United
States
Securities
and Exchange Commission
Washington,
D.C. 20549
_______________________________
FORM
8-K
_______________________________
Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
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June
10, 2008
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0-20525053
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Date
of Report (Date of earliest event reported)
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Commission
File Number
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THEGLOBE.COM,
Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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14-1782422
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(State
or other jurisdiction of incorporation or
organization)
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I.R.S.
Employer Identification Number)
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110
East Broward Boulevard, Suite 1400
Fort
Lauderdale, Florida 33301
(Address
of Principal Executive Offices) (Zip Code)
(954)
769-5900
(Registrant’s
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
This
Report includes forward-looking statements related to theglobe.com, inc.
("theglobe" or the “Company”) that involve risks and uncertainties, including,
but not limited to, our entry into, and risks associated with, a Purchase
Agreement with The Registry Management Company, LLC, as reported in this Report
on Form 8-K. These forward-looking statements are made in reliance on the “safe
harbor” provisions of the Private Securities Litigation Reform Act of 1995. For
further information about these and other factors that could affect
theglobe.com’s future results and business plans, including theglobe’s ability
to continue operations as a going concern, please see the Company’s filings with
the Securities and Exchange Commission, including in particular our Annual
Report of Form 10-K for the year ended December 31, 2007 and our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2008. Copies of these
filings are available online at http://www.sec.gov. Prospective investors are
cautioned that forward-looking statements are not guarantees of performance.
Actual results may differ materially and adversely from management
expectations.
Item
1.01. ENTRY
INTO A MATERIAL DEFINITIVE AGREEMENT
PROPOSED
SALE OF ASSETS OF TRALLIANCE CORPORATION; PROPOSED ISSUANCE OF SHARES;
STOCKHOLDER APPROVAL
On
June
10, 2008, theglobe entered into a Purchase Agreement (the "Purchase Agreement"),
by and between theglobe.com, its subsidiary, Tralliance Corporation
(“Tralliance") and The Registry Management Company, LLC (“Registry Management”
or “Buyer”), whereby theglobe will (i) issue two hundred twenty nine million
(229,000,000) shares of its common stock (the “Shares”) and (ii) sell the
business and substantially all of the assets of its subsidiary, Tralliance,
to
Registry Management (the “Purchase Transaction”) for consideration consisting of
(i) surrender to theglobe of secured demand convertible promissory notes issued
by theglobe and held by the Buyer in the aggregate principal amount of
$4,250,000, together with all accrued and unpaid interest thereon
(approximately, $1,148,439 as of May 31, 2008), (ii) satisfaction of outstanding
rent and miscellaneous fees due and unpaid to the Buyer through the date of
closing of the Proposed Transaction (equal to an aggregate of approximately
$722,000 as of May 31, 2008), and (iii) an earn-out equal to 10% of the Buyer’s
“net revenue” (as defined) derived from “.travel” names registered by the Buyer
through May 5, 2015. Registry Management is controlled by Michael S. Egan,
our
Chairman and Chief Executive Officer and principal stockholder and each of
our
two remaining Board members, Messrs. Edward A. Cespedes and Robin Segaul
Lebowitz, have a minority interest in Registry Management.
The
Purchase Agreement contemplates several ancillary agreements and transactions.
These agreements include, or will include, an Earn-out Agreement pursuant to
which the Earn-out would be paid (the “Earn-out Agreement”) and one or more
Termination Agreements (each a “Termination Agreement”) with our executive
officers. The minimum earn-out amount payable under the Earn-out Agreement
will
be at least $300,000 in the first year following closing, increasing by $25,000
in each subsequent year (pro-rated for the final year of the earn-out). Pursuant
to the Termination Agreements, theglobe’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, respectively, of
theglobe, will be terminated.
The
Board
of Directors has determined that the Purchase Transaction is advisable and
in
the best interests of theglobe and its stockholders. Immediately following
the
closing of the Purchase Transaction, theglobe is not anticipated to have
continuing business operations and no source of revenue other than the Earn-out.
The Purchase Transaction is 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.
The
Purchase Agreement includes customary representations and warranties by theglobe
and Tralliance and restricts our ability to operate Tralliance outside of the
ordinary course of business. The Purchase Transaction involves risks and there
are a number of conditions to the obligation of Registry Management to complete
the Purchase Transaction, all of which must either be satisfied or waived prior
to the completion of the Purchase Transaction. These conditions include
distribution of an Information Statement describing the Purchase Transaction
to
our stockholders, receipt of various third party consents to the transfer of
certain of the contracts of Tralliance to the Buyer, and the receipt of a
fairness opinion that the Purchase Transaction is fair to theglobe from a
financial point of view. Theglobe anticipates filing the Information Statement
with the Securities and Exchange Commission (“SEC”) in the near future and will
distribute the Information Statement to its stockholders as soon as practicable
after the Information Statement has been cleared by the SEC, with the closing
anticipated to take place approximately 20 days thereafter (approximately 45
days if theglobe elects to make the Information Statement available by Internet
in lieu of its mailing). One of the other conditions to the closing of the
Purchase Transaction - namely, approval by stockholders of theglobe representing
over 50% of the issued and outstanding shares of stock of theglobe - was
satisfied by written action of some of our stockholders on June 12, 2008 as
described below in Item 8.01 below.
Item
3.02. UNREGISTERED
SALE OF EQUITY SECURITIES
CONVERSION
OF NOTE
On
June
10, 2008, Dancing Bear Investments, Inc. (“DBI”), a company which is controlled
by Michael Egan, our Chairman, elected to convert $400,000 in principal amount
of certain secured convertible notes issued by the Company (the “Convertible
Notes”). In accordance with the conversion terms of such Convertible Notes, such
$400,000 was converted at $.01 per share, for an aggregate of 40 million shares
of our common stock. Although the beneficial ownership of DBI remained the
same
both before and after such conversion, DBI’s ownership of the actual issued and
outstanding shares of common stock increased from approximately 5% to 23% as
a
result of the conversion. Similarly, while the number of shares beneficially
owned by our Chairman, Michael Egan, remained the same, Mr Egan and his
affiliates’ (including DBI) ownership of the actual issued and outstanding
shares of common stock increased from approximately 36% to 48% as a result
of
the conversion. Consequently, Mr. Egan may now significantly influence, if
not
control, the outcome of any item submitted to a vote of our stockholders,
including approval of the Purchase Agreement described in Item 1.01 above.
POTENTIAL
SALE OF COMMON STOCK PURSUANT TO PURCHASE AGREEMENT
As
discussed in Item 1.01 above of this Form 8-K, upon the closing of the Purchase
Agreement the Company will issue 229 million shares of its common stock to
Registry Management. Registry Management will be entitled to one demand
registration with respect to such shares exercisable any time after June 10,
2009 and to customary “piggyback” registration rights with respect to other
potential registrations by the Company. The Company believes that Registry
Management is an accredited and sophisticated investor and will rely upon
exemptions from registration provided by Section 4(2) of the Securities Act
of
1933, as amended and Regulation D promulgated under such Act in issuing the
foregoing shares.
Item
8.01. OTHER
EVENTS
On
June
12, 2008, Mr. Michael Egan, the Chairman and CEO of theglobe, together with
certain of his affiliates and other related parties, whom collectively are
the
record owners of approximately 51.25% of the issued and outstanding shares
of
theglobe common stock, the sole class of voting securities of theglobe, executed
a written consent of the stockholders adopting the Purchase Agreement described
in Item 1.01 above and approving the transactions contemplated thereby in
accordance with Section 228 of Delaware Law. The actions by written consent
are
sufficient to approve the Purchase Agreement and the other transactions
contemplated by the Purchase Agreement without any further action or vote of
the
stockholders of theglobe.
Item
9.01. FINANCIAL
STATEMENTS AND EXHIBITS
(a)(b)(c)
None
(d)
Exhibits
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10.1
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Purchase
Agreement dated as of June 10, 2008 by and between theglobe.com,
inc.,
Tralliance Corporation and The Registry Management Company,
LLC.
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10.2
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Form
of Earn-out Agreement
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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theglobe.com,
inc.
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By:
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Edward
A. Cespedes, President
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Exhibit
Index
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10.1
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Purchase
Agreement dated as of June 10, 2008 by and between theglobe.com,
inc.,
Tralliance Corporation and The Registry Management Company,
LLC.
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10.2
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Form
of Earn-out Agreement
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