATION 

 

The unaudited interim condensed financial statements of the Company at September 30, 2020 and for the nine months ended September 30, 2020 and 2019 included herein have been prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended, and Article 10 of Regulation S-X under the Securities Act of 1933, as amended. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations relating to interim condensed financial statements.

 

In the opinion of management, the accompanying unaudited interim condensed financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company at September 30, 2020 and the results of its operations and its cash flows for the nine months ended September 30, 2020 and 2019. The results of operations and cash flows for such periods are not necessarily indicative of results expected for the full year or for any future period.

 

USE OF ESTIMATES 

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates and assumptions relate primarily to estimates of accounts payable and accrued expenses.

 

NET INCOME PER SHARE 

 

The Company reports basic and diluted net income per common share in accordance with FASB ASC Topic 260, “Earnings Per Share.” Basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Common equivalent shares consist of the incremental common shares issuable upon the exercise of stock options (using the treasury stock method). Common equivalent shares are excluded from the calculation if their effect is anti-dilutive. There were no potentially dilutive securities and common stock equivalents for the period ended September 30, 2020.

 

6 

 

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

Management has determined that all 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.

 

(2) LIQUIDITY AND GOING CONCERN CONSIDERATIONS

 

The accompanying 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 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 flows generated internally by the Company will be adequate to fund its limited overhead and other cash requirements over the next twelve months. These reasons raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

 

Delfin, the Company’s majority stockholder, has continued to fund the Company through loans to the Company (see Note 3). At September 30, 2020, the Company had a net working capital deficit of approximately $675,000. Such working capital deficit included accrued expenses of approximately $26,000 and approximately $677,000 in principal and accrued interest owed under the Promissory Note with Delfin.

 

The recent coronavirus (COVID-19) pandemic and its impact on debt and equity markets could also have a material adverse effect on our financial condition and ability to operate as a going concern.

 

MANAGEMENT’S PLANS

 

Management anticipates continued funding from Delfin over the next twelve months as it determines the direction of the Company.

 

(3) DEBT

 

In March 2018, the Company executed a Promissory Note with Delfin, which was amended and restated in May 2018 to $150,000, in November 2018 to $350,000, in June 2019 to $465,000, in November 2019 to $554,100 and then again in September 2020 to increase the principal amount to up to $600,000 to pay certain accrued expenses, accounts payable and to allow the Company to have working capital. Interest accrues on the unpaid principal balance at a rate of 8% per annum, calculated on a 365/66 day year, as applicable. The Promissory Note is due upon demand. It may be prepaid in whole or in any part at any time prior to demand.

 

(4) RELATED PARTY TRANSACTIONS

 

In March 2018, the Company executed a Promissory Note with Delfin, which was amended and restated in May 2018 to $150,000, in November 2018 to $350,000, in June 2019 to $465,000, in November 2019 to $554,100 and then again in September 2020 to increase the principal amount to up to $600,000 to pay certain accrued expenses, accounts payable and to allow the Company to have working capital. The Company expects continued funding from Delfin. Related party interest expense associated with such debt totaling $33,578 and $23,804 has been recognized in our condensed statement of operations for the nine months ended September 30, 2020 and 2019, respectively. See Note 3, “Debt,” for a more complete discussion of related party debt.

 

(5) SUBSEQUENT EVENTS

 

The Company’s management evaluated subsequent events through the time of the filing of this report on Form 10-Q. The Company’s management is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on its financial statements.

 

7 

 

 

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

 

FORWARD LOOKING STATEMENTS

 

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. 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:

 

  our need for additional equity and debt capital financing to continue as a going concern, and the sources of such capital;

 

  our intent with respect to future dividends;

 

  the continued forbearance of certain related parties from making demand for payment under certain contractual obligations of, and loans to, the Company; and

 

  our estimates with respect to certain accounting and tax matters.

 

These forward-looking statements reflect our current view about future events and are subject to risks, uncertainties and assumptions. Unless required by law, we do not intend to update any of the forward-looking statements after the date of this Form 10-Q or to conform these statements to actual results. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. A description of risks that could cause our results to vary appears under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated by those risks included in the Form 10-Q. The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward- looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

 

  our ability to raise additional and sufficient capital;

 

  our ability to continue to receive funding from related parties;

 

  the impact of the COVID-19 pandemic on the economy and financial markets; and

 

  our ability to successfully estimate the impact of certain accounting and tax matters.

 

The following discussion should be read together in conjunction with the accompanying unaudited condensed financial statements and related notes thereto and the audited financial statements and notes to those statements contained in the Annual Report on Form 10-K for the year ended December 31, 2019.

 

OVERVIEW

 

theglobe.com, inc. (the “Company,” “theglobe,” “we” or “us”) was incorporated on May 1, 1995 and commenced operations on that date. Originally, we were an online community with registered members and users in the United States and abroad. On September 29, 2008, we consummated the sale of the business and substantially all of the assets of our subsidiary, Tralliance Corporation (“Tralliance”), to Tralliance Registry Management Company, LLC, an entity controlled by Michael S. Egan, our former Chairman and Chief Executive Officer. As a result of and on the effective date of the sale of our Tralliance business, which was our last remaining operating business, we became a “shell company,” as that term is defined in Rule 12b-2 of the Exchange Act, with no material operations or assets. We currently have no material operations or assets.

 

On December 20, 2017, our former Chief Executive Officer and majority stockholder, Mr. Egan entered into the Purchase Agreement with Delfin for the purchase by Delfin of shares owned by Mr. Egan representing approximately 70.9% of our Common Stock. On the Closing Date, the former officers and directors, including Mr. Egan, resigned from their respective positions with the Company. Mr. Nichols was appointed the sole member of our Board and our sole executive officer. Effective June 29, 2018, our Board appointed Mr. Frederick Jones as President, Chief Executive Officer, Chief Financial Officer, and Director of the Company, and Mr. Nichols resigned from his positions of President, Chief Executive Officer, Chief Financial Officer, Director, and any other directorships, offices or other positions with the Company.

 

As a shell company, our operating expenses have consisted primarily of, and we expect them to continue to consist primarily of, customary public company expenses, including personnel, accounting, financial reporting, legal, audit and other related public company costs.

 

As of September 30, 2020, as reflected in our accompanying balance sheet, our current liabilities exceed our total assets. 

 

8 

 

 

BASIS OF PRESENTATION OF CONDENSED FINANCIAL STATEMENTS; GOING CONCERN

 

We received a report from our independent registered public accountants, relating to our December 31, 2019 audited financial statements, containing an explanatory paragraph regarding our ability to continue as a going concern. As a shell company, our management believes that we will not be able to generate operating cash flows sufficient to fund our operations and pay our existing current liabilities. Based upon our current limited cash resources and without the infusion of additional capital and/or the continued forbearance of our creditors, our management does not believe we can operate as a going concern beyond the next twelve months. 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 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 financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should we be unable to continue as a going concern.

 

RESULTS OF OPERATIONS

 

THREE MONTHS ENDED SEPTEMBER 30, 2020 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 2019

 

NET REVENUE. Commensurate with the sale of our Tralliance business on September 29, 2008, we became a shell company, and we have not had any material operations since then. As a result, net revenue for both the three months ended September 30, 2020 and 2019 was $0.

 

GENERAL AND ADMINISTRATIVE. General and administrative expenses include only customary public company expenses, including accounting, legal, audit, insurance and other related public company costs. General and administrative expenses totaled approximately $31,000 in the third quarter of 2020 as compared to approximately $54,000 for the same quarter of the prior year. This decrease was primarily due to our additional securities filings in 2019.

 

RELATED PARTY INTEREST EXPENSE. Related party interest expense for the three months ended September 30, 2020 totaled $11,475 compared to $9,376 for the three months ended September 30, 2019. This increase consisted of interest due and payable to Delfin for additional loan amounts.

 

NET LOSS. Net loss for the three months ended September 30, 2020 was approximately $42,000 as compared to a net loss of approximately $63,000 for the three months ended September 30, 2019. This decrease was primarily due to our additional securities filings in 2019.

 

NINE MONTHS ENDED SEPTEMBER 30, 2020 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2019

 

NET REVENUE. Commensurate with the sale of our Tralliance business on September 29, 2008, we became a shell company, and we have not had any material operations since then. As a result, net revenue for both the nine months ended September 30, 2020 and 2019 was $0.

 

GENERAL AND ADMINISTRATIVE. General and administrative expenses include only customary public company expenses, including accounting, legal, audit, insurance and other related public company costs. General and administrative expenses totaled approximately $98,000 for the first nine months of 2020 as compared to approximately $151,000 for the same period of the prior year. This decrease was primarily due to decreased legal expenses and our additional securities filings in 2019.

 

RELATED PARTY INTEREST EXPENSE. Related party interest expense for the nine months ended September 30, 2020 totaled $33,578 compared to $23,804 for the nine months ended September 30, 2019. This increase consisted of interest due and payable to Delfin as the loan amount has increased.

 

NET LOSS. Net loss for the nine months ended September 30, 2020 was approximately $131,000 as compared to a net loss of approximately $175,000 for the nine months ended September 30, 2019. This decrease was primarily due to decreased legal expenses and our additional securities filings in 2019.

 

 LIQUIDITY AND CAPITAL RESOURCES

 

CASH FLOW ITEMS

 

As of September 30, 2020, we had $27,526 in cash as compared to $86,961 as of December 31, 2019. Net cash flows used in operating activities totaled approximately $105,000 for the nine months ended September 30, 2020 compared to net cash flows used in operating activities of approximately $144,000 for the nine months ended September 30, 2019. The decrease was due to decrease in legal fees from prior year.

 

9 

 

 

Net cash flows provided by financing activities totaled approximately $46,000 for the nine months ended September 30, 2020 compared to approximately $165,000 for the nine months ended September 30, 2019.

 

FUTURE AND CRITICAL NEED FOR CAPITAL

 

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the 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. However, for the reasons described below, our management does not believe that cash on hand and cash flow generated internally by us will be adequate to fund our limited overhead and other cash requirements beyond the next twelve months. These reasons raise significant doubt about our ability to continue as a going concern. Additionally, the COVID 19 pandemic could have an adverse effect on our ability to continue operating. Please see Item 1A. RISK FACTORS.

 

In March 2018, the Company executed a Promissory Note with Delfin, which was amended and restated in May 2018 to $150,000, in November 2018 to $350,000, in June 2019 to $465,000, in November 2019 to $554,100 and then again in September 2020 to increase the principal amount to up to $600,000 to pay certain accrued expenses, accounts payable and to allow the Company to have working capital. Interest accrues on the unpaid principal balance at a rate of 8% per annum, calculated on a 365/66 day year, as applicable. The Promissory Note is due upon demand. It may be prepaid in whole or in any part at any time prior to demand. Management anticipates continued funding from Delfin over the next twelve months as it determines the direction of the Company.

 

At September 30, 2020, we had a net working capital deficit of approximately $675,000. This deficit included accrued expenses of approximately $26,000 and approximately $677,000 in principal and accrued interest owed under the Promissory Note with Delfin, the Company’s majority stockholder.

  

EFFECTS OF INFLATION

 

Management believes that inflation has not had a significant effect on our results of operations during 2020 and 2019.

 

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

 

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

 

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

 

Management has determined that all 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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

Not applicable to smaller reporting companies such as the Company.

 

10 

 

 

ITEM 4. 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 has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2020. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer has concluded that, as of September 30, 2020, our disclosure controls and procedures were effective in alerting him in a timely manner to material information regarding us that is required to be included in our periodic reports to the SEC.

 

Our Chief Executive Officer and Chief Financial Officer has evaluated any change in our internal control over financial reporting that occurred during the quarter ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, and has determined there to be no reportable changes.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

You should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which could materially affect our business, financial position, or future results of operations. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations. The risk factors set forth below update, and should be read together with, the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

 

You should also carefully consider the factor discussed in Part I, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which could materially affect our business, financial position, or future results of operations. The risk described in our Quarterly Report on Form 10-Q for the period ended March 31, 2020, refers to the recent coronavirus (COVID-19) and how it may impact our funding.

 

11 

 

 

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

 

(a) Unregistered Sales of Equity Securities.

 

None.

 

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

 

Not applicable.

 

(c) Repurchases.

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6.

EXHIBITS

 

10.27 Fifth Amended and Restated Promissory Note
   
31.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).

 

32.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and Rule 15d-14(b).
   
101.1NS XBRL Instance Document
   
101.SCH XBRL Taxonomy Extension Schema Document
   
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
   
101.DEF XBRL Taxonomy Extension Definitions Linkbase Document
   
101.LAB XBRL Taxonomy Extension Label Linkbase Document
   
101.PRE  XBRL Taxonomy Extension Presentation Linkbase Document 
   

 

12 

 

 

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.

 

Dated: November 10, 2020 theglobe.com, inc.
     
  By: /s/ Frederick Jones
  Frederick Jones
  Chief Executive Officer and Chief Financial Officer
  (Principal Executive Officer and Duly Authorized Officer)

 

13 

 

 

EXHIBIT INDEX

 

10.27 Fifth Amended and Restated Promissory Note
   
31.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a).
   
32.1 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and Rule 15d-14(b).
   
101.1NS XBRL Instance Document
   
101.SCH XBRL Taxonomy Extension Schema Document
   
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
   
101.DEF XBRL Taxonomy Extension Definitions Linkbase Document
   
101.LAB XBRL Taxonomy Extension Label Linkbase Document
   
101.PRE  XBRL Taxonomy Extension Presentation Linkbase Document 
   

 

14 

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