10-K/A

Form 10-K/A

Amendment No. 1

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 0-24115

WORLDS INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	22-1848316
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

11 Royal Road, Brookline, MA  02445

(Address of Principal Executive Offices)

(617) 725-8900

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name Of Each Exchange On Which Registered
None	Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.001 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o    No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes  o    No x

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  x    No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes x No ¨

 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,”  “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

¨ Large Accelerated Filer                                                ¨  Accelerated Filer                                          ¨  Non-Accelerated Filer             x  Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.):    Yes  o   No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked closing price of such common equity, as of April 13, 2012 (closing price was $0.17) was approximately $12,726,564.

At April 13, 2012, the issuer had outstanding 74,862,146 shares of par value $.001 Common Stock, of which 62,981,487.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 on Form 10-K/A (the “Form 10-K/A”) to the Annual Report on Form 10-K for the year ended December 31, 2011 (the “Original Filing”) of WORLDS INC.(the “Company”), filed with the Securities and Exchange Commission on April 19, 2012, is to:

a) Furnish Exhibit 101 XBRL (eXtensible Business Reporting Language) interactive data files in accordance with Rule 405 (a)(2) of Regulation S-T. Included as Exhibit 101 to this report is the following information formatted in XBRL: (i) the balance sheets at December 31, 2011 and 2010, (ii) the statements of operations for the years ended December 31, 2011 and December 31, 2010, (iii) the statement of stockholders’ deficit for the years ended December 31, 2011 and  December 31, 2010, (iv) the statement of cash flows for the years ended December 31, 2011 and December 31, 2010, and (v) the notes to the financial statements (tagged as blocks of text).

In accordance with applicable SEC rules, this Form 10-K/A includes certifications from our Chief Executive Officer and Chief Financial Officer dated as of the date of this filing.

Except for the items noted above, no other information included in the Original Filing is being amended by this Form 10-K/A. The Form 10-K/A continues to speak as of the date of the Original Filing.

Pursuant to Rule 406T of Regulation S-T, the interactive data files contained in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

EX-31

EXHIBIT 31.1 Certifications

I, Thomas Kidrin, certify that: 

1. I have reviewed this annual report on Form 10-K of Worlds Inc.;  

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): 

a) all significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 19, 2012

/s/ Thomas Kidrin

Thomas Kidrin

Chief Executive Officer

EX-31

EXHIBIT 31.2 Certifications

I, Christopher J. Ryan, Principal Accounting and Financial Officer, certify that:

1. I have reviewed this annual report on Form 10-K of Worlds Inc.;  

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): 

a) all significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 19, 2012

/s/ Christopher J. Ryan

Christopher J. Ryan

Principal Accounting and Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Worlds Inc. (the "Company") on Form 10-K for the year ended December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas Kidrin, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, our financial condition and result of operations.

	WORLDS INC. (Registrant)
Date: April 19, 2012	By:	/s/ Thomas Kidrin
		Thomas Kidrin Chief Executive Officer

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Worlds Inc. (the "Company") on Form 10-K for the year ended December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Christopher J. Ryan, Principal Accounting and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, our financial condition and result of operations.

	WORLDS INC. (Registrant)
Date: April 19, 2012	By:	/s/ Christopher J. Ryan
		Christopher J. Ryan Principal Accounting and Financial Officer

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NOTE 3 - PRIVATE PLACEMENTS OF EQUITY

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

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 year ended December 31, 2011 the Company issued an aggregate of 5,348,619 shares of common stock as payment for services rendered with an aggregate value of $1,093,482.

During the year ended December 31, 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 year ended December 31, 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.

During the year ended December 31, 2011, the Company issued 4,333,331 common shares for a cash investment of $150,000. Included in these shares were 3,333,331 in shares from the prior year that were issued for $400,000.

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NOTE 2 - GOING CONCERN

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

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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Balance Sheets (USD $)	Dec. 31, 2011	Dec. 31, 2010
Current Assets
Cash and cash equivalents	$ 152,526	$ 400,848
Due from related party	43,819
Prepaid expenses	82,633
Total Current Assets	278,978	400,848
Property and equipment, net of accumulated depreciation		759
Total Assets	278,978	401,607
Current Liabilities
Accounts payable	798,808	782,809
Accrued expenses	1,866,172	1,818,751
Loan payable officer		2,400
Deferred revenue		276,950
Notes payable	773,279	773,279
Total Current Liabilities	3,438,259	3,654,189
Common stock(Par value $0.001 authorized 100,000,000 shares, issued and outstanding 74,862,146 and 62,781,122 at December 31, 2011 and December 31, 2010, respectively)	74,862	62,780
Common stock subscribed but not yet issued (525,000 and 3,358,331 at December 31, 2011 and December 31, 2010, respectively)	525	3,358
Additional Paid in Capital	25,231,804	23,453,111
Accumulated Deficit	(28,466,471)	(26,771,831)
Total stockholders deficit	(3,159,281)	(3,252,582)
Total Liabilities and stockholders deficit	$ 278,978	$ 401,607

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Shareholders Deficit (USD $)	Common Stock	Additional Paid-In Capital	Common Stock Subscribed But Not Issued	Accumulated Deficit	Total
Beginning Balance, amount at Dec. 31, 2009	$ 53,663	$ 22,258,713		$ (26,176,269)	$ (3,863,893)
Beginning Balance, shares at Dec. 31, 2009	53,663,758
Common Stock Issued for services, shares	5,912,774		25,000
Common Stock Issued for services, amount	5,913	423,011	25		428,949
Conversion of debt to equity, shares	1,750,000
Conversion of debt to equity, amount	1,750	173,250			175,000
Exercise of warrants, shares	1,454,590
Exercise of warrants, amount	1,455	144,004			145,459
Issuance of warrants		14,922			14,922
Issuance of common stock for cash investment, shares			3,333,331
Issuance of common stock for cash investment, amount		396,667	3,333		400,000
Issuance of stock options		42,543			42,543
Net loss for the year ended				(595,563)	(595,563)
Ending Balance, amount at Dec. 31, 2010	62,780	23,453,111	3,358	(26,771,831)	(3,252,582)
Deferred Revenue at Dec. 31, 2010					276,950
Ending Balance, shares at Dec. 31, 2010	62,781,122		3,358,331
Common Stock Issued for services, shares	5,348,619		500,000
Common Stock Issued for services, amount	5,349	1,088,133	500		1,093,982
Conversion of debt to equity, shares	309,741
Conversion of debt to equity, amount	310	72,065			72,375
Exercise of warrants, shares	1,160,804
Exercise of warrants, amount	1,161	117,285			118,446
Issuance of common stock for cash investment, shares	4,333,331		(3,333,331)
Issuance of common stock for cash investment, amount	4,333	149,000	(3,333)		150,000
Exercise of stock options, shares	928,529
Exercise of stock options, amount	929	57,071			58,000
Issuance of stock options		18,188			18,188
Net loss for the year ended				(1,694,640)	(1,694,640)
Ending Balance, amount at Dec. 31, 2011	74,862	25,231,804	525	(28,466,471)	(3,159,281)
Deferred Revenue at Dec. 31, 2011		$ 276,950
Ending Balance, shares at Dec. 31, 2011	74,862,146		525,000

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NOTE 1 - DECSRIPTION OF BUSINESS & SUMMARY OF ACCTING POLICIES

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

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 alleged infringers. The Company also entered into a License Agreement with Worlds Online Inc. to sublicense its 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. for shared operating expenses.

Revenue Recognition

Effective for the second quarter of 2011, the Company spun off its online businesses to Worlds Online Inc. The Company’s sources of revenue after the spin off will be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its 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 customer’s 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 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 December 31, 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 Company’s 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. In 2011, 12 of the call options were extended for 1 year. The Company issued 315,000 additional shares as an inducement to enter into the 1 year extensions.

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 December 31, 2011 and 2010.

Stockholders Equity

5,348,619 shares of common stock were issued for services rendered during the year ended December 31, 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 December 31, 2011, and 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 technology industries, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel.

Recent Accounting Pronouncements

Recently issued accounting standards

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its consolidated financial condition or the consolidated results of its operations.

In July 2010, the FASB amended the requirements for Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. The new disclosures as of the end of the reporting period are effective for the fiscal year ending December 31, 2010, while the disclosures about activity that occurs during a reporting period are effective for the first fiscal quarter of 2011. The adoption of this guidance will not impact the Company’s consolidated results of operations or financial position.

In January 2010, the FASB issued authoritative guidance regarding fair value measures and disclosures. The guidance requires disclosure of significant transfers between level 1 and level 2 fair value measurements along with the reason for the transfer. An entity must also separately report purchases, sales, issuances and settlements within the level 3 fair value roll forward. The guidance further provides clarification of the level of disaggregation to be used within the fair value measurement disclosures for each class of assets and liabilities and clarified the disclosures required for the valuation techniques and inputs used to measure level 2 or level 3 fair value measurements. This new authoritative guidance is effective for the Company in fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of this guidance will not impact the Company’s consolidated results of operations or financial position.

In September 2011, the FASB issued ASU 2011-08 which provides an entity the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test for goodwill impairment.  If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required.  Otherwise, no further testing is required. The revised standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011.   The Company does not expect that the adoption of this standard will have a material impact on the Company’s results of operations, cash flows or financial condition.

In December 2011, FASB issued Accounting Standards Update 2011-11, “Balance Sheet - Disclosures about Offsetting Assets and Liabilities” to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such, the Company does not expect that the adoption of this standard will have a material impact on the Company’s results of operations, cash flows or financial condition.

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Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2011	Dec. 31, 2010
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	100,000,000	100,000,000
Common Stock, shares issued	74,862,146	62,781,122
Common Stock, shares outstanding	74,862,146	62,781,122

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Apr. 13, 2012
Document And Entity Information
Entity Registrant Name	Worlds Inc.
Entity Central Index Key	0000001961
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 66,000,000
Entity Common Stock, Shares Outstanding		74,862,146
Document Fiscal Period Focus	Q4
Document Fiscal Year Focus	2011

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Statements of Operations (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Revenues
Revenue	$ 199	$ 415,856
Total Revenue	199	415,856
Cost of Revenue	86,459	13,074
Gross Profit/(Loss)	(86,260)	402,782
Warrant expense		14,922
Option expense	18,188	42,543
Common Stock issued for services rendered	1,056,849	415,750
Selling, General & Administrative	333,249	258,930
Salaries	200,094	266,200
Operating Income (Loss)	(1,694,640)	(595,563)
Other Income Expense
Interest Expense
Net (Loss)	$ (1,694,640)	$ (595,563)
Weighted Average Net Income (Loss) per common share	$ (0.02)	$ (0.01)
Weighted Average Common Shares Outstanding	69,984,791	56,470,966

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NOTE 6 - PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

NOTE 6 - PROPERTY AND EQUIPMENT

NOTE 6- PROPERTY AND EQUIPMENT

The detail composition of property and equipment at December 31, 2011 and December 31, 2010 is as follows:

		31-Dec		31-Dec
		2011		2010
Computer equipment	$	10,891	$	10,891
Less: accumulated depreciation		10,891		10,132
Net book value	$	-0-	$	759

Depreciation expense recorded for the years ended December 31, 2011 and 2010 was $759 and $3,124, respectively.

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NOTE 5 - NOTES PAYABLE

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

NOTE 5 - NOTES PAYABLE

NOTE 5 - NOTES PAYABLE

Short term notes payable at December 31, 2011 consist of the following:
Unsecured note payable to a shareholder bearing 8% interest.
Entire balance of principal and unpaid interest due on demand	$	124,230
Unsecured note payable to a shareholder bearing 10% interest
Entire balance of principal and unpaid interest due on demand	$	649,049
Total current	$	773,279
2012	$	773,279
2013	$	-0-
2014	$	-0-
2015	$	-0-
2016	$	-0-
	$	773,279

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NOTE 9 - EMPLOYMENT AGREEMENTS (COMMITMENT)

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

NOTE 9 - EMPLOYMENT AGREEMENTS (COMMITMENT)

NOTE 9 - EMPLOYMENT AGREEMENTS (COMMITMENT)

On September 4, 2007, our board approved entry into an employment agreement with our president, Thom Kidrin.  The agreement, dated as of September 1, 2007, is for five years with a one-year renewal option held by Mr. Kidrin.  The agreement provides for a base salary of $200,000, which increases 10% on January 1 of each year; a monthly car allowance of $1,000; an annual bonus equal to 2.5% of Pre-Tax Income (as defined in the agreement); an additional bonus as follows: $75,000, if Pre-Tax Income for the year is between 150% and 200% of the prior fiscal year’s Pre-Tax Income or (B) $100,000, if Pre-Tax Income for the year is between 201% and 250% of the prior fiscal year’s Pre-Tax Income or (C) $200,000, if Pre-Tax Income for the year is 251% or greater than the prior fiscal year’s Pre-Tax Income, but in no event shall this additional bonus exceed five (5%) percent of Pre-Tax Income for such year; payment of up to $10,000 in life insurance premiums; options to purchase 15 million shares of our common stock at an exercise price of  $0.05 per share, of which one-third vested on September 4, 2007, one-third vest on August 31, 2008 and the balance vested on August 31, 2009; a death benefit equal to one year of the then base salary and a disability benefit equal to two years of the then base salary; and a payment equal to 2.99 times his base amount (as defined in the agreement) in the event of a Change of Control (as defined in the agreement).  The agreement also provides that Mr. Kidrin can be terminated for cause (as defined in the agreement) and that he is subject to restrictive covenants for 12 months after termination.    

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NOTE 7 - STOCK OPTIONS

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

NOTE 7 - STOCK OPTIONS

NOTE 7 – STOCK OPTIONS

During the year ended December 31,2011, the Company recorded an expense of $18,188, equal to the estimated fair value of the options that are to be issued to the directors for serving on the board in 2011 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 life of three years. 

During 2010 the Company issued stock options to various parties. The stock options allow the parties to purchase shares of the Company’s 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 year ended December 31, 2011.

During the year ended December 31, 2011, 1,160,804 warrants were exercised and 928,529 stock options were exercised for cash proceeds of $118,446 and $58,000, respectively. There are no outstanding warrants as of December 31, 2011.

Stock Options

Stock options outstanding and exercisable on December 31, 2011 are as follows:

Exercise Price per Share	Shares Under Option		Remaining Life in Years
Outstanding
$0.35		212,500		2.00
$0.30		300,000		.75
$0.20		300,000		1.00
$0.20		300,000		2.00
$0.11		150,000		3.30
$0.11		150,000		.75
$0.11		300,000		1.30
$0.05		15,450,000		0.67
$0.05		600,000		1.85
Exercisable
$0.35		212,500		2.00
$0.30		300,000		.75
$0.20		300,000		1.00
$0.20		300,000		2.00
$0.11		150,000		3.30
$0.11		150,000		.75
$0.11		300,000		1.30
$0.05		15,450,000		0.67
$0.05		600,000		1.85

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NOTE 8 - INCOME TAXES

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

NOTE 8 - INCOME TAXES

NOTE 8 - INCOME TAXES

At December 31, 2011, the Company had federal and state net operating loss carry forwards of approximately $40,000,000that 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 year ended December 31, 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 Company’s deferred tax asset at December 31, 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 Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance.

The Company’s total deferred tax asset as of December 31, 2011 is as follows:

Net operating loss carry forwards	$	16,000,000
Valuation allowance		(16,000,000)
Net deferred tax asset	$	—

The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the year ended December 31, 2011 is as follows:

Income tax computed at the federal statutory rate	34%
Income tax computed at the state statutory rate	5%
Valuation allowance	(39%)
Total deferred tax asset	0%

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NOTE 10 - SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

NOTE 10 - SUBSEQUENT EVENTS

NOTE - SUBSEQUENT EVENTS

On April 12, 2012, the company closed a small financing in which it sold 1 million shares of its common stock at a price of $0.25 per share. The purchaser was a non-U.S. entity with a history of investing in companies, like the registrant, with patent portfolios.

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Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net (loss)	$ (1,694,640)	$ (595,563)
Adjustments to reconcile net loss to net cash used in operating activities
Warrants expense		14,922
Depreciation	759	3,124
Fair value of stock options issued	18,188	42,543
Common stock issued for services rendered	1,093,982	368,949
Prepaid expenses	(10,258)
Bank overdraft		(1,175)
Accounts payable and accrued expenses	63,420	289,189
Due from related party	(43,819)
Deferred revenue		(265,000)
Net cash used in operating activities:	(572,368)	(143,011)
Cash flows from financing activities
Proceeds from issuance of common stock	150,000	400,000
Proceeds from exercise of warrants	118,446	145,459
Proceeds from exercise of options	58,000
Repayment of officer loan payable	(2,400)	(1,600)
Net cash provided by financing activities	324,046	543,859
Net increase/(decrease) in cash and cash equivalents	(248,322)	400,848
Cash and cash equivalents beginning of year	400,848
Cash and cash equivalents end of year	152,526	400,848
Common stock issued for payable	72,375
Deferred revenue	276,950
Conversion of debt to equity		175,000
Prepayment of expenses through issuance of commom stock	82,633
Interest
Income taxes

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NOTE 4 - DEFERRED REVENUE

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

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 December 31, 2011 the balance is $0.