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Hope you dig it out sooner and lets us know, We definitely don't want to see him just "sucking salary" like Luckyus has said.
Don't you think it will drop lower than .13? How far from now to next catalyst? We already got settlement with LL, is Thom ready build up business?
Agree, I definitely hope so.
I did not scare anyone, I just said "IF". Of course I want this case finish asap same as everyone here, I have been waiting for 10 years long and I have followed this lawsuit since 2012. I know what's going on. We expected winning each year , year after year..., however , it continue delays and drag out...
As you said: And who knows? A CAFC reversal could be the catalyst for a settlement with either ATVI or MSFT or both.
Yes, if reverse from CAFC may take 18 months, ATVI and MSFT perhaps settle with us, but there is 50/50 chance.
Today 10Q report released, 11Q will be next 3 months (8/18/21), will we see LL settlement details report on next quarter?
CAFC appeal= 18 months
If CAFC turn it over, return back to Boston court( or other court), court set timeline and trial date= 18 months.
If WDDD win in trial , ATVI will appeal again to CAFC or higher court= 18 months.
18x3=54 months= 4.5 years.
This case continue to drag out 5 more years, be completed in 2026?
Any thought?
NOTE 3 - NOTES PAYABLE
Notes payable at March 31, 2021 consist of the following:
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
2021 $ 773,279
2022 $ 0
2023 $ 0
2024 $ 0
2025 $ 0
$ 773,279
The Company imputed interest of $18,891 on the notes during the quarter ended March 31, 2021.
Stock Warrants and Options
Stock warrants/options outstanding and exercisable on March 31, 2021 are as follows
Exercise Price per Share Shares Under Option/warrant Remaining Life in Years
Outstanding
$ 0.325 3,400,000 0.83
$ 0.15 5,220,000 1.50
$ 0.15 580,000 1.75
$ 0.05 200,000 1.75
$ 0.30 200,000 1.75
$ 0.25 5,000,000 2.42
$ 0.24 800,000 2.42
$ 0.27 300,000 4.63
$ 0.30 400,000 4.75
Total 16,100,000
Exercisable
$ 0.325 3,400,000 0.83
$ 0.15 5,220,000 1.50
$ 0.15 580,000 1.75
$ 0.05 200,000 1.75
$ 0.30 200,000 1.75
$ 0.25 5,000,000 2.42
$ 0.24 800,000 2.42
Total 15,400,000
Worlds Inc. (WDDD)FORM 10-Q | Quarterly Report
May. 17, 2021 5:02 PM|About: Worlds Inc. (WDDD)View as PDF
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended March 31, 2021
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission File number 000-24115
WORLDS INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-1848316
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
11 Royal Road
Brookline, MA 02445
(Address of Principal Executive Offices)
(617) 725-8900
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]
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.
(Check One):
Large Accelerated filer ? Accelerated filer ?
Non-accelerated Filer ? Smaller reporting company ?
Emerging growth company ?
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ?
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of May 14, 2021, 57,112,506 shares of the Issuer's Common Stock were outstanding.
Worlds Inc.
Table of Contents
Page
Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020 (audited) 2
Statements of Operations for the three months ended March 31, 2021 and 2020 (unaudited) 3
Statements of Stockholders’ Deficit for the three months ended March 31, 2020 and 2021 (unaudited) 4
Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited) 5
Notes to Financial Statements 6
1
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Worlds Inc.
Balance Sheets
March 31, 2021 and December 31, 2020
Unaudited Audited
March 31, 2021 December 31, 2020
ASSETS:
Current Assets
Cash and cash equivalents $ 582,783 $ 474,587
Total Current Assets 582,783 474,587
Convertible Note Receivable - related party 200,000 200,000
Accrued interest receivable - related party 20,767 17,267
Total assets $ 803,550 $ 691,854
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Current Liabilities
Accounts payable $ 1,447,482 $ 981,898
Accrued expenses 1,546,250 1,606,565
Notes payable exceeding statute of limitations 773,279 773,279
Total Current Liabilities 3,767,011 3,361,742
Total Liabilities 3,767,011 3,361,742
Stockholders' Deficit
Common stock (Par value $0.001 authorized 250,000,000 shares, issued and outstanding 57,112,506 at March 31, 2021 and 56,814,833 at December 31, 2020, respectively) 57,113 56,815
Additional paid in capital 41,404,866 41,240,880
Common stock-warrants 1,206,913 1,206,913
Accumulated deficit (45,632,353 ) (45,174,496 )
Total stockholders’ deficit (2,963,461 ) (2,669,888 )
Total Liabilities and Stockholders' Deficit $ 803,550 $ 691,854
The accompanying notes are an integral part of these financial statements
2
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Worlds Inc.
Statements of Operations
For the Three Months Ended March 31, 2021 and 2020
Unaudited Unaudited
2021 2020
Revenues
Revenue $ — $ —
Total Revenue — —
Cost and Expenses
Cost of Revenue — —
Gross Profit/(Loss) — —
Option expense 58,182 81,079
Selling, General & Admin. 753,434 171,930
Salaries and related 53,356 52,666
Operating loss (864,972 ) (305,675 )
Other Income (Expense)
Loss on issuance of shares for services (8,685 ) —
Gain on sale of marketable securities 431,191 —
Interest income 3,500 3,539
Interest expense (18,891 ) (18,919 )
Net Income/(Loss) $ (457,857 ) $ (321,055 )
Weighted Average Income/(Loss) per share basic and diluted $ (0.01 ) $ (0.01 )
Weighted Average Common Shares Outstanding (reflecting the reverse stock split) basic and diluted 56,950,440 56,814,833
The accompanying notes are an integral part of these financial statements
3
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Statement of Stockholders' Deficit
For the Three Months Ended March 31, 2020 and 2021 - Unaudited
Common Common Additional Common Total
Stock Stock Paid-in Stock Accumulated Stockholders'
Shares Amount capital Warrants Deficit Deficit
Balances, December 31, 2019 56,814,833 56,815 40,897,142 1,206,913 (43,605,857 ) (1,444,987 )
Fair value of stock options — — 81,079 — — 81,079
Imputed interest — — 18,919 — — 18,919
Net Income/(Loss) — — — — (321,055 ) (321,055 )
Balances, March 31, 2020 56,814,833 56,815 40,997,140 1,206,913 (43,926,912 ) (1,666,044 )
Balances, December 31, 2020 56,814,833 56,815 41,240,880 1,206,913 (45,174,496 ) (2,669,888 )
Fair value of stock options — — 58,182 — — 58,182
Common stock issued for settlement of accounts payable - related party 297,673 298 70,512 — — 70,810
Gain on forgiveness of accounts payable - related party — — 16,401 — — 16,401
Imputed interest — — 18,891 — — 18,891
Net Income/(Loss) — — — — (457,857 ) (457,857 )
Balances, March 31, 2021 57,112,506 57,113 41,404,866 1,206,913 (45,632,353 ) (2,963,461 )
The accompanying notes are an integral part of these financial statements
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Worlds Inc.
Statements of Cash Flows
Three Months Ended March 31, 2021 and 2020
Unaudited Unaudited
3/31/2021 3/31/2020
Cash flows from operating activities:
Net loss $ (457,857 ) $ (321,055 )
Adjustments to reconcile net loss to net cash used in operating activities
Fair value of stock options issued for services 58,182 81,079
Loss on shares issued for settlement of accounts payable - related party 8,685 —
Realized gain on sale of marketable securities (431,191 ) —
Imputed interest 18,891 18,919
Changes in assets and liabilities
Accounts payable and accrued expenses 483,795 (19,993 )
Net cash (used in) operating activities: (319,495 ) (241,050 )
Cash flows from financing activities
Cash received from sale of marketable securities 431,191 —
Accrued interest receivable - related party (3,500 ) (3,539 )
Net cash provided by financing activities 427,691 (3,539 )
Net increase/(decrease) in cash and cash equivalents 108,196 (244,589 )
Cash and cash equivalents, including restricted, beginning of year 474,587 1,570,844
Cash and cash equivalents, including restricted, end of period $ 582,783 $ 1,326,255
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ — $ —
Income taxes $ — $ —
Non-cash financing activities
Shares issued for settlement of accounts payable - related party $ 62,125 $ —
Gain on forgiveness of accounts payable - related party $ 16,401 $ —
The accompanying notes are an integral part of these financial statements
5
Table of Contents
Worlds Inc.
NOTES TO FINANCIAL STATEMENTS
Three Months Ended March 31, 2021
(Unaudited)
NOTE 1 – GOING CONCERN
As reflected in the accompanying financial statements, the Company has a working capital deficiency of $3,184,228 and a stockholder’s deficiency of $2,963,461 and used $319,495 of cash in operations for the three months ended March 31, 2021. 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.
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 which it intends to continue to increase and to more aggressively enforce against alleged infringers.
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 development and enforcement of its patent portfolio. There can be no assurance that the Company will be able to obtain the substantial additional capital resources to pursue its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company has not been able to generate sufficient revenue or obtain sufficient financing which has had a material adverse effect on the Company, including requiring the Company to reduce operations. As the Company has focused its attention on increasing its patent portfolio and enforcing it, 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. 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.
6
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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 2020 and 2019.
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.
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Notes Payable
The Company has $773,279 in short term notes outstanding at March 31, 2021 and December 31, 2020. 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.
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 March 31, 2021, there were 11,720,000 options and 4,380,000 warrants outstanding and as of March 31, 2020, there were 11,140,000 options and 4,380,000 warrants outstanding whose effect is anti-dilutive and not included in diluted net loss per share for March 31, 2021 or for March 31, 2020. 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 March 31, 2021, and December 31, 2020 the Company recorded a reserve of $205,000 for this lawsuit, which is included in accrued expenses in the accompanying balance sheets.
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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, 2020.
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:
• 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.
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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.
The Company accounts for stock-based compensation for employees and directors in accordance with Accounting Standards Codification 718, Compensation (“ASC 718”) as issued by the FASB. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718 and, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of operations. The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Accounting Standards Update (“ASU”) 2018-07.
In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted the new lease guidance effective January 1, 2019. The Company is not a party to any leases and therefore is not showing any asset or liability related to leases in the current period or prior periods.
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NOTE 3 - NOTES PAYABLE
Notes payable at March 31, 2021 consist of the following:
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
2021 $ 773,279
2022 $ 0
2023 $ 0
2024 $ 0
2025 $ 0
$ 773,279
The Company imputed interest of $18,891 on the notes during the quarter ended March 31, 2021.
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NOTE 4 - 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 three months ended March 31, 2021, the Company issued 297,673 shares of common stock as settlement of accounts payable to a related party. The value of the shares at the date of issuance was $70,810 resulting in a loss of $8,685.
During the three months ended March 31, 2021, the Company recorded an option expense of $58,182 representing the amortization of the value of the options issued in 2020 that have not yet vested.
During the year ended December 31, 2020, the Company issued 700,000 options. 300,000 options were issued to Chris Ryan, the Chief Financial Officer of the Company, and 400,000 options were issued to Directors of the Company. The Company recorded an option expense of $267,647 in 2020. $256,574 of this amount relates to the 2018 grant to Mr. Kidrin, the CEO. $11,073 relates to the grant in 2020 to Mr. Ryan, the CFO. The directors’ options were granted on December 31, 2020 and no expense was recorded for these options. The option expense represents the amortization of the value of the options issued in 2020 and 2018 that have not yet vested. The fair market value for Mr. Ryan’s options was calculated using the Black Scholes method assuming a risk free interest of .36%, 0% dividend yield, volatility of 204%, and an exercise price of $0.266 per share with a market price of $0.266 per share at issuance date and an expected life of 5 years. The options vest one year from the date of grant.
During the three months ended March 31, 2020, the Company recorded an option expense of $81,079 representing the amortization of the value of the options issued in 2018 that have not yet vested.
Stock Warrants and Options
Stock warrants/options outstanding and exercisable on March 31, 2021 are as follows
Exercise Price per Share Shares Under Option/warrant Remaining Life in Years
Outstanding
$ 0.325 3,400,000 0.83
$ 0.15 5,220,000 1.50
$ 0.15 580,000 1.75
$ 0.05 200,000 1.75
$ 0.30 200,000 1.75
$ 0.25 5,000,000 2.42
$ 0.24 800,000 2.42
$ 0.27 300,000 4.63
$ 0.30 400,000 4.75
Total 16,100,000
Exercisable
$ 0.325 3,400,000 0.83
$ 0.15 5,220,000 1.50
$ 0.15 580,000 1.75
$ 0.05 200,000 1.75
$ 0.30 200,000 1.75
$ 0.25 5,000,000 2.42
$ 0.24 800,000 2.42
Total 15,400,000
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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 5 million shares of Worlds Inc. common stock at an exercise price of $0.25 per share, 2 million of which vested on August 28, 2018, 1.5 million vested on August 28, 2019 and the remaining 1.5 million 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.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company issued 297,673 shares of common stock to Chris Ryan the CFO as settlement of amounts previously recorded. The value of the shares on the date of issuance was $70,810. The Company recorded a loss of $8,685 on the issuance of the shares.
The Company recorded a gain on forgiveness of accounts payable related party due to the Company’s CFO in the amount of $16,401.
The balance in the accrued expense attributable to related parties is $21,899 and $82,214 at March 31, 2021 and December 31, 2020, respectively.
See note 9 for a discussion on the convertible note receivable from the related party.
NOTE 7 - PATENTS
Worlds Inc. currently has nine patents, 6,219,045 - 7,181,690 - 7,493,558 – 7,945,856, - 8,082,501, – 8,145,998 – 8,161,383, – 8,407,592 and 8,640,028. On March 30, 2012, the Company filed a patent infringement lawsuit against Activision Bizzard Inc., Blizzard Entertainment Inc. and Activision Publishing Inc. in the United States District Court for the District of Massachusetts. On September 20, 2019, the Company filed a lawsuit against Linden Research, Inc. in the US District court for the District of Delaware. On September 25, 2020, the Company filed a lawsuit against Microsoft Corporation in the U.S. District Court for the Western District of Texas. Davidson, Berquist, Jackon & Gowdey LLP is lead counsel for the Company. See Legal Proceedings section for more information on the patent infringement lawsuits.
There can be no assurance that the Company will be successful in its ability to prosecute its IP portfolio or that we will be able to acquire additional patents.
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NOTE 8 – ACCRUED EXPENSES
Accrued expenses is comprised of (i) $21,899 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) $1,305,009 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, and (iv) $14,342 related to accruals for recurring operating expenses.
NOTE 9 – CONVERTIBLE NOTE RECEIVABLE – RELATED PARTY
The Company made an investment in the form of a convertible note in the amount of $200,000 to Canadian American Standard Hemp (“CASH”). The convertible note has a 7% annual interest rate and matures in 2 years. Interest and principle is payable at maturity. The note can be converted at any time and either all or part of the amount due can be converted into the borrower’s equity. During the year ended December 31, 2020, CASH merged with Real Brands, Inc. The convertible note and accrued interest of $20,767 can be converted into 27,124,585 shares of Real Brands common stock at a conversion price of $0.008139. If converted into common stock, the Company would own approximately 1% of Real Brands Inc. Messrs. Kidrin, Toboroff and Christos are Directors of Real Brands and Mr. Kidrin is the CEO and Mr. Ryan is the CFO of Real Brands.
During the three months ended March 31, 2021, the Company earned $3,500 in interest on the note.
During the three months ended March 31, 2020, the Company earned $3,539 in interest on the note.
NOTE 10 – SALE OF MARKETABLE SECURITIES
When Worlds Inc. spun off Worlds Online Inc. in January 2011, the Company retained 5,936,115 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 $0.
During the three months ended March 31, 2021 the Company generated net cash of $431,191 from the sale of 495,000 shares of MariMed Inc. common stock during the three months ended March 31, 2021 and 100,000 shares of MariMed Inc. common stock at the end of December 2020 which was not transferred to the Company’s bank account until January of 2021. The average price per share was $0.73 per share.
As of March 31, 2021, the Company still owns approximately 2.4 million shares of MariMed Inc. common stock.
No shares were sold in the three months ended March 31, 2020.
NOTE 11 – SUBSEQUENT EVENTS
Regarding the Company's lawsuit against the Activision entities filed in 2012, on April 30, 2021, Judge Casper granted Activision’s summary judgment motion, entered an Order finding that all asserted patents were invalid as directed to patent-ineligible subject matter, and terminated the Company’s lawsuit against the Activision Entities. The Company has thirty (30) days from entry of this Order to appeal, and plans to seek appellate review of Judge Casper’s Order by the U.S. Court of Appeals for the Federal Circuit, sitting in Washington, D.C. For further information see Part II Other Information, legal proceedings.
Regarding the Company’s lawsuit against Linden Research, Inc., d/b/a Linden Lab (“Linden”) filed on September 20, 2019. On April 8, 2021, the Company and Linden jointly filed a stipulation to stay the Court’s deadlines for 30 days pending completion of a settlement agreement between the parties. The Court granted the stay stipulation on the same day. On May 11, 2021, the Company and Linden jointly reported to the Court that a settlement agreement has been finalized, and they anticipated that a stipulation of dismissal with prejudice would be filed by May 27, 2021. The Court authorized this proposal on May 12, 2021.
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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. We retained our patent portfolio which we intend to continue to increase and to more aggressively enforce against alleged infringers. We also entered into a License Agreement with MariMed Inc. to sublicense patented technologies, which agreement has since expired.
At present, the Company’s business is the enforcement and expansion of its patent portfolio and its anticipated sources of revenue will be from any revenue that may be generated from enforcing its patents.
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Revenues
We generated no revenue during the quarter because we did not receive any court awards or settlements during the quarter.
Expenses
We classify our expenses into two broad groups:
• Cost of revenues; and
• selling, general and administration.
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 protect, increase and enforce our patent portfolio. 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 three months ended March 31, 2021 and 2020 were $0. All the operations were transferred over to Worlds Online Inc. in the spin off. The Company’s sources of revenue are anticipated to be from enforcing our patents in litigation or otherwise. 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 March 31, 2021 compared to three months ended March 31, 2020
Selling general and administrative (SG&A) expenses increased substantially to $753,434 for the three months ended March 31, 2021 from $171,930 for the three months ended March 30, 2020. The increase of $581,504 is due to an increase in legal fees related to the patent litigation.
Salaries and related increased by $690 to $53,356 from $52,666 for the three months ended March 31, 2021 and 2020, respectively. The increase is due to the CEO’s salary based on the terms of his 2018 employment agreement.
For the three months ended March 31, 2021, the Company recorded an option expense of $58,182, equal to the increase in estimated fair value of the unvested options at March 31, 2021. For the three months ended March 31, 2020, there was $81,079 of option expense.
For the three months ended March 31, 2021 the Company had an interest expense of $18,891 and for March 31, 2020 the Company had an interest expense of $18,919.
For the three months ended March 31, 2020 the Company had interest income of $3,500. For the three months ended March 31, 2020 the Company had interest income of $3,539.
For the three months ended March 31, 2021, the Company recorded a loss on issuance of shares for services of $8,685.
For the three months ended March 31, 2021, the Company had a gain on sale of marketable securities of $431,191. The Company did not sell any marketable securities for the three months ended March 31, 2020.
As a result of the foregoing, we realized a net loss of $457,857 for the three months ended March 31, 2021 compared to a net loss of $321,055 in the three months ended March 31, 2020.
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Liquidity and Capital Resources
At March 31, 2021, our cash and cash equivalents were $582,783. The Company raised funds by selling shares of stock that the Company retained in the spin off company MariMed Inc. during the three months ended March 31, 2021. The Company raised $431,191 from selling shares of MariMed Inc. common stock. The Company used $319,495 in cash to pay for operating expenses during the three months ended March 31, 2021.
At March 31, 2020, our cash and cash equivalents were $1,326,255. The Company did not raise any funds or sell any shares of stock that the Company retained in the spin off company MariMed Inc. during the three months ended March 31, 2020. The Company used approximately $225,000 in cash to pay for operating expenses during the three months ended March 31, 2020.
Our 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.
We hope to raise additional funds to be used for further developing our portfolio of patents and to document our technology in order to enforce our patents where there is infringement. No assurances can be given that we will be able to raise any additional funds.
Item 4. Controls And Procedures
As of March 31, 2021, 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 March 31, 2021.
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.
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PART II OTHER INFORMATION
Legal Proceedings
The Company has sought damages for patent infringement of the Company’s patents in three proceedings. The first proceeding was filed by the Company against Activision Blizzard, Inc., Blizzard Entertainment, Inc., and Activision Publishing, Inc. in the U.S. District Court for the District of Massachusetts in 2012. The Company also filed a complaint for patent infringement against Linden Research, Inc., d/b/a Linden Lab in the U.S. District Court for the District of Delaware in 2019, and filed a complaint for patent infringement against Microsoft Corporation in the U.S. District Court for the Western District of Texas in September, 2020.
1. Company’s Lawsuit Against Activision Entities
The Company's lawsuit against the Activision entities was filed in 2012, with U.S. District Judge Casper presiding over these proceedings. This lawsuit was stayed in 2015 pending the outcome of six Inter Partes Review (“IPR”) petitions filed by Bungie, Inc. to the U.S. Patent & Trademark Office's Patent Trial and Appeal Board (“PTAB”). Those IPR proceedings were finally concluded in Company's favor on January 14, 2020, with the majority of the challenged claims surviving Bungie's challenges. Returning to its District Court litigation, the Company asked that Judge Casper lift the stay and allow the Company to proceed in its lawsuit for patent infringement of the Company’s patents against the Activision entities.
On April 17, 2020, Judge Casper issued an Order lifting the stay, and setting a pre-trial schedule with a final pretrial conference and trial to occur at a date to be determined after September 24, 2021. On May 5, 2020, Activision submitted a renewed motion for summary judgment of patent invalidity under 35 U.S.C. 101 motion, and claimed that the asserted patents are directed to patent-ineligible subject matter. Worlds opposed this motion on June 9, 2020, and a hearing was held on July 22, 2020 at 3:00 p.m. The parties proceeded with fact and expert discovery up to and including April 30, 2021. On April 30, 2021, Judge Casper granted Activision’s summary judgment motion, entered an Order finding that all asserted patents were invalid as directed to patent-ineligible subject matter, and terminated the Company’s lawsuit against the Activision Entities. The Company has thirty (30) days from entry of this Order to appeal, and plans to seek appellate review of Judge Casper’s Order by the U.S. Court of Appeals for the Federal Circuit, sitting in Washington, D.C.
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2. Company’s Lawsuit Against Linden Research, Inc. d/b/a Linden Lab
On September 20, 2019, the Company filed a lawsuit against Linden Research, Inc., d/b/a Linden Lab (“Linden”) in the U.S. District Court for the District of Delaware for patent infringement of the Company’s U.S. Patent No. 7,181,690. This case was assigned to U.S. District Judge Maryellen Noreika. On December 2, 2019, Linden answered the Complaint, denying that it has committed patent infringement. On January 8, 2020, the Court entered a Scheduling Order, setting deadlines for Fact Discovery and Contentions, Claim Construction, Expert Discovery, Summary Judgment, and Trial Phase. A claim construction hearing (“Markman” hearing) occurred on November 13, 2020. The scheduled trial date was set for January 31, 2022.
On April 8, 2021, the Company and Linden jointly filed a stipulation to stay the Court’s deadlines for 30 days pending completion of a settlement agreement between the parties. The Court granted the stay stipulation on the same day. On May 11, 2021, the Company and Linden jointly reported to the Court that a settlement agreement has been finalized, and they anticipated that a stipulation of dismissal with prejudice would be filed by May 27, 2021. The Court authorized this proposal on May 12, 2021.
3. Company’s Lawsuit Against Microsoft Corporation
On September 25, 2020, the Company filed a lawsuit against Microsoft Corporation (“Microsoft”) in the U.S. District Court for the Western District of Texas for patent infringement of the Company’s U.S. Patent No. 8,082,501. This case was assigned to U.S. District Judge Alan D. Albright. On December 4, 2020, Microsoft filed Motion to Dismiss and Motion to Stay. On January 15, 2021, the Court entered a Scheduling Order, setting the Jury Selection and Jury Trial for March 14, 2022. The Company filed its Opening claim construction brief on April 9, 2021. Microsoft filed its Responsive claim construction brief on April 30, 2021. In view of the Order issued by Judge Casper in the Company’s litigation against Activision on April 30, 2021, including the Company’s intent to appeal that Order, the Company and Microsoft jointly asked that Judge Albright stay the lawsuit against Microsoft pending the Company’s appeal of Judge Casper’s Order. The parties’ motion to stay pending appeal was filed on May 7, 2021, and Court granted the motion on May 11, 2021.
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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 2020 Annual Report on Form 10-K. There have been no material changes from the risk factors previously disclosed in our 2020 Annual Report on Form 10-K.
The above notwithstanding, we are mindful of the COVID-19 pandemic currently sweeping the world in general and in particular the United States. Inasmuch as our business model does not rely on sales of a product or services or consumer access thereto, we do not believe that we will be negatively impacted by the pandemic and the economic havoc it is currently wreaking on the economies of the United States and the world. Having said that, it is possible that if the pandemic continues for an extended period of time and/or recurs again in the future, it may cause delays in the prosecution of the Company’s lawsuit.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2021 and 2020 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.
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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.
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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: May 14, 2021
WORLDS INC.
By: /s/Thomas Kidrin
Thomas Kidrin
President and CEO
By: /s/Christopher Ryan
Christopher Ryan
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit No. Description
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.
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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: May 14, 2021
/s/ Thomas Kidrin
Thomas Kidrin
Chief Executive Officer
1
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: May 14, 2021
/s/ Christopher J. Ryan
Christopher J. Ryan
Chief Financial Officer
1
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 three months ended March 31, 2021 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: May 14, 2021 By:/s/ Thomas Kidrin
Thomas Kidrin
Chief Executive Officer
1
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 three months ended March 31, 2021 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: May 14, 2021 By:/s/ Christopher J. Ryan
Christopher J. Ryan
Chief Financial Officer
Oh! I did not know it under NDA. Thanks!
Too bad we did not get details today, I expected once settlement finalized share price up 1.00. I saw many other lawsuit cases released their details same day , but not WDDD? Really disappoint! Why have to wait until quarterly statements and Thom unable to announce it today?
It means settlement reached ? will we get more updates until 5/27? Why stock drop so badly ?
Never know. Need check pacer daily, and Kid will post when it ready.
Let's say the settlement be completed by 5/27 , PPS up to 1.00 on the same day, after 5/27 we have to wait about 18 months to get CAFC appeal result, ( Same as MSFT) , for this long period, I predict PPS will bleeding down to .50 or lower. Like I did say this stock only looks good on the first good news day, I have paid attention on it for long time and it is true. I missed many chances to make profits, I should sell on the first good news day, but I didn't.
I plan to sell 50% of my position this coming PPS up. If CAFC won't turn it over. Chance to win at CAFC 50/50.Be caution!
I doubt it, the extension to 5/27 and also need an approval by court, if your guess is right, you must be insider, otherwise you are the genius!
Hope your guess will be true tomorrow! :)
I do not think WDDD would accept this low ball, because they both reached to the deals before Casper's bad decision.
I think BesaredXX on #3 makes sense. OR between 25m -40m.
3) best case they paid the 5% plus for past infringement equaling approx 50-60m adding $1 per share plus 5% ongoing annually. This puts us all sitting pretty. But I’m not sure they have that kinda lump sum so it might be agreed to be paid as an annuity. But still best case scenario.
After cheap shares were scooped up , the other weak hands ask for lower price, how smart ( opposite) weak hands!
Funny!
I see. Thanks! Then what's your estimate?
If they can somehow squeeze out a win with MSFT and employ that strategy
If TX 'court review and think Casper made a bad ruling on 101, is it possible they suggest MSFT settle early instead of waiting for CAFC rule and turn it over, then MSFT has to pay much more after CAFC rule favor WDDD?
Your estimation from 1.50 to 3.00. I would HAPPILY take it, because mine was 1.00. If both parties agreed with the $$$ settled and signed, it doesn't matter before or after 101 decision.
The only validation that counts is the validation from the court and the jury.
I agree validation that counts from the court, but I disagree from the jury, because this under settlement, not going to trial.
Someone said WDDD can appeal in 2 months, when we know WDDD start to appeal? Why Casper dose not allow appeal?. And CAFC already ruled favorable WDDD. Unless CAFC think back Casper was right then not accept the appeal.
After LL settlement, what's Thom's planning?
I posted this good news on Yahoo Finance, it may help .
Glad to see many of you add more shares, hope stock rising to 1.00 on 5/27. Good luck to all of us!
Did anyone buy more shares today from this board?
If LL already singed for the $$$ they willing to pay before Casper's bad ruling, I don't think it is cheap settlement. But I agree MSFT may pay cheap.
Stock keep falling with good news. Unbelievable!?
Maybe people do not trust this settlement will go forward, and they wait until 5/27 seeing and believing?
If we get paid by LL , I suggest Thom Kidrin builds up a new business, after this settlement , we have to wait 18 months to see the appeal result, if Thom won't do anything, share price keep bleeding down.
Beside check on pacer, are there any source can get news? Maybe settlement done, because some reasons they want to keep it confidential for time being?
You look so optimism. Good!
Maybe after closing bell? Or delay? It said 5/10, must be any time today before market closed?
We have discussed this subject many years ago, look: If ATVI would pay 1 billion, my guess take off 40% S&G fees and taxes, we have 600 millions on hands with 57 millions outstanding share = 10 a share. Even before someone estimated just win ATVI only will get 20.00/share.
If settlement with ATVI (get discount, my guess 500 millions), very conservative estimate 5.00 a share.
Agree!?
Win all four, ATVI, MSFT, LL and Bungie, will get 20.00 a share, if settlement to all will be discount. However , we have to pay for timing, additional 2-3 more years if we win.
Yes, LL is small fish, if they pay around 60 millions, WDDD out standing share 57 million shares, estimate at 1.00/share. Win ATVI in final much more than 4-5 a share. You can do the easy math.
If that is what happened kinda dirty in my opinion
Yes, it seems dirty, as long as share price going up Monday, if LL willing to pay more, maybe we will see 1.00 on Monday, this what's I expecting!
At least Both parties agreed to stay, the timeline already set trial date next Spring on MSFT case, if the appeal on ATVI case take longer than Spring time, then the timeline on MSFT case will be changed and delay?
If 50k sold at .03 , it was not much shares sold at this level. Thanks !
Seem someone knows something today? Hope it up all the way to closing bell, and after hour get good news settlement reach to the deals.
Someone could fine the news quickly before Pacer posted, like 5/03 sold @.26. Was news leaked?
Do you know how many shares were dumped at .03? I could not find it on 5/03, but I believe just a few lucky buyers to get at .03. If they sell now, make good profit 5-6 times.
Agree, that's no simple and easy to investigate Federal judge, however, there are many different types under table , they will never ever written any check, for example : They can provide cash to a person's relative or someone can trust, pay cash for vacation, expensive jewelries....
I am looking forward and expecting CAFC rule it fair, turn it over!
If this isn't overturned, I’m going to try.
You mean wait until to see CAFC's decision ( Time frame 18 months)? In the mean time can we start to collect some evidences that she has participated in corruption? With your ideas and great action, we will get it turns over, you will be our HERO! Good luck to you all the the way to get this successful.