NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 and
2021
(Unaudited)
Note 1 – Organization and Basis
of Presentation
Organization and Basis of Presentation
Worldwide Strategies Incorporated (“WWSG”
or the “Company”) was incorporated under the laws of the State of Nevada on April 6, 1998 and ceased operations in 2015. The
Company fully impaired all assets since the shutdown of its operations in 2015. On May 7, 2019, the eight judicial District Court of Nevada
appointed Small Cap Compliance, LLC (“Custodian”) as custodian for Worldwide Strategies Incorporated., proper notice having
been given to the officers and directors of Worldwide Strategies Incorporated with no opposition. On July 10, 2019, the Company filed
a Certificate of Reinstatement with the state of Nevada.
The accompanying financial statements are
prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”) and have been prepared
assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient
to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making
efforts to raise additional funding until a registration statement relating to an equity funding facility is in effect. While management
of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance
that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products
it develops or initiates collaboration agreements thereon. The accompanying financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may
result from the possible inability of the Company to continue as a going concern.
Note 2 – Summary of significant
accounting policies
Cash and Cash Equivalents
The Company doesn’t maintain any bank
accounts and does not have any cash in hand. For day-to-day business activities, the Company depends upon the directors’ personal
accounts. For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject
to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be
cash and cash equivalents.
Use of Estimates
The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
Property and
Equipment
Property and equipment are carried at cost,
net of accumulated depreciation. Depreciation is provided by the straight-line method over an estimated useful life. The estimated lives
for computer software is three years. Maintenance and repairs which are not considered to extend the useful lives of the assets are charged
to operations as incurred. Expenditures for additions and improvements are capitalized. Expenditures for renewals and betterments, which
materially extend the useful lives of assets or increase their productivity, are capitalized. Upon sale or retirement, the cost of assets
and related accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are included in
operating expense.
Share-Based Compensation
The Company measures the cost of services
received in exchange for an equity award, which may include grants of stock options and restricted shares, based on the fair value of
the award at the date of grant. The Company recognizes share-based compensation expense over the requisite service The grant date fair
value of restricted share awards (“RSAs”) are determined using the fair market value of the Company’s common stock on
the date of grant.
Loss per Common Share
Net loss per common share is computed by
dividing net loss by the weighted average number of common shares outstanding for the period. As a result, diluted loss per common share
is the same as basic loss per common share for the three months ended October 31, 2022 and 2021. Excluded from the weighted average common
shares outstanding amount is convertible preferred stock equivalent to 204 million shares and convertible debt equivalent to 47.3 million
common shares as the effect of these on the computation of net loss per share would have been anti-dilutive.
Income Taxes
The Company accounts for income taxes pursuant
to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on
temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred
tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating
the differences.
The Company maintains a valuation allowance
with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the
deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period.
Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under
the Federal tax laws.
Changes in circumstances, such as the Company
generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the
valuation allowance will be included in income in the year of the change in estimate.
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 October 31, 2022 and July 31, 2022:
| Schedule of assets and liabilities measured at fair value | |
Fair Value Measurements at October 31, 2022 | |
| | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| Description | |
| | | |
| | | |
| | |
| Convertible Debt | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
| Total Liabilities | |
| – | | |
| 492,406 | | |
| – | |
| Totals | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
| | |
Fair Value Measurements at July 31, 2022 | |
| | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| Description | |
| | | |
| | | |
| | |
| Convertible Debt | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
| Total Liabilities | |
| – | | |
| 492,406 | | |
| – | |
| Totals | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
Reclassifications
Certain reclassifications have been made to the prior year presentation to conform to the current year presentation.
Recent Accounting Pronouncements
The Company reviewed all the recently issued,
but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the
Company.
Note 3 – Going
Concern
For the three months ended October 31, 2022
and 2021 we incurred net losses of approximately $290,000 and $26,000 respectively. As of October 31, 2022, we had no cash on hand and
current liabilities of $1.6 million. As of July 31, 2022, we had no cash on hand and current liabilities of $1.0 million. These losses
combined with our current liabilities cast significant doubt on the company’s ability to operate under the going concern. The ability
to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary
financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends
to finance operating costs over the next twelve months with loans from directors and/or private placement of common stock. The failure
to achieve the necessary levels of profitability or obtaining additional funding would be detrimental to the Company.
Note 4 – Property and Equipment
On February 17, 2022, as amended on October 18,
2022 the Company entered into an asset purchase agreement with Fitwell Limited, for the purchase of a copy of its native mobile fitness
application. The purchase price for the software application was $0.5 million to be payable upon the earlier of October 18, 2023 or the
Company completing a capital raise, under Regulation A which generates no less than $2 million in proceeds to the Company and shares of
the Company in the amount of $0.5 million. On October 18, 2022 and in connection with the purchase of the Fitwell assets, the Company
issued a promissory note for $0.5 million and issued approximately 2 million shares of common stock which was valued at $108,000 based
on the stock price at the date of issuance as consideration. Additionally, the Company incurred expenses of approximately $76,000 in relation
to the purchase of this software which was included as part of the consideration.
Property and equipment
represent purchased software which had a cost of approximately $684,000
and accumulated depreciation of approximately $8,000
as of October 31, 2022.
Note 5 – Related Party Transactions
The Company’s CFO has provided office
space at no cost to the Company. Our CEO and CFO incurred expenses on behalf of the Company amounting to approximately $12,000 during
the three months ending October 31, 2022. As of October 31, 2022 total amounts due to our CEO and CFO are approximately $58,000. These
amounts are due on December 31, 2022 and bear interest at eight percent per annum.
As of October 31, 2022 and July 31, 2022,
the Company had a convertible promissory note in the principal outstanding balance of $40,000, payable to a shareholder. Such note bears
interest at nine percent per annum with a maturity date of July 31, 2015. The principal and accrued interest is convertible, at the option
of the holder, into common shares at $.01 per share.
Note 6 – Notes
Payable
Convertible Notes Payable
The Company has convertible promissory notes
that in the aggregate result in a principal outstanding balance of $160,750 as of October 31, 2022 and July 31, 2022, respectively. Interest
on these notes range from nine to ten percent per annum and such notes had maturity dates of July 31, 2015. The principal and accrued
interest is convertible, at the option of the holder, into common shares at $.01 per share.
The Company has convertible promissory notes
that in the aggregate result in a principal outstanding balance of $157,945 as of October 31, 2022 and July 31, 2022, respectively. Interest
on these notes range from eight to ten percent per annum and such notes had maturity dates of July 31, 2015. The principal and accrued
interest is convertible, at the option of the holder, into common shares at $.04 per share.
The Company has convertible promissory notes
that in the aggregate result in a principal outstanding balance of $50,000 as of October 31, 2022 and July 31, 2022, respectively. Interest
on these notes are 8% per annum and such notes had maturity date of March 31, 2015. 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 Company has convertible promissory notes
that in the aggregate result in a principal outstanding balance of $44,711 as of October 31, 2022 and July 31, 2022, respectively. Interest
on these notes are 10% per annum and such notes had maturity dates ranging from July 31, 2015 to December 31, 2015. The principal and
accrued interest is convertible, at the option of the holder, into common shares at $.07 per share.
The Company has convertible promissory notes
that in the aggregate result in a principal outstanding balance of $39,000 as of October 31, 2022 and July 31, 2022, respectively. Interest
on these notes are 10% per annum and such notes had maturity dates ranging from July 31, 2015 to December 31, 2015. The principal and
accrued interest is convertible, at the option of the holder, into common shares at $.10 per share.
Accrued interest on such notes total approximately
$435,000 and $423,000 as of October 31, 2022 and July 31, 2022, respectively and are included within accrued liabilities on the accompanying
balance sheet. Based on the maturity dates of the promissory notes, all promissory notes are in default.
Notes Payable
In October 2022 we entered
into a promissory note in the amount of $0.5
million in connection with the purchase of software from Fitwell Limited. The promissory note bears interest at one-tenth of one
percent per annum and is due and payable upon the earlier of October 18, 2023 or the Company completing a capital raise, under Regulation
A which generates no less than $2 million in proceeds to the Company and shares of the Company in the amount of $0.5 million. In addition,
and in connection with the purchase of the software, the Company entered into a non-interest-bearing note with no stated repayment date
in the amount of approximately $78,000.
Note 7 – Shareholders’ Equity
Preferred stock
The Company has two classes of preferred
stock and 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.
Series A Preferred Stock
The Company is authorized to issue 5,000,000 shares
of Convertible Series A Preferred Stock at a par value of $0.001. Each share of Series A Preferred Stock 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. On October 22, 2022, approximately 1.2 million shares of Series
A Preferred Stock were cancelled pursuant to the termination of a license agreement for intellectual property.
Series B Preferred Stock
The Company is authorized to issue 5,000,000 shares
of Convertible Series B Preferred Stock at a par value of $0.001. Each share of Series B Preferred Stock is convertible into 1,000 shares
of common stock at the election of the holder. On October 22, 2022, approximately 90,000 shares of Series B Preferred Stock were cancelled
pursuant to the termination of a license agreement for intellectual property.
Common stock
As of October 31, 2022 and July 31, 2022, the
Company was authorized to issue 975,000,000
shares of common stock respectively. During October 2022, the Company issued approximately 2
million shares in connection with the purchase of software from Fitwell Limited. These shares were valued based on the stock price
on the date of grant for an aggregate consideration of approximately $108,000. In addition, we issued 4.8
million restricted shares for services rendered to certain individuals and recognized stock compensation of approximately $257,000
which represented the total grant value on the date of grant.
Total shares outstanding at October 31,
2022 and July 31, 2022 were 26,580,678 and 19,830,679, respectively.
Note 8 – Income Taxes
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 October 31, 2022, 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.
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 October 31, 2022 and
July 31, 2022. The Company had no uncertain tax positions as of October 31, 2022 and July 31, 2022.
Note 9 - Supplemental Disclosure of Noncash Activities
As noted in Note 4, the Company purchased software from Fitwell Limited
in the amount of approximately $684,000 through the issuance of common shares of approximately $108,000 and promissory notes in the amount
of approximately $576,000.