Worlds Inc (WDDD)

[Rainmaker80]

Some facts for all investors so they can be aware of the reality of what is occurring with this stock and on this board.

1. Why the converts being “done” (ie the convert holder has finished selling) or not matters is because material dilution and selling clearly affects a stock price and is an important factor to consider if buying or adding more etc.

2. Last week, I stated that I believed that the convert holder had a great deal of stock left (to sell or hold) and made a number of comments related to this.

a. Perhaps the convert holder would hold – this was clearly not the case but it does happen quite regularly, it really depends on the holder and the company etc

b. When we started seeing a great deal of volume I mentioned that in my view the convert holder was selling. I was told that I was incorrect, and repeatedly told by someone who said he spoke with the Market Maker selling that the converts were ‘done’.

3. I then quickly read the filings and suggested again, that based on my read of the annual report that the converts had not been sold off and that they were converting on April 30th and May 8th, 2016 (or thereabouts – the conversion dates, check the dates but close enough) and that as such there was still a great deal of dilution to come. I also mentioned the point in the PROXY (NOT QUARTERLY - SO IT IS NOT BOILERPLATE) as to why the company is asking for additional share authorization. It was stated:

Reasons to Increase the Amount of Authorized Shares

The principal purpose to authorize additional shares of common stock is to provide us with (i) sufficient shares to satisfy all of our obligations under outstanding convertible securities

A company must explain what the USES OF NEWLY AUTHORIZED SHARES WILL BE FOR, under SEC rules. It does not use 'boilerplate language' in PROXY form and identify outstanding convertible debt as one of those uses if it is not to be used for that purpose (or if there is no outstanding converts) - thus the logical implication is that there is outstanding convertible debt - which again I was correct about as per this 10Q today. So yes, I know what I am talking about.

a. I then provided math to suggest that based on approximately 720k worth of converts and a market price of approximately 1.5 cents per share, this would translate to approximately 50 mil shares of dilution to come, this is easy math.

b. Whether that number was perfect and whether it was 50 million shares vs. 30 million or 35 million shares, is moot.

c. The point was, and always will be the MATERIALITY OF THE DILUTION. Clearly, none of us know the exact number, but the point was simple – Material selling was still to come vs. those saying there was no more stock coming from the converts. This matters for those wanting to add who are trying to find the bottom vs overpaying for stock.

One might ask why those suggesting that the converts were done and thus implicitly that the stock was at a bottom (given there was no more dilution coming) were so vehemently opposing my views but not providing any factual information to support it, nothing from the filings, no math etc. The counter to my arguments was simply ‘you are wrong’ and the ‘converts are done’. I am not sure why we never saw any factual information and just the constant ‘you’re wrong’ / ‘no more converts are out there’.

4. My math was corrected recently by FlyersDH (thanks) as he pointed out that I had missed a comment in the recent events area of the filings (Annual as at Dec 31, 2015) that mentioned the converts were down to approx $280K

5. This amount ($280k), based on the current share price (0.01-0.012) would amount to 25 to 30 mil shares STILL LEFT TO BE SOLD prior to the recent selling (again ALL OF THIS IS NOTED IN THE FINANCIAL STATEMENTS). Clearly, that is a MATERIAL AMOUNT OF SHARES TO BE SOLD prior to the selling last week and this week, when we were all told the ‘converts’ were done. Last week the converts weren’t even close to done and even today, as we now know, the converts are still not even close to done.

6. MORE IMPORTANTLY - In today’s 10Q – THE COMPANY STATED IN THEIR PUBLIC FILINGS in NOTE 5 THE FOLLOWING:

“As of March 31, 2016, the aggregate carrying value of the debentures was $327,000”

7. Based on today’s share price, that amount ($327k) at 0.01 translates to 32.7 million shares. That is certainly closer to 50 million shares than zero / ‘the converts are done’ or any view that suggested last week that material dilution was not coming.

8. Indeed over the last week, as I mentioned prior – 5.4 million shares were traded. This is after the comment in subsequent events area of the 10k (dated March 31) and after the point we were told the converts were done. Today we saw another 8.4 million shares traded.

9. BASED ON TODAY’S FILING, clearly when I stated there was material selling to come, there was material selling to come, so my analysis while not 100% correct in terms of numbers was very valid directionally as per the selling we’ve seen as well as what we see in the 10Q.

Again, none of us knew the real numbers but I would argue again, 30-35 million is much closer to 50 million than zero, and the implications of 30/35/50 million are the same relative to zero.

a. My call on the converts not being done was CORRECT AS PER THE FINANCIAL STATEMENTS

b. My call last week on there being MATERIAL DILUTION to come was also correct based on the financial statements, my understanding of typical convert terms and the volume of 13 mil shares we’ve see in approximately one week.

c. My call on the fact there is STILL SIGNIFICANT DILUTION to occur and thus downward pressure on this stock is correct given the recent 10Q and quote above and the volume of shares traded since March 31, 2016 and the outstanding convert value.

d. My estimate is that there is still 8-10 million shares to be sold. The math is easy. If we take the 327k as at March 31, 2016, and estimate that dollar value equals approximately 32-35 million shares converted (at 0.01-0.012), then we subtract the 24 mil shares traded since March 31, 2016 (and clearly not ALL the selling was the convert holder), then there is AT LEAST 8-11 mil shares left, maybe more depending on when they started selling and how much they have sold off since March 31st.

Finally, most here are aware that my views on how this stock would trade in the coming weeks are intended to help longs hold off buying (as I said to wait) as the price would come down, given my analysis on the material number of shares still to be sold by the convert holder.

My view was clear, anyone looking to add or buy should be patient as the convert seller needed to sell off a ‘boat load’ of shares and thus the price would continue to decline. Mass selling with little buying = share price decline, we all know this.

Since I provided my views last week, the stock has traded from 0.02 all the way down to 0.0093 today. Someone buying could have owned double the shares they purchased last week if they read
through and agreed with my analysis and waited.

Regardless of this constant debate, my views have now been proven fairly accurate with today's 10Q. None of us is perfect, but my view was certainly much more correct than those suggesting I was wrong and that ‘the converts were done’ weeks ago.

I am glad I could be of help to all WDDD longs and those looking to add. I would suggest that there is still a material number of shares to go with the convert as per the filings today (and as I suggested last week, even after accounting for the recent sales), so if you are adding, be patient and make the seller sell to you for cheap.

Buyers have leverage here, seller is trying to get off their position, there is no catalyst coming in the near term.