UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(
For the Quarterly Period ended
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For the transition period from __________________ to __________________
Commission File number
(Exact Name of Registrant as Specified in Its Charter)
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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
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large Accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
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As of August 10, 2023, shares of the Issuer's Common Stock were outstanding.
Worlds Inc.
Table of Contents
| 1 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
| Worlds Inc. | ||||||||
| Balance Sheets | ||||||||
| June 30, 2023 and December 31, 2022 | ||||||||
| Unaudited | Audited | |||||||
| June 30, 2023 | December 31, 2022 | |||||||
| ASSETS: | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other Assets | ||||||||
| Total Current Assets | ||||||||
| Convertible Note Receivable | ||||||||
| Accrued interest receivable | ||||||||
| Patents | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT: | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Due to related party | ||||||||
| Loan payable related party | ||||||||
| Notes payable exceeding statute of limitations | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Common stock (Par value $ authorized shares, issued and outstanding at June 30, 2023 and December 31, 2022 | ||||||||
| Additional paid in capital | ||||||||
| Common stock-warrants | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities and stockholders' deficit | $ | $ | ||||||
| The accompanying notes are an integral part of these financial statements | ||||||||
| 2 |
| Worlds Inc. | ||||||||||||||||
| Statements of Operations | ||||||||||||||||
| For the Six and Three Months Ended June 30, 2023 and 2022 | ||||||||||||||||
| Unaudited | Unaudited | |||||||||||||||
| Six Months Ended June 30 | Three Months Ended June 30 | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | ||||||||||||||||
| Revenue | $ | $ | ||||||||||||||
| Total Revenue | ||||||||||||||||
| Cost and Expenses | ||||||||||||||||
| Cost of Revenue | ||||||||||||||||
| Gross Profit/(Loss) | ||||||||||||||||
| Option expense | ||||||||||||||||
| Selling, General & Admin. | ||||||||||||||||
| Salaries and related | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Gain on sale of marketable securities | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income/(Loss) | $ | ( | ) | ( | ) | $ | ( | ) | ||||||||
| Weighted Average Loss per share, basic and diluted | $ | ** | ) | $ | ** | ** | ||||||||||
| Weighted Average Common Shares Outstanding, basic and diluted | ||||||||||||||||
| **=less than $0.01 | ||||||||||||||||
| The accompanying notes are an integral part of these financial statements | ||||||||||||||||
| 3 |
| Worlds Inc. | ||||||||||||||||||||||||
| Statement of Stockholders' Deficit | ||||||||||||||||||||||||
| For the Six Months Ended June 30, 2022 and 2023 - Unaudited | ||||||||||||||||||||||||
| Additional | Common | Total | ||||||||||||||||||||||
| Stock | Stock | Paid-in | Stock | Accumulated | stockholders' | |||||||||||||||||||
| Shares | Amount | capital | Warrants | Deficit | Deficit | |||||||||||||||||||
| Balances, December 31, 2021 | ( | ) | ( | ) | ||||||||||||||||||||
| Fair value of stock options | — | |||||||||||||||||||||||
| Imputed interest | — | |||||||||||||||||||||||
| Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balances, March 31, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
| Fair value of stock options | — | |||||||||||||||||||||||
| Imputed interest | — | |||||||||||||||||||||||
| Net Income | — | |||||||||||||||||||||||
| Balances, June 30, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
| Balances, December 31, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
| Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balances. March 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
| Net Loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balances, June 30, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
| The accompanying notes are an integral part of these financial statements | ||||||||||||||||||||||||
| 4 |
| Worlds Inc. | ||||||||
| Statements of Cash Flows | ||||||||
| Six Months Ended June 30, 2023 and 2022 | ||||||||
| Unaudited | Unaudited | |||||||
| 6/30/2023 | 6/30/2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Fair value of stock options issued for services | ||||||||
| Realized gain on sale of marketable securities | ( | ) | ( | ) | ||||
| Imputed interest | ||||||||
| Changes in assets and liabilities | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Net cash (used in) operating activities: | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Cash received from sale of marketable securities | ||||||||
| Accrued interest receivable - related party | ( | ) | ||||||
| Cash provided by investing activities | ||||||||
| Cash flows from financing activities | ||||||||
| Loan payable related party | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase/(decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, including restricted, beginning of year | ||||||||
| Cash and cash equivalents, including restricted, end of period | $ | $ | ( | ) | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| The accompanying notes are an integral part of these financial statements | ||||||||
| 5 |
Worlds Inc.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended June 30, 2023
(Unaudited)
NOTE 1 – GOING CONCERN
As reflected in the accompanying financial statements,
the Company has a working capital deficiency of $
Management believes that the actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern, although no assurance can be given that the Company will be successful.
NOTE 2 – 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. (currently called MariMed Inc.), the majority of its operations and related operational assets. The Company retained its patent portfolio and is looking to expand on its legacy celebrity worlds and its collection of non-fungible tokens.
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"). The Company has incurred significant losses since its inception and has had minimal revenues from operations. The Company will require substantial additional funds for its expansion of its legacy celebrity worlds and its collection of non-fungible tokens. 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. As the Company has focused its attention historically on increasing its patent portfolio and enforcing it, and more recently on its expansion of its legacy celebrity worlds and its collection of non-fungible tokens, the Company has been operating at a reduced capacity, with only one employee 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.
| 6 |
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid money market instruments, which have original maturities of three months or less at the time of purchase.
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606. There was no impact in adopting ASC 606 as the Company has no revenue at this time. In the second quarter of 2011, the Company spun off its online businesses to MariMed Inc. The Company’s sources of revenue after the spinoff was expected to be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its patents. Commencing in the first half of 2023, the Company expects that its revenues will come from its expansion of its legacy celebrity worlds and its collection of non-fungible tokens. The Company recognizes revenue by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 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, 2023 and 2022.
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 ASC 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 (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
| 7 |
Income Taxes
The Company accounts for income taxes under Section 740-10-30 of the FASB ASC. 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.
ASC 740 prescribes a comprehensive model for how companies
should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on
a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the
position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as
the largest amount of tax benefit that has a greater than
Notes Payable
The Company has $
Comprehensive Income (Loss)
The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB ASC which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
Net loss per common share is computed pursuant to
section 260-10-45 of the FASB ASC. 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. As of June 30, 2023, there were options and
Commitments and Contingencies
The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
| 8 |
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
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 $
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.
Off Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Uncertain Tax Positions
The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the year ended December 31, 2022.
Fair Value of Financial Instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
| 9 |
The following are the hierarchical levels of inputs to measure fair value:
| • | Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. |
| • | Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| • | Level 3 - Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
The carrying amounts of the Company’s financial assets and liabilities, such as cash, other receivables, accounts payable & accrued expenses, due to related party, notes payable and notes payables, approximate their fair values because of the short maturity of these instruments. The Company's convertible notes payable are measured at amortized cost.
Warrant and option expense was measured by using level 3 valuation.
Embedded Conversion Features
The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.
For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
| 10 |
Recent Accounting Pronouncements
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 financial condition or the results of its operations.
NOTE 3 - NOTES PAYABLE
| Notes payable at June 30, 2023 consist of the following: | ||||
| Unsecured note payable bearing 8% interest, entire balance of principal and unpaid interest due on demand | $ | |||
| Unsecured note payable bearing 10% interest, entire balance of principal and unpaid interest due on demand | $ | |||
| Total notes | $ | |||
| 2023 | $ | |||
| 2024 | $ | - | ||
| 2025 | $ | - | ||
| 2026 | $ | - | ||
| 2027 | $ | - | ||
| $ | ||||
The Company accrued interest of $
During the six months ended June 30, 2022, the Company issued options. Another options were re-issued to Directors at a new price and an extended term.
As consideration for the IP in the Asset Purchase
Agreement between the Company and Mr. Kidrin, Mr. Kidrin was granted options at an exercise price of per share for three
years. The Company recorded an option expense of $
The active directors of the Company received options
each on January 3, 2022. The options were for service performed during 2019, 2021 and 2022 which were never issued. The
Company recorded an option expense for these options of $
| 11 |
The active directors of the Company had their
existing options repriced and the terms extended another
| Stock Options | ||||||
| Stock options outstanding and exercisable on June 30, 2023 are as follows | ||||||
| Exercise Price per Share | Shares Under Option | Remaining Life in Years | ||||
| Outstanding | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| Total | ||||||
| Exercisable | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| $ | ||||||
| Total | ||||||
| 12 |
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company is committed to an employment agreement
with its President and CEO, Thom Kidrin. The agreement, dated as of August 28, 2018, is for
NOTE 6 - RELATED PARTY TRANSACTIONS
During the six months ended June 30, 2023, Mr. Kidrin
the CEO of the Company loaned to the Company $
During the six months ended June 30, 2022, the Company entered into an asset purchase agreement with Thom Kidrin the CEO of the Company. The Company purchased certain IP which was transferred to Worlds Online Inc., now called MariMed Inc. Mr. Kidrin received the IP as part of a settlement agreement he signed with MariMed Inc. The purchase price was options to purchase Worlds Inc. common stock at $ per share for years, the closing market price on the date of the agreement.
The balance in the accrued expense attributable to
related parties is $
See note 9 for a discussion on the convertible note receivable from the related party.
NOTE 7 – ACCRUED EXPENSES
Accrued expenses is comprised of (i) $
| 13 |
NOTE 8 – SALE OF MARKETABLE SECURITIES
When Worlds Inc. spun off Worlds Online Inc. in January 2011, the Company retained shares of common stock in Worlds Online Inc. (now named MariMed Inc.). Those shares were retained on the books of the Company with a book value of $.
During the six months ended June 30, 2023 the
Company generated net cash of $
During the six months ended June 30, 2022 the
Company generated net cash of $
As of June 30, 2023, the Company still owns approximately shares of MariMed Inc. common stock.
NOTE 9 – SUBSEQUENT EVENTS
The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any additional recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.
| 14 |
Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
When used in this Form 10-Q and in other filings by the Company with the Commission, the words or phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," “hope”, "may," "plan," "predict," "project," "will" or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward looking statements, each of which speak only as of the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company has no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. These factors include, but are not limited to, changes that may occur to general economic and business conditions resulting from changes in political, social and economic conditions (whether or not related to terrorism, war, pandemic, weather, environmental or other factors) in the jurisdictions in which we operate and changes to regulations that pertain to our operations.
The following discussion should be read in conjunction with the unaudited financial statements and related notes which are included under Item 1.
We do not undertake to update our forward-looking statements or risk factors to reflect future events or circumstances.
Overview
General
On May 16, 2011, we transferred, through a spin-off to our then wholly owned subsidiary, Worlds Online Inc. (currently named MariMed Inc.), the majority of our operations and related operational assets. On January 18, 2022 we entered into an asset purchase agreement with Thom Kidrin, our CEO, for the IP that was transferred over to MariMed Inc. Mr. Kidrin received the IP through a settlement agreement that he reached with MariMed Inc.
We will be focused on monetizing our collection of non-fungible tokens and our legacy celebrity virtual reality worlds and on expanding our patent portfolio.
Revenues
We generated no revenue during the quarter.
Expenses
We classify our expenses into two broad groups:
| • | Cost of revenues; and |
| • | selling, general and administration. |
| 15 |
Liquidity and Capital Resources
We have had to limit our operations since mid- 2001 due to a lack of liquidity. However, we were able to issue equity and convertible debt in the last few years and raise small amounts of capital from time to time that, prior to the spinoff, was used to enable us to begin upgrading our technology, develop new products and actively solicit additional business, and more recently to expand on our legacy celebrity worlds and our collection of non-fungible tokens.
Although we have been able to generate funds through our sale of shares of MariMed Inc., we continue to pursue additional sources of capital
though we have no current arrangements with respect to, or sources of, additional financing at this time and there can be no assurance
that any such financing will become available. If we cannot raise additional capital, form an alliance of some nature with another entity,
raise more funds through the sale of shares of MariMed Inc., or start to generate sufficient revenues, we may be unable to purchase additional
patents or otherwise expand operations through acquisition or otherwise.
RESULTS OF OPERATIONS
Our net revenues for each of the six months ended June 30, 2023 and 2022 were $0. All the operations were transferred over to Worlds Online Inc. in the spin off and we were unsuccessful in prosecuting our patent infringement. Accordingly, going forward, the Company’s sources of revenue are anticipated to be from the monetizing our collection of non-fungible tokens and our legacy celebrity virtual reality worlds. We still need to raise a sufficient amount of capital to provide the resources required that would enable us to expand our business.
Three months ended June 30, 2023 compared to three months ended June 30, 2022
Selling general and administrative (SG&A) expenses decreased substantially to $30,678 for the three months ended June 30, 2023 from $140,905 for the three months ended June 30, 2022. The decrease of $110,227 is due to a decrease in legal fees related to the patent litigation.
Salaries and related increased by $2,069 to $53,824 from $51,755 for the three months ended June 30, 2023 and 2022, respectively. The CEO’s salary is based on the terms of his 2018 employment agreement and he is the Company’s only salaried employee.
For the three months ended June 30, 2022, the Company recorded an option expense of $15,904, representing the expense associated with the options issued during the first quarter of 2022. There was no option expense for the three months ended June 30, 2023.
For the three months ended June 30, 2023 the Company had an interest expense of $18,919 and for the three months ended June 30, 2022 the Company had an interest expense of $18,891.
For the three months ended June 30, 2022 the Company had interest income of $3,539. The Company had no interest income for the three months ended June 30, 2023.
For the three months ended June 30, 2023, the Company had a gain on sale of marketable securities of $7,804. For the three months ended June 30, 2022, the Company had a gain on sale of marketable securities of $238,767.
As a result of the foregoing, we realized a net loss of $95,617 for the three months ended June 30, 2023 compared to net income of $14,823 in the three months ended June 30, 2022.
| 16 |
Six months ended June 30, 2023 compared to six months ended June 30, 2022
Revenue is $0 for the six months ended June 30, 2023 and 2022. All the operations were transferred over to Worlds Online Inc. in the spin off. The business up to the spin off continued to run in a severely diminished mode due to the lack of liquidity. Post spin off we still need to raise a sufficient amount of capital to provide the resources required that would enable us to continue running the business.
Cost of revenues is $0 in the six months ended June 30, 2023 and 2022.
Selling general and administrative (SG&A) expenses decreased by $321,128 from $377,530 to $56,402 for the six months ended June 30, 2022 and 2023, respectively. The decrease is due to a decrease in legal costs related to the patent infringement litigation cases.
Salaries and related increased by $6,285 to $107,934 from $101,649 for the six months ended June 30, 2023 and 2022, respectively.
For the six months ended June 30, 2022, the Company recorded an option expense of $821,296, the estimated fair value of the options issued in the first quarter of 2022. No option expense was recorded for the six months ended June 30, 2023.
For the six months ended June 30, 2023, the Company had interest expense of $37,630. For the six months ended June 30, 2022, the Company had interest expense of $37,630.
For the six months ended June 30, 2022 the Company had interest income of $7,039. No interest income was recorded for the six months ended June 30, 2023.
For the six months ended June 30, 2023, the Company had a gain on sale of marketable securities of $76,839. For the six months ended June 30, 2022, the Company had a gain on sale of marketable securities of $606,136.
As a result of the foregoing, we realized a net loss of $125,127 for the six months ended June 30, 2023 compared to a net loss of $724,930 in the six months ended June 30, 2022.
Liquidity and Capital Resources
At June 30, 2023, our cash and cash equivalents were $45,902. The Company raised funds by selling shares of stock that the Company retained in the spin off company MariMed Inc. during the six months ended June 30, 2023. The Company raised $76,839 from selling shares of MariMed Inc. common stock. The Company used $65,715 in cash to pay for operating expenses during the six months ended June 30, 2023.
At June 30, 2022, our cash and cash equivalents were $36,973. The Company raised funds by selling shares of stock that the Company retained in the spin off company MariMed Inc. during the six months ended June 30, 2022. The Company raised $606,136 from selling shares of MariMed Inc. common stock. The Company used $606,544 in cash to pay for operating expenses during the six months ended June 30, 2022.
Historically, primary cash requirements have been used to fund the cost of operations and lawsuits, and patent enforcement, with additional funds having been used in connection with the exploration of new business lines.
| 17 |
We hope to raise additional funds to be used for further expansion of our legacy celebrity worlds and collection of non-fungible tokens. No assurances can be given that we will be able to raise any additional funds.
Item 4. Controls And Procedures
As of June 30, 2023, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2023.
Changes in Internal Control Over Financial Reporting
During the quarter covered by this report there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 18 |
PART II OTHER INFORMATION
Legal Proceedings
None
Item 1A. Risk Factors
We are not obligated to disclose our risk factors in this report, however, limited information regarding our risk factors appears in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Forward-Looking Statements” contained in this Quarterly Report on Form 10-Q and in “Item 1A. RISK FACTORS” of our 2022 Annual Report on Form 10-K. There have been no material changes from the risk factors previously disclosed in our 2022 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the six months ended June 30, 2023 and 2022 we did not raise any funds through the sale of equity securities.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosure
Not applicable.
Item 5. Other Information
None.
| 19 |
Item 6. Exhibits
| 3.1 | Certificate of Incorporation (a) | |||
| 3.2 | By-Laws Restated as Amended (b) | |||
| 31.1 | Certification of Chief Executive Officer | |||
| 31.2 | Certification of Chief Financial Officer | |||
| 32.1 | Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. | |||
| 32.2 | Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. | |||
| 101.INS* XBRL | Instance Document | |||
| 101. | SCH*XBRL | Taxonomy Extension Schema | ||
| 101. | CAL*XBRL | Taxonomy Extension Calculation Linkbase | ||
| 101. | DEF*XBRL | Taxonomy Extension Definition Linkbase | ||
| 101. | LAB*XBRL | Taxonomy Extension Label Linkbase | ||
| 101. | PRE*XBRL | Taxonomy Extension Presentation Linkbase |
| (a) | Filed previously with the Proxy Statement Form DEF 14A on May, 19, 2010, as amended as described in Proxy Statements on Form DEF 14A filed on June 7, 2013 and May 17, 2016, and incorporated herein by reference. |
| (b) | Filed previously with the Proxy Statement Form DEF 14A on May, 19, 2010, and incorporated herein by reference. |
| 20 |
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned thereto duly authorized.
Date: August 11, 2023
WORLDS INC.
By: /s/Thomas Kidrin
Thomas Kidrin
President and CEO
By: /s/Christopher Ryan
Christopher Ryan
Chief Financial Officer
| 21 |
EXHIBIT 31.1
Certifications
I, Thomas Kidrin, certify that:
1. I have reviewed this quarterly report on Form 10-Q 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: August 11, 2023
/s/ Thomas Kidrin
Thomas Kidrin
Chief Executive Officer
EXHIBIT 31.2
Certifications
I, Christopher J. Ryan, certify that:
1. I have reviewed this quarterly report on Form 10-Q 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: August 11, 2023
/s/ Christopher J. Ryan
Christopher J. Ryan
Chief Financial Officer
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 Quarterly Report of Worlds Inc. (the "Company") on Form 10-Q for the six months ended June 30, 2023 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: August 11, 2023 | By:/s/ Thomas Kidrin |
| Thomas Kidrin | |
| Chief Executive Officer |
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 Quarterly Report of Worlds Inc. (the "Company") on Form 10-Q for the six months ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Christopher J. Ryan, Chief 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: August 11, 2023 | By:/s/ Christopher J. Ryan |
| Christopher J. Ryan | |
| Chief Financial Officer |
Cover - shares |
6 Months Ended | |
|---|---|---|
Jun. 30, 2023 |
Aug. 10, 2023 |
|
| Cover [Abstract] | ||
| Document Type | 10-Q | |
| Amendment Flag | false | |
| Document Quarterly Report | true | |
| Document Transition Report | false | |
| Document Period End Date | Jun. 30, 2023 | |
| Document Fiscal Period Focus | Q2 | |
| Document Fiscal Year Focus | 2023 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity File Number | 000-24115 | |
| Entity Registrant Name | WORLDS INC. | |
| Entity Central Index Key | 0000001961 | |
| Entity Tax Identification Number | 22-1848316 | |
| Entity Incorporation, State or Country Code | DE | |
| Entity Address, Address Line One | 11 Royal Road | |
| Entity Address, City or Town | Brookline | |
| Entity Address, State or Province | MA | |
| Entity Address, Postal Zip Code | 02445 | |
| City Area Code | 617 | |
| Local Phone Number | 725-8900 | |
| Entity Current Reporting Status | Yes | |
| Entity Interactive Data Current | Yes | |
| Entity Filer Category | Non-accelerated Filer | |
| Entity Small Business | true | |
| Entity Emerging Growth Company | false | |
| Entity Shell Company | false | |
| Entity Common Stock, Shares Outstanding | 57,112,506 |
Balance Sheets - USD ($) |
Jun. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Current Assets | ||
| Cash and cash equivalents | $ 45,902 | $ 7,778 |
| Other Assets | ||
| Total Current Assets | 45,902 | 7,778 |
| Convertible Note Receivable | ||
| Accrued interest receivable | ||
| Patents | ||
| Total assets | 45,902 | 7,778 |
| Current Liabilities | ||
| Accounts payable | 800,558 | 797,908 |
| Accrued expenses | 1,794,534 | 1,660,933 |
| Due to related party | ||
| Loan payable related party | 27,000 | |
| Notes payable exceeding statute of limitations | 773,279 | 773,279 |
| Total Current Liabilities | 3,395,371 | 3,232,120 |
| Total Liabilities | 3,395,371 | 3,232,120 |
| Common stock (Par value $0.001 authorized 250,000,000 shares, issued and outstanding 57,112,506 at June 30, 2023 and December 31, 2022 | 57,113 | 57,113 |
| Additional paid in capital | 42,335,725 | 42,335,725 |
| Common stock-warrants | 1,206,913 | 1,206,913 |
| Accumulated deficit | (46,949,220) | (46,824,093) |
| Total stockholders’ deficit | (3,349,469) | (3,224,342) |
| Total Liabilities and stockholders' deficit | $ 45,902 | $ 7,778 |
Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 250,000,000 | 250,000,000 |
| Common stock, shares issued | 57,112,506 | 57,112,506 |
| Common stock, shares outstanding | 57,112,506 | 57,112,506 |
Statements of Operations - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
| Revenue | ||||
| Revenue | ||||
| Total Revenue | ||||
| Cost and Expenses | ||||
| Cost of Revenue | ||||
| Gross Profit/(Loss) | ||||
| Option expense | 15,904 | 821,296 | ||
| Selling, General & Admin. | 30,678 | 140,905 | 56,402 | 377,530 |
| Salaries and related | 53,825 | 51,755 | 107,934 | 101,649 |
| Operating loss | (84,502) | (208,563) | (164,336) | (1,300,475) |
| Other Income (Expense) | ||||
| Gain on sale of marketable securities | 7,804 | 238,767 | 76,839 | 606,136 |
| Interest income | 3,539 | 7,039 | ||
| Interest expense | (18,919) | (18,919) | (37,630) | (37,630) |
| Net Income/(Loss) | $ (95,617) | $ 14,823 | $ (125,127) | $ (724,930) |
| Weighted Average Loss per share, basic and diluted | $ (0.01) | |||
| Weighted Average Common Shares Outstanding, basic and diluted | 57,112,506 | 57,112,506 | 57,112,506 | 57,112,506 |
Statement of Stockholders' Deficit - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Warrant [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|
| Balances. March 31, 2023 at Dec. 31, 2021 | $ 57,113 | $ 41,513,730 | $ 1,206,913 | $ (45,788,666) | $ (3,010,910) |
| Beginning balance, shares at Dec. 31, 2021 | 57,112,506 | ||||
| Fair value of stock options | 805,392 | 805,392 | |||
| Imputed interest | 18,711 | 18,711 | |||
| Net Loss | (739,753) | (739,753) | |||
| Ending balance, value at Mar. 31, 2022 | $ 57,113 | 42,337,833 | 1,206,913 | (46,528,419) | (2,926,560) |
| Ending balance, shares at Mar. 31, 2022 | 57,112,506 | ||||
| Balances. March 31, 2023 at Dec. 31, 2021 | $ 57,113 | 41,513,730 | 1,206,913 | (45,788,666) | (3,010,910) |
| Beginning balance, shares at Dec. 31, 2021 | 57,112,506 | ||||
| Net Loss | (724,930) | ||||
| Ending balance, value at Jun. 30, 2022 | $ 57,113 | 42,372,656 | 1,206,913 | (46,513,596) | (2,876,914) |
| Ending balance, shares at Jun. 30, 2022 | 57,112,506 | ||||
| Balances. March 31, 2023 at Mar. 31, 2022 | $ 57,113 | 42,337,833 | 1,206,913 | (46,528,419) | (2,926,560) |
| Beginning balance, shares at Mar. 31, 2022 | 57,112,506 | ||||
| Fair value of stock options | 15,904 | 15,904 | |||
| Imputed interest | 18,919 | 18,919 | |||
| Net Loss | 14,823 | 14,823 | |||
| Ending balance, value at Jun. 30, 2022 | $ 57,113 | 42,372,656 | 1,206,913 | (46,513,596) | (2,876,914) |
| Ending balance, shares at Jun. 30, 2022 | 57,112,506 | ||||
| Balances. March 31, 2023 at Dec. 31, 2022 | $ 57,113 | 42,335,725 | 1,206,913 | (46,824,093) | $ (3,224,342) |
| Beginning balance, shares at Dec. 31, 2022 | 57,112,506 | ||||
| Net Loss | (29,510) | $ (29,510) | |||
| Ending balance, value at Mar. 31, 2023 | $ 57,113 | 42,335,725 | 1,206,913 | (46,853,603) | (3,253,852) |
| Ending balance, shares at Mar. 31, 2023 | 57,112,506 | ||||
| Balances. March 31, 2023 at Dec. 31, 2022 | $ 57,113 | 42,335,725 | 1,206,913 | (46,824,093) | $ (3,224,342) |
| Beginning balance, shares at Dec. 31, 2022 | 57,112,506 | ||||
| Net Loss | $ (125,127) | ||||
| Ending balance, value at Jun. 30, 2023 | $ 57,113 | 42,335,725 | 1,206,913 | (46,949,220) | $ (3,349,469) |
| Ending balance, shares at Jun. 30, 2023 | 57,112,506 | 57,112,506 | |||
| Balances. March 31, 2023 at Mar. 31, 2023 | $ 57,113 | 42,335,725 | 1,206,913 | (46,853,603) | $ (3,253,852) |
| Beginning balance, shares at Mar. 31, 2023 | 57,112,506 | ||||
| Net Loss | (95,617) | (95,617) | |||
| Ending balance, value at Jun. 30, 2023 | $ 57,113 | $ 42,335,725 | $ 1,206,913 | $ (46,949,220) | $ (3,349,469) |
| Ending balance, shares at Jun. 30, 2023 | 57,112,506 | 57,112,506 |
GOING CONCERN |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 1 – GOING CONCERN
As reflected in the accompanying financial statements, the Company has a working capital deficiency of $3,349,469 and a stockholder’s deficiency of $3,349,469 and used $65,715 of cash in operations for the six months ended June 30, 2023. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that the actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern, although no assurance can be given that the Company will be successful.
|
DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES |
6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | |||||||
| Accounting Policies [Abstract] | |||||||
| DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | NOTE 2 – 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. (currently called MariMed Inc.), the majority of its operations and related operational assets. The Company retained its patent portfolio and is looking to expand on its legacy celebrity worlds and its collection of non-fungible tokens.
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"). The Company has incurred significant losses since its inception and has had minimal revenues from operations. The Company will require substantial additional funds for its expansion of its legacy celebrity worlds and its collection of non-fungible tokens. 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. As the Company has focused its attention historically on increasing its patent portfolio and enforcing it, and more recently on its expansion of its legacy celebrity worlds and its collection of non-fungible tokens, the Company has been operating at a reduced capacity, with only one employee 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 include highly liquid money market instruments, which have original maturities of three months or less at the time of purchase.
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606. There was no impact in adopting ASC 606 as the Company has no revenue at this time. In the second quarter of 2011, the Company spun off its online businesses to MariMed Inc. The Company’s sources of revenue after the spinoff was expected to be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its patents. Commencing in the first half of 2023, the Company expects that its revenues will come from its expansion of its legacy celebrity worlds and its collection of non-fungible tokens. The Company recognizes revenue by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 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, 2023 and 2022.
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 ASC 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 (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 ASC. 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.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
Notes Payable
The Company has $773,279 in short term notes outstanding at June 30, 2023 and December 31, 2022. These are old notes payable for which the statute of limitations has passed and therefore the Company does not expect it will ever have to repay those notes.
Comprehensive Income (Loss)
The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB ASC which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
Net loss per common share is computed pursuant to section 260-10-45 of the FASB ASC. 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. As of June 30, 2023, there were options and no warrants outstanding and as of June 30, 2022, there were options and 4,380,000 warrants outstanding whose effect is anti-dilutive and not included in diluted net loss per share for June 30, 2023 or for June 30, 2022. The options and warrants may dilute future earnings per share.
Commitments and Contingencies
The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
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, 2023, and December 31, 2022 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.
Off Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Uncertain Tax Positions
The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the year ended December 31, 2022.
Fair Value of Financial Instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
The carrying amounts of the Company’s financial assets and liabilities, such as cash, other receivables, accounts payable & accrued expenses, due to related party, notes payable and notes payables, approximate their fair values because of the short maturity of these instruments. The Company's convertible notes payable are measured at amortized cost.
Warrant and option expense was measured by using level 3 valuation.
Embedded Conversion Features
The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.
For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
Recent Accounting Pronouncements
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 financial condition or the results of its operations.
|
NOTES PAYABLE |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTES PAYABLE | NOTE 3 - NOTES PAYABLE
The Company accrued interest of $37,630 on the notes during the six months ended June 30, 2023.
|
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EQUITY |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EQUITY |
All common stock numbers and exercise prices in this Note are reflected on a post reverse split (5 to 1) basis, which reverse split was effectuated on February 9, 2018.
During the six months ended June 30, 2022, the Company issued options. Another options were re-issued to Directors at a new price and an extended term.
As consideration for the IP in the Asset Purchase Agreement between the Company and Mr. Kidrin, Mr. Kidrin was granted options at an exercise price of per share for three years. The Company recorded an option expense of $751,744. The fair market value for Mr. Kidrin’s options was calculated using the Black Scholes method assuming a risk free interest of %, % dividend yield, volatility of %, and an exercise price of $ per share with a market price of $ per share at issuance date and an expected life of . The options vested on January 18, 2022.
The active directors of the Company received options each on January 3, 2022. The options were for service performed during 2019, 2021 and 2022 which were never issued. The Company recorded an option expense for these options of $31,108 for the six months ended June 30, 2022. The fair market value for these options was calculated using the Black Scholes method assuming a risk free interest of %, % dividend yield, volatility of %, and an exercise price of per share with a market price of per share at issuance date and an expected life of 5 years. The options vest six months from the date of grant.
The active directors of the Company had their existing options repriced and the terms extended another 5 years. The total number of options that were repriced on February 16, 2022 was 900,000. The Company recorded an option expense for these options of $38,444 for the six months ended June 30, 2022. The fair market value for these options was calculated using the Black Scholes method assuming a risk free interest of %, % dividend yield, volatility of %, and an exercise price of per share with a market price of per share at issuance date and an expected life of 5 years. The options are all vested upon date of grant.
No options were issued during the six months ended June 30, 2023.
|
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COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company is committed to an employment agreement with its President and CEO, Thom Kidrin. The agreement, dated as of August 28, 2018, 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 September 1 of each year; a monthly car allowance of $500; 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 shares of Worlds Inc. common stock at an exercise price of per share, of which vested on August 28, 2018, vested on August 28, 2019 and the remaining vested on August 28, 2020 ; a death benefit of at least $2 million dollars; 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.
|
RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | NOTE 6 - RELATED PARTY TRANSACTIONS
During the six months ended June 30, 2023, Mr. Kidrin the CEO of the Company loaned to the Company $47,000 to cover operating expenses. The Company repaid Mr. Kidrin $20,000 In April of 2023.
During the six months ended June 30, 2022, the Company entered into an asset purchase agreement with Thom Kidrin the CEO of the Company. The Company purchased certain IP which was transferred to Worlds Online Inc., now called MariMed Inc. Mr. Kidrin received the IP as part of a settlement agreement he signed with MariMed Inc. The purchase price was options to purchase Worlds Inc. common stock at $ per share for years, the closing market price on the date of the agreement.
The balance in the accrued expense attributable to related parties is $140,759 and $53,688 at June 30, 2023 and December 31, 2022, respectively.
See note 9 for a discussion on the convertible note receivable from the related party.
|
ACCRUED EXPENSES |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Payables and Accruals [Abstract] | |
| ACCRUED EXPENSES | NOTE 7 – ACCRUED EXPENSES
Accrued expenses is comprised of (i) $140,759 owed to related parties, (ii) $205,000 related to a judgment against the Company relating to unpaid consulting services dating back to April of 2001, (iii) $1,399,604 related to old accruals for which the statute of limitations has passed and therefore the Company does not expect it will ever have to repay those amounts, (iv) $12,472 related to accruals for recurring operating expenses, and (v) $17,780 related to a judgement requiring the Company to reimburse litigation fees.
|
SALE OF MARKETABLE SECURITIES |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Investments, Debt and Equity Securities [Abstract] | |
| SALE OF MARKETABLE SECURITIES | NOTE 8 – SALE OF MARKETABLE SECURITIES
When Worlds Inc. spun off Worlds Online Inc. in January 2011, the Company retained shares of common stock in Worlds Online Inc. (now named MariMed Inc.). Those shares were retained on the books of the Company with a book value of $.
During the six months ended June 30, 2023 the Company generated net cash of $76,839 from the sale of shares of MariMed Inc. common stock. The average price was $ per share.
During the six months ended June 30, 2022 the Company generated net cash of $606,136 from the sale of shares of MariMed Inc. common stock. The average price was $ per share.
As of June 30, 2023, the Company still owns approximately shares of MariMed Inc. common stock.
|
SUBSEQUENT EVENTS |
6 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS
The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any additional recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements. |
DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies) |
6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | |||||||
| Accounting Policies [Abstract] | |||||||
| Description of Business | Description of Business
On May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc. (currently called MariMed Inc.), the majority of its operations and related operational assets. The Company retained its patent portfolio and is looking to expand on its legacy celebrity worlds and its collection of non-fungible tokens.
|
||||||
| Basis of Presentation | 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"). The Company has incurred significant losses since its inception and has had minimal revenues from operations. The Company will require substantial additional funds for its expansion of its legacy celebrity worlds and its collection of non-fungible tokens. 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. As the Company has focused its attention historically on increasing its patent portfolio and enforcing it, and more recently on its expansion of its legacy celebrity worlds and its collection of non-fungible tokens, the Company has been operating at a reduced capacity, with only one employee and using consultants to perform any additional work that may be required.
|
||||||
| Use of Estimates | 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
Cash and cash equivalents include highly liquid money market instruments, which have original maturities of three months or less at the time of purchase.
|
||||||
| Revenue Recognition | Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606. There was no impact in adopting ASC 606 as the Company has no revenue at this time. In the second quarter of 2011, the Company spun off its online businesses to MariMed Inc. The Company’s sources of revenue after the spinoff was expected to be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its patents. Commencing in the first half of 2023, the Company expects that its revenues will come from its expansion of its legacy celebrity worlds and its collection of non-fungible tokens. The Company recognizes revenue by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
|
||||||
| Research and Development Costs | Research and Development Costs
Research and development costs are charged to operations as incurred.
|
||||||
| Property and Equipment | 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 | 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 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, 2023 and 2022.
|
||||||
| Stock-Based Compensation | 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 ASC 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 (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
|
||||||
| Income Taxes | Income Taxes
The Company accounts for income taxes under Section 740-10-30 of the FASB ASC. 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.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
|
||||||
| Notes Payable | Notes Payable
The Company has $773,279 in short term notes outstanding at June 30, 2023 and December 31, 2022. These are old notes payable for which the statute of limitations has passed and therefore the Company does not expect it will ever have to repay those notes.
|
||||||
| Comprehensive Income (Loss) | Comprehensive Income (Loss)
The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB ASC which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
|
||||||
| Loss Per Share |
Net loss per common share is computed pursuant to section 260-10-45 of the FASB ASC. 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. As of June 30, 2023, there were options and no warrants outstanding and as of June 30, 2022, there were options and 4,380,000 warrants outstanding whose effect is anti-dilutive and not included in diluted net loss per share for June 30, 2023 or for June 30, 2022. The options and warrants may dilute future earnings per share.
|
||||||
| Commitments and Contingencies | Commitments and Contingencies
The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
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, 2023, and December 31, 2022 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 | 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.
|
||||||
| Off Balance Sheet Arrangements | Off Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
|
||||||
| Uncertain Tax Positions | Uncertain Tax Positions
The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the year ended December 31, 2022.
|
||||||
| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
The carrying amounts of the Company’s financial assets and liabilities, such as cash, other receivables, accounts payable & accrued expenses, due to related party, notes payable and notes payables, approximate their fair values because of the short maturity of these instruments. The Company's convertible notes payable are measured at amortized cost.
Warrant and option expense was measured by using level 3 valuation.
|
||||||
| Embedded Conversion Features | Embedded Conversion Features
The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.
|
||||||
| Derivative Financial Instruments | Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.
For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
|
||||||
| Recent Accounting Pronouncements | Recent Accounting Pronouncements
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 financial condition or the results of its operations.
|
NOTES PAYABLE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable |
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EQUITY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options |
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GOING CONCERN (Details Narrative) |
6 Months Ended |
|---|---|
|
Jun. 30, 2023
USD ($)
| |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Working capital deficiency | $ 3,349,469 |
| Stockholders deficiency | 3,349,469 |
| Used cash in operations | $ 65,715 |
DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - USD ($) |
6 Months Ended | |||
|---|---|---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
Jun. 30, 2022 |
Apr. 01, 2001 |
|
| Class of Warrant or Right [Line Items] | ||||
| Realized ultimate settlement | 50.00% | |||
| Short term notes outstanding | $ 773,279 | $ 773,279 | ||
| Outstanding options | 22,400,000 | 27,620,000 | ||
| Outstanding warrants | 22,400,000 | |||
| Judgment against company | $ 205,000 | |||
| Lawsuit reserve | $ 205,000 | $ 205,000 | ||
| Antidilutive Securities, Name [Domain] | ||||
| Class of Warrant or Right [Line Items] | ||||
| Outstanding warrants | 0 | 4,380,000 |
Notes Payable (Details) - USD ($) |
Jun. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Debt Disclosure [Abstract] | ||
| Unsecured note payable bearing 8% interest, entire balance of principal and unpaid interest due on demand | $ 124,230 | |
| Unsecured note payable bearing 10% interest, entire balance of principal and unpaid interest due on demand | 649,049 | |
| Total notes | 773,279 | $ 773,279 |
| 2023 | 773,279 | |
| 2024 | 0 | |
| 2025 | 0 | |
| 2026 | 0 | |
| 2027 | $ 0 |
NOTES PAYABLE (Details Narrative) |
6 Months Ended |
|---|---|
|
Jun. 30, 2023
USD ($)
| |
| Debt Disclosure [Abstract] | |
| Accured interest on notes | $ 37,630 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
48 Months Ended | |||
|---|---|---|---|---|
|
Aug. 28, 2022
shares
|
Aug. 28, 2020
shares
|
Aug. 28, 2019
shares
|
Aug. 28, 2018
USD ($)
yr
Interger
$ / shares
shares
|
|
| Length of contract | yr | 5 | |||
| Renewal terms | yr | 1 | |||
| Base salary | $ 200,000 | |||
| Annual percentage increase | 10.00% | |||
| Car allowance | $ 500 | |||
| Annual bonus pre-tax income | 0.025 | |||
| Additional bonus | $ 75,000 | |||
| Pre-tax income lower range | 150.00% | |||
| Pre-tax income higher range | 200.00% | |||
| Additional bonus | 0.05 | |||
| Life insurance premiums | $ 10,000 | |||
| Options to purchase | shares | 5,000,000 | |||
| Options exercise price | $ / shares | $ 0.25 | |||
| Vested shares | shares | 2,000,000 | |||
| Vested shares | shares | 1,500,000 | 1,500,000 | ||
| Death benefit | $ 2,000,000 | |||
| Payment based amount | 2.99 | |||
| Restrictive covenants | Interger | 12 | |||
| Additional bonus 1 | ||||
| Additional bonus | $ 100,000 | |||
| Pre-tax income lower range | 201.00% | |||
| Pre-tax income higher range | 250.00% | |||
| Additional bonus 2 | ||||
| Additional bonus | $ 200,000 | |||
| Pre-tax income higher range | 251.00% |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
1 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Apr. 30, 2023 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
| CEO loan | $ 47,000 | |||
| Company repaid Mr, Kidrin | $ 20,000 | |||
| Market price | $ 0.05 | |||
| Accrued expense balance | $ 140,759 | |||
| Accrued expense balance | $ 53,688 | |||
| Officer [Member] | ||||
| Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
| Officer options granted | 15,000,000 | 15,000,000 | ||
| Market price | $ 0.07 | $ 0.07 | ||
| Option expected life | 3 years | 3 years | ||
ACCRUED EXPENSES (Details Narrative) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2023 |
Apr. 01, 2001 |
|
| Payables and Accruals [Abstract] | ||
| Owed to related parties | $ 140,759 | |
| Judgment amount | $ 205,000 | |
| Old accrual | 1,399,604 | |
| Accruals for operating expense | 12,472 | |
| Reimbursement legal fees | $ 17,780 |
SALE OF MARKETABLE SECURITIES (Details Narrative) - USD ($) |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jan. 01, 2011 |
|
| Investments, Debt and Equity Securities [Abstract] | |||
| Number of reatined shares from spin off | 5,936,115 | ||
| Ratined shares value on company books | $ 0 | ||
| Generated cash of sale | $ 76,839 | $ 606,136 | |
| Shares sold | 200,000 | 900,000 | |
| Average price per share | $ 0.40 | $ 0.70 | |
| Shares owned by MariMed | 350,000 | ||