UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K 

(Mark One)

For the fiscal year ended December 31, 20152022

For the transition period fromto

Commission File Number: 0-24115000-24115 

WORLDS INC.

(Exact Name of Registrant as Specified in Its Charter) 

11 Royal Road, Brookline, MA02445

(Address of Principal Executive Offices)

(617)725-8900

(Registrant’s Telephone Number, Including Area Code) 

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: 

Common Stock, $.001 par value

(Title of Class)

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 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 disclosurewhether the registrant has filed a report on and attestation to its management’s assessment of delinquent filers pursuant to Item 405the effectiveness of Regulation S-K is not contained herein, and will not be contained, toits internal control over financial reporting under Section 404(b) of the best of registrant’s knowledge, in definitive proxySarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. issued its audit report. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,”  “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Large Accelerated Filer ☐ Accelerated Filer ☐Non-Accelerated Filer   ☒Smaller reporting company

(Do not check if a smaller reporting company) 

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

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 closing price of such common equity, as of June 30, 20152022 (closing price was $0.11)$0.03) was approximately $12,527,709.$1,713,375.

As of April 12, 2016, 120,193,050March 28, 2023, 57,112,506 shares of the Issuer's Common Stock were outstanding.

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties and our actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "believe,"“anticipate,” “expect,” “intend,” “plan,” “may, “could,” “will,” “believe,” and similar language, including those set forth in the discussion under "Description of Business," "Risk Factors" and "Management's Discussion and Analysis or Plan of Operation" as well as those discussed elsewhere in this Form 10-K. We base our forward-looking statements on information currently available to us, and we believe that the assumption and expectations reflected in such forward-looking statements are reasonable, and we assume no obligation to update them. Statements contained in this Form 10-K that are not historical facts are forward-looking statements that are subject to the "safe harbor" created by the Private Securities Litigation Reform Act of 1995.

PART I

ITEM 1. BUSINESS.

General

On March 31,May 16, 2011, it was announced thatwe transferred, through a spin-off to our board had determined it would be in the best interest of our shareholders to transfer all of our online and operational technologies to ourthen wholly owned subsidiary, Worlds Online Inc. (currently named MariMed Inc.), the majority of our operations and related operational assets. On January 18, 2022 we entered into an asset purchase agreement with Thom Kidrin, our CEO, for the IP that was transferred over to MariMed Inc. Mr. Kidrin received the IP through a settlement agreement that he reached with MariMed Inc. The assets were transfered as of May 16, 2011 and included:purchased include: Worlds’ technology platform, Worlds Ultimate Chat, Aerosmith World,DMC Worlds,,Cinema Virtual,,Pearson contracts and related revenue,, URLs: Worlds.com,, Cybersexworld.com,,Hang.com, and Worldsfunds.com, a digital inventory of over 10,000 3D objects, animation sequences, an extensive avatar library, texture maps and virtual world architectures.

Worlds Inc. has retained all of its related Intellectual Property (IP) consisting of the nine existing patents, 6,219,045; 7,181,690; 7,493,558; 7,945,856; 8,082,501; 8,145,998; 8,161,385, 8,407,592 and 8,640,028 and all continuance claims currently before the USPTO including any to be filed going forward.

We intend to endeavor to prosecute our issued patents and any future issued patents against all parties that the company and our legal counsel believe to be infringing on said patents.

Enforcement actions are subject to the analysis of all relevant prior art and the costs associated with litigation.

We may also seek to acquire additional patents we believe will enhance our portfolio positionCommencing in the markets within which our existing patents cover.

There can be no assurance that2022, we will be successful infocused on monetizing our ability to prosecutecollection of non-fungible tokens and our IP portfolio or that we will be able to acquire additional patents.legacy celebrity virtual reality worlds. 

As of December 31, 2015,2022, we own an approximately 9.5% equity interest in Worlds Online.

On May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online549,697 shares of MariMed Inc., the majority of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online Inc. to sublicense its patented technologies. common stock.

Before the spin-off, Worlds was a leading 3D entertainment portal which leveraged its proprietary technology, which we retained through our patent portfolio, to offer visitors a network of virtual, multi-user environments which we call "worlds". These worlds are visually engaging online environments featuring animation, motion and content where people can come together and, by navigating through the website, shop, interact with others, attend events and be entertained. In support of this portal and the overall business strategy, we design and develop software, content and related technology for the creation of interactive, three-dimensional ("3D") Internet web sites. Using our technology, we created our own Internet sites, as well as sites available through third-party online service providers.

Sites using our technology allow numerous, simultaneous visitors to enter, navigate and share interactive "worlds". Our 3D Internet sites are designed to promote frequent, repeat and prolonged visitation by users by providing them with unique online communities featuring dynamic graphics, highly useful and entertaining information content, and interactive capabilities. We believe that sites are highly attractive to advertisers because they offer access to demographic-specific user bases comprised of people that visit the site frequently and stay for relatively long periods of time.Recent developments

Recent developments

On May 8, 2015, theThe Company issued convertible debentures to an accredited investor. The total principal amount of the debenture is $300,000 with maturity date of November 8, 2015 and a zero percent interest rate. The debenture is convertible into shareshas sought damages for patent infringement of the Company’s common stock atpatents.  The Company's lawsuit against the lowerActivision entities was filed in 2012. On April 30, 2021, Judge Casper granted Activision’s summary judgment motion, entered an Order finding that all asserted patents were invalid as directed to patent-ineligible subject matter, and terminated the Company’s lawsuit, with judgment for the Activision Entities.  The Company appealed this Order on May 28, 2021 to the U.S. Court of Appeals for the Federal Circuit, sitting in Washington, D.C.  On March 10, 2022, the Federal Circuit issued an Order affirming the District Court’s judgment. On June 8, 2022, the Company petitioned the Supreme Court of the fixed price ($0.89) or fifty five percent (55%)United States for a writ of certiorari, which is the process required for asking the Supreme Court to review the judgment of the average of the three lowest trading price for 20 trading days prior to conversion. Federal Circuit. 

The Company signed a Forbearance Agreementwas notified on October 26, 20154, 2022, that the Supreme Court denied the Petition for the 10% Convertible Debenture with the principal amounta writ of $300,000 that was due November 8, 2015.certiorari. The new maturity date of the debenture is May 8, 2016.

On October 30, 2015, the company entered into a new Debenture with the same Lender with a face amount of $405,000 having similar terms as the first Convertible Debenture with a maturity date of April 30, 2016. The debenture included a forbearance fee of $90,000 and had an original issue discount of 10%.

In April 2015 we issued six Promissory Notes totaling $135,000. One of the Promissory NotesCompany has exhausted all legal remedies in the amount $25,000 was in lieu of payment of cash for an outstanding balance due to a consultant of the Company.

The promissory notes carry a 6% annual interest rate and are payable upon the earlier of (a) 24 months from the date of the promissory notes or (b) the Company reaching a settlement(s) on athis patent infringement claim(s) and receiving an aggregate of at least $2 million net proceeds from such settlement(s). 

The holders of the promissory notes shall receive repayment in the full face amount of the notes from the initial $500,000 the Company actually receives from the net proceeds of its patent infringement claim(s) or from the net proceeds of a public offering. In addition, the holders shall receive a preferred return (i) in an amount equal to up to 200% of the initial face amount of the notes out of available cash by sharing with all other investors in this series of notes in the allocation of 50% of the available cash received by the Company from $2M - $4M and (ii) in an amount equal to up to 100% of the initial face amount of the notes out of available cash by sharing with all other investors in this series of notes in the allocation of 25% of the available cash received by the Company from $4M - $6M. In other words, if the Company collects $6M in the net proceeds of available cash, the holder will receive a return equal to 400% of its investment.

On March 24, 2016 we filed a preliminary proxy with the Securities and Exchange Commission seeking approval of, among other things, increasing our authorized common shares from 150 Million shares to 250 Million shares and to implement a reverse split in the range of 1:2 - 1:20.

case.

Our Technology

We used our technology to produce three-dimensional portals and web sites. We believe that our core technology delivers a considerably faster frame rate for user experiences and, in some cases, a meaningful productivity increase in art production and integration over its previous generation production tools. Our technology permits the development of virtual worlds which have broad applications. These applications include but are not limited to:

•	a virtual meeting place (such as a fan club);
•	a 3D e-commerce store (where merchandise can be viewed in 3D and purchased online); and
•	a virtual classroom (where content can be viewed via video streaming and then discussed in real time).

• a 3D e-commerce store (where merchandise can be viewed in 3D and purchased online); and

• a virtual classroom (where content can be viewed via video streaming and then discussed in real time).

Our core technology has substantial elements written in Sun Microsystem's programming language, Java, including WorldsBrowser and WorldsShaper, so we expect that it can be made portable across Windows and UNIX Platforms because of Java's platform independence.

Our core technology includes:

Our Strategy

Worlds Inc. will be focused solely on expandingmonetizing our patent portfoliocollection of non-fungible tokens and our legacy celebrity virtual reality worlds. The company is exploring strategic alliances with state of the art virtual reality platforms to enforcerefocus our rights where it believes parties are infringing on its IP portfolio.

We have contracted to Worlds Online Inc. a perpetual world-wide license to our patented technology. Pursuantpositioning in the VR/AR market returning to the license, Worlds Online hasgenesis of the rightcompany. These new platforms, if successfully developed and marketed, would enable to issue unlimited sublicensescompany to the licensed technology, subject to our reasonable consent. The sublicenses are subject to a revenue share negotiated between the two Companies.leverage its existing software assets and industry relationships.

Competition

Since all operations were transferred to Worlds Online and our business is now the expansionmonetizing our collection of our patented technology,non-fungible tokens, the Company does not have any direct competition as it did in the past. However, inasmuch as we believe that multi-user, interactive 3D is becoming a “hot” area, we expect other companies, many with far more resources than us, to move into this space.

Currently, there are many companies collaborating to establish standardization of 3D usage on the Internet, the adoption of which may require changes to our technology.

Intellectual Property

U.S. Patents: Worlds has been granted U.S patent 6,219,045, 7,181,690, 7,493,558, 7,945,856, 8,082,501, 8,145,998, 8,161,385, 8,407,592 and 8,640,028 for multi-server technology for 3D applications, which is our core technology.  We are nowWhile the patents have all expired, we continue looking into the implications and breadth of the patent in order to maximize its benefits.  The description of the initial patent is as follows:

"The present invention provides a highly scalable architecture for a three dimensional, multi-user, interactive virtual world system.  In a preferred embodiment a plurality of users interact in the three-dimensional, computer-generated graphical space where each user executes a client process to view a virtual world from the perspective of that user.  The virtual world shows Avatars representing the other users who are neighbors of the user viewing the virtual world.  In order that the view can be updated to reflect the motion of the remote user's Avatar, motion information is transmitted to a central server process that provides position updates to client processes for neighbors of the user at that client process.  The client process also uses an environment database to determine which background objects to rendertheir benefits as well as to limit the numberour catalog of displayable Avatars to a maximum number of Avatars displayable by that client."non-fungible tokens and our legacy celebrity worlds.

Trademark: Worldsplayer - The WorldsPlayer is especially designed to allow users to view and experience the multi-user, interactive Worlds Gamma technology. Any world created with the WorldsShaper will be viewable and navigable with WorldsPlayer.  Utilizing the WorldsPlayer, a user assumes a persona (via a digital actor, or Avatars), and can then move, view, chat, play, express one's self via gestures and animations, voice chat, send email, join discussion groups, listen to music, shop at Worlds 3D stores, and watch videos, all in the company of users from around the world, within the 3D environment.  The WorldsPlayer boasts high frame rate for fast, high quality graphics, an easy to use graphic user interface, seamless 2D Web browser integration, auto-upgrade capability over the Internet, and a complete communication tool set including chat, voice-to-voice chat, email and animation. The WorldsPlayer offers users the unique and creative experience of customizing their Avatars, while maintaining the ability to animate and activate their Avatars.

In addition to our patents and trademark, we intend to enter into confidentiality agreements with key employees and consultants to protect our IP and general know-how. 

Employees

As of December 31, 2015,2022, we had one full time employee, our president and chief executive officer, Thomas Kidrin, who divided his time between us and Worlds Online.Kidrin.

Corporate History

We were formed as a result of the contemporaneous mergers on December 3, 1997 of Worlds Inc., a Delaware corporation formed on April 26, 1994 with and into Worlds Acquisition Corp., a Delaware corporation formed on April 8, 1997 and of Worlds Acquisition Corp. with and into Academic Computer Systems, Inc., a New Jersey corporation formed on May 20, 1968 (the "Mergers"). Academic Computer Systems changed its name to Worlds Inc. after the Mergers. In December 1999, we changed our name from Worlds Inc. to Worlds.com Inc. in order to better reflect our business as a consumer Internet web site that offers virtual "worlds" in which consumers interact, conduct e-commerce and receive entertainment. 

The Company created a wholly-owned subsidiary named Worlds Online Inc. on January 25, 2011. On May 16, 2011, Worlds Inc. transferred to Worlds Online Inc. the majority of its operations and related operational assets, except for its patent portfolio. Worlds Online Inc. changed its name to MariMed Inc. in 2017. 

ITEM 1A. RISK FACTORS

Our business is subject to numerous risks, including but not limited to those set forth below. Our operations and performance could also be subject to risks that do not exist as of the date of this report but emerge thereafter as well as risks that we do not currently deem material.

Risks related to our operations

Our auditors have expressed doubt about our ability to continue as a going concern. If we do not generate substantial revenue from our patent litigation and are also unable to obtain capital from other resources, we will significantly curtail our operations or halt them entirely.

Our capital requirements have been and will continue to be significant. Historically, we have been dependent on financings to fund our development and working capital needs. As of December 31, 2015, we had only limited cash or cash equivalents. Accordingly, if we do not develop sources of revenues from our patent portfolio, we would have to severely diminish our operations or halt them entirely. The opinion of our auditors contains an explanatory paragraph regarding our ability to continue as a going concern. 

We have experienced relatively large losses during our development and, without significant increases in the market penetration of our services and improvements to our operating margins, we will not achieve profitability. 

Since inception we have incurred significant net losses as set forth in the financial information included herein. We anticipate that we will continue to incur significant losses for at least the short-term. We will not achieve profitable operations until we successfully develop sources of revenues from our patent portfolio of intellectual property (IP) or generate revenues from other sources that are sufficient to offset our operating costs. We may never be able to accomplish these objectives. Developing IP is very expensive and we may not have sufficient cash available to completely develop our IP to a form where it can be monetized because currently we do not generate revenues. 

We are dependent upon the success of monetizing our IP assets

After all of our operations were spun off, our success is essentially dependent upon the success of our ability to monetize our IP assets such as our legacy celebrity worlds and our collection of non-fungible tokens. This is a relatively new industry and it is unclear if it will develop and be accepted in the mainstream as items to purchase and/or invest in.

It will be difficult for you to evaluate us based on our past performance because we have a relatively new business strategy with a limited operating history. 

We have been actively engaged in the business of being an IP company for a relatively short period of time and, accordingly, have only limited financial results on which you can evaluate our company and its new operations. We are subject to, and have not been successful in addressing, the risks typically encountered by new enterprises and companies operating in the rapidly evolving Internet marketplace, including those risks relating to:

• the failure to develop brand name recognition and reputation;

• the failure to achieve market acceptance of our services; and 

• an inability to grow and adapt our business and technology to evolving consumer demand.

Our limited resources may restrict our ability to manage any growth we may experience.

Growth of our business may place a significant strain on our management systems and resources and may require us to implement new operating and financial systems, procedures and controls. Our failure to manage our growth and expansion could adversely affect our business, results of operations and financial condition. Failure to implement new systems effectively or within a reasonable period of time could adversely affect our business, results of operations and financial condition.

If we are unable to protect our intellectual property rights, competitors may be able to use our technology or trademarks, which could weaken our competitive position.

In addition to our patents, we rely on a combination of copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. We also intend to enter into confidentiality or license agreements with our employees, consultants and customers, and control access to and distribution of our software, documentation and other proprietary information. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our products or technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States. 

We cannot guarantee that the patents issued to uswe will be broad enough to providehave any meaningful protection nor can we assure you that one of our competitors may not develop more effective technologies, designs or methods without infringing our intellectual property rights or that one of our competitors might not design around our proprietary technologies.

If we are not able to protect our proprietary technology, trade secrets and know-how, our competitors may use our inventions to develop competing products. We own certain patents relating to the multi-user 3D technology. However, these patents may not protect us against our competitors, and patent litigation is very expensive. We may not have sufficient cash available to pursue any patent litigation to its conclusion because currently we do not generate revenues.

We cannot rely solely on our current patents to be successful. The standards that the U.S. Patent and Trademark Office and foreign patent office's use to grant patents, and the standards that U.S. and foreign courts use to interpret patents, are not the same and are not always applied predictably or uniformly and can change, particularly as new technologies develop. As such, the degree of patent protection obtained in the U.S. may differ substantially from that obtained in various foreign countries. In some instances, patents have been issued in the U.S. while substantially less or no protection has been obtained in Europe or other countries.

We cannot be certain of the level of protection, if any that we will be provided byable to provide for our patents if we attempt to enforce them and they are challenged in court where our competitors may raise defenses such as invalidity, unenforceability or possession of a valid license. In addition, the type and extent of any patent claims that may be issued to us in the future are uncertain. Any patents which are issued may not contain claims that will permit us to stop competitors from using similar technology.

IP.

We may incur substantial costs as a result of litigation or other proceedings relating to patent and otherour intellectual property rights.

Third parties have, and others may challenge the validity of our patents and other intellectual property rights, resulting in costly litigation or other time-consuming and expensive proceedings, which could deprive us of valuable rights. If we become involved in any intellectual property litigation, interference or other judicial or administrative proceedings, we may incur substantial expenses and the diversion of financial resources and technical and management personnel. An adverse determination may subject us to significant liabilities or require us to seek licenses that may not be available from third parties on commercially favorable terms, if at all. Further, if such claims are proven valid, through litigation or otherwise, we may be required to pay substantial financial damages, which can be tripled if the infringement is deemed willful, or be required to discontinue or significantly delay development, marketing, selling and licensing of the affected products and intellectual property rights.

Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours. There may be third-party patents, patent applications and other intellectual property relevant to our potential products that may block or compete with our products or processes. If another party has filed a United States patent application on inventions similar to ours, we may have to participate in an interference proceeding declared by the United States Patent and Trademark Office to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful, resulting in a loss of our United States patent position with respect to such inventions.

In addition, we cannot assure you that we would prevail in any of these suits or that the damages or other remedies if any, awarded against us would not be substantial. Claims of intellectual property infringement may require us to enter into royalty or license agreements with third parties that may not be available on acceptable terms, if at all. We may also become subject to injunctions against the further development and use of our technology, which would have a material adverse effect on our business, financial condition and results of operations.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

If we lose any of our key personnel or fail to hire and retain other talented employees, our operations could be harmed. 

Our success is currently dependent, in large part, on the personal efforts of Thomas Kidrin, our president and chief executive officer.  The loss of Mr. Kidrin's services could have a material adverse effect on our business and prospects. Our success is also dependent upon our ability to hire and retain additional qualified management, marketing, technical, financial, and other personnel, if and when our business grows. Competition for qualified personnel is intense and we may not be able to hire or retain additional qualified personnel. Any inability to attract and retain qualified management and other personnel would have a material adverse effect on our ability to grow our business and operations. 

We may not be able to economically comply with any new government regulation that may be adopted with respect to the Internet. 

New Internet legislation or regulation, or the application of existing laws and regulations to the Internet and e-commerce could add additional costs and risks to doing business on the Internet. We are subject to regulations applicable to businesses generally and laws or regulations directly applicable to communications over the Internet and access to e-commerce. Although there are currently few laws and regulations directly applicable to e-commerce, it is possible that a number of laws and regulations may be adopted with respect to the Internet, covering issues such as user privacy, pricing, content, copyrights, distribution, antitrust, taxation and characteristics and quality of products and services.   

Risks related to our common stock

Possible issuances of our capital stock would cause dilution to our existing shareholders.

While we currently have 120,193,05057,112,506 shares of common stock outstanding after implementing the 5 to 1 reverse split in 2018, we are authorized to issue up to 150,000,000250,000,000 shares of common stock. Therefore, we will be able to issue a substantial number of additional shares without obtaining shareholder approval. In the event we elect to issue additional shares of common stock in connection with any financing, acquisition or otherwise, current shareholders could find their holdings substantially diluted, which means they will own a smaller percentage of our company. There are also 5 million shares of preferred stock that the board can issue under any terms it wants and without any shareholder approval. In the event the shareholders approveShareholders approved the Company’s proposalsproposal to increase the authorized capital and/or a reverse split, the risk described above will beis heightened even more.

Certain shareholders control a substantial portion of our outstanding common stock. 

Our chief executive officer owns a significant portion of the outstanding shares of our common stock and Mr. Kidrin may be issued an additional 7.520 million post reverse split shares of our common stock upon the exercise of outstanding stock options. Accordingly, in the event he receives and then exercises such options, he will be able to influence the election of our directors and thereby influence or direct our policies. 

No dividends have been paid on our common stock. 

To date, we have not paid any cash dividends on our common stock and we do not expect to declare or pay dividends on the common stock in the foreseeable future. In addition, the payment of cash dividends may be limited or prohibited by the terms of any future loan agreements. 

We are subject to "penny stock" regulations which may adversely impact the liquidity and price of our common stock. 

Our common stock is currently deemed a "penny stock." Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information on penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, broker-dealers who sell such securities to persons other than established customers and accredited investors (generally, those persons with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse), the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. 

These requirements could reduce the level of trading activity, if any, in the secondary market for our common stock. As a result of the foregoing, our shareholders may find it more difficult to sell their shares. 

The exercise or conversion of outstanding options into common stock will dilute the percentage ownership of our other shareholders. The sale of such common stock or other common stock in the open market could adversely affect the market price of our common stock. 

As of March 15, 2016,December 31, 2022, there are outstanding options and warrants to purchase an aggregate of 9,350,00022,400,000 shares of our common stock and more options and warrants will likely be granted in the future to our officers, directors, employees and consultants. Also, on such date there are outstanding warrants to purchase an aggregate of 3,400,000 shares of our common stock. The exercise of outstanding stock options and warrants and conversion of notes will dilute the percentage ownership of our other shareholders. Sales, or the expectation of sales, of a substantial number of shares of our common stock in the public market, including shares of our common stock issuable upon exercise of our stock options, could adversely affect the prevailing market price of our common stock.

ITEM 2. DESCRIPTION OF PROPERTIES.

We do not own any property nor do we have any contracts or options to acquire any property in the future. Presently, we are operating out of offices in our president's residence at 11 Royal Road, Brookline, Massachusetts 02445, where we occupy approximately 800 square feet.  This space is adequate for our present and our planned future operations. We currently pay no rent to our president for use of this space, although when funds are available we may do so in the future. In addition we have no written agreement or formal arrangement with our president pertaining to the use of this space. We have no current plans to occupy other or additional office space.

ITEM 3. LEGAL PROCEEDINGS.

Judge Denise CasperThe Company has sought damages for patent infringement of the Company’s patents.  The Company's lawsuit against the Activision entities was filed in 2012, with U.S. District Judge Casper presiding over these proceedings.  This lawsuit was stayed in 2015 pending the outcome of six Inter Partes Review (“IPR”)

petitions filed by Bungie, Inc. to the U.S. Patent & Trademark Office's Patent Trial and Appeal Board (“PTAB”).  Those IPR proceedings were finally concluded in Company's favor on January 14, 2020, with each of the challenged patents and the majority of the challenged claims surviving Bungie's challenges.  Returning to its District Court District of Massachusetts has issuedlitigation, the Joint Pretrial ScheduleCompany asked that Judge Casper lift the stay and allow the Company to proceed in its lawsuit for the Worlds Inc. vs. Activision Blizzard Inc. et al patent infringement lawsuit withof the following dates:Company’s patents against the Activision entities.

On April 17, 2020, Judge Casper issued an Order lifting the Inter Party Reviewstay, and setting a pre-trial schedule with a final pretrial conference and trial to occur at a date to be determined after September 24, 2021.  On May 19, 2020, Activision submitted a renewed motion for summary judgment of patent invalidity under 35 U.S.C. 101, and claimed that the asserted patents are directed to patent-ineligible subject matter.  Worlds opposed this motion on June 9, 2020, and a hearing was held on July 22, 2020 at 3:00 p.m.  The parties proceeded with fact and expert discovery up to and including April 30, 2021.  On April 30, 2021, Judge Casper granted Activision’s summary judgment motion, entered an Order finding that all asserted patents were invalid as directed to patent-ineligible subject matter, beforeand terminated the Patent Trial Board (PTAB),Company’s lawsuit, with judgment for the company has submitted Preliminary Response’sActivision Entities.  The Company appealed this Order on May 28, 2021 to the PTAB and anticipates a determinationU.S. Court of Appeals for the Federal Circuit, sitting in Washington, D.C.  Oral argument occurred on whether a full review will be initiated beforeMarch 8, 2022.  On March 10, 2022, the endFederal Circuit issued an Order affirming the District Court’s judgment.

On June 8, 2022, the Company petitioned the Supreme Court of the year.  

On January 23, 2015 we entered into an agreement with Hudson Bay IP Opportunities Master Fund LPUnited States for a writ of certiorari, which is the process required for asking the Supreme Court to among other things, terminatereview the litigation between us, terminate all agreements between us, cancel all warrants we have previously issued to them as well as the outstanding balancejudgment of the Class C Note, provideFederal Circuit. 

The Company was notified on October 4, 2022, that the Supreme Court has denied the Petition for mutual releases and our deliverya writ of eight million shares of our common stock, of which seven million shares will be subject to certain volume limitations upon resale. In order to have sufficient shares to deliver, we implemented the previously authorized amendment to our certificate of incorporation and increased our authorized common stock to one hundred fifty million shares. We entered into essentially similar agreements with the other holders of our Class C Notes, albeit for less shares.certiorari. The Company has exhausted all legal remedies in this patent infringement case.

ITEM 4. MINE SAFETY DISCLOSURES.

N/A 

PART II

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

Our common stock began trading on the OTC Bulletin Board on October 20, 1998 under the symbol "WLDI." On February 11, 2000, in connection with the change in our name from Worlds Inc. to Worlds.com Inc., our symbol was changed to "WDDD." During 2001, our stock was no longer quoted on the OTC Bulletin Board and was quoted on the Pink Sheets, but returned to the Bulletin Board in the third quarter of 2008. The following table sets forth, for the periods indicated, the high and low bids for our common stock as reported on the OTC Bulletin Board or the Pink Sheets (representing(rounded to two decimals and representing interdealer quotations, without retail mark-ups, mark-downs or commissions, and may not necessarily represent actual transactions):. The bids below reflect the reverse 5 to 1 stock split implemented in February 2018.

Holders

As of December 31, 2015,2022, we had 618approximately 606 shareholders of record of our common stock.stock and an unknown, but assumed to be significant, number of additional holders in “street name”.

Dividends

We have never paid a cash dividend on our common stock and do not anticipate paying any dividends in the near future.

Recent Sales of Unregistered Securities 

On May 8, 2015,During the Company issued convertible debentures to certain accredited investors. The total principal amount of the debentures is $300,000 with a maturity date of November 8, 2015 with a zero percent interest rate. The debentures are convertible into shares of the Company’s common stock at the lower of the fixed price ($0.89) or fifty five percent (55%) of the average if the three lower trading price for 20 trading days prior to conversion. 

The Company signed a Forbearance Agreement on October 26, 2015 for the 10% Convertible Debenture with the principal amount of $300,000 that was due November 8, 2015. The new maturity date of the debenture is May 8, 2016.

On October 30, 2015, the company entered into a new Debenture with the same Lender, face amount of $405,000 having similar terms as the first Convertible Debenture with a maturity date of April 30, 2016. The debenture included a forbearance fee of $90,000 and had an original issue discount of 10%.

The Company issued promissory notes in the amount of $135,000 during the yearyears ended December 31, 2015. One2022 and 2021 we did not raise any funds through the sale of the Promissory Notes in the amount $25,000 was in lieu of payment of cash for an outstanding balance due to a consultant of the Company. The promissory notes carry a 6% annual interest rate and are payable upon the earlier of (a) 24 months from the date of the promissory note or (b) the Company reaching a settlement(s) on a patent infringement claim(s) and receiving an aggregate of at least $2 million net proceeds from such settlement(s).

All of these issuances were exempt from registration in as much as they were all sold to accredited investors in private offerings without the use of advertising. 

equity securities.  

Company Equity Compensation Plans

The following table sets forth information as of December 31, 20152022 with respect to compensation plans (including individual compensation arrangements) under which equity securities of the Company are authorized for issuance.

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

Forward Looking Statements

When used in this formForm 10-K and in future filings by the Company with the Commission, The words or phrases such as "anticipate," "believe," "could," "would," “should,” "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" or similar expressions are intended to identify “forward-looking statements” within  the meaning of the Private Securities Litigation Reform Act of 1995.  Readers are cautioned not to place undue reliance on any such forward looking statements, each of which speak only as of the date made.  Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected.  The Company has no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. These factors include, but are not limited to, changes that may occur to general economic and business conditions; changes in current pricing levels that we can charge for our services or which we pay to our suppliers and business partners; changes in political, social and economic conditions in the jurisdictions in which we operate; changes to regulations that pertain to our operations; changes in technology that render our technology relatively inferior, obsolete or more expensive compared to others; foreign currency fluctuations; changes in the business prospects of our business partners and customers; increased competition, including from our business partners; delays in the delivery of broadband capacity to the homes and offices of persons who use our services; general disruptions to Internet service; and the loss of customer faith in the Internet as a means of commerce.

The following discussion should be read in conjunction with the financial statements and related notes which are included in this report under Item 8.

We do not undertake to update our forward-looking statements or risk factors to reflect future events or circumstances.

Overview

General

Starting in mid-2001 we were not able to generate enough revenue to sustain full operations and other sources of capital were not available. As a result, we have had to significantly curtail our operations since that time and at times almost halt them all together. Since mid-2007, as more funds became available from our financings, we were able to increase operations and become more active operationally.

On May 16, 2011, we transferred, through a spin-off to our then wholly owned subsidiary, Worlds Online Inc. (currently named MariMed Inc.), the majority of our operations and related operational assets. We retained our patent portfolio which we intend to continue to increase and to more aggressively enforce against alleged infringers.portfolio. We also entered into a License Agreement with Worlds OnlineMariMed Inc. to sublicense patented technologies.technologies, which agreement has since expired.

TheAt present, the Company’s anticipated sources of revenue after the spin off will be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its patents in litigation or otherwise.monetizing our collection of non-fungible tokens and our legacy celebrity virtual reality worlds .

Revenues

The Company’s sources ofWe generated no revenue afterduring the spin off will be from sublicensesyear because we transferred the operations of the patented technology by Worlds OnlineCompany to MariMed Inc. and our other anticipated revenue generation streams did not produce any revenue that may be generated from enforcing its patents in litigation or otherwise.

Prior toincome during the spin-off we generated only modest revenue from VIP subscriptions to the Worlds Ultimate 3-D Chat service.quarter.

Expenses

We classify our expenses into two broad groups:

Liquidity and Capital Resources

We have had to limit our operations since midmid- 2001 due to a lack of liquidity.  However, we were able to issue equity and convertible debt in the last few years and raise small amounts of capital from time to time that, enabledprior to the spinoff, was used to enable us to begin upgrading our technology, develop new products and actively solicit additional business.  Webusiness, and more recently to protect, increase and enforce our patent portfolio.  

Although we have been able to generate funds through our sale of shares of MariMed Inc., we continue to pursue additional sources of capital though we have no current arrangements with respect to, or sources of, additional financing at this time and there can be no assurance that any such financing will become available. If we cannot raise additional capital, form an alliance of some nature with another entity, raise more funds through the sale of shares of MariMed Inc., or start to generate sufficient revenues, we may needbe unable to once again scale back operations.purchase additional patents or otherwise expand operations through acquisition or otherwise.   

RESULTS OF OPERATIONS

Our net revenues for each of the years ended December 31, 2015 and 2014 were $0.  All the operations were transferred over to Worlds Online Inc. in the spin off. The Company’s future sources of revenue after the spinoff are anticipated to be from sublicenses of the patented technology to Worlds Online Inc.’s customers and any revenue that may be generated from enforcing our patents in litigation or otherwise.  Inasmuch as the expiration date on the Company’s patents is November 16, 2016, the Company does not expect any material amount of revenues from sublicense.

Year ended December 31, 20152022 compared to year ended December 31, 20142021

Revenue was $0 for the years ended December 31, 20152022 and 2014.2021.  All the operations were transferred over to Worlds OnlineMariMed Inc. in the spin off. The business upSine the termination of our patent infringement lawsuits, the Company’s sources of revenue are anticipated to the spin off continued to run in a severely diminished mode due to the lackbe from monetizing our collection of liquidity. Post spin off wenon-fungible tokens from our legacy celebrity virtual reality worlds.  We still need to raise a sufficient amount of capital to provide the resources required that would enable us to continue running theexpand our business.

Cost of revenues is $0 in the years ended December 31, 2015 and 2014.

Selling general and administrative (S, G & A) expenses decreased by $67,988$242,317 from $455,613$1,539,998 to $387,625$1,297,681 for the year ended December 31, 2015.  Expenses are primarily professional fees and business consulting including broker fees. Expenses decreased during the year2022.   The decrease is due to thea decrease in activitylegal costs related to financings of the Company and all the activity surrounding those financings which inflated SG&A expenses in 2014.patent infringement litigation cases.  

Salaries and related expenses increaseddecreased by $9,153$9,319 to $225,025$206,013 from $215,872$215,332 for the year ended December 31, 2015. Increase is primarily due to2022. Salaries and related are in line with last year and are based on the CEO working under anterms of the CEO’s employment agreement whereby he is to receive a 10% increase each year.

Common stock issued for services rendered increased by $34,492 to $110,400 in 2014 compared to $75,908 in 2014. Increase is due to a strategic business consulting agreement valued at a slightly greater expense than in 2014.agreement.

For the year ended December 31, 2015,2022, the Company recorded an option expense of $47,007, equal to$821,995, the estimated fair value of the options atissued in the datefirst quarter of grants. The option expense was due to 600,000 options granted to the Company’s directors and an officer of the company. The directors, Bernard Stolar, Robert Fireman and Edward Gildea each received 100,000 options for serving as board members in 2015. Christopher Ryan, an officer of the company received 300,000 options.2022. For the year ended December 31, 2014,2021, the Company recorded an$109,874 of option expense of $66,451, equal to the estimated fair value of the options at the date of grants. The option expense was due to 450,000 options granted to the Company’s directors. The directors, Bernard Stolar, Robert Fireman and Edward Gildea each received 100,000 options for serving as board members in 2014. Edward Gildea joined the board on January 10, 2014 and received an additional 150,000 options for joining the Company’s board.expense. 

For the year ended December 31, 2015 we2022, the Company had a loss on settlementinterest expense of convertible notes$75,883. For the year ended December 31, 2021, the Company had interest expense of $2,313,151.$76,063.

For the years ended December 31, 2022, the Company had interest income of $0. For the years ended December 31, 2021, the Company had interest income of $14,194.

For the year ended December 31, 2015,2021, the Company hadrecorded a loss on change in fair valueissuance of derivative liabilityshares for services of $761,722 and interest expense of $61,935. $8,685.

For the year ended December 31, 2014,2022, the Company had a gain on change in fair valuesale of derivative liabilitymarketable securities of $199,102 and interest expense of $358,835.$793,391. For the year ended December 31, 2015,2021, the Company had a debt issuance expensegain on sale of $130,500 related tomarketable securities of $1,006,588.

For the two debentures signed duringyear ended December 31, 2021, the year.Company had income from the settlement of litigation in the amount of $315,000.

For the year ended December 31, 2022, the company had a loss on impairment of $231,462.

For the year ended December 31, 2022, the company had a loss on litigation of $17,780.

As a result of the foregoing, we realizedhad a net loss of $4,037,365$1,035,427 for the year ended December 31, 20152022 compared to a net loss of $982,577 in$614,170 for the year ended December 31, 2014, an increase in net losses of $2,969,236.2021. 

Liquidity and Capital Resources

At December 31, 2015,2022, our cash and cash equivalents were $26,298.$7,778. We raised an aggregate of $479,000 from issuing notes and convertible notes payabledid not raise any additional cash during the year ended December 31, 2015.2022.

OurAt December 31, 2021, our cash and cash equivalents were $27,661 at December 31, 2014. We raised an aggregate of $100,000 from issuing notes payable during the year ended December 31, 2014.$44,421.

No capital expenditures were made in 20152022 or 2014.2021.

Historically, ourOur primary cash requirements have been used to fund the cost of operations developmentincluding monetizing our collection of our productsnon-fungible tokens, lawsuits, and patent protection, with additional funds having been used in connection with the exploration of new business lines.

The funds raised in our 2015 and 2014 financings were and will be used to enhance our patent portfolio, pay salaries to management and pay professional fees to our attorneys and auditors to prepare and file reports with the Securities and Exchange Commission.  We hope to raise additional funds to be used for further developing our portfolio of patents and to document our technology in order to enforce our patents where there is infringement.  No assurances can be given that we will be able to raise any additional funds.

Subsequent Events

The company received an additional $56,500 in January and February under the Convertible Debenture signed on October 30, 2015 with the face amount of $405,000.

We issued promissory notes in the amount of $140,000 during January and February of 2016. The promissory notes carry a 6% annual interest rate and are payable upon the earlier of (a) 12 months from the date of the promissory note or (b) the Company reaching a settlement(s) on a patent infringement claim(s) and receiving an aggregate of at least $2 million net proceeds from such settlement(s). 

The convertible debt holder converted $125,000 worth of debentures for 11,271,666 shares of common stock during the first quarter of 2016.

enforcement. 

Recent Accounting Pronouncements

Recently issued accounting standards

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements up to ASU 2014-05, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.  

ITEM 8. FINANCIAL STATEMENTS.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Worlds, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Worlds, Inc. (the “Company”)Company) as of December 31, 20152022 and 20142021, and the related statements of operations, stockholders’ deficit, and cash flows for each of the two years then ended. in the two-year period ended December 31, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has negative cash flow from operations, stockholders’ deficiency, and a working capital deficiency which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audits, included considerationwe are required to obtain an understanding of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

In our opinion,The critical audit matters communicated below are matters arising from the current period audit of the financial statements referredthat were communicated or required to above present fairly, in allbe communicated to the audit committee and that: (1) relate to accounts or disclosures that are material respects,to the financial positionstatements and (2) involved our especially challenging, subjective, or complex judgments. The communication of Worlds Inc. (a Delaware corporation)critical audit matters does not alter in any way our opinion on the financial statements, taken as of December 31, 2015a whole, and 2014 andwe are not, by communicating the results of itscritical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 

Going Concern

As discussed in Note 1 to the consolidated financial statements, the Company had a working capital deficiency, net cash used in operations, and its cash flows for two years then ended in conformitya stockholder deficiency.

Auditing management’s evaluation of a going concern can be a significant judgement given the fact that the Company uses management estimates on future revenues and expenses which are not able to be substantiated.

To evaluate the appropriateness of the going concern, we examined and evaluated the financial information that was the initial cause along with accounting principles generally accepted inmanagement’s plans to mitigate going concern and management’s disclosure on going concern.

Worlds, Inc.

Notes to the United States of America.Financial Statements

The

NOTE 1 – GOING CONCERN

As reflected in the accompanying financial statements, have been prepared assuming the Company will continue ashas a going concern. The Company has suffered recurring operating losses, has an accumulated stockholders’ deficit, has negative working capital has had minimal revenues fromdeficiency of $3,148,459 and a stockholder’s deficiency of $3,148,459 and used $830,034 of cash in operations and has yet to generate an internal cash flow thatfor the year ended December 31, 2022. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regardThe ability of the Company to these matters are described in Note 2.continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might result frombe necessary if the outcome of this uncertainty.Company is unable to continue as a going concern.

Management believes that the actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.  

/s/ L&L CPAS, PA

L&L CPAS, PA

F/K/A/ Bongiovanni & Associates, PA

Certified Public Accountants

Cornelius, NC

The United States of America

April 11, 2016

www.llcpas.net

NOTE 12 – DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

Description of Business

On May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc. (currently called MariMed Inc.), the majority of its operations and related operational assets. The Company retained its patent portfolio which it intendsand is looking to continue to increaseexpand on its legacy celebrity worlds and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online Inc. to sublicense its patented technologies.collection of non-fungible tokens.

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"), which contemplates continuation of the Company as a going concern.. The Company has always been considered a developmental stage business, has incurred significant losses since its inception and has had minimal revenues from operations. The Company will require substantial additional funds for development and enforcement of its patent portfolio. There can be no assurance that the Company will be able to obtain the substantial additional capital resources to pursue its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company has not been able to generate sufficient revenue or obtain sufficient financing which has had a material adverse effect on the Company, including requiring the Company to reduce operations. These factors raise substantial doubt aboutAs the Company's ability to continue as a going concern. For the past yearCompany has focused its attention on increasing its patent portfolio and enforcing it, the Company has been operating at a significantly reduced capacity, with only one full time employee performing primarily consulting services and licensing software and using consultants to perform any additional work that may be required.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash and Cash Equivalents

Cash and cash equivalents are comprised ofinclude highly liquid money market instruments, which have original maturities of three months or less at the time of purchase.

Due to Related Party

Due to related party is comprised of cash payments made by Worlds Online Inc. on behalf of Worlds Inc. for shared operating expenses.

Revenue Recognition

Effective forJanuary 1, 2018, the Company adopted ASC 606. There was no impact in adopting ASC 606 as the Company has no revenue at this time. In the second quarter of 2011, the Company spun off its online businesses to Worlds OnlineMariMed Inc. The Company’s sources of revenue after the spin off willspinoff was expected to be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated from enforcing its patents. Prior toCommencing in the spin-off,first half of 2023, the Company had the following sourcesexpects that its revenues will come from its expansion of revenue: (1) consulting/licensing revenue from the performanceits legacy celebrity worlds and its collection of development work performed on behalf of the Company, licensing revenue or from the sale of certain software to third parties; and (2) VIP subscriptions to our Worlds Ultimate 3-D Chat service.non-fungible tokens. The Company recognizes revenue when all ofby applying the following criteria are met: evidence of an arrangement exists such assteps: (1) identify the contract with a signed contract, delivery has occurred,customer; (2) identify the price is fixed or determinable, and collectability is reasonable assured. This will usually beperformance obligations in the form of a receipt of a customer’s acceptance indicatingcontract; (3) determine the product has been completedtransaction price; (4) allocate the transaction price to their satisfaction except for development workeach performance obligation in the contract; and service revenue which is recognized when the services have been performed. Deferred revenue represents cash payments received in advance to be recorded as(5) recognize revenue when earned. The corresponding cost associated with those contractseach performance obligation is also deferred as deferred costs until the revenue is ultimately recognized.satisfied.

Research and Development Costs

Research and development costs are charged to operations as incurred.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided on a straight linestraight-line basis over the estimated useful lives of the assets ranging from three to five years.years. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Maintenance and repairs are charged to expense in the period incurred.

Impairment of Long LivedLong-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during 20152022 and 2014.2021.

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service periodaward (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Income Taxes

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50%50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

Notes Payable

The Company has $773,279$773,279 in short term notes outstanding at December 31, 20152022 and 2014.December 31, 2021. These are old notes payable for which the statute of limitations has passed and therefore the Company does not expect it will ever have to repay those notes.

The company has an additional $410,000 and $275,000 in notes, and $349,500 (net of $21,000 discount) and $11,803 in convertible notes outstanding at December 31, 2015 and 2014, respectively.

Comprehensive Income (Loss)

The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.

Loss Per Share

Net loss per common share is computed pursuant to section 260-10-45 of the FASB ASC. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. As of December 31, 2015,2022 there were 9,050,00022,400,000 options and no3,400,000 warrants outstanding and as of December 31, 2021, there were 11,720,000 options and 4,380,000 warrants outstanding whose effect is anti-dilutive and not included in diluted net loss per share for December 31, 2015.2022 or for December 31, 2021. The options and warrants may dilute future earnings per share.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. 

During 2000 the Company was involved in a lawsuit relating to unpaid consulting services. In April 2001 a judgment against the Company was rendered for approximately $205,000.$205,000. As of December 31, 2015,2022, and 2014December 31, 2021, the Company recorded a reserve of $205,000 $205,000 for this lawsuit, which is included in accrued expenses in the accompanying balance sheets.

As part of the judgement on March 18, 2022, the Company is required to reimburse litigation fees in the amount of $17,780.

Risk and Uncertainties

The Company is subject to risks common to companies in the technology industries, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the yearsyear ended December 31, 2015 or 2014.

2022.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

The carrying amounts of the Company’s financial assets and liabilities, such as cash, other receivables, accounts payable & accrued expenses, due to related party, notes payable and notes payables, approximate their fair values because of the short maturity of these instruments. The Company's convertible notes payable are measured at amortized cost.

The Company accounts for its derivative liabilities, at fair value, on a recurring basis underWarrant and option expense was measured by using level 3. See Note 5.3 valuation. 

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.

For option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.  

Subsequent Events

The Company evaluated for subsequent events through the issuance date of the Company’s financial statements.

Recent Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements, up to ASU 2015-16, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

The Company accounts for stock-based compensation for employees and directors in accordance with Accounting Standards Codification 718, Compensation (“ASC 718”) as issued by the FASB. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). The fair value of the Company’s common stock options are estimated using the Black Scholes option-pricing model with the following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses stock-based compensation by using the straight-line method. In accordance with ASC 718 and, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of operations. The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Accounting Standards Update (“ASU”) 2018-07.

In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted the new lease guidance effective January 1, 2019. The Company is not a party to any leases and therefore is not showing any asset or liability related to leases in the current period or prior periods.  

NOTE 23 - GOING CONCERNNOTES PAYABLE

The accompanying financial statements have been prepared assuming thatCompany accrued interest of $75,883 on the notes during the year ended December 31, 2022.

NOTE 4 - EQUITY

All common stock numbers and exercise prices in this Note are reflected on a post reverse split (5 to 1) basis. As a result of the reverse split on February 9, 2018, the Company will continue as a going concern. Since its inception, the Company has had periods where it had only minimal revenues from operations. There can be no assurance that the Company will be able to obtain theissue an additional capital resources167 shares due to fully implement its business plan or that any assumptions relating to its business plan will prove to be accurate. The Company is pursuing sources of additional financing and there can be no assurance that any such financing will be available to the Company on commercially reasonable terms, or at all. Any inability to obtain additional financing will likely have a material adverse effect on the Company, including possibly requiring the Company to reduce and/or cease operations.

These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 - CAPITAL STOCKrounding.

During the year ended December 31, 2015,2022, the companyCompany issued 15,608,696 common shares15,900,000 options. Another 900,000 options were re-issued to Directors at a new price and an extended term.

As consideration for the Class C Note holdersIP in order to terminate the litigationAsset Purchase Agreement between us, terminate all agreements between us, cancel all warrants we have previously issued to them as well as the outstanding balanceCompany and Mr. Kidrin, Mr. Kidrin was granted 15,000,000 options at an exercise price of $0.07 per share for three years. The Company recorded an option expense of $751,744. The fair market value for Mr. Kidrin’s options was calculated using the Black Scholes method assuming a risk free interest of 1.35%, 0% dividend yield, volatility of 174%, and an exercise price of $0.07 per share with a market price of $0.07 per share at issuance date and an expected life of 3 years. The options vested on January 18, 2022.

The active directors of the Class C Notes. In order to have sufficient shares to deliver, we implementedCompany received 300,000 options each on January 3, 2022. The options were for service performed during 2019, 2021 and 2022 which were never issued.  The Company recorded an option expense for these options of $31,807 for the previously authorized amendment to our certificateyear ended December 31, 2022. The fair market value for these options was calculated using the Black Scholes method assuming a risk free interest of incorporation1.37%, 0% dividend yield, volatility of 142%, and increased our authorized common stock to one hundred fifty million shares.an exercise price of $0.05 per share with a market price of $0.05 per share at issuance date and an expected life of 5 years. The options vest six months from the date of grant. 

The active directors of the Company had their existing options repriced and the terms extended another 5 years. The total number of options that were repriced on February 16, 2022 was 900,000. The Company recorded an option expense for these options of $38,444 for the year ended December 31, 2022. The fair market value for these options was calculated using the Black Scholes method assuming a risk free interest of 1.90%, 0% dividend yield, volatility of 153%, and an exercise price of $0.08 per share with a market price of $0.08 per share at issuance date and an expected life of 5 years. The options are all vested upon date of grant.

During the year ended December 31, 2015,2021, the Company issued an aggregate of 804,000297,673 shares of common stock as payment for services rendered, an aggregatesettlement of accounts payable to a related party. The value of $80,400the shares at the date of issuance was $70,810 resulting in a loss of $8,685.

During the year ended December 31, 2021, the Company recorded an option expense of $109,874 representing the amortization of the value of the options issued in 2020 that had not yet vested.

During the year ended December 31, 2015,2022, the Company issued 182,057 shares torecorded an officeroption expense of the company as payment for an accrued expense in the amount of $24,506.07.$821,995. 

During the year ended December 31, 2015, the Company issued 6,746,356 shares of common stock by converting $150,000 of the principal of convertible notes payable.