WWSG Worldwide Strategies Incorporated (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended July 31, 2014

ACT OF 1934

Commission File Number: 000-52362

Worldwide Strategies Incorporated

(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code:  (303) 991-5887

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

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

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

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 ◻   No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒   No ◻

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

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter:  $463,179 on January 31, 2014.

Indicate the number of shares outstanding of each of the registrant's classes of common equity, as of the latest practicable date: 19,830,673 on January 31, 2015.

FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K contains "forward-looking statements."  All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements.  In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "project," "estimate," "anticipate," "believe," or "continue" or the negative thereof or variations thereon or similar terminology.  In assessing forward-looking statements contained in this report, readers are urged to read carefully all cautionary statements, including those contained in other sections of this report.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove to be correct.  Important factors that could cause actual results to differ materially from our expectations ("Cautionary Statements") include, but are not limited to:

·	our ability to generate sufficient capital to complete planned acquisitions;

·	our ability to successfully operate our business upon completion of any or all planned acquisitions;

·	the lack of liquidity of our common stock;

·	our ability to find and retain skilled personnel;

·	availability of capital;

·	the strength and financial resources of our competitors;

·	general economic conditions; and

·	the securities or capital markets and other factors disclosed under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this report.

All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements.  We assume no duty to update or revise our forward-looking statements based on changes in internal estimates or expectations or otherwise.

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WORLDWIDE STRATEGIES INCORPORATED

FORM 10-K

FOR THE FISCAL YEAR ENDED

JULY 31, 2014

INDEX

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PART I

ITEM 1.         BUSINESS

Business Development

Worldwide Strategies Incorporated ("we", "us", or "our") was originally incorporated in the State of Nevada on April 6, 1998 as Boyd Energy Corporation for the purpose of developing a mechanical lifting device that would enhance existing stripper well production.  We were unable to raise sufficient capital to carry out this business and focused instead on leasing properties and exploring for oil and gas.  We changed our name to Barnett Energy Corporation on July 17, 2001.

On July 8, 2005, pursuant to a Share Exchange Agreement with Worldwide Business Solutions Incorporated, a Colorado corporation ("WBSI"), we acquired all of the issued and outstanding capital stock of WBSI, in exchange for 2,573,435 shares of our common stock.  As a result of this share exchange, shareholders of WBSI as a group owned approximately 76.8% of the shares then outstanding, and WBSI became our wholly-owned subsidiary.  We changed our name to Worldwide Strategies Incorporated as of June 14, 2005.

For accounting purposes, the acquisition of WBSI was accounted for as a recapitalization of WBSI.  Since we had only minimal assets and no operations, the recapitalization has been accounted for as the sale of 778,539 shares of WBSI common stock for our net liabilities at the time of the transaction.  Therefore, the historical financial information prior to the date of the recapitalization is the financial information of WBSI.  WBSI was incorporated on March 1, 2005 to provide Business Process Outsourcing services.

WBSI incorporated a subsidiary, Worldwide Business Solutions Limited, in the United Kingdom under the Companies Acts 1985 and 1989, on May 31, 2005.  This U.K. subsidiary was formed for the purpose of supporting sales and marketing efforts in English-speaking countries.  While the subsidiary has a temporary office it does not yet have any employees and has no operations.

On July 31, 2007, we acquired 100% of the issued and outstanding shares of Centric Rx, Inc., a Nevada corporation ("Centric") in exchange for 2,250,000 post-reverse-split shares of our common stock.  We filed Articles of Exchange Pursuant to NRS 92A.200 effective July 31, 2007.  Centric is no longer in existence.

Effective July 31, 2007, we filed a Certificate of Change Pursuant to NRS 78.209, which decreased the number of our authorized shares of common stock from 100,000,000 to 33,333,333 and reduced the number of common shares issued and outstanding immediately prior to filing from 17,768,607 to 5,923,106.

The company is finalizing plans to file to increase the number of authorized shares of common stock from 33,333,333 to 600,000,000.

Our Business Plans

We originally intended to offer call center services, such as technical support, language interpreting, debt collections, and help desk solutions.  Then, with the acquisition of Centric, we planned to enter the business of distributing health services and prescription drug discount cards.  As of the date hereof, our only plan is to search for merger or acquisition opportunities.

On December 14, 2012, Worldwide Strategies Incorporated ("Worldwide") executed a stock exchange agreement with Jorge Zamacona Pliego, the President of Euzkadi Corporation of America S.A. de C.V. ("Euzkadi") and other principal owners of Euzkadi ("Euzkadi Principals"). Under the terms of the stock exchange agreement, Euzkadi Principals would assign and transfer Euzkadi shares to Worldwide such that Worldwide would then own 10% of Euzkadi, and Worldwide would issue shares of its common stock to Euzkadi Principals, such that they would then own 80% of Worldwide.

 

On April 6, 2013, Worldwide and Euzkadi entered into an Operating Agreement that outlines how the activities of the two corporations will be conducted after consummation of the stock exchange agreement. Under the

 

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terms of the Operating Agreement, Worldwide will be the international sales, financial reporting, licensing and acquisition base for Euzkadi. Euzkadi will act as a dedicated supplier to procure, transport and deliver grain products for sale.

 

As part of the terms of the Operating Agreement, Worldwide will commence efforts to change the name of the company to Euzkadi International Corporation.

Consummation of the stock exchange is contingent upon the satisfaction of several conditions, including Worldwide increasing its authorized shares of common stock to accommodate this transaction and Euzkadi completing its first shipment of products.

Employees

As of January 31, 2015 we employed a total of 2 persons, both of whom were full-time.  None of our employees are covered by a collective bargaining agreement.

ITEM 1A.     RISK FACTORS

Risks Relating To Our Business and Marketplace

We must obtain financing to continue operations.  We must engage in debt and/or equity financing in order to continue operations.  We do not know the terms on which any financing might be available or if such financing is available on any terms.  Such terms may be detrimental to the interests of our existing shareholders.  The value of an investment in our common stock could be reduced.  Interest on debt securities could increase costs and negatively impacts operating results.  Preferred stock could be issued in series from time to time with such designations, rights, preferences, and limitations as needed to raise capital.  The terms of preferred stock could be more advantageous to those investors than to the holders of common stock.  In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms given to our current investors.  Shares of common stock that we sell could be sold into the market, which could adversely affect market price.

We are seeking other merger and acquisition opportunities.  We may not be able to successfully acquire or merge with another business.  Any acquisition or merger that we undertake will require an unspecified amount of additional capital expenditure in the form of planning, due diligence, legal, and accounting fees.  We have no substantial experience in completing acquisitions of or mergers with other businesses, and we may be unable to successfully complete such a transaction.  Any acquisition or merger we undertake may result in a potentially dilutive issuance of equity securities, the issuance of debt and incurrence of expenses related to the transaction.

We have limited operating history and we cannot assure you that we will succeed or be profitable.  From March 1, 2005 (inception) through July 31, 2014, we generated revenues of only $34,518.  As of July 31, 2014, our planned principal operations have not commenced, as we have devoted substantially all of our efforts to financial planning, raising capital, and developing markets.  We cannot assure you that we will be successful or profitable.

We do not have sufficient working capital to pay our debts or our costs of continuing operations.  We do not currently have sufficient working capital to pay our debts as they become due or our costs of operating our business.  As of July 31, 2014, our working capital deficiency was $452,605.  We are dependent upon additional debt or equity financing to pay our debts and the costs of operation.  If we are unsuccessful in raising additional funds, we may not be able to begin our planned operations or continue as a going concern, and we may have to either liquidate our company or file for bankruptcy protection from our creditors.

Risks Factors Relating To Our Common Stock

Future equity transactions, including exercise of options or warrants, could result in dilution.  In order to raise sufficient capital to implement our planned operations, from time to time, we intend to sell restricted stock, warrants, and convertible debt to investors in private placements.  Because the stock will be restricted, the stock will likely be sold at a greater discount to market prices compared to a public stock offering, and the exercise price of the

 

 

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warrants is likely to be at or even lower than market prices.  These transactions will cause dilution to existing stockholders.  Also, from time to time, options will be issued to officers, directors, or employees, with exercise prices equal to market.  Exercise of in-the-money options and warrants will result in dilution to existing stockholders.  The amount of dilution will depend on the spread between the market and exercise price, and the number of shares involved.  In addition, such shares would increase the number of shares in the "public float" and could depress the market price for our common stock.

Our common stock is subject to SEC "Penny Stock" rules.  Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment of our common stock.  Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10.  Those rules require broker-dealers, before effecting transactions in any penny stock, to:

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities.  These additional procedures could also limit our ability to raise additional capital in the future.

Trading volumes and prices may be sporadic because our shares are not traded on an exchange.  Our common shares are currently quoted on the over-the-counter markets.  The trading price of our common shares has been subject to wide fluctuations.  Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control.  The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with limited business operations.  There can be no assurance that trading prices previously experienced by our common shares will be matched or maintained.  Broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted.  Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.

We are subject to SEC regulations and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and other trading market rules, are creating uncertainty for public companies.  We are committed to maintaining high standards of corporate governance and public disclosure.  As a result, we intend to invest appropriate resources to comply with evolving standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

ITEM 1B.       UNRESOLVED STAFF COMMENTS

Not required for smaller reporting companies.

ITEM 2.           PROPERTIES

Our principal offices are located at 3801 East Florida Avenue, Suite 400, Denver, Colorado.  We lease these offices pursuant to a month-to-month lease.  The base rent on the lease is $150 per month.

 

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Our legal address for our U.K. subsidiary is that of the accountant and financial firm Wilkins Kennedy, 77-79 High Street, Egham, Surrey TW20 9HY, UK.

ITEM 3.           LEGAL PROCEEDINGS

To the best of our knowledge, there are no known or pending litigation proceedings against us.

ITEM 4.           MINE SAFETY DISCLOSURES

Not applicable

PART II

ITEM 5.            MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is currently quoted in the OTC Markets in the No Information tier under the symbol "WWSG" due to the late filing of this report.  We expect our common stock to be quoted on the OTCQB tier once we are current with our SEC reporting requirements.  The following table sets forth the range of high and low bid quotations for each fiscal quarter for the last two completed fiscal years and have been adjusted to reflect the effects of reverse stock splits.  These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions and may not necessarily represent actual transactions.

 

Fiscal Quarter Ending	High Bid	Low Bid
October 31, 2012	$0.03	$0.03
January 31, 2013	$0.03	$0.03
April 30, 2013	$0.05	$0.03
July 31, 2013	$0.18	$0.05
October 31, 2013	$0.06	$0.02
January 31, 2014	$0.05	$0.05
April 30, 2014	$0.20	$0.05
July 31, 2014	$0.14	$0.05

Holders and Dividends

As of December 15, 2014 there were 90 record holders of our common stock.  Since our inception, no cash dividends have been declared on our common stock.

Recent Sales of Unregistered Securities

During the quarter ended July 31, 2014, we did not issue or sell any unregistered securities.

ITEM 6.           SELECTED FINANCIAL DATA

Not required for smaller reporting companies.

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ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and plan of operation should be read in conjunction with our Consolidated Financial Statements and related notes appearing elsewhere in this report.

Overview

On July 8, 2005, pursuant to a Share Exchange Agreement with Worldwide Business Solutions Incorporated, a Colorado corporation ("WBSI"), we acquired all of the issued and outstanding capital stock of WBSI, in exchange for 2,573,435 shares of our common stock.  As a result of this share exchange, shareholders of WBSI as a group owned approximately 76.8% of the shares then outstanding, and WBSI became our wholly-owned subsidiary.

For accounting purposes, the acquisition of WBSI has been accounted for as a recapitalization of WBSI.  Since we had only minimal assets and no operations, the recapitalization has been accounted for as the sale of 778,539 shares of WBSI common stock for our net liabilities at the time of the transaction.  Therefore, the historical financial information prior to the date of the recapitalization is the financial information of WBSI.

Effective July 31, 2007, we filed a Certificate of Change Pursuant to NRS 78.209, which decreased the number of our authorized shares of common stock from 100,000,000 to 33,333,333 and reduced the number of common shares issued and outstanding from 17,768,607 to 5,923,106.  All shares and per share amounts in our consolidated financial statements and related notes have been retroactively adjusted to reflect the one-for-three reverse stock split for all periods presented.

On July 31, 2007, we acquired 100% of the issued and outstanding shares of Centric in exchange for 2,250,000 shares of our common stock.  As a result of the acquisition, Centric became our wholly-owned subsidiary and the results of its operations have been included in our consolidated financial statements since the date of acquisition.

The company is finalizing plans to file to increase the number of authorized shares of common stock from 33,333,333 to 600,000,000 so that the stock exchange agreement entered into on December 14, 2012 with Jorge Zamacona Pliego, the President of Euzkadi Corporation of America S.A. de C.V. ("Euzkadi") and other principal owners of Euzkadi ("Euzkadi Principals") can be consummated.

We currently devote substantially all of our efforts to financial planning, raising capital and developing markets as we continue to be in the development stage.

Results of Operations

During the years ended July 31, 2014 and 2013, respectively, we had no revenue.

We had no salaries, benefits and payroll taxes for the years ended July 31, 2014 and 2013 respectively.

We incurred non-cash stock-based compensation expense of $0 and $1,550 during the years ended July 31, 2014 and 2013, respectively, as a result of issuing shares and options to our employees and directors for services.

Professional and consulting fees were $39,787 and $138,156 for the years ended July 31, 2014 and 2013, respectively.  The reduction is due to not incurring stock-based compensation as in the prior year.

Travel expenses totaled $601 and $12,566 for the years ended July 31, 2014 and 2013, respectively, the decline due to a decreased level of activity and a focus on cost control.

For the years ended July 31, 2014 and 2013, we incurred other general and administrative expenses of $2,536 and $3,784, respectively.

 

 

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Interest expense was $163,801 and $78,175 for the years ended July 31, 2014 and 2013, respectively.  The higher interest expense is the result of increased debt related to funding operations and the amortization of debt discount related to the beneficial conversion feature on assorted convertible promissory notes.

Liquidity and Capital

For the year ended July 31, 2014, $42,000 provided by financing activities offset $43,398 used in operating activities.

We had a deficiency in working capital of $452,605 at July 31, 2014, as compared to $328,180 at July 31, 2013.  The increase was primarily as a result of outstanding notes classified as current liabilities as their maturity dates are within one year of the balance sheet date.

During the years ended July 31, 2014 and 2013, we borrowed $46,000 and $49,550, respectively.

Going Concern

The report of our independent registered public accounting firm on the financial statements for the year ended July 31, 2014, includes an explanatory paragraph relating to the uncertainty of our ability to continue as a going concern.  We have incurred recurring losses, incurred liabilities in excess of assets over the past year, and have an accumulated deficit of $8,166,674.  Based upon current operating levels, we will be required to obtain additional capital or reconfigure our operations in order to sustain our operations through July 31, 2015.

Contractual Obligations

We lease office space on a month-to-month basis at a rate of $150 per month.  We have no other contractual commitments.

Plan of Operations

As of the date hereof, we do not have any plans for business operations, merger or acquisition, other than the proposed business combination transaction with Euzkadi.  We cannot assure you that this transaction will be completed.

We must raise additional capital to support our ongoing existence while we search for other merger opportunities.  We cannot assure you that we will be able to complete additional financings successfully.

Significant Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  On an ongoing basis, we evaluate our estimates, including those related to the valuation of accounts receivable and inventories, the impairment of long-lived assets, any potential losses from pending litigation and deferred tax assets or liabilities.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

Development Stage.  In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements to improve financial reporting by reducing cost and complexity associated with the incremental reporting requirements of development stage entities.  The changes eliminate the need for inception to date reporting and other disclosure requirement.  The amendments are effective for annual reporting periods

 

 

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beginning after December 15, 2014.  Early adoption is permitted.  The Company has elected early adoption of these amendments.

Stock-based Compensation.  The Company accounts for all stock-based payments to employees and non-employees under Accounting Standards Codification (ASC) 718 Stock Compensation, using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.

Loss per common share.  We report net loss per share using a dual presentation of basic and diluted loss per share.  Diluted net loss per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.  As of July 31, 2014, there were 1,600,000 vested common stock options outstanding, which were excluded from the calculation of net loss per share-diluted because they were antidilutive.

Beneficial Conversion Features.  From time to time, the Company may issue convertible notes that contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

Fair Value of Financial Instruments.  On August 1, 2012, the Company adopted ASC 820, Fair Value Measurements and Disclosures ("ASC 820").  ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

·	Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·	Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.

The following table represents our assets and liabilities by level measured at fair value on a recurring basis at July 31, 2014:

New accounting pronouncements

Note 1 to the consolidated financial statements includes a complete description of new accounting pronouncements applicable to our Company.

Off Balance Sheet Arrangements

We do not have any material off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8.            FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

WORLDWIDE STRATEGIES INCORPORATED

Index to Consolidated Financial Statements

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WORLDWIDE STRATEGIES INCORPORATED

Consolidated Balance Sheets

 

		July 31,				July 31,
		2014				2013
Assets
Current Assets:
Cash	$		2,139			$	3,537
Total current assets			2,139				3,537
Deposits			150				150
Total assets	$		2,289			$	3,687
Liabilities and Shareholders' Deficit
Current Liabilities:
Accounts and notes payable:
Accounts payable	$		84,372			$	84,846
Accounts payable, related party			3,900				3,900
Accrued liabilities			42,902				26,503
Accrued liabilities, related party			18,041				4,723
Notes payable, related party, net of unamortized discount
of $1,341 and $28,822, respectively			101,696				11,445
Note payable, related party, in default, net of unamortized discount
of $0 and $17,000, respectively			65,000				65,000
Note payable, net of unamortized discount of $1,341 and
$8,644, respectively			136,833				135,300
Note payable, in default			2,000				-
Total current liabilities			454,744				331,717
Shareholders' deficit:
Preferred stock, $.001 par value; 25,000,000 shares authorized,
1,491,743 shares issued and outstanding			1,492				1,492
Common stock, $.001 par value, 33,333,333 shares authorized
19,830,673 and 18,859,005 shares issued and outstanding respectively			19,831				18,860
Stock Payable			—				36,000
Additional paid-in capital			7,692,896				7,575,567
Accumulated deficit			(8,166,674	)			(7,959,949	)
Total shareholders' deficit			(452,455	)			(328,030	)
Total liabilities and shareholders' deficit	$		2,289			$	3,687

 

 

See accompanying notes to the consolidated financial statements.

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WORLDWIDE STRATEGIES INCORPORATED

Consolidated Statements of Operations

 

		For The Year Ended
		July 31,
		2014				2013
Sales	$		—		$		—
Cost of sales			—				—
			—				—
Operating expenses:
Professional and consulting fees			39,787				138,156
Travel			601				12,566
Other general and administrative expenses			2,536				3,784
Total operating expenses			42,924				154,506
Loss from operations			(42,924	)			(154,506	)
Other expense:
Interest expense			(163,801	)			(78,175	)
Loss before income taxes			(206,725	)			(232,681	)
Income tax provision			—				—
Net loss	$		(206,725	)	$		(232,681	)
Basic and diluted loss per share	$		(0.01	)	$		(0.01	)
Basic and diluted weighted average
common shares outstanding			28,949,088				27,487,506

See accompanying notes to the consolidated financial statements.

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WORLDWIDE STRATEGIES INCORPORATED

Consolidated Statement of Changes in Shareholders' Deficit

For the Years Ending July 31, 2014 and 2013

 

 

																		Common
																		Stock								Additional
		Preferred Stock								Common Stock								Subscriptions				Stock				Paid-In				Accumulated
		Shares				Par Value				Shares				Par Value				Receivable				Payable				Capital				Deficit				Total
Balance at July 31, 2012 (restated)			1,491,743		$		1,492				16,870,234		$		16,871		$		—		$		37,500		$		6,896,455		$		(7,727,268	)	$		(774,950	)
Common stock  issued in exchange for
interest, related party			—				—				1,453,771				1,454				—				(1,500	)			42,528				—				42,482
Common stock issued in exchange for
CFO compensation			—				—				150,000				150				—				—				1,350				—				1,500
Common stock issued for consulting
services			—				—				385,000				385				—				—				4,165				—				4,550
Options issued in exchange for
board member services (Aug 2012)			—				—				—				—				—				—				5,000				—				5,000
Options issued in exchange for
CFO compensation (Aug 2012)			—				—				—				—				—				—				1,500				—				1,500
Options issued in exchange for
board member services (Jul 2013)			—				—				—				—				—				—				60,000				—				60,000
Options issued in exchange for
CFO compensation (Jul 2013)			—				—				—				—				—				—				18,000				—				18,000
Foregiveness Of Past Salary And
Expenses To CEO and Former CFO			—				—				—				—				—				—				474,019				—				474,019
Beneficial conversion feature			—				—				—				—				—				—				72,550				—				72,550
Net loss for the year ended July 31, 2013			—				—				—				—				—				—				—				(232,681	)			(232,681	)
Balance at July 31, 2013			1,491,743		$		1,492				18,859,005		$		18,860		$		—		$		36,000		$		7,575,567		$		(7,959,949	)	$		(328,030	)
Common stock  issued in exchange for
interest, related party			—				—				671,667				671				—				—				39,629				—				40,300
Common stock authorized for Feb 2012
but not issued until March 2014			—				—				300,000				300				—				(36,000	)			35,700								—
Beneficial conversion feature			—				—				—				—				—				—				42,000				—				42,000
Net loss for the year ended July 31, 2014			—				—				—				—				—				—				—				(206,725	)			(206,725	)
Balance at July 31, 2014			1,491,743		$		1,492				19,830,672		$		19,831		$		—		$		—		$		7,692,896		$		(8,166,674	)	$		(452,455	)

 

See accompanying notes to the consolidated financial statements.

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WORLDWIDE STRATEGIES INCORPORATED

Consolidated Statements of Cash Flows

		For The Year Ended
		July 31,
		2014				2013
Cash flows from operating activities:
Net loss	$		(206,725	)	$		(232,681	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation			—				—
Amortization of beneficial conversion feature			93,784				20,095
Stock based compensation			—				1,500
Stock issued for promissory note extension			40,300				84,500
Consulting expense paid in common stock			—				4,550
Interest expense paid in common stock			—				37,304
Changes in current assets and liabilities:
Accounts payable and accrued liablities			15,925				18,056
Accounts payable and accrued
liabilities, related party			13,318				15,954
Net cash used in operating activities			(43,398	)			(50,722	)
Cash flows from financing activities:
Proceeds from notes payable, related party			18,000				2,500
Proceeds from notes payable			28,000				47,050
Payment of notes payable			(4,000	)			—
Net cash provided by financing activities			42,000				49,550
Net change in cash			(1,398	)			(1,172	)
Cash, beginning of period			3,537				4,709
Cash, end of period	$		2,139		$		3,537
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$		—		$		—
Interest	$		—		$		—
Non-cash investing/financing activities
Stock issued for conversion of accrued interest			—				5,187
Beneficial Conversion Feature - Debt			42,000				72,550
Debt relief by directors			—				474,019
Transfer to debt			—				45,500
Common shares issued out of stock payable			36,000				1,500

 

See accompanying notes to the consolidated financial statements.

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WORLDWIDE STRATEGIES INCORPORATED

Notes To Consolidated Financial Statements

Organization and Basis of Presentation

Worldwide Strategies Incorporated (the "Company") was originally incorporated in the state of Nevada on April 6, 1998.  On March 1, 2005, Worldwide Business Solutions Incorporated ("WBSI") was incorporated in the State of Colorado.  On July 8, 2005, the Company acquired all the shares of WBSI for 76.8% of the Company's outstanding stock.  The acquisition of WBSI has been accounted for as a recapitalization of WBSI.  Therefore the historical information prior to the date of recapitalization is the financial information of WBSI.

Effective July 31, 2007 the Company filed a Certificate of Change Pursuant to NRS 78.209, which decreased the number of its authorized shares of common stock from 100,000,000 to 33,333,333 and reduced the number of common shares issued and outstanding from 17,768,607 to 5,923,106.

All shares and per share amounts in these Consolidated Financial Statements and related notes have been retroactively adjusted to reflect the reverse stock split for all periods presented.

On July 31, 2007, the Company acquired 100% of the issued and outstanding shares of Centric Rx, Inc., ("Centric") in exchange for 2,250,000 shares of the Company's common stock.  As a result of the acquisition, Centric became a wholly owned subsidiary of the Company and the results of its operation have been included in the Company's consolidated financial statements since the date of acquisition.

Development Stage

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements to improve financial reporting by reducing cost and complexity associated with the incremental reporting requirements of development stage entities.  The changes eliminate the need for inception to date reporting and other disclosure requirements.  The amendments are effective for annual reporting periods beginning after December 15, 2014.  Early adoption is permitted.  The Company has elected early adoption of these amendments.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplate continuation of the Company as a going concern.  However, the Company experienced net losses of $206,725, and $232,681 for the years ended July 31, 2014 and 2013, respectively.  In addition, the Company has incurred liabilities in excess of assets over the past year and, as of July 31, 2014, has an accumulated deficit of $8,166,674. These matters, among others, raise substantial doubt about its ability to continue as a going concern.

 

In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon the Company's ability to generate sufficient sales volume to cover its operating expenses and to raise sufficient capital to meet its payment obligations.  Historically, management has been able to raise additional capital. During the year ended July 31, 2014 and 2013, the Company issued convertible promissory notes in exchange for $46,000 and $49,550, respectively.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

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Principles of Consolidation

The accompanying Consolidated Financial Statements include the Company's accounts and those of its wholly owned subsidiaries.  All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents.  The Company had no cash equivalents at July 31, 2014 or 2013 respectively.

Financial Instruments

The carrying amounts of cash and current liabilities approximate fair value due to the short-term maturity of the instruments.

Property and Equipment

Property and equipment are stated at cost.  Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, currently ranging from three to five years.  Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred.  The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.

 

 

The Company had no depreciation expense for the years ended July 31, 2014 and 2013.

Impairment of Long-Lived Assets

The Company has adopted ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets, which requires that long-lived assets to be held be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  ASC 360 establishes a single auditing model for long-lived assets to be disposed of by sale.

Loss per Common Share

The Company reports net loss per share using a dual presentation of basic and diluted loss per share. Basic earnings (loss) per share are computed by dividing the net income (loss) by the weighted-average number of shares of common stock and common stock equivalents (primarily outstanding options and convertible preferred stock). Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and convertible preferred stock, using the treasury stock method. The calculation of fully diluted earnings (loss) per share assumes the dilutive effect of the exercise of outstanding options and convertible preferred stock at either the

 

 

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beginning of the respective period presented or the date of issuance, whichever is later. At July 31, 2014 and 2013, the Company had outstanding options equivalent to 1,600,000 and 4,333,328 common shares, respectively, and convertible preferred stock equivalent to 9,323,394 common shares.

Stock-based Compensation

The Company accounts for all stock-based payments to employees and non-employees under ASC 718 "Stock Compensation," using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.

Beneficial Conversion Features

From time to time, the Company may issue convertible notes that contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

Fair Value of Financial Instruments

On August 1, 2012, the Company adopted ASC 820, Fair Value Measurements and Disclosures.  ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

·	Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·	Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.

The following tables represent our assets and liabilities by level measured at fair value on a recurring basis at July 31, 2014 and July 31, 2013:

Fiscal Year-end

The Company's year-end is July 31.

 

 

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New Accounting Pronouncements

In June 2014, the FASB issued ASU No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that requires a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

In June 2014, the FASB issued ASU 2014-10, Development Stage Entities. The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments in this update are applied retrospectively. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements from the Company.

In July 2013, the FASB issued ASU No. 2013-11: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists. The new guidance requires that unrecognized tax benefits be presented on a net basis with the deferred tax assets for such carry forwards. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2013. We do not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.

In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

·

Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

·

Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments were effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption was permitted. The adoption of ASU No. 2013-02 did not have a material impact on our financial position or results of operations.

At July 31, 2014 and 2013, the Company was indebted to related parties for expenses incurred on behalf of the Company totaling $3,900.

At both July 31, 2014 and 2013, accrued compensation totaled $0. During the 2013 fiscal year the CEO and former CFO forgave this liability in exchange for convertible promissory notes totaling $45,500 in value, including amounts related to Accrued Liabilities forgiven.  The difference was recorded to Paid In Capital on the balance sheet.

Accrued liabilities

At July 31, 2014 and 2013, accrued liabilities totaled $18,041 and $4,723, respectively.  During the 2013 fiscal year the CEO incurred $8,321 expenses related to Company efforts.  The CEO forgave accrued expenses of $108,844 in exchange for convertible promissory notes totaling $45,500 in value, including amounts related to Accrued Liabilities forgiven.  The difference was recorded to Paid In Capital on the balance sheet.  The increase of $13,318 represents accrued interest expense on notes payable to related parties for 2014.

Notes payable

During May 2010, the Company issued a convertible promissory note to a related party in exchange for $50,000. The note bears interest at 9% and the principal and accrued interest is convertible into common shares at $.04 per share upon the election of the holder. The note also provides for renewal in 120-day cycles, assuming issuing of common stock as a renewal premium.  This note was exchanged in April 2013 for new promissory notes bearing interest at 10% and convertible into common shares at $.01 per share with a 120-day renewal cycle and identical renewal premium.  The new promissory notes allow the Company to call the note and pay it off, a feature not available in the prior promissory note.

During December 2010, the Company issued a convertible promissory note to a related party in exchange for $15,000. The note bears interest at 9% and the principal and accrued interest is convertible into common shares at $.04 per share upon the election of the holder. The note also provides for renewal in 120-day cycles, assuming issuing of common stock as a renewal premium.  This note was exchanged in April 2013 for new promissory notes

 

 

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bearing interest at 10% and convertible into common shares at $.01 per share with a 120-day renewal cycle and identical renewal premium.  The new promissory notes allow the Company to call the note and pay it off, a feature not available in the prior promissory note.

During May 2011, the Company issued two convertible promissory notes to related parties in exchange for a total of $4,000.  The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holder.  In November 2011 these notes were exchanged for new convertible promissory notes totaling $4,173 in principal and accrued interest.

During November 2011, the Company issued two convertible promissory notes to related parties in exchange for $4,173 of principal and accrued interest on due promissory notes. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holders, as did the notes being replaced. Based on the initial valuation the Company has recorded a debt discount of $2,340, all of which was amortized in the fiscal year ending July 31, 2012.  The original maturity date on these notes was April 30, 2012.  The holders have extended both notes to July 31, 2015.

During April 2012, the Company issued a convertible promissory note to a related party in exchange for a total of $5,000.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.04 per share upon the election of the holder.  Based on the initial valuation the Company has recorded a debt discount of $1,250, $831 of which was amortized in the fiscal year ended July 31, 2012 and the remaining $419 amortized in the fiscal year ending July 31, 2013.  The original maturity date on this note was September 30, 2012.  The holder has extended the note to July 31, 2015.

During December 2012, the Company issued two promissory notes to two related parties totaling $2,000. The notes bear interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share.  Based on the initial valuation the Company has recorded a debt discount of $2,000, all of which was amortized in the fiscal year ending July 31, 2013.  The original maturity date on these notes was June 30, 2013.  The holders have extended the notes to July 31, 2015.

During February 2013, the Company issued one promissory note to a related party for $500.  The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share.  This note was related to company expenses paid.  Based on the initial valuation the Company has recorded a debt discount of $500, $427 of which was amortized in the fiscal year ended July 31, 2013 and the remaining $73 amortized in the fiscal year ending July 31, 2014.  The original maturity date on this note was August 31, 2013.  The holder has extended the note to July 31, 2015.

During April 2013, the Company issued five convertible promissory notes to related parties in exchange for two promissory notes totaling $65,000. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder.  These notes have a 120-day term and are renewed with payment of accrued interest in common stock as well as a renewal fee of 455,000 shares.  The common shares for this renewal fee were issued May 14, 2013 and valued at $13,577.  These notes were replaced through renewal in July 2013.

During July 2013, the Company issued one promissory note to a related party for $28,500.  The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share.  This note was in exchange for accrued and owed salary of $241,875 and accrued and owed expense of $108,844.  Based on the initial valuation the Company has recorded a debt discount of $28,500, all of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on this note was January 31, 2014.  The holder has extended the note to July 31, 2015.

During July 2013, the Company issued one promissory note to a related party for $17,000.  The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share.  This note was in exchange for accrued and owed salary of $168,750 to the Company's former CFO.    Based on the initial valuation the Company has recorded a debt discount of $17,000, all of which was amortized in the fiscal year ended July 31, 2013.  The original maturity date on this note was January 31, 2014.  The holder has extended the note to July 31, 2015.

 

 

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During July 2013, the Company issued five convertible promissory notes to related parties in exchange for five promissory notes totaling $65,000. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder.  These notes have a 120-day term and are renewed with payment of accrued interest in common stock as well as a renewal fee of 455,000 shares.  The common shares for this renewal fee were issued August 5, 2013 and valued at $26,845.  These notes matured December 11, 2013 and the holders chose not to renew per the note terms.  The notes are in default and payable on demand of the holders.

During December 2013, the Company issued two promissory notes to two related parties totaling $16,000. The notes bear interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share.  Based on the initial valuation the Company has recorded a debt discount of $16,000, all of which was amortized in the fiscal year ending July 31, 2014.  The original maturity date on these notes was May 31, 2014.  The holders have extended the notes to July 31, 2015.

During June 2014, the Company issued one promissory note to a related party for $2,000.  The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share. Based on the initial valuation the Company has recorded a debt discount of $2,000, $659 of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on this note was November 30, 2014.  The holder has extended the note to July 31, 2015.

As of July 31, 2014, the Company had outstanding convertible promissory notes to nine related parties totaling $140,173. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares, with $4,173 convertible at $.07 per share, $5,000 convertible at $.04 per share and $131,000 convertible at $.01 per share upon the election of the holder. The Company reported Debt Discount of $69,838 on these notes of which $3,171, $2,846 and $62,480 amortized in the fiscal years ended July 31, 2012, July 31, 2013 and July 31, 2014, respectively.  $1,341 of Debt Discount remains unamortized as of July 31, 2014.

Preferred stock

The Company issued no Preferred stock for the fiscal years ending July 31, 2014 and 2013 respectively.

Common stock

In August 2012, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from July 25, 2012 to November 22, 2012 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.01 per share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($1,500) is reflected in the accompanying financial statements as interest.

In September 2012, the Company issued 387,500 shares of the Company's common stock in exchange for accrued interest and an extension of due date from September 12, 2012 to January 10, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.01 per share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($5,000) is reflected in the accompanying financial statements as interest.

In December 2012, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from November 22, 2012 to January 10, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.03 per share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($3,488) is reflected in the accompanying financial statements as interest.

In February 2013, the Company issued 387,500 shares of the Company's common stock in exchange for accrued interest and an extension of due date from January 10, 2013 to May 10, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.03 per

 

 

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share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($11,625) is reflected in the accompanying financial statements as interest.

In March 2013, the Company issued 116,250 shares of the Company's common stock in exchange for accrued interest and an extension of due date from March 22, 2013 to July 20, 2013 on a note payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.05 per share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($3,600) is reflected in the accompanying financial statements as interest.

In May 2013, the Company issued 330,021 shares of the Company's common stock in exchange for accrued interest and an exchange for replacement on two notes payable. The shares related to the accrued interest were issued at $.04 per share and the shares related to the extension were issued at $.05 per share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($16,182) is reflected in the accompanying financial statements as interest.

In August 2013, the Company issued 503,750 shares of the Company's common stock in exchange for accrued interest and an extension of due date on five notes payable.  The shares related to the accrued interest were issued at $.01 per share and the shares related to the extension were issued at $.06 per share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($30,225) is reflected in the accompanying financial statements as interest.

In September 2013, the Company issued 167,917 shares of the Company's common stock in exchange for additional accrued interest on five notes payable.  The shares related to the accrued interest were issued at $.01 per share and the shares related to the extension were issued at $.06 per share (fair market value) on the day they were granted, per the terms of the agreement.  This amount ($10,075) is reflected in the accompanying financial statements as interest.

In March 2014, the Company issued 300,000 shares of common stocks to independent Directors as compensation for services provided.  These shares, approved August 2011, were previously recorded as stock payable.

During November 2009, the Company issued a convertible promissory note to an unrelated third party in exchange for $25,000. The note bears interest at 8% and the principal and accrued interest is convertible, at the option of the holder, into non-restricted common stock in an amount equal to the total sum due, based on a mutually agreed discount (not to exceed 50%) to the then market price.  The original maturity date on this note was May 31, 2010.  The holder has extended the note to March 31, 2015.

During February 2010, the Company issued a convertible promissory note to an unrelated third party in exchange for $25,000. The note bears interest at 8% and the principal and accrued interest is convertible, at the option of the holder, into non-restricted common stock in an amount equal to the total sum due, based on a mutually agreed discount (not to exceed 50%) to the then market price. The original maturity date on this note was July 31, 2010.  The holder has extended the note to March 31, 2015.

During October 2011, the Company issued a convertible promissory note to an unrelated party in exchange for $15,000. The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holder. The original maturity date on this note was April 25, 2012.  The holder has extended the note to July 31, 2015.

During November 2011, the Company issued a convertible promissory note to an unrelated party in exchange for $2,087 of principal and accrued interest on a due promissory note. The terms of the new note match those of the note being replaced.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holder, as did the notes being replaced. The original maturity date on this note was April 30, 2012.  The holder has extended the note to July 31, 2015.

During March 2012, the Company issued a convertible promissory note to an unrelated party to replace a note due, including accrued interest, of $15,750.  The terms of the new note match those of the note being replaced.  The note

 

 

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bears interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holder.  The original maturity date on this note was August 31, 2012.  The holder has extended the note to July 31, 2015.

During March 2012, the Company issued a convertible promissory note to an unrelated party in exchange for $2,150.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.07 per share upon the election of the holder.  The original maturity date on this note was September 12, 2012.  The holder has extended the note to July 31, 2015.

During April 2012, the Company issued convertible promissory notes to four unrelated parties in exchange for a total of $12,000.  The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.04 per share upon the election of the holder of each note.  Based on the initial valuation the Company has recorded a debt discount of $4,750, $3,158 of which was amortized in the fiscal year ended July 31, 2012 and $1,592 amortized in the fiscal year ended July 31, 2013.  The original maturity date on these notes was September 30, 2012.  The holders have extended the notes to July 31, 2015.

During July 2012, the Company issued a convertible promissory note to an unrelated party in exchange for $15,000.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder.  The original maturity date on this note was January 31, 2013.  The holder has extended the note July 31, 2015.

During October 2012, the Company issued convertible promissory notes to five unrelated parties in exchange for a total of $7,500.  The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder of each note.  The original maturity date on these notes was March 31, 2013.  The holders have extended the notes to July 31, 2015.

During January 2013, the Company issued three promissory notes to one unrelated party for a total of $12,500.  The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder of each note. Based on the initial valuation the Company has recorded a debt discount of $12,500, all of which was amortized in the fiscal year ended July 31, 2013.  The original maturity date on these notes was July 31, 2013.  The holder has extended the notes to July 31, 2015.

During June 2013, the Company issued convertible promissory notes to three unrelated parties in exchange for a total of $8,500. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder of each note.  Based on the initial valuation the Company has recorded a debt discount of $8,500, $2,558 of which was amortized in the fiscal year ended July 31, 2013 and $5,942 amortized in the fiscal year ended July 31, 2014.  The original maturity date on these notes was November 30, 2013.  The holders have extended the notes to July 31, 2015.

During June 2013, the Company issued a convertible promissory note to an unrelated party valued at $3,550 as compensation for consulting services.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder.  Based on the initial valuation the Company has recorded a debt discount of $3,550, $848 of which was amortized in the fiscal year ended July 31, 2013 and $2,702 was amortized in the fiscal year ended July 31, 2014.  The original maturity date on this note was December 31, 2013.  The holder has extended the note to July 31, 2015.

During September 2013, the Company issued one promissory note to one unrelated party for a total of $3,000.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder. Based on the initial valuation the Company has recorded a debt discount of $3,000, all of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on this note was February 28, 2014.  The holder has extended the note to July 31, 2015.

During December 2013, the Company issued four promissory notes to four unrelated parties for a total of $8,000.  The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder of each note. Based on the initial valuation the Company has recorded a debt

 

 

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discount of $8,000, all of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on these notes was May 31, 2014.  The holders have extended the notes to July 31, 2015.

During December 2013, the Company issued one promissory note to one unrelated party for a total of $5,000.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder. Based on the initial valuation the Company has recorded a debt discount of $5,000, all of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on this note was June 30, 2014.  The holder has extended the note to July 31, 2015.

During December 2013, the Company issued one promissory note to one unrelated party for a total of $2,000.  The note bears interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder. Based on the initial valuation the Company has recorded a debt discount of $2,000, all of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on this note was June 30, 2014.  The holder has not extended the note and the note is in default.

During January 2014, the Company issued two promissory notes to two unrelated party for a total of $4,000.  The notes bear interest at 10% and the principal and accrued interest is convertible into common shares at $.01 per share upon the election of the holder of each note. Based on the initial valuation the Company has recorded a debt discount of $4,000, all of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on the notes was June 30, 2014.  The holders have extended the notes to July 31, 2015.

During June 2014, the Company issued one promissory note to one unrelated party for $2,000.  The note bears interest at 10% and the principal and accrued interest are convertible into common shares at $.01 per share. Based on the initial valuation the Company has recorded a debt discount of $2,000, $659 of which was amortized in the fiscal year ended July 31, 2014.  The original maturity date on this note was November 30, 2014.  The holder has extended the note to July 31, 2015.

Preferred stock

The Company is authorized to issue 25,000,000 shares of $.001 par value preferred stock. The Company's Board of Directors may divide and issue the preferred shares in series. Each Series, when issued, shall be designated to distinguish them from the shares of all other series. The relative rights and preferences of these series include preference of dividends, redemption terms and conditions, amount payable upon shares of voluntary or involuntary liquidation, terms and condition of conversion as well as voting powers.

 

In December 2008, the Company designated 5,000,000 shares of preferred stock as Series A Convertible Preferred Stock ("Series A"). Each share of Series A is convertible into 6.25 shares of common stock at the election of the holder. Each Series A share is entitled to 6.25 votes in any vote of the common stock holders. Series A shares are redeemable by the Company at $.50 per share with 15 days written notice. Series A shares are entitled to a 5% dividend preference and a participation interest in the remaining 95% dividend.

There were no issues of Preferred Stock during the years ending July 31, 2014 and 2013.

Common stock

The Company is authorized to issue 33,333,333 shares of common stock.  Total shares outstanding at July 31, 2014 and 2013 were 19,830,673 and 18,859,005, respectively.

In August 2012, the Company issued 150,000 shares of the Company's common stock in exchange for services valued at $1,500 to its chief financial officer.  The shares were valued based on the fair value on the date of grant, $.01 per share, and are reflected in the accompanying year ended July 31, 2013 financial statements as professional and consulting fees.

 

 

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In September 2012, the Company issued 350,000 shares of the Company's common stock in exchange for services valued at $3,500. The shares were valued based on the fair value on the date of grant, $.03 per share, and are reflected in the accompanying year ended July 31, 2013 financial statements as professional and consulting fees.

In December 2012, the Company issued 35,000 shares of the Company's common stock to two individuals in exchange for services valued at $3,500. The shares were valued based on the fair value on the date of grant, $.01 per share, and are reflected in the accompanying year ended July 31, 2013 financial statements as professional and consulting fees.

Options granted to employees, accounted for under the fair value method

Effective February 1, 2006, the Company adopted ASC 718 Stock Based Payment which 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).

In August 2012, the Company granted two officers and four directors options to purchase an aggregate of 500,000 shares of the Company's common stock at an exercise price of $.01 per share, in exchange for unpaid services expenses.  All 500,000 options were fully vested on the grant date.  The quoted market price of the stock was $.01 per share on the grant date.  The Company valued the options at $.01 per share, or $5,000.  This amount is reflected in the accompanying year ended July 31, 2013 financial statements as stock based compensation.   The fair value of the options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

In August 2012, the Company granted the VP Finance & CFO options to purchase an aggregate of 150,000 shares of the Company's common stock at an exercise price of $.01 per share, in exchange for unpaid services expenses.  All 150,000 options were fully vested on the grant date.  The quoted market price of the stock was $.01 per share on the grant date.  The Company valued the options at $.01 per share, or $1,500.  This amount is reflected in the accompanying year ended July 31, 2013 financial statements as stock based compensation.   The fair value of the options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

In July 2013, the Company granted the CEO and four directors options to purchase an aggregate of 500,000 shares of the Company's common stock at an exercise price of $.05 per share, in exchange for unpaid services expenses.  All 500,000 options were fully vested on the grant date.  The quoted market price of the stock was $.12 per share on the grant date.  The Company valued the options at $.12 per share, or $60,000.  This amount is reflected in the accompanying year ended July 31, 2013 financial statements as stock based compensation.   The fair value of the options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

 

 

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In August 2012, the Company granted the VP Finance & CFO options to purchase an aggregate of 150,000 shares of the Company's common stock at an exercise price of $.05 per share, in exchange for unpaid services expenses.  All 150,000 options were fully vested on the grant date.  The quoted market price of the stock was $.12 per share on the grant date.  The Company valued the options at $.12 per share, or $18,000.  This amount is reflected in the accompanying year ended July 31, 2013 financial statements as stock based compensation.   The fair value of the options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

The Company accounts for income taxes under FASB ASC Topic 740, which requires use of the liability method.  FASB ASC Topic 740 provides that deferred tax assets and liabilities are recorded based on the differences the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

As of July 31, 2014, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded.  In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets.  The Company has approximately $3,459,471 and $3,267,261 of federal net operating loss carry forwards at July 31, 2014 and 2013, respectively.  The net operating loss carry forwards, if not utilized, will begin to expire in 2031.

The Components of the Company's deferred tax asset are as follows:

 

 

	July 31, 2014				July 31, 2013
Deferred tax assets:
Net operating loss carry forwards	$3,339,902				$3,267,261
Net deferred tax assets before valuation allowance	$1,135,567				$1,110,869
Less: Valuation allowance	(1,135,567	)			(1,110,869	)
Net Deferred tax assets	$               -				$               -

Based on the available objective evidence, including the Company's history of losses, management believes it is more likely than not, the net deferred tax assets will not be fully realizable.  Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2014 and 2013.  The Company had no uncertain tax positions as of December 31, 2013 and 2012.

A reconciliation between the amounts of income tax benefit determined by applying the federal and state statutory income tax rate to pre-tax loss is as follows:

 

 

		July 31, 2014		July 31, 2013
Federal and state statutory rate		34.00%		34.00%
Change in valuation allowance on deferred taxes		(34.00%)		(34.00%)

  
(8)            Commitments

Beginning February 2007, the Company commenced a month-to-month lease on a "virtual" office at a rate of $150 per month.  Rent expense for the years ended July 31, 2014 and 2013 totaled $1,800, and $1,800, respectively.

 

 

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The Company has concentrated its credit risk for cash by maintaining deposits in a financial institution, which may at times exceed the amounts covered by insurance provided by the United States Federal Deposit Insurance Corporation ("FDIC").  At July 31, 2014 and 2013, the loss that would have resulted from that risk totaled $-0-.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk to cash.

In September 2014, the Company issued two convertible promissory notes to two related parties in exchange for $1,750.

In October 2013, the Company issued a convertible promissory note to an unrelated party in exchange for $40,000.

In November 2013, the Company issued two convertible promissory notes to two unrelated parties in exchange for $24,000.

In December 2013, the Company issued two convertible promissory notes to two unrelated parties in exchange for $17,000.

In January 2015, the Company issued a convertible promissory note to an unrelated party in exchange for $2,000.

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ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On October 21, 2013, we were notified by Hamilton, P.C. ("Hamilton") that it was resigning as our independent public accountants.  Hamilton had audited our financial statements for the fiscal years ended July 31, 2009, 2010, 2011 and 2012.

The reports of Hamilton on our consolidated financial statements for the two most recent fiscal years ended July 31, 2011 and 2012 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended July 31, 2011 and 2012, and through the subsequent interim period ending October 21, 2013, there were no disagreements with Hamilton on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Hamilton, would have caused Hamilton to make reference thereto in its report on our financial statements for such years.  Further, there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K occurring within our two most recent fiscal years and the subsequent interim period ending October 21, 2013.

On October 31, 2013, we appointed M&K CPAS, PLLC ("M&K") in Houston, Texas as our registered independent public accountant for the fiscal years ended July 31, 2013 and 2012.  The decision to appoint M&K was approved by our Board of Directors on October 31, 2013.

During our two most recent fiscal years and the subsequent interim period up through the date of engagement of M&K (October 31, 2013), neither we nor anyone on our behalf consulted M&K regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on our financial statements.  Further, M&K has not provided us with written or oral advice that was an important factor that we considered in reaching a decision as to any accounting, auditing or financial reporting issues.

There were no disagreements between the company and M&K since their engagement in October of 2013.

ITEM 9A.       CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of July 31, 2014 an evaluation was performed under the supervision and with the participation of the Company's management, including James P.R. Samuels, the Company's President and Chief Executive Officer ("CEO"), and Thomas E. McCabe, the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities and Exchange Act of 1934 (the "Exchange Act"))

Management's Report on Internal Controls Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

-	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions of the company;

 

-	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of July 31, 2014, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.  Based on that evaluation, management concluded that, during the period covered by this report, such internal controls and procedures were not effective based on the COSO criteria.  This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our ability to prepare accurate and timely financial statements, which are considered to be material weaknesses.

As a public company with listed equity securities, we need to comply with laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act or the Dodd-Frank Act, and related regulations of the SEC, which we would not be required to comply with as a private company. Complying with these statutes, regulations and requirements occupies a significant amount of time of our board of directors and management and significantly increases our costs and expenses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of adequate resources so as to remain compliant with our periodic filings as required by the Securities and Exchange Commission; and (2) failure to perform adequate timely review of specific transactions as recorded. The aforementioned material weaknesses were identified by our management in connection with the audit of our financial statements as of July 31, 2014.

Management believes that the material weaknesses set forth above did not have an effect on our financial results.   See, "Management's Remediation Initiatives."

Attestation Report of the Registered Public Accounting Firm

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the Dodd-Frank Act and the Company only provided management's report in this annual report.

Management's Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we are in the process of formulating a plan to remediate our material weaknesses in internal controls.  That plan includes the following:

 

 

 

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As of the date of this report, we believe that adequate resources are available so as to properly staff the financial reporting process.  We are further studying best practices in internal controls over financial reporting and designing other internal controls to implement that will help remediate our weaknesses.

Changes in internal controls over financial reporting

Other than as described above, there have been no significant changes in our internal control over financial reporting during the quarter ended July 31, 2014 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B.       OTHER INFORMATION

None.

PART III

ITEM 10.            DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

Our executive officers and directors are:

Our articles of incorporation and bylaws provide for the maximum indemnification of our officer and director allowable under Nevada corporate law.  Our shareholders elect our directors annually and our board of directors appoints our officers annually.  Vacancies in our board are filled by the board itself.  Set forth below are brief descriptions of the recent employment and business experience of our executive officers and directors.

James P.R. Samuels, Chief Executive Officer and Director.  Mr. Samuels founded Worldwide Business Solutions Incorporated in March 2005 and has been the chief executive officer and a director of the company since June 2005.  From May 1996 to March 2004, he served as vice president-finance, treasurer and chief financial officer of Rentech, Inc., a publicly-held company headquartered in Denver, Colorado.  Rentech develops and markets processes for conversion of low-value carbon-bearing solids or gases into high-value hydrocarbons.  From December 1995 through April 1998, he provided consulting services in finance and securities law compliance to Telepad Corporation, Herndon, Virginia, a company engaged in systems solutions for field force computing.  From 1991 through August 1995, he served as chief financial officer, vice president-finance, treasurer and director of Top Sources, Inc., Palm Beach Gardens, Florida, a development stage company engaged in developing and commercializing technologies for the transportation, industrial and petrochemical markets.  From 1989 to 1991, he was vice president and general manager of the automotive group of BML Corporation, Mississauga, Ontario, a privately-held company engaged in auto rentals, car leasing, and automotive insurance. From 1983 through 1989, Mr. Samuels was employed by Purolator Products Corporation, a large manufacturer and distributor of automotive parts.  He was president of the Mississauga, Ontario branch from 1985 to 1989; a director of marketing from 1984 to 1985; and director of business development and planning during 1983 for the Rahway, New Jersey filter division headquarters of Purolator Products Corporation.  From 1975 to 1983, he was employed by Bendix Automotive Group, Southfield, Michigan, a manufacturer of automotive filters, electronics and brakes.  He served in various capacities, including group director for management consulting services on the corporate staff, director of market research and planning, manager of financial analysis and planning, and plant controller at its Fram Autolite division.  From 1973 to 1974, he was employed by Bowmar Ali, Inc., of Acton, Massachusetts, in various marketing and financial positions, and in 1974 he was managing director of its division in Wiesbaden, Germany.  He received a

 

 

 

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Bachelor's degree in Business Administration from Lowell Technological Institute in 1970, and a Master of Business Administration degree in 1972 from Suffolk University, Boston, Massachusetts.  He completed an executive program in strategic market management through Harvard University in Switzerland in 1984.

We believe that Mr. Samuels should serve on the board because of his previous experience in management and with publicly held companies.

Thomas E. McCabe, VP Finance and Chief Financial Officer. Thomas McCabe has been our chief financial officer since October 2011.  He has over 25 years experience in public and privately held companies.  Mr. McCabe's corporate leadership roles include President, CFO, General Manager, Senior Vice President, Vice President of Administration, Vice President Information Technology, Manufacturing Manager and Controller. His educational background includes a BS in Math/Business from Wake Forest University and an MBA from the University of Florida.  Mr. McCabe started TEM Associates in 2009 with a primary focus on providing C-level guidance, support and services to start-up, early-stage and small/medium sized companies, focusing primarily on CFO related activities.  TEM Associates also provides investment evaluation services to Private Equity investors, support for acquisition execution and assorted project and interim C-level support.

Frank J. Deleo, Director.  Mr. Deleo has been a director since June 2005.  Since September 2007, Mr. Deleo has served as president of Rioath Group.  Mr. Deleo was with Citigroup Inc. from 1978 to September 2007.  He was with CitiFinancial Branch Network from 1996, first as a vice president/regional manager and since March 2002 as a managing director over Texas, New Mexico, Oklahoma, and Kansas.  CitiFinancial, which is part of Citigroup Inc., a financial services company listed on the New York Stock Exchange, offers consumer loan products and services, including real estate, personal loans, and loans to finance consumer goods.  From 1979 to 1996, he was employed by Associates Corporation of North America.  Mr. Deleo received a bachelors degree in psychology from University of Stony Brook University in 1977.

We believe that Mr. Deleo should serve on the board because of his previous experience in financial services and management with publicly held companies.

Robert T. Kane, Director.  Robert Kane has been a director since June 2005.  He has been a practicing attorney in Munhall, Pennsylvania, since 1970.  Mr. Kane received his J.D. degree from Villanova University in 1970 and his B.S. degree from Pennsylvania State University in 1965.

We believe Mr. Kane should serve on the board because of his experience in corporate oversight, litigation and general corporate law practice.

Edward J. Weisberg, Director.  Mr. Weisberg has been a director since September 2005.  He is currently Vice President of Marketing and Business Development at GXT Green, Inc. GXT Green develops and markets economically viable sustainable products including ECOgrade photodegradable bags and ECO-R3SP suspension packaging.  Mr. Weisberg is also Managing Partner of Ecommerce Expertise, a consulting practice dedicated to assisting companies with Internet marketing and improving eCommerce profitability, a role he has had since September 2008.  From January 2008 to October 2009, he was Vice President of Innovaro (formerly UTEK) Corporation, a public corporation based in Tampa, Florida, which provides innovation and patent licensing services.  From April 2004 to July 2007, he was the vice president of eCommerce, responsible for web-based initiatives, at iBasis, Inc., a publicly-held company based in Burlington, Massachusetts, that provides international Voice over Internet Protocol (VoIP) services. From 1995 until April 2003, he co-founded and served as president of PureCommerce, Inc. (formerly BX.COM Inc.), a Providence, Rhode Island company that provides eCommerce web site development, hosting, and Internet marketing support.  Prior to founding BX.COM, he held various key marketing, planning, and sales roles at Paradigm Management Consulting Group, Inc., BASF Corporation, Data General Corporation, and Wang Laboratories, Inc.  Mr. Weisberg is also on the board of advisors of Sustainable Minds, LLC, a privately held company.  Mr. Weisberg has a Masters degree in management from MIT/Sloan School of Management and a bachelor's degree in social psychology from the University of Pennsylvania..

We believe Mr. Weisberg should serve on the board because of his previous experience in management, marketing, emerging technology and with publicly held companies.

 

 

 

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Gregory Kinney, Director.  Formerly a director of Centric, Mr. Kinney was appointed to serve as a director on August 1, 2007.  Since April 1997 to the present, Mr. Kinney has served as Vice-President of Operations of Kristel, LP, a privately held organization operating in Illinois.  Kristel designs and manufactures LCD and CRT displays.  From 1984 to 1997, Mr. Kinney worked in a variety of positions with The Bradley Group, American Instruments, Strand Lighting Company, Northrop, and Amistar.  Between 1980 and 1984, Mr. Kinney served in the United States Navy.  Mr. Kinney has received a B.A., M.A., and Ph.D. in Clinical Christian Counseling from International Theological Seminary in Bradenton Florida.

We believe Mr. Kinney should serve on the board because of his previous experience in management and with the technology sector.

Committees

Audit Committee.  Our audit committee members are Edward J. Weisberg and Robert T. Kane.  The Audit Committee is appointed by the Board of Directors to assist the Board in fulfilling its responsibility to oversee (1) the integrity of our financial statements, controls and disclosure; (2) the qualifications and independence of our independent accountants; (3) the performance of our independent accountants and of its internal audit staff; and (4) our compliance with legal and regulatory requirements.

The Audit Committee has the sole authority to appoint our independent accountants, subject to any shareholder ratification.  The Audit Committee also prepares the annual Audit Committee report required by the rules and regulations of the Securities and Exchange Commission to be included in our annual proxy statement.

We believe that until such time as the Company acquires a business that it is not necessary to have a financial expert serving on the audit committee.

Compensation Committee.  Our compensation committee members are Frank J. Deleo and Gregory Kinney.  The Compensation Committee is appointed by the Board of Directors to (1) discharge the responsibilities of the Board of Directors relating to compensation of our executives and (2) produce an annual report on executive compensation for inclusion in our proxy statement in accordance with applicable rules and regulations.

Nominating Committee.  Our nominating committee members are Gregory Kinney and Frank J. Deleo.  The Nominating Committee is appointed by the Board of Directors to identify, review credentials of and recommend membership of new board members.

Family Relationships

There is no family relationship between any director, executive or person nominated or chosen by us to become a director or executive officer of our company.

Conflicts of Interest

Members of our management are associated with other firms involved in a range of business activities.  Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our company.  While the officers and directors are engaged in other business activities, we anticipate that such activities will not interfere in any significant fashion with the affairs of our business, in terms of having adequate time to devote to the business of the company.

Our officers and directors are now and may in the future become shareholders, officers or directors of other companies, which may be formed for the purpose of engaging in business activities similar to us.  Accordingly, additional direct conflicts of interest may arise in the future with respect to such individuals acting on behalf of us or other entities.  Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise.  Currently, we do not have a right of first refusal pertaining to opportunities that come to their attention and may relate to our business operations.

 

 

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Our officers and directors are, so long as they are our officers or directors, subject to the restriction that all opportunities contemplated by our plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to us and the companies that they are affiliated with on an equal basis.  A breach of this requirement will be a breach of the fiduciary duties of the officer or director.  If we or the companies with which the officers and directors are affiliated both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity.  However, all directors may still individually take advantage of opportunities if we should decline to do so.  Except as set forth above, we have not adopted any other conflict of interest policy with respect to such transactions.

Code of Ethics

We have not yet adopted a code of ethics that applies to our principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions, since we have been focusing our efforts on obtaining financing for the company.  We expect to adopt a code by the end of the current fiscal year.

Procedure for Nominating Directors

The board of directors will consider candidates for director positions that are recommended by any of our stockholders and approved by the Nominating Committee.  Any such recommendation for the annual meeting of stockholders should be provided to our corporate secretary by December 31, 2015.  The recommended candidate should be submitted to us in writing addressed to 3801 East Florida Avenue, Suite 400, Denver, Colorado  80210.  The recommendation must include the following information: name of candidate; address, phone, and fax number of candidate; a statement signed by the candidate certifying that the candidate wishes to be considered for nomination to our board of directors and stating why the candidate believes that he or she would be a valuable addition to our board of directors; a summary of the candidate's work experience for the prior five years and the number of shares of our stock beneficially owned by the candidate.

The Nominating Committee will evaluate any recommended candidate and determine whether or not to proceed with the candidate in accordance with our procedures.  We reserve the right to change our procedures at any time to comply with the requirements of applicable laws.

Section 16(a) Beneficial Ownership Reporting Compliance

Officers and directors, and persons who own more than 10% of a registered class of the Company's equity securities, are required to file reports of ownership and changes in ownership with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934.  The following table sets forth reports that were not filed on a timely basis through the fiscal year ended July 31, 2014:

Reporting Person	Date Report Due	Date Report Filed
Christensen , Donald A.	Form 4 due December 16, 2008	Not yet filed
Christensen , Donald A.	Form 4 due December 30, 2008	Not yet filed
Christensen , Donald A.	Form 4 due February 5, 2009	Not yet filed
Christensen, Donald A.	Form 4 due May 21, 2010	Not yet filed
Deleo, Frank J.	Form 4 due December 16, 2008	January 2015
Deleo, Frank J.	Form 4 due December 30, 2008	January 2015
Deleo, Frank J.	Form 4 due May 21, 2010	January 2015
Deleo, Frank J.	Form 4 due August 12, 2011	January 2015
Deleo, Frank J.	Form 4 due April 3, 2012	January 2015
Deleo, Frank J.	Form 4 due September 5, 2012	January 2015
Deleo, Frank J.	Form 4 due July 16, 2013	January 2015
Kane, Robert T.	Form 4 due December 16, 2008	January 2015
Kane, Robert T.	Form 4 due December 30, 2008	January 2015
Kane, Robert T.	Form 4 due February 5, 2009	January 2015

 

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ITEM 11.            EXECUTIVE COMPENSATION

The following table sets forth information regarding the remuneration of our chief executive officer.  There were no executive officers that earned in excess of $100,000 per annum during any part of the last two completed fiscal years ending July 31, 2014.

Summary Compensation Table

 

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(1)	On July 12, 2013, Mr. Samuels was granted five-year options to purchase 100,000 shares at $0.05 per share.  These options were valued using the following assumptions: expected options life: 5 years; risk-free interest rate: 0.59%; annual rate of quarterly dividends: 0.00%; and volatility: 314.40%.

The following table sets forth information concerning unexercised options and equity incentive plan awards on a grant by grant basis for our chief executive officer as of the end of the last completed fiscal year ending July 31, 2014.

Outstanding Equity Awards at Fiscal Year-End

                                        

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(1)	These options were valued using the following assumptions: expected options life: 5 years; risk-free interest rate: 0.59%; annual rate of quarterly dividends: 0.00%; and volatility: 314.40%.

(2)	These options were valued using the following assumptions: expected options life: 7 years; risk-free interest rate: 0.63%; annual rate of quarterly dividends: 0.00%; and volatility: 273.47%.

The following table sets forth information regarding the remuneration of our directors, other than those already mentioned in the Summary Compensation Table, during the last completed fiscal year.

Director Compensation

In the fiscal year ending July 31, 2014, the Company did not approve and issue compensation to its directors.  In March 2014, the Company issued 75,000 shares of common stock to each independent Director as compensation for services provided.  These shares, approved August 2011, were to be issued February 2012.  The liability for this transaction had been accrued to the date granted.

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Options Exercised in the Last Fiscal Year

No options were exercised in the fiscal year ended July 31, 2014.

Long-Term Incentive Plan Awards

No long-term incentive plan awards were granted in the fiscal year ended July 31, 2014.

ITEM 12.            SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides certain information as to the officers and directors, individually and as a group, and the holders of more than 5% of the Common Stock and Preferred Stock on a combined basis, as of December 15, 2014.

 

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(1)	To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person's name.

         

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James P.R. Samuels may be deemed to be the "parent" of our company within the meaning of the rules and regulations of the Securities and Exchange Commission.

Changes in Control

On December 14, 2012, Worldwide Strategies Incorporated ("Worldwide") executed a stock exchange agreement with Jorge Zamacona Pliego, the President of Euzkadi Corporation of America S.A. de C.V. ("Euzkadi") and other principal owners of Euzkadi ("Euzkadi Principals"). Under the terms of the stock exchange agreement, Euzkadi Principals would assign and transfer Euzkadi shares to Worldwide such that Worldwide would then own 10% of Euzkadi, and Worldwide would issue shares of its common stock to Euzkadi Principals, such that they would then own 80% of Worldwide.

Equity Compensation Plan Information

The following table sets forth information as of the end of the most recently completed fiscal year, July 31, 2014:

Stock Option Plan

By written consent dated May 13, 2005, our shareholders adopted the 2005 Stock Plan.  Under the Plan up to 500,000 shares of our common stock (the "Available Shares") that may be purchased pursuant to the exercise of

 

 

 

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incentive stock options, non-qualified stock options, stock grants and stock-based awards ("Stock Rights") which may be granted to our employees, directors and consultants.  This Plan will terminate on May 13, 2015, unless terminated at an earlier date by vote of the shareholders.

The 2005 Stock Plan is intended to (i) encourage ownership of shares by our employees and directors of and certain consultants to the company; (ii) induce them to work for the benefit of the company; and (iii) provide additional incentive for such persons to promote the success of the company.

As of July 31, 2014, no Stock Rights had been granted under the Plan.

ITEM 13.            CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Other than described below, none of our present directors, officers or principal shareholders, nor any family member of the foregoing, nor, to the best of our information and belief, any of our former directors, officers or principal shareholders, nor any family member of such former directors, officers or principal shareholders, has or had any material interest, direct or indirect, in any transaction, or in any proposed transaction which has materially affected or will materially affect us.

Accrued Liabilities.  At July 31, 2014 and 2013, $-0- and $-0-, respectively, was owed to James P.R. Samuels for amounts paid by him on behalf of the Company.  Effective July 2013, Mr. Samuels agreed to forgive any debt, in addition to accrued salaries owed him, in exchange for a convertible promissory note of $28,500.

Convertible Notes.  In December 2012, Greg Kinney and Ed Weisberg loaned the Company $1,500 and $500, respectively.  The notes bear interest at 10% per annum and are convertible into shares of the Company's common stock at the conversion price of $0.01.

In February 2013, James P.R. Samuels received a convertible promissory note of $500 for Company expenses paid personally by him.  The note bears interest at 10% per annum and is convertible into shares of the Company's common stock at the conversion price of $0.01.

In July 2013, James P.R. Samuels received a convertible promissory note of $28,500 in exchange for forgiveness of accrued compensation of  $241,875 and accrued expenses of $108,844 owed to him by the Company.  The note bears interest at 10% per annum and is convertible into shares of the Company's common stock at the conversion price of $0.01.

In December 2013, Greg Kinney and Robert Kane loaned the Company $10,000 and $6,000, respectively.  The notes bear interest at 10% per annum and are convertible into shares of the Company's common stock at the conversion price of $0.01.

In June 2014, Greg Kinney loaned the Company $2,000.  The note bears interest at 10% per annum and is convertible into shares of the Company's common stock at the conversion price of $0.01.

In September 2014, Greg Kinney and Ed Weisberg loaned the Company $1,000 and $750, respectively.  The notes bear interest at 10% per annum and are convertible into shares of the Company's common stock at the conversion price of $0.01.

 Interest expense related to convertible notes held by Company officers and directors was $5,117 and $1,065, respectively, for the years ended July 31, 2014 and 2013.

Future Transactions.  All future affiliated transactions will be made or entered into on terms that are no less favorable to us than those that can be obtained from any unaffiliated third party.  A majority of the independent, disinterested members of our board of directors will approve future affiliated transactions.

 

 

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Director Independence.  Frank J. Deleo, Robert T. Kane, Edward J. Weisberg, and Gregory Kinney are considered independent directors.  We define director independence pursuant to NASDAQ Marketplace Rule 5605(a)(2).

ITEM 14.            PRINCIPAL ACCOUNTING FEES AND SERVICES

The fees billed for professional services rendered by our principal accountant are as follows:

Pre-Approval Policies and Procedures

The Audit Committee must pre-approve any use of our independent accountants for any non-audit services.  All services of our auditors are approved by our whole Board and are subject to review by our whole Board.

PART IV

ITEM 15.            EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

_____________________________________                                                  

(1)	Filed as an exhibit to the Current Report on Form 8-K dated June 28, 2007, filed July 2, 2007.

(2)	Filed as an exhibit to the initial filing of the registration statement on Form SB-2, File No. 333-129398, on November 2, 2005.

(3)	Filed as an exhibit to the Current Report on Form 8-K dated July 31, 2007, filed August 6, 2007.

(4)	Filed as an exhibit to the Current Report on Form 8-K dated December 8, 2008, filed December 10, 2008.

(5)	Filed as an exhibit to the Current Report on Form 8-K dated December 15, 2008, filed December 17, 2008.

(6)	Filed as an exhibit to the Annual Report for the fiscal year ended July 31, 2009, filed October 23, 2009.

 

 

 

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

ACKNOWLEDGMENT OF DEBT
SATISFACTION AND FULL RELEASE

THIS ACKNOWLEDGEMENT OF DEBT SATISFACTION AND FULL RELEASE (this "Release") is made by and between James P.R. Samuels (the "Creditor"), and Worldwide Strategies Incorporated, a Nevada corporation (the "Company"), as of this 31st day of July, 2013.

WHEREAS, the Company owes Creditor $241,874.92 for accrued compensation and $108,843.72 for accrued expenses (the "Accrued Liabilities"); and

WHEREAS, Creditor has agreed to accept a convertible promissory note from the Company in the amount of $28,500.00, a copy of which is attached to this Acknowledgement as Exhibit A (the "Note") and to forgive the remaining $322,218.64;

NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, the parties mutually agree as follows:

 

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE CORPORATION OF A FAVORABLE OPINION OF ITS COUNSEL OR SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL FOR THE CORPORATION, TO

 

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THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.

 

 

 

 

 

 

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securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Underlying Shares, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering.

This Acknowledgment of Debt Satisfaction and Full Release is dated and effective as of the date first written above.

 

 

"Company"	"Creditor"
WORLDWIDE STRATEGIES
INCORPORATED
/s/  Thomas E. McCabe	/s/ James P.R. Samuels
By: Thomas E. McCabe	James P.R. Samuels
Chief Financial Officer

 

 

 

 

Page 3 of 3

ACKNOWLEDGMENT OF DEBT
SATISFACTION AND FULL RELEASE

THIS ACKNOWLEDGEMENT OF DEBT SATISFACTION AND FULL RELEASE (this "Release") is made by and between Earl Somerville (the "Creditor"), and Worldwide Strategies Incorporated, a Nevada corporation (the "Company"), as of this 31st day of July, 2013.

WHEREAS, the Company owes Creditor $168,750.00 for accrued compensation and $0.00 for accrued expenses (the "Accrued Liabilities"); and

WHEREAS, Creditor has agreed to accept a convertible promissory note from the Company in the amount of $17,000.00, a copy of which is attached to this Acknowledgement as Exhibit A (the "Note") and to forgive the remaining $151,750.00;

NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, the parties mutually agree as follows:

 

THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE CORPORATION OF A FAVORABLE OPINION OF ITS COUNSEL OR SUBMISSION TO THE CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL FOR THE CORPORATION, TO

 

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THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE ACTS.

 

 

 

 

 

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securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Underlying Shares, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering.

This Acknowledgment of Debt Satisfaction and Full Release is dated and effective as of the date first written above.

 

"Company"	"Creditor"
WORLDWIDE STRATEGIES
INCORPORATED
/s/  Thomas E. McCabe	/s/ Earl Somerville
By: Thomas E. McCabe	Earl Somerville
Chief Financial Officer

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)

 

I, James P.R. Samuels, certify that:

 

1.	I have reviewed this annual report on Form 10-K of Worldwide Strategies Incorporated;

 

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 control 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 the 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 over financial reporting 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.