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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Washington,
      D.C. 20549</strong></font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Pursuant
      To Section 13 Or 15(D) of The Securities Exchange Act of
      1934</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Date
      of report (date of earliest event reported): April 7, 2006</strong></font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>GLOBALNET
      CORPORATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Exact
      name of registrant as specified in its charter)</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Nevada</strong></font></div>
            </td>
            <td valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>000-24962</strong></font></div>
            </td>
            <td valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>75-2863583</strong></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(State
                or Other Jurisdiction</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>of
                Incorporation)</strong></font></div>
            </td>
            <td valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Commission</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>File
                Number)</strong></font></div>
            </td>
            <td valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(IRS
                Employer</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Identification
                No.)</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2616
      South Loop West, Suite 660, Houston, Texas 77054</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Address
      of principal executive offices)</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Registrant&#8217;s
      telephone number, including area code: </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(832)
      778-9591</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Copy
      of correspondence to:</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gregory
      Sichenzia, Esq.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stephen
      M. Fleming, Esq.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sichenzia
      Ross Friedman Ference LLP</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1065
      Avenue of the Americas</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New
      York,
      New York 10018</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tel:
      (212) 930-9700 Fax: (212) 930-9725</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font>&#160;Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font face="Wingdings">o</font>&#160;Soliciting
      material pursuant to Rule 14a-12 under
      the Exchange Act (17 CFR 240.14a-12)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font face="Wingdings">o</font>&#160;Pre-commencement
      communications pursuant to Rule
      14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font face="Wingdings">o</font>&#160;Pre-commencement
      communications pursuant to Rule
      13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      8.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 33pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
      Events</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Globalnet
      Corporation (the &#8220;Company&#8221;) provides the following information as an update on
      its current financial condition and operations. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
      statements, other than statements of historical facts, included in this report
      regarding the Company's strategy, expected future financial position,
      development and marketing of products, competitive position, and plans and
      objectives of management are forward-looking statements. Words such as
      "anticipate," "believe," "estimate," "expect," "intend," "plan," "will" and
      other similar expressions help identify forward-looking statements, although
      not
      all forward-looking statements contain these identifying words. In particular,
      the statements regarding the treatment of various financial instruments and
      the
      related charge to earnings, the impairment of goodwill, the continued
      implementation of the Company's strategic plan, the expected future monthly
      losses, the availability and terms and conditions of new financing, and the
      impact of capital allocation decisions should new financing be obtained, are
      forward-looking statements. These forward-looking statements involve substantial
      risks and uncertainties and are based on current expectations, assumptions,
      estimates and projections about the Company's business and the
      telecommunications industry in which the Company operates. The Company may
      not
      actually achieve the plans, intentions or expectations disclosed in its
      forward-looking statements, and you should not place undue reliance on the
      Company's forward-looking statements. Actual results or events could differ
      materially from the plans, intentions and expectations disclosed in the
      forward-looking statements that the Company makes. In addition, the forward
      looking financial information presented below was prepared using very basic
      information and assumptions which did not include all, information and
      assumptions generally used in the preparation of forward looking financials.
      Furthermore, the forwarding looking financial information presented below
      assumes the Company is able to obtain funding when needed and on reasonable
      terms. There can be no assurance when or if the Company will obtain funding
      or
      the terms of any such funding. At the present time the Company does not have
      sufficient cash to fund its operations. The Company's forward-looking statements
      do not reflect the potential impact of any future acquisitions, mergers,
      dispositions, joint ventures or investments that the Company may make. The
      Company does not assume any obligation to update any forward-looking
      statements.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Status
      of Financial Statements and Audits</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 33pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      previously disclosed, the Company engaged in conversations with the Securities
      and Exchange Commission (the "SEC") on a variety of accounting issues in early
      to mid-2005. On February 11, 2006, the Company re-initiated contact with the
      SEC
      via a request for guidance (the "Request") with the Office of the Chief
      Accountant.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 33pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      primary purpose of the Request was to seek guidance on the treatment of certain
      convertible notes and preferred stock (the "Instruments") issued during 2003,
      and possibly requiring derivative accounting treatment under Financial
      Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging
      Activities" and Emerging Issues Task Force ("EITF") No. 00-19 "Accounting for
      Derivative Financial Instruments Indexed to, and Potentially Settled in, a
      Company's Own Stock."</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
      the
      conversations with the SEC, subject to final audit, the Company now expects
      to
      record the Instruments as derivatives. The accounting charge that will result
      from this accounting treatment substantially reflects the significant rise
      in
      the price of the Company's common stock during the fourth quarter of 2003,
      followed by the steep decline in 2004. Although the Company has not completed
      its analysis and the estimate has not been audited, the Company has advised
      the
      SEC that the fourth quarter of 2003 charge to earnings will likely exceed $600
      million dollars, and that this charge will significantly be recovered as income
      in 2004 as the common stock price which underlies the derivative calculation,
      declined. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      guidance received from the SEC will also impact the Company's recording of
      the
      Instruments in 2004 through 2006, and will also affect the accounting for new
      convertible instruments in those years. The impact of derivative accounting
      on
      the Instruments and new financing instruments has not been calculated, but
      is
      expected to be material to the Company&#8217;s financial statements. The Company also
      expects, subject to audit, to report a major impairment of goodwill and other
      intangible assets, at December 31, 2003.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      derivative accounting treatment, discussed above, also affects periods prior
      to
      2003. Currently, the Company expects to correct the 2003 opening balance sheet
      for the impact of derivative accounting prior to 2003, and to restate the
      quarterly information for all periods in 2003 within a &#8220;comprehensive&#8221; Form
      10-K, as discussed below.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has also been in discussions with the SEC regarding mechanisms through
      which the Company might be able to expedite the filing of its annual and
      quarterly reports with the Securities and Exchange Commission. The Division
      of
      Corporation Finance of the SEC has advised the Company that it will accept
      the
      inclusion of required quarterly information in a &#8220;comprehensive&#8221; Form 10-KSB for
      the year ended December 31, 2004. While this filing would allow the Company
      to
      forgo filing amended Forms 10-QSB and Form 10-KSB for the earlier periods,
      it
      does not relieve the Company of the requirement to substantively provide all
      required information within the comprehensive Form 10-KSB that would otherwise
      have been filed in amended filings. The waiver by the Division of Corporation
      Finance does not protect the Company against any enforcement actions. For
      certain purposes under the SEC&#8217;s rules and regulations, the Company may not be
      deemed to be &#8220;current.&#8221; The impact of not being deemed current for certain
      purposes may materially affect the Company&#8217;s options with respect to certain
      filings it may wish to make in the future and may negatively impact the
      Company&#8217;s ability to be relisted on the Over-the-Counter Bulletin
      Board.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      a
      result of these discussions, and the need to restate all periods in 2003 which
      was previously not anticipated, the Company's efforts will require significantly
      more time to complete. Although there is no assurance that the filings, as
      described above, would be completed by June 30, 2006, the Company has advised
      the SEC that its new goal for filing would approximate this date.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Finances
      and Operations Related Update</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 33pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Due
      to
      the incomplete nature of its work associated with the 2003 to 2005 audits,
      discussed above, the Company is able to provide only limited financial statement
      information:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                &#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                Company's revenue for the fourth quarter of 2005 is expected to
                approximate $1.5 million, with gross margin in the 3-6%
                range.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <table cellpadding="0" cellspacing="0" id="list" width="100%">

        <tr valign="top" style="line-height: 1.25;">
          <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-&#160;&#160;</font></td>
          <td>
            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">revenues
              for the first quarter of 2006 are projected to approximate $1.2 million,
              with gross margins in the 6% range. </font></div>
          </td>
        </tr>

    </table>
    <table cellpadding="0" cellspacing="0" id="list" width="100%">

        <tr valign="top" style="line-height: 1.25;">
          <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-&#160;&#160;</font></td>
          <td>
            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">wholesale
              activities continue to be reoriented, with an ultimate goal that these
              activities will exist primarily to support and differentiate the VOIP
              product lines. This reorientation will result in slow revenue growth
              in
              the wholesale offerings, with only minimal margin expansion expected.
              In
              subsequent periods of 2006, the Company expects to show slow revenue
              and
              margin growth in its VOIP product lines;</font></div>
          </td>
        </tr>

    </table>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                &#160;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                Company's cash consumption, excluding audit related and new marketing
                initiative expenses, has been reduced to the approximate $200,000
                per
                month range;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">
            </td>
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;
              -</font></td>
            <td align="right">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                Company's relocation of its primary switching facility from San Antonio
                to
                Houston, Texas has been substantially
                completed;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 18pt;">
            </td>
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;
              -</font></td>
            <td align="right">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                Company continues to settle claims and contingencies, as it deems
                appropriate and necessary. In February 2006, the Company settled
                a three
                year commitment for cable service in San Antonio, Texas, and expects
                to
                engage in discussions relating to other long-term commitments associated
                with its San Antonio location. The Company cannot currently estimate
                the
                ultimate result of these other negotiation
                efforts.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Financing
      Related Update </u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      disclosed in its Current Report on Form 8-K, filed March 16, 2006, the Company
      has entered into a Securities Purchase Agreement (the "SPA") for the aggregate
      of $1,500,000 in callable secured convertible notes (the "Notes") with certain
      investors (the "Investors"). As of the date hereof, the Company has sold
      $1,225,000 in the Notes pursuant to the SPA. While the SPA contemplates monthly
      purchases of the Notes, under defined conditions either the Company or the
      Investors may decline to proceed with additional 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. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company is behind on its original expectations relative to the funding schedule
      on the Notes. The Company has recently initiated discussions with the Investors
      relating to a request to fund current operations, increase marketing and
      promotion budgets, and fully fund the remaining costs of the audits and filings.
      Although the requests are fluid and subject to negotiation, the Company has
      initially requested additional normal operations funding of approximately
      $200,000 per month (including certain settlements payments), and additional
      marketing and operations support funding in the $50,000 per month range. This
      additional market and operations funding would allow attendance at various
      trade
      shows, and provide for international marketing on a very limited scale. While
      viewed as necessary investments, these marketing expenditures would not result
      in immediate or near-term revenue expansion. The Company is also discussing
      a
      remaining audit and filings budget in the range of $200,000 to $250,000.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 April 7, 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
      $.0002 and, therefore, the conversion price for the secured convertible notes
      was $.00004. 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).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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
      10,600,000,000 shares outstanding (including conversions of Previous Notes
      during calendar year 2006 of approximately 1,845,000,000 common shares), 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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURE</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirement of the Securities and Exchange Act of 1934, the registrant
      has duly caused this report to be signed on its behalf by the undersigned
      thereunto duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>GLOBALNET
              CORPORATION</strong></font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td>&#160;</td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;MARK
              T.
              WOOD</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
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            <td align="left">
              <hr style="COLOR: black" align="left" noshade size="2" width="80%"><font size="2">Mark
              T. Wood, CEO </font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td>&#160;</td>
          </tr>

      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
      April 10, 2006</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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          <hr style="COLOR: black" noshade size="2">
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{"company-data": {"conformed-name": "GLOBALNET CORP", "cik": "0000810932", "assigned-sic": "4813", "irs-number": "752863583", "state-of-incorporation": "NV", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-24962", "film-number": "06750891"}, "business-address": {"street1": "16990 DALLAS PARKWAY SUITE 106", "street2": "SUITE 106", "city": "DALLAS", "state": "TX", "zip": "75248", "phone": "9728181058"}, "mail-address": {"street1": "16990 DALLAS PARKWAY SUITE 106", "street2": "SUITE 106", "city": "DALLAS", "state": "TX", "zip": "75248"}, "former-company": [{"former-conformed-name": "IDIAL NETWORKS INC", "date-changed": "20000316"}, {"former-conformed-name": "DESERT SPRINGS ACQUISITION CORP", "date-changed": "19960717"}, {"former-conformed-name": "BARTEL FINANCIAL GROUP INC", "date-changed": "19941021"}]}
Unassociated Document
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
Date
      of report (date of earliest event reported): April 7, 2006
GLOBALNET
      CORPORATION
(Exact
      name of registrant as specified in its charter)
Nevada
000-24962
75-2863583
(State
                or Other Jurisdiction
of
                Incorporation)
(Commission
File
                Number)
(IRS
                Employer
Identification
                No.)
2616
      South Loop West, Suite 660, Houston, Texas 77054
(Address
      of principal executive offices)
Registrant's
      telephone number, including area code:
(832)
      778-9591
Copy
      of correspondence to:
Gregory
      Sichenzia, Esq.
Stephen
      M. Fleming, Esq.
Sichenzia
      Ross Friedman Ference LLP
1065
      Avenue of the Americas
New
      York,
      New York 10018
Tel:
      (212) 930-9700 Fax: (212) 930-9725
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))
ITEM
      8.01
Other
      Events
Globalnet
      Corporation (the "Company") provides the following information as an update on
      its current financial condition and operations.
All
      statements, other than statements of historical facts, included in this report
      regarding the Company's strategy, expected future financial position,
      development and marketing of products, competitive position, and plans and
      objectives of management are forward-looking statements. Words such as
      "anticipate," "believe," "estimate," "expect," "intend," "plan," "will" and
      other similar expressions help identify forward-looking statements, although
      not
      all forward-looking statements contain these identifying words. In particular,
      the statements regarding the treatment of various financial instruments and
      the
      related charge to earnings, the impairment of goodwill, the continued
      implementation of the Company's strategic plan, the expected future monthly
      losses, the availability and terms and conditions of new financing, and the
      impact of capital allocation decisions should new financing be obtained, are
      forward-looking statements. These forward-looking statements involve substantial
      risks and uncertainties and are based on current expectations, assumptions,
      estimates and projections about the Company's business and the
      telecommunications industry in which the Company operates. The Company may
      not
      actually achieve the plans, intentions or expectations disclosed in its
      forward-looking statements, and you should not place undue reliance on the
      Company's forward-looking statements. Actual results or events could differ
      materially from the plans, intentions and expectations disclosed in the
      forward-looking statements that the Company makes. In addition, the forward
      looking financial information presented below was prepared using very basic
      information and assumptions which did not include all, information and
      assumptions generally used in the preparation of forward looking financials.
      Furthermore, the forwarding looking financial information presented below
      assumes the Company is able to obtain funding when needed and on reasonable
      terms. There can be no assurance when or if the Company will obtain funding
      or
      the terms of any such funding. At the present time the Company does not have
      sufficient cash to fund its operations. The Company's forward-looking statements
      do not reflect the potential impact of any future acquisitions, mergers,
      dispositions, joint ventures or investments that the Company may make. The
      Company does not assume any obligation to update any forward-looking
      statements.
Status
      of Financial Statements and Audits
As
      previously disclosed, the Company engaged in conversations with the Securities
      and Exchange Commission (the "SEC") on a variety of accounting issues in early
      to mid-2005. On February 11, 2006, the Company re-initiated contact with the
      SEC
      via a request for guidance (the "Request") with the Office of the Chief
      Accountant.
The
      primary purpose of the Request was to seek guidance on the treatment of certain
      convertible notes and preferred stock (the "Instruments") issued during 2003,
      and possibly requiring derivative accounting treatment under Financial
      Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging
      Activities" and Emerging Issues Task Force ("EITF") No. 00-19 "Accounting for
      Derivative Financial Instruments Indexed to, and Potentially Settled in, a
      Company's Own Stock."
From
      the
      conversations with the SEC, subject to final audit, the Company now expects
      to
      record the Instruments as derivatives. The accounting charge that will result
      from this accounting treatment substantially reflects the significant rise
      in
      the price of the Company's common stock during the fourth quarter of 2003,
      followed by the steep decline in 2004. Although the Company has not completed
      its analysis and the estimate has not been audited, the Company has advised
      the
      SEC that the fourth quarter of 2003 charge to earnings will likely exceed $600
      million dollars, and that this charge will significantly be recovered as income
      in 2004 as the common stock price which underlies the derivative calculation,
      declined.
The
      guidance received from the SEC will also impact the Company's recording of
      the
      Instruments in 2004 through 2006, and will also affect the accounting for new
      convertible instruments in those years. The impact of derivative accounting
      on
      the Instruments and new financing instruments has not been calculated, but
      is
      expected to be material to the Company's financial statements. The Company also
      expects, subject to audit, to report a major impairment of goodwill and other
      intangible assets, at December 31, 2003.
The
      derivative accounting treatment, discussed above, also affects periods prior
      to
      2003. Currently, the Company expects to correct the 2003 opening balance sheet
      for the impact of derivative accounting prior to 2003, and to restate the
      quarterly information for all periods in 2003 within a "comprehensive" Form
      10-K, as discussed below.
The
      Company has also been in discussions with the SEC regarding mechanisms through
      which the Company might be able to expedite the filing of its annual and
      quarterly reports with the Securities and Exchange Commission. The Division
      of
      Corporation Finance of the SEC has advised the Company that it will accept
      the
      inclusion of required quarterly information in a "comprehensive" Form 10-KSB for
      the year ended December 31, 2004. While this filing would allow the Company
      to
      forgo filing amended Forms 10-QSB and Form 10-KSB for the earlier periods,
      it
      does not relieve the Company of the requirement to substantively provide all
      required information within the comprehensive Form 10-KSB that would otherwise
      have been filed in amended filings. The waiver by the Division of Corporation
      Finance does not protect the Company against any enforcement actions. For
      certain purposes under the SEC's rules and regulations, the Company may not be
      deemed to be "current." The impact of not being deemed current for certain
      purposes may materially affect the Company's options with respect to certain
      filings it may wish to make in the future and may negatively impact the
      Company's ability to be relisted on the Over-the-Counter Bulletin
      Board.
2
As
      a
      result of these discussions, and the need to restate all periods in 2003 which
      was previously not anticipated, the Company's efforts will require significantly
      more time to complete. Although there is no assurance that the filings, as
      described above, would be completed by June 30, 2006, the Company has advised
      the SEC that its new goal for filing would approximate this date.
Finances
      and Operations Related Update
Due
      to
      the incomplete nature of its work associated with the 2003 to 2005 audits,
      discussed above, the Company is able to provide only limited financial statement
      information:
-
the
                Company's revenue for the fourth quarter of 2005 is expected to
                approximate $1.5 million, with gross margin in the 3-6%
                range.
-
revenues
              for the first quarter of 2006 are projected to approximate $1.2 million,
              with gross margins in the 6% range.
-
wholesale
              activities continue to be reoriented, with an ultimate goal that these
              activities will exist primarily to support and differentiate the VOIP
              product lines. This reorientation will result in slow revenue growth
              in
              the wholesale offerings, with only minimal margin expansion expected.
              In
              subsequent periods of 2006, the Company expects to show slow revenue
              and
              margin growth in its VOIP product lines;
-
the
                Company's cash consumption, excluding audit related and new marketing
                initiative expenses, has been reduced to the approximate $200,000
                per
                month range;
-
the
                Company's relocation of its primary switching facility from San Antonio
                to
                Houston, Texas has been substantially
                completed;
-
the
                Company continues to settle claims and contingencies, as it deems
                appropriate and necessary. In February 2006, the Company settled
                a three
                year commitment for cable service in San Antonio, Texas, and expects
                to
                engage in discussions relating to other long-term commitments associated
                with its San Antonio location. The Company cannot currently estimate
                the
                ultimate result of these other negotiation
                efforts.
Financing
      Related Update
As
      disclosed in its Current Report on Form 8-K, filed March 16, 2006, the Company
      has entered into a Securities Purchase Agreement (the "SPA") for the aggregate
      of $1,500,000 in callable secured convertible notes (the "Notes") with certain
      investors (the "Investors"). As of the date hereof, the Company has sold
      $1,225,000 in the Notes pursuant to the SPA. While the SPA contemplates monthly
      purchases of the Notes, under defined conditions either the Company or the
      Investors may decline to proceed with additional 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.
The
      Company is behind on its original expectations relative to the funding schedule
      on the Notes. The Company has recently initiated discussions with the Investors
      relating to a request to fund current operations, increase marketing and
      promotion budgets, and fully fund the remaining costs of the audits and filings.
      Although the requests are fluid and subject to negotiation, the Company has
      initially requested additional normal operations funding of approximately
      $200,000 per month (including certain settlements payments), and additional
      marketing and operations support funding in the $50,000 per month range. This
      additional market and operations funding would allow attendance at various
      trade
      shows, and provide for international marketing on a very limited scale. While
      viewed as necessary investments, these marketing expenditures would not result
      in immediate or near-term revenue expansion. The Company is also discussing
      a
      remaining audit and filings budget in the range of $200,000 to $250,000.
3
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 April 7, 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
      $.0002 and, therefore, the conversion price for the secured convertible notes
      was $.00004. 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
      10,600,000,000 shares outstanding (including conversions of Previous Notes
      during calendar year 2006 of approximately 1,845,000,000 common shares), 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.
SIGNATURE
Pursuant
      to the requirement of the Securities and Exchange Act of 1934, the registrant
      has duly caused this report to be signed on its behalf by the undersigned
      thereunto duly authorized.
GLOBALNET
              CORPORATION
By:
/s/ MARK
              T.
              WOOD
Mark
              T. Wood, CEO
Dated:
      April 10, 2006
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