Globalnet (fka GLBT)

[meanmikeca]

http://www.pinksheets.com/quote/print_filings.jsp?url=%2Fredirect.asp%3Ffilename%3D0001144204%252D06...

As disclosed in its Current Report on Form 8-K, filed January 20, 2006, the Company has sold $675,000 in callable secured convertible notes (the "Notes") pursuant to a Securities Purchase Agreement (the "SPA") for an aggregate of $1,500,000 in Notes with certain investors (the "Investors"). While the SPA contemplates monthly purchases of the Notes, under defined conditions either the Company or the Investors may decline to proceed with additional
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purchases of the Notes. There is no assurance that additional purchases of the Notes will occur, and should such a circumstance occur, it is likely that the Company would have insufficient funds to continue operations. Assuming the investors purchase the remaining $825,000 of the Notes, the anticipated monthly funding schedule is likely to be less, month over month, mirroring the projected reduced cash consumption projections discussed above. The Company is behind on its original expectations relative to this funding schedule. Should the Company be unable to achieve the revenue or cost reduction goals, discussed above, the anticipated funding schedule would not be sufficient to fund the Company's revised operations.

The Notes, together with approximately $9,000,000 in face amount of callable secured convertible notes also issued to the Investors (the "Previous Notes"), are convertible into our common stock, at the Investors' option, at a conversion price, equal to the lower of (i) $0.0036 or (ii) 20% of the average of the three lowest intraday trading prices for our common stock during the 20 trading days before, but not including, the conversion date. As of February 16, 2006, the average of the three lowest intraday trading prices for our common stock during the preceding 20 trading days as reported on the Over-The-Counter Bulletin Board was $.0001 and, therefore, the conversion price for the secured convertible notes was $.00002. Certain of the Company's debt instruments originated in periods prior to October 2003; accordingly, such debt instruments may be converted to common stock which may be sold pursuant to Rule 144(k).

The Company's Articles of Incorporation currently allow for issuance of a maximum of 20,000,000,000 shares of common stock. Currently, the Company has approximately 9,300,000,000 shares outstanding, including conversions of Previous Notes, leaving an unissued balance of authorized shares that is not sufficient to service the maximum requirements of all of its convertible securities. In the event we are unable to obtain an increase in our authorized common stock, we will be required to repay the convertible debenture and we will be subject to penalties associated with such failure to deliver shares of common stock upon conversion of the debentures as well as prepayment penalties. In addition, the Investors, which have a secured lien on all of our assets and intellectual property, would be entitled to foreclose on our assets and intellectual property. In the event that the foregoing were to occur, significant adverse consequences to the Company would be reasonably anticipated. Although no notice of default has been received from the Investors, all Previous Notes are in default under numerous covenants.

from the company's own 8k. is that proof?