THEGLOBE COM INC 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA FINANCIAL STATEMENTS THEGLOBE.COM, INC. INDEX TO FINANCIAL STATEMENTS Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 11 BALANCE SHEETS 12 STATEMENTS OF OPERATIONS 13 STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) 14 STATEMENTS OF CASH FLOWS 15 NOTES TO FINANCIAL STATEMENTS 16 10 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of theglobe.com, inc. Opinion on the Financial Statements We have audited the accompanying balance sheet s of theglobe.com, Inc. (the “Company”) as of December 31, 2020 and 2019, the related statements of operations, stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty . Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provides a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2001. West Palm Beach, Florida March 26, 2021 11 THEGLOBE.COM, INC. BALANCE SHEETS December 31, 2019 December 31, 2020 ASSETS Current Assets: Cash $ 86,961 $ 7,624 Total current assets $ 86,961 $ 7,624 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities: Accounts payable $ 9,078 $ 2,000 Accrued expenses and other current liabilities 24,000 24,000 Accrued interest due to related party 43,224 88,901 Notes payable due to related party 554,100 600,000 Total current liabilities 630,402 714,901 Stockholders’ Deficit: Common stock, $0.001 par value; 500,000,000 shares authorized; 441,480,473 shares issued at December 31, 2019 and December 31, 2020 441,480 441,480 Preferred stock, $0.001 par value; 3,000,000 shares authorized; 0 shares issued at December 31, 2019 and 2020 -- -- Additional paid in capital 296,594,042 296,594,042 Accumulated deficit (297,578,963 ) (297,742,799 ) Total stockholders’ deficit (543,441 ) (707,277 ) Total liabilities and stockholders’ deficit $ 86,961 $ 7,624 See notes to financial statements. 12 THEGLOBE.COM, INC. STATEMENTS OF OPERATIONS Year Ended December 31, 2019 2020 Net Revenue $ — $ — Operating Expenses: General and administrative 177,552 118,160 Operating Loss (177,552 ) (118,160 ) Other Income (Expense), net: Miscellaneous Income 335 — Related party interest expense (34,157 ) (45,676 ) Loss from Operations Before Income Taxes (211,374 ) (163,836 ) Income Taxes — — Loss from Operations (211,374 ) (163,836 ) Net Loss $ (211,374 ) $ (163,836 ) Loss Per Share: Basic and Diluted: $ — $ — Weighted Average Common Shares Outstanding 441,480,473 441,480,473 See notes to financial statements. 13 THEGLOBE.COM, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock Additional Shares Amount Paid-in Capital Accumulated Deficit Total Balance, December 31, 2018 441,480,473 $ 441,480 $ 294,594,042 $ (297,367,589 ) $ (332,067 ) Year Ended December 31, 2019 Net Loss — — (211,374 ) (211,374 ) Balance December 31, 2019 441,480,473 441,480 296,594,042 (297,578,963 ) (543,441 ) Year Ended December 31, 2020 Net Loss — — — (163,836 ) (163,836 ) Balance, December 31, 2020 441,480,473 $ 441,480 $ 296,594,042 $ (297,742,799 ) $ (707,277 ) See notes to financial statements. 14 THEGLOBE.COM, INC. STATEMENTS OF CASH FLOWS Year Ended December 31, 2019 2020 Cash Flows from Operating Activities: Net Loss $ (211,374 ) $ (163,836 ) Adjustments to reconcile loss to net cash flows used in operating activities: Changes in operating assets and liabilities: Accounts payable 1,596 (7,078 ) Accrued expenses and other current liabilities 2,950 — Accrued interest due to related party 34,156 45,677 Net cash flows used in operating activities (172,672 ) (125,237 ) Cash Flows from Financing Activities: Borrowings on Notes Payable 253,738 45,900 Net cash flows from financing activities 253,738 45,900 Net change in cash 81,066 (79,337 ) Cash at beginning of period 5,895 86,961 Cash at end of period $ 86,961 $ 7,624 See notes to financial statements. 15 THEGLOBE.COM, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2019 and 2020 (1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF THE COMPANY 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 (“Tralliance Registry Management”), 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. 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 December 31, 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 for any significant length of time in the future. Notwithstanding the above, we currently intend to continue operating as a public company and making all the requisite filings under the Exchange Act. 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 valuations of accounts payable and accrued expenses. 16 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, accounts payable and accrued expenses, are a reasonable estimate of their fair values at December 31, 2020 and 2019, respectively, due to their short maturities. 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 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 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. 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. There were no potentially dilutive securities and common stock equivalents for the years ended December 31, 2020 and 2019. RECENTLY ISSUED 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. 17 (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 flow 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 December 31, 2020, the Company had a net working capital deficit of approximately $707,000. This deficit included accrued expenses of approximately $24,000, accounts payable of approximately $2,000 and approximately $689,000 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 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, in August 2020 to $600,000 and then again in February 2021 to increase the principal amount to up to $637,500 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. 18 (4) INCOME TAXES The provision (benefit) for income taxes is summarized as follows: Year Ended December 31, 2019 2020 Continuing operations $ — $ — $ — $ — The provision (benefit) for income taxes attributable to continuing operations was as follows: Year Ended December 31, 2019 2020 Current: $ — $ — Federal — — State $ — $ — Deferred: $ — $ — Federal — — State $ — $ — Provision for income taxes $ — $ — 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, 2019 2020 Statutory federal income tax rate 21.00 % 21.00 % State income taxes, net of federal benefit 4.74 4.74 Change in valuation allowance (25.74 ) (25.74 ) Effective tax rate 0.00 % 0.00 % 19 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2019 and 2020 are presented below. Year Ended December 31, 2019 2020 Deferred tax assets (liabilities): Net operating loss carryforwards $ 134,000 $ 176,000 Issuance of warrants 982,000 982,000 Accrued expenses 29,000 29,000 Depreciation and amortization 10,000 10,000 Total gross deferred tax assets 1,155,000 1,197,000 Less: valuation allowance (1,155,000 ) (1,197,000 ) Total net deferred tax assets $ — $ — 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 $1,155,000 and $1,197,000 as of December 31, 2019 and 2020, respectively. The net change in the total valuation allowance was $(55,000) and $(42,000) for the years ended December 31, 2019 and 2020, 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 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. At December 31, 2020, the Company had net operating loss carryforwards available for U.S. tax purposes of approximately $682,000, which will carry forward indefinitely. (5) RELATED PARTY TRANSACTIONS Under terms of the debt with its majority stockholder (See Note 3), the Company recorded accrued interest of approximately $43,000 and $89,000 as of December 31, 2019 and 2020, respectively and interest expense of approximately $34,000 and $46,000 for the years ended December 31, 2019 and 2020, respectively. 20 (6) SUBSEQUENT EVENTS The Company’s management evaluated subsequent events through the time of the filing of this report on Form 10-K. 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, with the exceptional of additional funding received from Delfin of $37,500 on February 8, 2021. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.