UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________
FORM 10-Q/A
Amendment No. 1
_________________
þ QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2011
or
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
_________________
WORLDS INC.
(not
affiliated with Worldcom, Inc.)
(Exact name of registrant as specified in its charter)
_________________
Delaware | 0-24115 | 22-1848316 |
(State or Other Jurisdiction | (Commission | (I.R.S. Employer |
of Incorporation or Organization) | File Number) | Identification No.) |
11
Royal Road
Brookline, MA 02445
(Address of Principal Executive Offices)
(617) 725-8900
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address and former fiscal year, if changed since last report)
_________________
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 o No þ
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes o No þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ
As of August 12, 2011, the registrant had 71,361,909 shares shares of common stock, par value $0.001 per share outstanding.
EXPLANATORY NOTE
This Amendment No. 1 to the Quarterly Report on Form 10-Q/A (the “Amendment”) amends the Quarterly Report on Form 10-Q of Worlds Inc. (the “Company”) for the quarter ended June 30, 2011 (the “Original Filing”), that was originally filed with the U.S. Securities and Exchange Commission on August 22, 2011. The Amendment is being filed to submit Notes. The Amendment revises the financial notes of the Original Filing (XBRL interactive data) is included as an exhibit to the Amendment.
Except as described above, the Amendment does not modify or update the disclosures presented in, or exhibits to, the Original Filing in any way. Those sections of the Original Filing that are unaffected by the Amendment are not included herein. The Amendment continues to speak as of the date of the Original Filing. Furthermore, the Amendment does not reflect events occurring after the filing of the Original Filing. Accordingly, the Amendment should be read in conjunction with the Original Filing, as well as the Company’s other filings made with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act subsequent to the filing of the Original Filing.
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, thereunto duly authorized.
Date: August 22, 2011
WORLDS INC.
By:
/s/ Thomas Kidrin Thomas Kidrin President and CEO By: /s/ Christopher Ryan Christopher Ryan Chief Financial Officer |
Balance Sheets (Parenthetical) (USD $)
|
Dec. 31, 2010
|
Jun. 30, 2011
Unaudited
|
Dec. 31, 2010
Audited
|
---|---|---|---|
Common Stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 62,781,122 | 71,361,909 | 62,781,122 |
Common Stock, shares outstanding | 62,781,122 | 71,361,909 | 62,781,122 |
Statements of Operations (Unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Revenues | Â | Â | Â | Â |
Revenue | $ 0 | $ 38 | $ 199 | $ 75,574 |
Total Revenue | 0 | 38 | 199 | 75,574 |
Cost of Revenue | 4,650 | 3,331 | 16,959 | 8,112 |
Gross Profit/(Loss) | (4,650) | (3,293) | (16,760) | 67,462 |
Common Stock issued for services rendered | 210,000 | 0 | 683,430 | 0 |
Selling, General & Admin. | 112,172 | 122,271 | 225,425 | 206,675 |
Salaries | 61,004 | 0 | 134,209 | 0 |
Operating loss | (387,826) | (125,564) | (1,059,825) | (139,213) |
Other Income Expense | Â | Â | Â | Â |
Interest Expense | 0 | 0 | 0 | 0 |
Net (Loss) | $ (387,826) | $ (125,564) | $ (1,059,825) | $ (139,213) |
Weighted Average Loss per share | $ (0.01) | $ 0.00 | $ (0.02) | $ 0.00 |
Weighted Average Common Shares Outstanding | 69,987,733 | 56,370,906 | 67,503,361 | 55,024,810 |
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 12, 2011
|
|
Document And Entity Information | Â | Â |
Entity Registrant Name | Worlds.com, Inc. | Â |
Entity Central Index Key | 0000001961 | Â |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 30, 2011 | |
Amendment Flag | false | Â |
Current Fiscal Year End Date | --12-31 | Â |
Is Entity a Well-known Seasoned Issuer? | No | Â |
Is Entity a Voluntary Filer? | No | Â |
Is Entity's Reporting Status Current? | Yes | Â |
Entity Filer Category | Smaller Reporting Company | Â |
Entity Common Stock, Shares Outstanding | Â | 71,361,909 |
Document Fiscal Period Focus | Q2 | Â |
Document Fiscal Year Focus | 2011 | Â |
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NOTE 7 - STOCK OPTIONS
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Jun. 30, 2011
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Notes to Financial Statements | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 7 - STOCK OPTIONS |
NOTE 7 STOCK OPTIONS
During 2010 the Company issued stock options to various parties. The stock options allow the parties to purchase shares of the Companys common stock at various prices per share per each individual option agreement. The options allow the various parties to purchase one share of its stock for each option. The options expire at various times through October 28, 2013 per each individual option agreement. The Company did not grant any registration rights with respect to any shares of common stock issuable upon exercise of the options. There were no forfeited options during 2010. During the year ended December 31, 2010, the Company recorded an expense of $42,543, equal to the estimated fair value of the options at the date of grants. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 5.0% risk-free interest, 0% dividend yield, 60% volatility, and expected lives ranging from one to three years.
During 2010 we also issued 500,000 stock options exercisable at $0.05 per share to one person, who is not an officer or a director. No stock options have been issued in the six months ended June 30, 2011.
During the three months ended June 30, 2011, 928,529 stock options were exercised and 920,160 warrants were exercised. There are no outstanding warrants as of June 30, 2011.
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NOTE 3 - PRIVATE PLACEMENTS OF EQUITY
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Notes to Financial Statements | Â |
NOTE 3 - PRIVATE PLACEMENTS OF EQUITY |
NOTE 3 - PRIVATE PLACEMENTS OF EQUITY
During 2010, the Company completed a private placement of 1,454,590 shares of its common stock at a price per share of $0.10 for aggregate proceeds of $145,459. The five accredited investors also received an aggregate of 975,338 warrants as part of the equity investment exercisable at $0.15 per share. The Company also converted the $175,000 in notes payable from the 2009 financing into 1,750,000 shares of its common stock. Also in 2010, the Company completed a private placement of 3,333,331 shares of its common stock at a price per share of $0.12 for aggregate proceeds of $400,000.
During 2010, the Company issued an aggregate of 5,912,774 shares of common stock as payment for services rendered. During the six months ended June 30, 2011 the Company issued an aggregate of 3,173,382 shares of common stock as payment for services rendered.
During the six months ended June 30, 2011, the Company raised $118,446 with the exercise of warrants covering 1,160,804 shares of its common stock at a price per share ranging from $0.01 to $0.15 per share.
During the six months ended June 30, 2011, the Company raised $58,000 with the exercise of options covering 928,529 shares of its common stock at a price ranging from $0.05 to $0.30 per share. 128,529 of those shares were exercised on a cashless basis by the surrender to the Company of an aggregate of 131,747 options with a value of $38,558 being equal to the difference in price between the exercise price and the market price on the date of exercise.
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NOTE 8 - INCOME TAXES
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6 Months Ended | ||||||||||||||||||||||||||||
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Jun. 30, 2011
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Notes to Financial Statements | Â | ||||||||||||||||||||||||||||
NOTE 8 - INCOME TAXES |
NOTE 8 - INCOME TAXES
At June 30, 2011, the Company had federal and state net operating loss carry forwards of approximately $40,000,000 that expire in various years through the year 2024.
Due to operating losses, there is no provision for current federal or state income taxes for the six months ended June 30, 2011 and 2010.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.
The Companys deferred tax asset at June 30, 2011 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating to approximately $16,000,000 less a valuation allowance in the amount of approximately $16,000,000. Because of the Companys lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance.
The Companys total deferred tax asset as of June 30, 2011 is as follows:
The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the six months ended June 30, 2011 is as follows:
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NOTE 1 - DECSRIPTION OF BUSINESS & SUMMARY OF ACCTING POLICIES
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Notes to Financial Statements | Â |
NOTE 1 - DECSRIPTION OF BUSINESS & SUMMARY OF ACCTING POLICIES |
NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Description of Business
On May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc., the majority of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase and to more aggressively enforce against infringers. The Company also entered into a License Agreement with Worlds Online Inc. to sublicense patented technologies.
Basis of Presentation
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"), which contemplates continuation of the Company as a going concern. The Company has always been considered a developmental stage business, has incurred significant losses since its inception and has had minimal revenues from operations. The Company will require substantial additional funds for development and enforcement of its patent portfolio. There can be no assurance that the Company will be able to obtain the substantial additional capital resources to pursue its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company has not been able to generate sufficient revenue or obtain sufficient financing which has had a material adverse effect on the Company, including requiring the Company to reduce operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. For the past year the Company has been operating at a significantly reduced capacity, with only one full time employee, performing primarily consulting services and licensing software and using consultants to perform any additional work that may be required.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents are comprised of highly liquid money market instruments, which have original maturities of three months or less at the time of purchase.
Due from Related Party
Due from related party is comprised of cash payments made by Worlds Inc. on behalf of Worlds Online Inc.
Revenue Recognition
Effective for the second quarter of 2011, the Company spun off its online businesses to Worlds Online Inc. The Companys sources of revenue after the spin off will be from sublicensing the patented technology and any revenue that may be generated from enforcing those patents in the market. The Company had the following sources of revenue: (1) consulting/licensing revenue from the performance of development work performed on behalf of the Company, licensing revenue or from the sale of certain software to third parties; and (2) VIP subscriptions to our Worlds Ultimate 3-D Chat service. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectibility is reasonable assured. This will usually be in the form of a receipt of a customers acceptance indicating the product has been completed to their satisfaction except for development work and service revenue which is recognized when the services have been performed. Deferred revenue represents cash payments received in advance to be recorded as revenue when earned. The corresponding cost associated with those contracts is also deferred as deferred costs until the revenue is ultimately recognized.
Research and Development Costs
Research and development costs are charged to operations as incurred.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided on a straight line basis over the estimated useful lives of the assets ranging from three to five years. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Maintenance and repairs are charged to expense in the period incurred.
Impairment of Long Lived Assets
The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the six months ended June 30, 2011 and 2010.
Stock-Based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Income Taxes
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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 consolidated statements of operations in the period that includes the enactment date.
Notes Payable
The Company has $773,279 in short term notes outstanding at June 30, 2011.
Deferred Revenue
As part of a debt refinancing in 2000, $631,950 of debt was renegotiated to deferred revenue representing future services to be provided by the Company. $355,000 has been amortized into income since then. The balance was transferred over to Worlds Online Inc. and no longer appears on the Companys balance sheet.
Call Option Agreements
The Company has entered into call option agreements with 13 of its major shareholders. The call options give the Company the right to purchase up to 4,150,000 shares of stock back at prices ranging from $0.15 per share up to $0.40 per share. The Company issued an aggregate of 680,000 shares of stock to these shareholders as an inducement to enter into these call option agreements. The call option agreements have expiration dates of 1 and 2 years.
Comprehensive Income (Loss)
The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the consolidated financial statements.
Loss Per Share
Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of June 30, 2011 and 2010.
Stockholders Equity
3,173,382 shares of common stock were issued for services rendered during the six months ended June 30, 2011.
Commitments and Contingencies
During 2000 the Company was involved in a lawsuit relating to unpaid consulting services. In April, 2001 a judgment against the Company was rendered for approximately $205,000. As of June 30, 2011 and December 31, 2010 the Company recorded a reserve of $205,000 for this lawsuit, which is included in accrued expenses in the accompanying balance sheets.
Risk and Uncertainties
The Company is subject to risks common to companies in the service and technology industries, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel.
Recent Accounting Pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
FASB Accounting Standards Codification (Accounting Standards Update (ASU) 2009-01)
In June 2009, FASB approved the FASB Accounting Standards Codification (the Codification) as the single source of authoritative nongovernmental US GAAP. All existing accounting standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other related literature, excluding guidance from the Securities and Exchange Commission (SEC), have been superseded by the Codification. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become nonauthoritative. The Codification did not change US GAAP, but instead introduced a new structure that combines all authoritative standards into a comprehensive, topically organized online database. The Codification is effective for interim or annual periods ending after September 15, 2009, and impacts the Companys consolidated financial statements as all future references to authoritative accounting literature will be referenced in accordance with the Codification. There have been no changes to the content of the Companys financial statements or disclosures as a result of implementing the Codification during the fiscal year ended December 31, 2010 or the six months ended June 30, 2011.
As a result of the Companys implementation of the Codification during the fiscal year ended December 31, 2009, previous references to new accounting standards and literature are no longer applicable. In the current annual consolidated financial statements, the Company will provide reference to both new and old guidance to assist in understanding the impacts of recently adopted accounting literature, particularly for guidance adopted since the beginning of the current fiscal year but prior to the Codification.
Subsequent Events (Included in Accounting Standards Codification (ASC) 855 Subsequent Events, previously SFAS No. 165 Subsequent Events)
SFAS No. 165 established general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the consolidated financial statements are issued or available to be issued (subsequent events). An entity is required to disclose the date through which subsequent events have been evaluated and the basis for that date. For public entities, this is the date the consolidated financial statements are issued. SFAS No. 165 does not apply to subsequent events or transactions that are within the scope of other GAAP and did not result in significant changes in the subsequent events reported by the Company. SFAS No. 165 became effective for interim or annual periods ending after June 15, 2009 and did not impact the Companys consolidated financial statements. The Company evaluated for subsequent events through the issuance date of the Companys consolidated financial statements. No recognized or non-recognized subsequent events were noted.
Determination of the Useful Life of Intangible Assets (Included in ASC 350 Intangibles Goodwill and Other, previously FSP SFAS No. 142-3 Determination of the Useful Lives of Intangible Assets)
FSP SFAS No. 142-3 amended the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under previously issued goodwill and intangible assets topics. This change was intended to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under topics related to business combinations and other GAAP. The requirement for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FSP SFAS No. 142-3 became effective for consolidated financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the Companys consolidated financial statements.
Non-controlling Interests (Included in ASC 810 Consolidation, previously SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51)
SFAS No. 160 changed the accounting and reporting for minority interests such that they will be recharacterized as noncontrolling interests and classified as a component of equity. SFAS No. 160 became effective for fiscal years beginning after December 15, 2008 with early application prohibited. The Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer records an intangible asset when the purchase price of a non-controlling interest exceeds the book value at the time of buyout. The adoption of SFAS No. 160 did not have any other material impact on the Companys financial statements.
Consolidation of Variable Interest Entities Amended (To be included in ASC 810 Consolidation, SFAS No. 167 Amendments to FASB Interpretation No. 46(R))
SFAS No. 167 amends FASB Interpretation No. 46(R) Consolidation of Variable Interest Entities regarding certain guidance for determining whether an entity is a variable interest entity and modifies the methods allowed for determining the primary beneficiary of a variable interest entity. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. SFAS No. 167 is effective for the first annual reporting period beginning after November 15, 2009, with earlier adoption prohibited. The adoption of SFAS No. 167 in 2010 did not have a material impact on the Companys financial statements.
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NOTE 4 - DEFERRED REVENUE
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6 Months Ended |
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Jun. 30, 2011
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Notes to Financial Statements | Â |
NOTE 4 - DEFERRED REVENUE |
NOTE 4 DEFERRED REVENUE
Deferred revenue represents advance payments for the license, the design and development of the software, content and related technology for the creation of an interactive, 3D entertainment portal on the internet. As part of a debt refinancing in 2000, $631,950 of debt was renegotiated to deferred revenue representing future services to be provided by the Company. During 2010, $265,000 worth of services was provided leaving a balance of $276,950 at December 31, 2010. As part of the spin off, the deferred revenue agreement was transferred to Worlds Online Inc. As of June 30, 2011 the balance is $0.
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NOTE 5 - NOTES PAYABLE
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Jun. 30, 2011
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Notes to Financial Statements | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 5 - NOTES PAYABLE |
NOTE 5 - NOTES PAYABLE
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NOTE 6 - PROPERTY AND EQUIPMENT
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Notes to Financial Statements | Â | |||||||||||||||||||||||||||||||||||||||||||||
NOTE 6 - PROPERTY AND EQUIPMENT |
NOTE 6- PROPERTY AND EQUIPMENT
The detail composition of property and equipment at June 30, 2011 and December 31, 2010 is as follows:
Depreciation expense recorded for the three months ended June 30, 2011 and 2010 was $0 and $781, respectively. |
Statements of Cash Flows (Unaudited) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
|
Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
|
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Cash flows from operating activities: | Â | Â | Â | Â |
Net (loss) | $ (387,826) | $ (125,564) | $ (1,059,825) | $ (139,213) |
Adjustments to reconcile net loss to net cash used in operating activities | Â | Â | Â | Â |
Depreciation | 759 | 1,562 | 759 | 1,562 |
Common stock issued for services rendered | Â | Â | 683,430 | 10,900 |
Bank Overdraft | 0 | (1,175) | 0 | (1,175) |
Accounts payable and accrued expenses | (4,972) | 88,847 | (4,972) | 88,847 |
Contingent Deposit | 0 | 417,500 | 0 | 417,500 |
Deferred revenue | 0 | (75,000) | 0 | (75,000) |
Net cash used in operating activities: | (380,608) | 303,421 | (380,608) | 303,421 |
Proceeds from exercise of warrants | 118,446 | 145,459 | 118,446 | 145,459 |
Proceeds from exercise of options | 58,000 | 0 | 58,000 | 0 |
Due from related party | (23,339) | 0 | (23,339) | 0 |
Repayment of officer loan payable | (2,400) | (4,000) | (2,400) | (4,000) |
Net cash provided by financing activities | 150,707 | 141,459 | 150,707 | 141,459 |
Net increase/(decrease) in cash | (229,901) | 444,880 | (229,901) | 444,880 |
Cash beginning of period | 400,848 | 0 | 400,848 | Â |
Cash end of period | 170,947 | 444,880 | 170,947 | 444,880 |
Common stock issued for payable | 72,375 | 0 | 72,375 | 0 |
Deferred revenue | Â | Â | 276,950 | 0 |
Interest | 0 | 0 | 0 | 0 |
Income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
NOTE 2 - GOING CONCERN
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6 Months Ended |
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Jun. 30, 2011
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Notes to Financial Statements | Â |
NOTE 2 - GOING CONCERN |
NOTE 2 - GOING CONCERN
From mid-2001 through most of 2007, the Company had to significantly curtail and at times almost cease operations due to lack of resources. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Since its inception, the Company has had periods where it had only minimal revenues from operations. There can be no assurance that the Company will be able to obtain the additional capital resources to fully implement its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company is pursuing sources of additional financing and there can be no assurance that any such financing will be available to the Company on commercially reasonable terms, or at all. Any inability to obtain additional financing will likely have a material adverse effect on the Company, including possibly requiring the Company to reduce and/or cease operations.
These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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