Worldwide Strategies (WWSG) 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended April 30, 2010

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

For the transition period from ________________ to _______________

Commission file number: 000-52362

Worldwide Strategies Incorporated

(Exact name of registrant as specified in its charter)

Nevada	41-0946897
(State or other jurisdiction of incorporation or organization)	(I.R.S.  Employer Identification No.)
3801 East Florida Avenue, Suite 400, Denver, Colorado	80210
(Address of principal executive offices)	(Zip Code)

(303) 991-5887

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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 ý   No o

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 o   No o (not required)

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

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  o	Smaller reporting company  ý

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  As of June 1, 2010 – 12,496,234 shares of common stock

WORLDWIDE STRATEGIES INCORPORATED

FORM 10-Q

FOR THE FISCAL QUARTER ENDED

APRIL 30, 2010

INDEX

		Page
PART I.  FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets	2
	Consolidated Condensed Statements of Operations (unaudited)	3
	Consolidated Condensed Statement of Changes in Shareholders’ Deficit (unaudited)	4
	Consolidated Condensed Statements of Cash Flows (unaudited)	5
	Notes to Consolidated Condensed Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4.	Controls and Procedures	16
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	(Removed and Reserved)	17
Item 5.	Other Information	17
Item 6.	Exhibits	17
SIGNATURES		18

1

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Consolidated Condensed Balance Sheets

	April 30,			July 31,
	2010			2009
	(unaudited)			(audited)
Assets
Current Assets:
Cash	$	1,486		$	173
Prepaid expenses		18,636			1,337
Total current assets		20,122			1,510
Office equipment, net of accumulated depreciation of $22,417(Note 1)		206			670
Deposits		150			150
Total assets	$	20,478		$	2,330
Liabilities and Shareholders’ Deficit
Current Liabilities:
Accounts and notes payable:
Accounts payable	$	44,631		$	57,889
Accounts payable, related party(Note 2)		8,269			3,769
Accrued compensation(Note 3)		182,500			45,625
Accrued liabilities (Note 5)		1,383			-
Accrued liabilities, related party (Note 4)		29,769			17,622
Notes payable (Note 5)		66,836			-
Total current liabilities		333,388			124,905
Shareholders’ deficit (Note 6):
Preferred stock, $.001 par value; 25,000,000 shares authorized,
1,421,043 shares issued and outstanding		1,421			1,379
Common stock, $.001 parvalue, 33,333,333 shares authorized
12,496,234 shares issued and outstanding		12,497			12,227
Additional paid-in capital		6,427,353			6,383,125
Deficit accumulated during development stage		(6,754,181	)		(6,519,306	)
Total shareholders’ deficit		(312,910	)		(122,575	)
Total liabilities and shareholders' deficit	$	20,478		$	2,330

See accompanying notes to consolidated condensed financial statements

2

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Consolidated Condensed Statement of Operations

(Unaudited)

													March 1, 2005
													(Inception)
	Nine Months Ended						Three Months Ended						Through
	April 30,						April 30,						April 30,
	2010			2009			2010			2009			2010
Sales	$	—		$	—		$	—			—			34,518
Cost of sales		—			—			—			—			30,568
		—			—			—			—			3,950
Operating expenses:
Salaries, benefits and payroll taxes		80,625			61,335			26,875			—			974,000
Stock based compensation		—			184,750			—			154,000			3,374,953
Professional and consulting fees		58,610			49,424			15,135			12,605			833,339
Travel		12,446			5,833			6,520			3,362			240,861
Contract labor		56,250			37,500			18,750			—			464,250
Insurance		16,545			26,822			8,472			7,129			236,706
Depreciation		464			1,705			155			155			140,072
Loss on failed acquisition		—			—			—			—			181,016
Other general and administrative expenses		7,086			9,093			511			3,114			202,581
Total operating expenses		232,026			376,462			76,418			180,365			6,647,778
Loss from operations		(232,026	)		(376,462	)		(76,418	)		(180,365	)		(6,643,828	)
Other expense:
Interest expense		(2,849	)		(15,807	)		(1,726	)		(1,579	)		(110,353	)
Loss before income taxes		(234,875	)		(392,269	)		(78,144	)		(181,944	)		(6,754,181	)
Income tax provision (Note 7)		—			—			—			—			—
Net loss	$	(234,875	)	$	(392,269	)	$	(78,144	)		(181,944	)		(6,754,181	)
Basic and diluted loss per share	$	(0.011	)	$	(0.041	)	$	(0.004	)	$	(0.016	)
Basic and diluted weighted average
common shares outstanding		21,008,864			9,662,901			21,156,920			11,076,234

See accompanying notes to consolidated condensed financial statements

3

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Consolidated Condensed Statement of Changes in Shareholders’ Deficit

(Unaudited)

											Deficit
											Accumulated
									Additional		During
	Preferred Stock				Common Stock				Paid-In		Development
	Shares		Par Value		Shares		Par Value		Capital		Stage			Total
Balance at July 31, 2009		1,378,643	$	1,379		12,226,234	$	12,227	$	6,383,125	$	(6,519,306	)	$	(122,575	)
Common stock issued in exchange for consulting (Note 6)						270,000		270		20,830					21,100
Deposit on proposed acquisition (Note 8)										2,240					2,240
Preferred stock issued in exchange for convertible promissory notes (Note 6)		42400		42						21,158					21,200
Net Loss												(234,875	)		(234,875	)
Balance at April 30, 2010		1,421,043	$	1,421		12,496,234	$	12,497	$	6,427,353	$	(6,754,181	)	$	(312,910	)

See accompanying notes to consolidated condensed financial statements

4

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Consolidated Condensed Statement of Cash Flows

(Unaudited)

							March 1, 2005
							(Inception)
	For the Nine Months Ended						Through
	April 30,						April 30,
	2010			2009			2010
Cash flows from operating activities:
Net cash used in
operating activities	$	(70,927	)	$	(68,566	)	$	(2,080,256	)
Cash flows from investing activities:
Cash acquired in Centric acquisition		—			—			6
Purchases of equipment		—			—			(23,612	)
Deposit paid on Cascade acquisition		—			—			(100,000	)
Net cash used in
investing activities		—			—			(123,606	)
Cash flows from financing activities:
Proceeds from sale of preferred stock		—			8,000			8,000
Proceeds from sale of common stock		—			—			1,587,706
Deposit on proposed acquisition (Note 8)		2,240			25,000			77,240
Payments for offering costs		—			—			(150,339	)
Proceeds from notes payable, related party		—			10,000			286,301
Proceeds from notes payable (Note 5)		70,000			18,440			396,440
Net cash provided by
financing activities		72,240			61,440			2,205,348
Net change in cash.		1,313			(7,126	)		1,486
Cash, beginning of period		173			7,308			—
Cash, end of period	$	1,486		$	182		$	1,486
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—		$	—		$	—
Interest	$	—		$	—		$	7,518
Non-cash investing/financing activities
Preferred stock issued to repay notes	$	21,200		$	652,274		$	652,274
Common stock issued to repay loan	$	—		$	—		$	75,000
Common stock issued to acquire Centric	$	—		$	—		$	41,673
Offering costs exchanged for stock	$	—		$	—		$	6,500

See accompanying notes to consolidated condensed financial statements

5

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Notes to Consolidated Condensed Financial Statements

(Unaudited)

(1)           Organization and Basis of Presentation

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

The Company is in the development stage in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises.”  As of April 30, 2010, the Company has devoted substantially all of its efforts to financial planning, raising capital and developing markets.

Interim financial data presented herein are unaudited.  The unaudited interim financial information presented herein have been prepared by the Company in accordance with the accounting policies in its audited financial statements for the period ended July 31, 2009, included in its annual report on Form 10-K, and should be read in conjunction with the notes thereto.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim period presented have been made.  The results of operations for the periods presented are not necessarily indicative of the results to be expected for the year.

Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplate continuation of the Company as a going concern.  However, the Company experienced net losses of $234,875, $78,144, and $6,754,181 for the nine-month period and the three-month period ended April 30, 2010 and for the period from March 1, 2005 (inception) through April 30, 2010, respectively.  These matters, among others, raise substantial doubt about its ability to continue as a going concern.

In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon the Company’s ability to generate sufficient sales volume to cover its operating expenses and to raise sufficient capital to meet its payment obligations.  Historically, management has been able to raise additional capital.  During the nine-month period ended April 30, 2010, the Company issued convertible promissory notes in exchange for $70,000.

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

New Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (“FASB”) approved the FASB Accounting Standards Codification (the “Codification” or “ASC”) as the single source of authoritative nongovernmental GAAP. All existing accounting standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other related literature, excluding guidance from the Securities and Exchange Commission (“SEC”), have been superseded by the Codification. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become nonauthoritative. The Codification did not change GAAP, but instead introduced a new structure that combines all authoritative standards into a comprehensive, topically organized online database. The Codification is effective for interim or annual periods ending after September 15, 2009, and impacts our financial statements as all references to authoritative accounting literature will be referenced in accordance with the Codification. Pursuant to the provisions of FASB ASC 105 Topic Generally Accepted Accounting Principles (“ASC 105”) we have updated references to GAAP in our financial statements for the periods ended September 30, 2009.  The adoption of ASC 105 did not impact our financial position or results of operations.

6

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Also in June 2009, the FASB issued new accounting guidance related to the accounting and disclosure for transfers of financial assets, which is included in ASC Topic 860, Transfers and Servicing. This guidance will require entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk with respect to the assets. This guidance is effective for fiscal years beginning after November 15, 2009. We do not anticipate that the adoption of this guidance will have a material impact on our financial position or results of operations.

Also in June 2009, the FASB issued new accounting guidance related to the accounting and disclosure for the consolidation of variable interest entities regarding certain guidance for determining whether an entity is a variable interest entity and modifies the methods allowed for determining the primary beneficiary of a variable interest entity. The guidance is included in ASC Topic 810, Consolidation. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. The guidance is effective for the first annual reporting period beginning after November 15, 2009. We do not anticipate that the adoption of this guidance will have a material impact on our financial position or results of operations.

In August 2009, the FASB issued an update of ASC Topic 820, Measuring Liabilities at Fair Value. The new guidance provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using prescribed techniques. We adopted the new guidance in the third quarter of 2009 and it did not materially affect our financial position and results of operations.

(2)           Accounts payable related parties

At April 30, 2010, the Company was indebted to three officers for expenses incurred on behalf of the Company totaling $8,269.

(3)           Accrued compensation

The Company accrued compensation for the CEO and the CFO during the nine-month period ended April 30, 2010 in the amount of $136,875. The accrued compensation will only be paid if the Company successfully obtains sufficient financing to fund its plan of operation.

(4)           Related party transactions

Accrued charges

During the nine-month period ended April 30, 2010, various liabilities of the Company in the amount of $12,147 were paid personally by the CEO and CFO.  These amounts will be repaid when the Company has sufficient working capital.

(5)           Notes payable

During February 2010, the Company issued a convertible promissory note to an unrelated third party in exchange for $25,000. The note, which bears interest at 8%, is due on May 21, 2010 and the principal and accrued interest is convertible into Series A shares at $.50 per share upon the election of the holder.  Interest expense for this note payable was $500 for the nine- and three-month periods ended April 30, 2010.

During February 2010, the Company entered into an agreement to finance the purchase of insurance policies in the amount of $22,400. After a down payment of $2,240 and finance charges of $885 the total amount of payment will be $21,045 in 10 equal amounts over 10 months commencing February 1, 2010. The effective annual interest rate is 9.47%. Interest expense for this loan is $266 for the nine- and three-month periods ended April 30, 2010.

7

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Notes to Consolidated Condensed Financial Statements

(Unaudited)

During November 2009 the Company issued a convertible promissory note to an unrelated third party in exchange for $25,000. The note which bears interest at 8% is due on May 21, 2010 and the principal and accrued interest is convertible into Series A shares at $.50 per share upon the election of the holder.  Interest expense for this note payable was $883 and $500 for the nine-month and three-month periods ended April 30, 2010, respectively.

During October 2009 the Company issued a convertible promissory note to an unrelated third party in exchange for $20,000. On April 19, 2010 the note bearing interest at 12% was converted into 42,400 Series A shares at $.50 per share upon the election of the holder.  Interest expense for this note payable was $1,200 and $460 for the nine-month and three-month periods ended April 30, 2010, respectively.

(6)           Shareholders’ Deficit

Preferred stock

The Company is authorized to issue 25,000,000 shares of $0.001 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.

Effective December 15, 2008, the Company established a series of 5,000,000 shares of preferred stock to be known as “Series A Convertible Preferred Stock” (“Series A”).  The shares of Series A have a par value of $0.001 per share.  Shares of Series A may be redeemed, for $0.50 per share, at the Company’s option.  Each share of Series A may be converted into 6.25 shares of common stock, at the option of the holder.

Shares of Series A will participate in dividends paid, in cash or other property, to holders of outstanding common stock.  In the event the Company declares and pays a dividend to common stockholders, five percent (5%) of the value of such dividend shall be paid to the holders of outstanding Series A shares. After payment of the 5% preference, each outstanding Series A share will participate in the distribution of the remaining 95% of the dividend with the holders of common stock, as if each outstanding Series A share were one share of common stock. Any dividend payable to holders of Series A shares will have the same record and payment date and terms as the dividend payable on the common stock.

Holders Series A shares shall be entitled to vote together with the holders of the common stock as a single class, upon all matters submitted to holders of common stock for a vote. Shares of Series A will vote that number of votes equal to the number of shares of common stock issuable upon conversion of one share of Series A, as adjusted from time-to time.

Whenever holders of Series A are required or permitted to take any action by separate class or series, such action may be taken without a meeting by written consent, setting forth the action so taken and signed by the holders of the outstanding Series A shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

Effective April 19, 2010, the Company issued 42,400 preferred shares at $0.50 in full settlement of notes payable and accrued interest in the amount of $21,200.

Effective January 31, 2009, the Company issued 1,304,552 preferred shares at $0.50 in full settlement of notes payable and accrued interest in the amount of $652,274.  An additional 16,000 shares were issued for $8,000 in cash.

8

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Common stock

In February 2010, the Company issued a total of 25,000 shares of the Company’s common stock in exchange for consulting services provided to the Company.  The shares were valued at $0.30 per share based on the fair value of the shares when they were issued.  This amount ($7,500) is reflected in the accompanying financial statements as consulting fees.

In October 2009, the Company issued a total of 20,000 shares of the Company’s common stock in exchange for consulting services provided to the Company.  The shares were valued at $0.08 per share based on the fair value of the shares when they were issued.  This amount ($1,600) is reflected in the accompanying financial statements as consulting fees.

In September 2009, the Company issued a total of 200,000 shares of the Company’s common stock in exchange for consulting services provided to the Company.  The shares were valued at $0.05 per share based on the fair value of the shares when they were issued.  This amount ($10,000) is reflected in the accompanying financial statements as consulting fees.

In September 2009, the Company issued a total of 25,000 shares of the Company’s common stock in exchange for consulting services provided to the Company.  The shares were valued at $0.08 per share based on the fair value of the shares when they were issued.  This amount ($2,000) is reflected in the accompanying financial statements as consulting fees.

In April 2009, the Company issued a total of 2,200,000 shares of the Company’s common stock in exchange for uncompensated services provided to the Company by the CEO and the CFO.  The shares were valued at $0.07 per share based on the fair value of the shares when they were issued.  This amount ($154,000) is reflected in the accompanying financial statements as stock based compensation.

In April 2009, the Company issued 100,000 shares of the Company’s common stock as a payment to a creditor for extending credit to the Company in April 2009.  The shares were valued at $0.07 per share based on the fair value of the shares when they were issued.  This amount ($7,000) will be charged to interest expense over the term of the associated note payable.

In December 2008, the Company issued a total of 625,000 shares of the Company’s common stock in exchange for uncompensated services provided to the Company by one employee, two officers, five directors and four consultants.  The shares were valued at $0.03 per share based on the fair value of the shares in the month they were issued.  This amount ($18,750) is reflected in the accompanying financial statements as stock based compensation.

In September 2008, the Company issued a total of 18,023 shares of the Company’s common stock in exchange for $2,470 in interest on five convertible notes payable.  The shares were valued based on the fair value of the shares in the month interest was accrued.

Stock Options and Warrants

Following is a schedule of changes in common stock options and warrants from July 31, 2009 through April 30, 2010:

					Weighted		Weighted
					Average		Average
			Exercise		Exercise		Remaining
	Awards Outstanding		Price		Price		Contractual
	Total	Exercisable	Per Share		Per Share		Life
Outstanding at July 31, 2009	11,758,059	11,758,059	$	0.06-$3.36	$	0.45	2.27years
Granted	—	—		—		—	—
Exercised	—	—		—		—	—
Cancelled/Expired	2,276,662	2,276,662	$	.75		—	—
Outstanding at April 30, 2010	9,481,397	9,481,397	$	0.015-$3.36	$	0.35	1.90 years

9

WORLDWIDE STRATEGIES INCORPORATED

(A Development Stage Company)

Notes to Consolidated Condensed Financial Statements

(Unaudited)

The following changes occurred in outstanding options and warrants during the period from July 31, 2009 through April 30, 2010:

	Options	Warrants	Awards
Outstanding at July 31, 2009	6,724,695	5,033,364	11,758,059
Granted	—	—	—
Exercised	—	—	—
Cancelled/Expired	333,331	1,943,331	2,276,662
Outstanding at April 30, 2010	6,391,364	3,090,033	9,481,397

(7)           Income Taxes

The Company records its income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.”  The Company incurred net operating losses during all periods presented resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefits and expense resulted in $0 income taxes.

 (8)           Letters of Intent

NewMarket Technology, Inc.

In February 2008, the Company entered into a letter of intent with NMKT.  Pursuant to the letter of intent, NewMarket will acquire a majority interest in the Company in exchange for (i) the assumption of all of the Company’s outstanding debts and (ii) the payment of $100,000.  NMKT’s ownership interest will be protected from dilution for three years.  The transaction is subject to the execution of a mutually satisfactory definitive stock purchase agreement and the completion of due diligence.  Withdrawal from the transaction by either party will subject the withdrawing party to a claim for the legal and due diligence expenses of the other party, not to exceed $100,000.

In March 2009, the Company entered into a second letter of intent with NMKT.  Pursuant to the second letter of intent, the Company will acquire a majority interest in NMKT’s Latin America subsidiary in exchange for the Company’s preferred non-convertible shares sufficient to ensure a majority interest position of the Company will be owned by NMKT.  The transaction is subject to the execution of a mutually satisfactory definitive stock purchase agreement and the completion of due diligence.  The parties have agreed that the prior letter of intent entered in February 2008 will be replaced by the new letter of intent.

The Company has received $77,240, from NMKT as partial payment of item (ii) in the letter of intent.  Both parties are engaged in the negotiation of a mutually satisfactory definitive stock purchase agreement and the completion of due diligence.

(9)           Subsequent Events

On May 3, 2010, the Company received $1,600 in cash for 3,200 shares of Series A preferred stock at $0.50 per share.

On May 26, 2010, the Company issued a promissory note to an unrelated third party in exchange for $50,000.  The note bears interest at 9% and is due on September 23, 2010.  Interest is payable on the due date in restricted shares of the Company’s common stock.  The number of shares to be issued will equal the accrued interest divided by $0.04.  At the option of the note holder the due date may be extended for 120 days on any due date.  For each extension the Company will issue 350,000 shares of common stock.  The principal and any unpaid accrued interest may be converted at any time at the option of the note holder to fully paid and nonassessable common shares.  The number of shares to be issued will equal the dollar amount converted divided by $0.04.

10

Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion and analysis should be read in conjunction with our financial statements and related footnotes for the year ended July 31, 2009 included in our Annual Report on Form 10-K.  The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.

Overview

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

On July 8, 2005, pursuant to a Share Exchange Agreement with Worldwide Business Solutions Incorporated, a Colorado corporation (“WBSI”), we acquired all of the issued and outstanding capital stock of WBSI, in exchange for 2,573,335 shares of our common stock.  As a result of this share exchange, shareholders of WBSI as a group owned approximately 76.8% of the shares then outstanding, and WBSI became our wholly-owned subsidiary.  We changed our name to Worldwide Strategies Incorporated as of June 14, 2005.

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

WBSI incorporated a subsidiary, Worldwide Business Solutions Limited, in the United Kingdom under the Companies Acts 1985 and 1989, on May 31, 2005.  This U.K. subsidiary was formed for the purpose of supporting sales and marketing efforts in English-speaking countries.  While the subsidiary has a temporary office and bank accounts established, it does not yet have any employees.

On July 31, 2007, we acquired 100% of the issued and outstanding shares of Centric Rx, Inc., a Nevada corporation (“Centric”) in exchange for 2,250,000 post-reverse-split shares of our common stock.  We filed Articles of Exchange Pursuant to NRS 92A.200 effective July 31, 2007.

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

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

Plan of Operation

On February 14, 2008, we entered into a letter of intent with NewMarket Technology, Inc. (“NMKT”).  It is proposed that NMKT will acquire a majority interest in our Company in exchange for (i) the assumption of all of our outstanding debts and (ii) the payment of $100,000.  NMKT’s ownership interest would be protected from dilution for three years.  As of the date hereof, our only plan is to be acquired by NMKT and NMKT has paid us $77,240 of its $100,000 deposit obligation pursuant to the letter of intent.

If we fail to complete the transaction with NMKT, we may attempt to market the Company as a “shell company” as we believe that its status as a reporting company whose stock is quoted on the OTC Bulletin Board has value.  Alternatively, we may be forced to raise additional capital to support our ongoing existence while we search

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for other merger opportunities.  We cannot assure you that we will be successful in marketing the Company as a “shell” or that we will be able to complete additional financings successfully.

Recent Financing Activity

During the nine months ended April 30, 2010, we raised a total of $70,000 through the issuance of convertible notes payable.  We utilized these funds to reduce outstanding accounts payable.  During the nine months ended April 30, 2010, our CEO and CFO paid various liabilities of the Company in the amount of $12,147.

Significant Accounting Policies and Estimates

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

Development Stage.  We are in the development stage in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises.”  As of April 30, 2010, we had devoted substantially all of our efforts to financial planning, raising capital and developing markets.

Stock-based Compensation.  We account for compensation expense for our stock-based compensation plans using the fair value method prescribed in FASB ASC 718, “Stock Compensation,” which requires us to recognize the cost of services received in exchange for awards of equity instruments based on the grant-date fair value of the awards.  The fair value of each option grant is estimated on the date of grant using the Black-Scholes method.

Loss per Common Share.  We report net loss per share using a dual presentation of basic and diluted loss per share.  Basic net loss per share excludes the impact of common stock equivalents.  Diluted net loss per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.  As of April 30, 2010, there were 6,391,364 and 3,090,033 common stock options and warrants outstanding, respectively, which were excluded from the calculation of net loss per share-diluted because they were antidilutive.

Results of Operations

Three Months Ended April 30, 2010 and 2009.  Salaries, benefits and payroll taxes totaled $26,875 and $-0- for the three-month periods ended April 30, 2010 and 2009, an increase of $26,875.  We did not accrue any salaries from November 1, 2008 to May 2009 in light of our cash shortage.

We did not incur any stock-based compensation expense during the three-month period ended April 30, 2010, as compared to $154,000 in 2009.

Professional and consulting fees totaled $15,135 and $12,605 for the three-month periods ended April 30, 2010 and 2009.

Travel expenses totaled $6,520 and $3,362 during the three-month periods ended April 30, 2010 and 2009.

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Contract labor expenses totaled $18,750 and $-0- during the three-month periods ended April 30, 2010 and 2009.

Insurance expenses totaled $8,472 and $7,129 during the three-month periods ended April 30, 2010 and 2009.

Depreciation of $155 and $155 was recorded during the three-month periods ended April 30, 2010 and 2009.  Almost all of our equipment is fully depreciated and, therefore, our depreciation expense has decreased substantially.

Other general and administrative expenses totaled $511 and $3,114 during the three-month periods ended April 30, 2010 and 2009.

We recorded $1,726 and $1,579 in interest expense for the three-month periods ended April 30, 2010 and 2009.  Effective January 31, 2009, we converted many of our outstanding debts into preferred stock.  However, since July 2009, we have issued convertible promissory notes totaling $20,000 and $50,000 that accrue interest at 12% and 8%, respectively.

Our net loss was $78,144 and $181,944 for three-month periods ended April 30, 2010 and 2009.

Nine months Ended April 30, 2010 and 2009.  Salaries, benefits and payroll taxes totaled $80,625 and $61,335 for the nine-month periods ended April 30, 2010 and 2009, an increase of $19,290.

We did not incur any stock-based compensation expense during the nine-month period ended April 30, 2010, as compared to $184,750 in 2009.

Professional and consulting fees totaled $58,610 and $49,424 for the nine-month periods ended April 30, 2010 and 2009.

Travel expenses totaled $12,446 and $5,833 during the nine-month periods ended April 30, 2010 and 2009.

Contract labor expenses totaled $56,250 and $37,500 during the nine-month periods ended April 30, 2010 and 2009.

Insurance expenses totaled $16,545 and $26,822 during the nine-month periods ended April 30, 2010 and 2009.  The decrease was caused by a decrease in employee health benefits.

Depreciation of $464 and $1,705 was recorded during the nine-month periods ended April 30, 2010 and 2009.  Almost all of our equipment is fully depreciated and, therefore, our depreciation expense has decreased substantially.

Other general and administrative expenses totaled $7,086 and $9,093 during the nine-month periods ended April 30, 2010 and 2009.

We recorded $2,849 and $15,807 in interest expense for the nine-month periods ended April 30, 2010 and 2009.  Effective January 31, 2009, we converted many of our outstanding debts into preferred stock.  However, since July 2009, we have issued convertible promissory notes totaling $20,000 and $50,000 that accrue interest at 12% and 8%, respectively.

Our net loss was $234,875 and $392,269 for nine-month periods ended April 30, 2010 and 2009.

March 1, 2005 (inception) to April 30, 2010.  For the period from March 1, 2005 (inception) to April 30, 2010, we were engaged primarily in raising capital to implement our business plan.  Accordingly, we have earned revenue of only $34,518.  We incurred expenses for professional and consulting fees, salaries and payroll taxes, stock-based compensation, travel, contract labor, insurance, interest and other expenses resulting in an accumulated loss of $6,754,181.  Approximately half of the cumulative net loss is due to the recognition of non-cash stock-based

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compensation expense for issuing shares, options, and warrants to employees and third parties in the amount of $3,374,953.  As we develop our business plan, we expect that cash generated through operations will replace many of the non-cash transaction structures currently utilized to implement our business plan.

Liquidity and Capital Resources

Since inception, we have relied on the sale of equity capital and debt instruments to fund working capital and the costs of developing our business plan.  For the nine months ended April 30, 2010, net cash of $72,240 provided by financing activities offset the $70,927 used in operating activities resulting in a $1,313 increase in cash.  We obtained $70,000 through the issuance of debt.  We have a working capital deficit of $313,266 at April 30, 2010, as compared to $123,395 at July 31, 2009.

As discussed above, we have had minimal revenues and have accumulated a deficit of $6,754,181 since inception.  Furthermore, we have not commenced our planned principal operations.  Our future is dependent upon our ability to obtain equity and/or debt financing and upon future profitable operations from the development of our business plan.

Our significant operating losses raise substantial doubt about our ability to continue as a going concern.  Historically, we have been able to raise additional capital sufficient to continue as a going concern.  However, there can be no assurance that this additional capital will be sufficient for us to implement our business plan or achieve profitability in our operations.  Additional equity or debt financing will be required to continue as a going concern.  Without such additional capital, either from NMKT or from a debt or equity offering by our Company, there is doubt as to whether we will continue as a going concern.

Off Balance Sheet Arrangements

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

Factors That May Affect Our Results of Operations

RISK FACTORS RELATED TO OUR BUSINESS AND MARKETPLACE

If we do not complete the change of control transaction with NMKT, we must obtain financing to continue operations.  If we do not complete the transaction with NMKT, we must engage in debt and/or equity financing in order to continue operations.  We do not know the terms on which any financing might be available or if such financing is available on any terms.  Such terms may be detrimental to the interests of our existing shareholders.  The value of an investment in our common stock could be reduced.  Interest on debt securities could increase costs and negatively impacts operating results.  In addition to the 5,000,000 shares of Series A Convertible Preferred Stock that has been authorized, other prefer red stock could be issued in series from time to time with such designations, rights, preferences, and limitations as needed to raise capital.  The terms of such other preferred stock could be more advantageous to those investors than to the holders of common stock.  In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms given to our current investors.  Shares of common stock that we sell could be sold into the market, which could adversely affect market price.

If we complete our planned transaction with NewMarket Technology, Inc., there will be a change in control.  We have entered into letters of intent with NMKT whereby it is proposed that NMKT will obtain a majority interest in our Company.  If this transaction is completed, NMKT will have voting control of the Company and will likely put in new management.  The ownership interests of existing shareholders will be diluted as well.

If we do not complete the proposed transaction with NMKT, we will seek other merger and acquisition opportunities.  We may not be able to successfully acquire or merge with another business.  Any acquisition or merger that we undertake will require an unspecified amount of additional capital expenditure in the form of planning, due diligence, legal, and accounting fees.  We have no substantial experience in completing acquisitions of

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or mergers with other businesses, and we may be unable to successfully complete such a transaction.  Any acquisition or merger we undertake may result in a potentially dilutive issuance of equity securities, the issuance of debt and incurrence of expenses related to the transaction.

As a development stage company, we cannot assure you that we will succeed or be profitable.  We have been in business for approximately five years.  From March 1, 2005 (inception) through April 30, 2010, we generated revenues of only $34,518 and accumulated a net loss of $6,754,181.  We are in the development stage, as that term is defined by certain financial accounting standards.  This means that as of April 30, 2010, our planned principal operations had not commenced, as we had devoted substantially all of our efforts to financial planning, raising capital, and developing markets.  We cannot assure you that we will be successful or profitable.

As discussed above, we have had minimal revenues and have accumulated a net loss since inception.  Our future is dependent upon completing the change of control transaction with NMKT or our ability to obtain equity and/or debt financing and upon future profitable operations from the development of our business plan.  Therefore, there is substantial doubt that we will be able to continue as a going concern.

RISK FACTORS RELATED TO OUR COMMON STOCK

We have significant numbers of convertible securities outstanding, which, if converted, will result in substantial dilution.  We have preferred stock, stock options, and warrants outstanding which can all be converted or exercised into common stock.  Our outstanding Series A shares can be converted, without additional consideration, into 8,881,519 shares of common stock.  The outstanding Series A shares already have the right to vote 8,881,519 common share equivalent votes on any matter placed before the common shareholders for a vote.  We have 6,391,364 stock options and 3,090,033 warrants outstanding, with varying exercise prices.  The exercise of the options and warrants into common stock will result in substan tial dilution to existing stockholders.

Future equity transactions, including exercise of options or warrants, could result in dilution.  In order to raise sufficient capital to fund operations, from time to time, we intend to sell restricted stock, warrants, and convertible debt to investors in private placements.  Because the stock will be restricted, the stock will likely be sold at a greater discount to market prices compared to a public stock offering, and the exercise price of the warrants is likely to be at or even lower than market prices.  These transactions will cause dilution to existing stockholders.  Also, from time to time, options will be issued to officers, directors, or employees, with exercise prices equal to market.  Exercise of in-th e-money options and warrants will result in dilution to existing stockholders.  The amount of dilution will depend on the spread between the market and exercise price, and the number of shares involved.  In addition, such shares would increase the number of shares in the “public float” and could depress the market price for our common stock.

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

·     Deliver to the customer, and obtain a written receipt for, a disclosure document;

·     Disclose certain price information about the stock;

·     Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

·     Send monthly statements to customers with market and price information about the penny stock; and

·     In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

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

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Since our shares are trading on the “OTC Bulletin Board”, trading volumes and prices may be sporadic because it is not an exchange.  Our common shares are currently trading on the “OTC Bulletin Board.”  The trading price of our common shares has been subject to wide fluctuations.  Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control.  The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with limited business operations.  There can be no assurance that trading prices and price earnings ratios previou sly experienced by our common shares will be matched or maintained.  Broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance.

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

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

Item 3.           Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4.           Controls and Procedures

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report.  This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer.  Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures are effective to ensure that all required information is presented in our quarterly report.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

During our last fiscal quarter, there were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II.  OTHER INFORMATION

Item 1.           Legal Proceedings

None.

Item 1A.        Risk Factors

Not required of smaller reporting companies.

Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds

In February 2010, the registrant issued 25,000 shares of its common stock to one investor in exchange for consulting services valued in the amount of $7,500.

In April 2010, the registrant issued 42,400 shares of its Series A Convertible Preferred Stock to one accredited investor upon conversion of the principal and accrued interest under promissory note in the amount of $21,200.

No underwriters were used in the above stock transactions.  We relied upon the exemption from registration contained in Section 4(2) and/or Rule 506 of the Securities Act of 1933, as the investors were deemed to be sophisticated with respect to the investment in the securities due to their financial condition and involvement in our business.  A restrictive legend was placed on the certificates evidencing the securities issued.

Item 3.           Defaults Upon Senior Securities

None.

Item 4.           (Removed and Reserved)

None.

Item 5.           Other Information

None.

Item 6.           Exhibits

Regulation S-K Number	Exhibit
2.1	Share Exchange Agreement by and between Worldwide Strategies Incorporated, Centric Rx, Inc., Jim Crelia, Jeff Crelia, J.  Jireh, Inc. and Canada Pharmacy Express, Ltd.  dated as of June 28, 2007 (1)
3.1	Amended and Restated Articles of Incorporation (2)
3.2	Amended Bylaws (2)
3.3	Articles of Exchange Pursuant to NRS 92A.200 effective July 31, 2007 (3)
3.4	Certificate of Change Pursuant to NRS 78.209 effective July 31, 2007 (3)
3.5	Certificate of Designation Pursuant to NRS 78.1955 effective December 8, 2008 (4)
3.6	Amendment to Certificate of Designation Pursuant to NRS 78.1955 effective December 15, 2008 (5)
10.1	2005 Stock Plan (2)
10.2	Employment Agreement with James P.R. Samuels dated October 12, 2007 (6)
10.3	Employment Agreement with W. Earl Somerville dated October 12, 2007 (6)
31.1	Rule 13a-14(a) Certification of James P.R. Samuels
31.2	Rule 13a-14(a) Certification of W. Earl Somerville

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Regulation S-K Number Exhibit

32.1	Certification of James P.R. Samuels Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
32.2	Certification of W. Earl Somerville Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

__________________

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

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

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

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

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

(6)       Filed as an exhibit to the Annual Report on Form 10-KSB, File No. 000-52362, on November 2, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WORLDWIDE STRATEGIES INCORPORATED
Date:  June 9, 2010	By:	/s/ James P.R. Samuels
		James P.R. Samuels
		Chief Executive Officer
		(Principal Executive Officer)
Date:  June 9, 2010	By:	/s/ W. Earl Somerville
		W. Earl Somerville
		Chief Financial Officer, Secretary and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)

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