Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Sep. 16, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | WORLDS ONLINE INC. | |
Entity Central Index Key | 1,522,767 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 23,288,895 | |
Entity Common Stock, Shares Outstanding | 64,074,683 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash | $ 160,859 | $ 988,268 |
Accounts receivable | 467,348 | 50,078 |
Prepaid expense | 38,225 | 18,500 |
Due from third party | 77,500 | 175,898 |
Due from - related party | 104,494 | 59,486 |
Notes receivables - Current | 100,767 | |
Other current assets | 212 | 4,069 |
Total Current Assets | 949,405 | 1,296,299 |
Long Term Assets | ||
Website (net of accumulated amortization) | 353,333 | |
Notes receivables - long term | 587,592 | |
Property, Furniture and Equipment (net of accumulated depreciation) | 84,140 | 2,666 |
Building Improvements (net of accumulated depreciation) | 2,025,108 | |
Land and improvements | 71,488 | |
Total Long Term Assets | 2,768,328 | 355,999 |
Total Assets | 3,717,733 | 1,652,298 |
Current Liabilities | ||
Account payable and accrued expenses | 1,136,344 | 1,076,608 |
Account payable - related party | 680,320 | |
Due to related parties | 125,902 | 1,930 |
Deferred revenue | 226,950 | 226,950 |
Other payable | 230,000 | 225,000 |
Total Current Liabilities | 2,399,517 | 1,530,488 |
Notes Payables | 3,250,000 | 2,050,000 |
Total Liabilities | 5,649,517 | 3,580,488 |
Stockholders (Deficit) | ||
Common Stock (par value $0.001 authorized 100,000,000 shares, 32,120,446 and 31,954,236 common shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively) | 32,120 | 31,954 |
Common stock subscribed but not yet issued (32,354,236 and 32,354,236 common shares as of December 31, 2015 and December 31, 2014, respectively) | 32,354 | 32,354 |
Subscription receivable | (25,000) | |
Common Stock Warrants | 1,165,563 | 1,165,563 |
Additional Paid in Capital | 7,005,164 | 6,056,740 |
Accumulated Deficit | (10,196,094) | (8,971,892) |
Noncontrolling interest | 54,109 | (242,909) |
Total stockholders deficit | (1,931,783) | (1,928,190) |
Total Liabilities and Stockholders Deficit | $ 3,717,733 | $ 1,652,298 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock issued | 32,120,446 | 31,954,236 |
Common stock outstanding | 32,120,446 | 31,954,236 |
Common stock subscribed not yet issued | 32,354,236 | 32,354,236 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | ||
Revenue | $ 1,270,176 | $ 88,384 |
Total | 1,270,176 | 88,384 |
Cost and Expenses | ||
Cost of Revenue | 1,303,713 | 190,165 |
Gross Income/(Loss) | (33,537) | (101,781) |
Equity compensation | 45,946 | 35,999 |
Amortization of intangible asset | 366,667 | 20,000 |
Consulting expense | 60,000 | 60,000 |
Research & development | 93,106 | |
Selling, General & Admin. | 588,282 | 302,270 |
Payroll and related taxes | 503,033 | 297,298 |
Total expenses | 1,657,034 | 715,567 |
Operating (loss) | (1,690,571) | (817,348) |
Interest expense | (206,563) | (56,203) |
Interest income | 56,145 | |
Loss on extinguishment of Debt | (19,078) | |
Loss on conversion of payable to common stock | (2,556) | |
Realized loss on trading securities | ||
Realized gain on trading securities | 5,404 | |
Unrealized loss on trading securities | (3,838) | (10,355) |
Unrealized gain on trading securities | 480 | 343 |
Goodwill impariment loss | (6,524,054) | |
Total other income (expense) | (156,332) | (6,603,943) |
Net (Loss) | (1,846,902) | (7,421,291) |
Less: Net loss attributable to noncontrolling interest | (631,569) | (201,750) |
Net (loss) attributable to Worlds Online common shareholders | $ (1,215,334) | $ (7,219,541) |
Weighted Average Loss per share (basic and fully diluted) | $ (0.04) | $ (0.23) |
Weighted Average Common Shares Outstanding | 31,976,154 | 31,899,874 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net (loss) | $ (1,215,334) | $ (7,219,541) |
Net loss attributed to noncontrolling interest | (631,569) | (201,750) |
Adjustments to reconcile net (loss) to net cash provided by operating activities | ||
Loss on extinguishment of Debt | 19,078 | |
Stock and warrants issued for acqusition | 6,524,054 | |
Amortization of intangible asset | 366,667 | 20,000 |
Realized gain on trading securities | (5,404) | |
Unrealized loss on trading securities | 3,838 | 10,355 |
Unrealized gain on trading securities | (480) | (343) |
Equity compensation | 45,946 | 35,999 |
Accounts receivable | (473,415) | (50,078) |
Other current assets | 3,857 | (500) |
Prepaid expense | (19,725) | |
Due from third party | (77,500) | |
Deposits | (18,500) | |
Acounts payable and accrued expenses | 59,737 | 507,056 |
Accounts payable related party | 700,761 | (300,650) |
Other payable | 5,000 | 225,000 |
Net cash (used in) operating activities: | (392,881) | (455,224) |
Proceeds from sales of trading securities | 23,004 | |
Notes receivables issued to third party | (456,316) | |
Purchase of website | (400,000) | |
Purchase of fixed assets | (3,048,776) | (2,666) |
Net cash provided by investing activities: | (3,505,092) | (379,662) |
Proceeds from note payable | 1,200,000 | 2,050,000 |
Dividend paid to investors | (8,868) | |
Proceeds from related party | 378,964 | (235,384) |
Proceeds from Mia Dev Class A shares | 1,500,469 | |
Net cash provided by financing activities | 3,070,565 | 1,814,616 |
Net (decrease) in cash and cash equivalents | (827,408) | 979,730 |
Cash and cash equivalents beginning of period | 988,268 | 8,538 |
Cash and cash equivalents end of period | 160,859 | 988,268 |
Non-cash financing activities: | ||
Common stock issued for accrued expenses | 22,375 | 10,750 |
Cash paid during the period for: | ||
Interest | ||
Income taxes | ||
Non-cash Activities | ||
Converting related party liabilities to Equity | 300,000 | |
Issuance common stock to repay accounts payables | $ 24,932 | |
Aquisition of Sigal LLC | ||
Issurance of common stock | 5,911,534 | |
Issuance of option | $ 569,682 | |
Assuming of liabilitie | 1,832,020 | |
Intangible asset | (391,111) | |
Other asset | (162,997) | |
Goodwill | (6,515,990) | |
Non-controllling interest | (32,448) | |
Cash Acquired | $ 1,210,690 |
Shareholders Deficit
Shareholders Deficit - USD ($) | Common Stock | Additional Paid-In Capital | Common Share subscribed but not issued | Subscription Receivable | Common Stock Warrants | Accumulated Deficit | Non-Controlling Interest | Total |
Beginning Balance, shares at Dec. 31, 2013 | 31,824,548 | 400,000 | ||||||
Beginning Balance, amount at Dec. 31, 2013 | $ 31,824 | $ (458,218) | $ 400 | $ 1,165,563 | $ (1,752,352) | $ (1,012,782) | ||
Stock options for directors and officer | $ 35,999 | 35,999 | ||||||
Payment of accrued expense, shares | 129,688 | |||||||
Payment of accrued expense, amount | $ 130 | $ 29,699 | 29,828 | |||||
Aquistion of Sigal Consulting, shares | 31,954,236 | |||||||
Aquistion of Sigal Consulting, amount | $ 6,449,260 | $ 31,954 | 6,481,214 | |||||
Non-controlling interest | (41,159) | (41,159) | ||||||
Class A shares in Mia Development | ||||||||
Dividend paid | ||||||||
Net Income Loss | (7,219,541) | (201,750) | (7,421,291) | |||||
Ending Balance, shares at Dec. 31, 2014 | 31,954,236 | 32,354,236 | ||||||
Ending Balance, amount at Dec. 31, 2014 | $ 31,954 | 6,056,740 | $ 32,354 | 1,165,563 | (8,971,892) | (242,909) | (1,928,190) | |
Stock options for directors and officer | 45,946 | 45,946 | ||||||
Payment of accrued expense, shares | 166,210 | |||||||
Payment of accrued expense, amount | $ 166 | 24,765 | 24,931 | |||||
Class A shares in Mia Development | 877,713 | $ (25,000) | 947,756 | 1,800,469 | ||||
Dividend paid | (8,868) | (19,169) | (28,037) | |||||
Net Income Loss | (1,215,334) | (631,569) | (1,846,902) | |||||
Ending Balance, shares at Dec. 31, 2015 | 32,120,446 | 32,354,236 | ||||||
Ending Balance, amount at Dec. 31, 2015 | $ 32,120 | $ 7,005,164 | $ 32,354 | $ (25,000) | $ 1,165,563 | $ (10,196,094) | $ 54,109 | $ (1,931,783) |
NOTE 1 - DESCRIPTION OF BUSINES
NOTE 1 - DESCRIPTION OF BUSINESS & SUMMARY OF ACCTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 1 - DESCRIPTION OF BUSINESS & SUMMARY OF ACCTING POLICIES | NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES Description of Business We currently operate in two separate segments with one segment being a 3D entertainment portal which leverages its proprietary licensed technology to offer visitors a network of virtual, multi-user environments which we call "worlds" and the second segment being a management company in the medical cannabis industry. We were formed on January 25, 2011 as a wholly-owned subsidiary of Worlds Inc. (formerly known as Worlds.com Inc.). Effective May 16, The assets transferred to us include: Worlds Inc.s technology platform, Worlds Chat, Aerosmith World, DMC Worlds, Cinema Virtual, Pearson contracts and related revenue, the following 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. The transfer On May 19, 2014, Worlds Online Inc. (the Company) entered into a Membership Interest Purchase Agreement (the Agreement) between MariMed Advisors Inc. (MariMed), a wholly owned subsidiary of the Company, Sigal Consulting LLC (Sigal), a Massachusetts limited liability company, and the Members of Sigal (Sellers). The transaction closed on September 29, 2014. Pursuant to the Agreement, the Company, through MariMed, acquired all of the assets of Sigal and the Sellers received the aggregate amount of (i) the Companys common stock (WORX) equal to 50% of the Companys outstanding common stock on the Closing Date; (ii) three million options to purchase shares of the Companys common stock which are exercisable over five years with various exercise prices ranging from $0.15 to $0.35 and (iii) 49% of MariMeds outstanding common stock. As a result, the Companys ownership of MariMed was reduced from 100% to 51%. The transaction was accounted for as a purchase acquisition/merger wherein the Company is both accounting acquirer and legal acquirer. Accordingly, the company recorded the assets purchased and liabilities assumed as part of the merger and the portion that the fair value Basis of Presentation The accompanying financial our ability to grow our business 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. Trading Securities Trading securities are common stock in publicly traded companies, one that was received as compensation for performing consulting services. The other was purchased as an investment. The carrying value of the investments is the market price of the shares at December 31, 2015 and December 31, 2014. Any unrealized gain or loss are recorded under other income/(expense) in the accompanying statements of operations. Cash and Cash Equivalents Cash and cash equivalents are comprised of highly liquid money market instruments, which have original maturities of three months or less at the time of purchase. Revenue Recognition The Company has the following source of revenue: VIP subscriptions to our Worlds Ultimate 3-D Chat service and consulting and other revenues from MariMed. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectability is reasonable assured. This will usually be in the form of a receipt of a customers acceptance indicating the product has been completed to their satisfaction except for development work and service revenue which is recognized when the services have been performed. Deferred revenue represents cash payments received in advance to be recorded as revenue when earned. The corresponding cost associated with those contracts is also deferred as deferred costs until the revenue is ultimately recognized. Research and Development Costs Research and development costs will be charged to operations as incurred. Intangible Asset - Websites The Company purchased several medical marijuana related websites in 2014. The cost of these websites are being amortized using the straight line method over a period of five years. The websites are currently generating a deal flow for us and we expect the future economic benefit of those websites to be at least 5 years. Property and Equipment Property and equipment will be stated at cost. Depreciation will be provided on a straight line basis over the estimated useful lives of the assets ranging from three to five 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 will be charged to expense in the period incurred. Impairment of Long 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 (ASC) 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. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB ASC for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB ASC (Paragraph 820-10-35-37) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in US GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amounts of the Companys financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments. Accounts Payable Related Party Accounts payable related party is comprised of cash payments made by Worlds Inc. on our behalf for shared operating expenses. Deferred Revenue Deferred revenue represents advance payments for the license, the design and development of the software, content and related technology for the creation of an interactive, 3D entertainment portal on the internet. Extinguishment of liabilities The Company Extinguishments of 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 ASC 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). Income Taxes The Company accounts for income taxes under Section 740-10-30 of the FASB ASC (ASC 740). 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 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 Related Party Transactions The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, Comprehensive Income (Loss) The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB ASC which establishes standards for the reporting and display of comprehensive income and its components in the consolidated 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 Commitments and Contingencies The Company follows subtopic 450-20 of the FASB ASC 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 Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees 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. The Company is also subject to risks arising from its medical marijuana related business inasmuch as marijuana is still a federally prohibited substance. 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 years ended December 31, 2015 or 2014. Acquisition On September 29, 2014 our wholly-owned subsidiary, MariMed Advisors Inc. ("MariMed"), acquired all of the outstanding assets of Sigal Consulting LLC ("Sigal") from its members, The purchase price consisted of 31,954,236 shares of the Company's common stock, 3 million five-year options to purchase additional shares of our common stock at prices ranging from $0.15 - $0.35 per share and which vest over two years and 49% of MariMed's outstanding equity. The fair value of the common stock issued was $5,911,534 determined by the fair value of the Companys Common Stock on the closing date, at a price of approximately $0.185 per share. The fair value of the stock options was $569,682 measured using the Black-Scholes valuation model on the grant date, assuming approximately 1.56% risk-free interest, 0% dividend yield, 311% volatility, and expected life of five years. The fair value of common stock issued and options granted for acquisition over the book value of Sigal is recorded as goodwill, which was subsequently impaired in full. One of the owners of Sigal, Robert Fireman, is a director of the Company. Subsequent Events The Company evaluated for subsequent events through the issuance date of the Companys financial statements. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This amendment outlines 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. |
NOTE 2 - GOING CONCERN
NOTE 2 - GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
Note 2 - Going Concern | |
NOTE 2 - GOING CONCERNS | NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Worlds Online Inc. has had only minimal revenues from operations, has a negative working capital, and has a negative stockholders deficit and negative cash flows from operations. There can be no assurance that the Company will be able to obtain the substantial additional capital resources necessary 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 - USE OF EQUITY AS COMPE
NOTE 3 - USE OF EQUITY AS COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
NOTE 3 – USE OF EQUITY AS COMPENSATION | NOTE 3 - USE OF EQUITY AS COMPENSATION During the year ended December 31, 2015, the Company issued an aggregate of 166,210 shares of common stock as payment for an accrued expense with an aggregate value of $22,375. During the year ended December 31, 2015, the Company issued 300,000 options to the Company's directors. The directors each received 100,000 options for serving as board members in 2015. The stock options allow each director to purchase 100,000 shares of the Company's common stock at $0.13 per share per each individual option. An additional 300,000 options were issued to the Chief Financial Officer of the Company. The stock options to the Company's Chief Financial Officer allow for the purchase of 300,000 shares of the Company's common stock at $0.13 per share per each individual option. The options expire on June 29, 2020. Refer to Note 6 for further discussion. During the year ended December During the year ended December 31, 2014, the Company issued an aggregate of 129,688 shares of common stock as payment for an accrued expense with an aggregate value of $10,750. |
NOTE 4 - DEFERRED REVENUE
NOTE 4 - DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
NOTE 4 - DEFERRED REVENUE | NOTE 4 - DEFERRED REVENUE Deferred revenue represents advance payments for the license, the design and development of the software, content and related technology for the creation of an interactive, 3D entertainment portal on the internet. During the year ended December 31, 2015, no services were provided. The deferred revenue balance is $226,950. |
NOTE 5 - PROPERTY AND EQUIPMENT
NOTE 5 - PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 5 - PROPERTY AND EQUIPMENT | NOTE 5 - PROPERTY AND EQUIPMENT During the year ended December 31, 2015 Mia Development LLC, a subsidiary of MariMed purchased $3,048,776 in building improvements, land and equipment. |
NOTE 6 - STOCK OPTIONS
NOTE 6 - STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
NOTE 6 - STOCK OPTIONS | NOTE 6 - STOCK OPTIONS During the year ended December 31, 2015, the Company issued 300,000 options to the Companys directors. The directors each received 100,000 options for serving as board members in 2015. An additional 300,000 options were issued to the Chief Financial Officer of the Company. The stock options allow each director to purchase 100,000 shares of the Companys common stock at $0.13 per share per each individual option. The stock options to the Companys Chief Financial Officer allow for the purchase of 300,000 shares of the Companys common stock at $0.13 per share per each individual option. The options expire on June 29, 2020. During the During the year ended December 31, 2015, the Company issued 55,000 warrants and recorded a warrant expense of $7,036 equal to the estimated fair value of the options at the date of grants. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 1.63% risk-free interest, 0% dividend yield, 271% volatility, and expected life of 3 years. No stock options or warrants were exercised during the year ended December 31, 2015. During the year ended December 31, 2014, the Company issued 450,000 stock options to Directors of the Company. The Company issued 100,000 options to each of the Companys independent directors for serving as a Director in 2014. The stock options allow each director to purchase 100,000 shares of the Companys common stock at $0.08 Accordingly, the Company recorded an expense of $35,999 during the year ended December 31, 2014 equal to the estimated fair value of the options at the date of grants. These options were granted for services to be performed. The fair market value was calculated In connection with the acquisition of Sigal Consulting LLC, the Company granted three million five-year stock options to the sellers of Sigal Consulting LLC at prices ranging from $0.15 - $0.35 per share and which vest over two years. The fair value of the stock options was $569,682 measured using the Black-Scholes valuation model on the grant date, assuming approximately 1.56% risk-free interest, 0% dividend yield, 311% volatility, and expected life of five years. During the year ended December 31, 2014, no stock options or warrants were exercised. There were no outstanding warrants as of December 31, 2014. Stock options outstanding and exercisable as of December 31, 2015 are as follows: Exercise Price per Share Shares Under Option Remaining Life in Years Outstanding $ 0.08 450,000 3.00 $ 0.025 200,000 2.00 $ 0.025 500,000 1.97 $ 0.01 4,500,000 1.67 $ 0.13 600,000 4.50 $ 0.15 1,000,000 3.39 $ 0.25 1,000,000 3.39 $ 0.35 1,000,000 3.39 9,250,000 Exercisable $ 0.08 450,000 3.00 $ 0.025 200,000 2.00 $ 0.025 500,000 1.97 $ 0.01 4,500,000 1.67 $ 0.15 1,000,000 3.39 6,650,000 |
NOTE 7 - INCOME TAXES
NOTE 7 - INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
NOTE 7 - INCOME TAXES | NOTE 7 - INCOME TAXES At December 31, 2015, the Company had federal and state net operating loss carry forwards of approximately $2,942,820 that expire in 2036. Due to operating losses, there is no provision for current federal or state income taxes for the periods ended December 31, 2015 or 2014. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes. The Companys deferred tax asset at December 31, 2015 consists of a net operating loss calculated using federal and state effective tax rates equating to approximately $1,326,000 less a valuation allowance in the amount of approximately $1,326,000. Because of the Companys lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The measurement valuation allowance increased by $293,232 and $349,000 during the 2015 and 2014 periods respectively. The Companys total deferred tax asset as of December 31, 2015 is as follows: Deferred tax asset gross $ 1,326,000 Valuation allowance (1,326,000 ) Net deferred tax asset $ The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the periods ended December 31, 2015 and 2014 is as follows: 2015 2014 Income tax computed at the federal statutory rate 34 % 34 % Income tax computed at the state statutory rate 5 % 5 % Valuation allowance (39 %) (39 %) Total deferred tax asset 0 % 0 % |
NOTE 8 - TRADING SECURITIES
NOTE 8 - TRADING SECURITIES | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities [Abstract] | |
NOTE 8 - TRADING SECURITIES | NOTE 8 - Trading Securities Marketable equity securities Cost Market value Unrealized Gain/(Loss) Paid, Inc. $ 13,200 $ 212 $ (12,987 ) Global Links Corp. $ 381 $ 0 $ (381 ) Fair market measurement at December 31, 2015 were computed using quoted prices in an active market for identified assets, (level 1). The shares were obtained as compensation for performing consulting services. An unrealized loss of $3,838, and a $480 unrealized gain are included in the Company Statements of Operations for the periods ended December 31, 2015. An unrealized loss of $10,355, an unrealized gain of $343 and a $5,404 realized gain are included in the Company Statements of Operations for the periods ended December 31, 2014. |
NOTE 9 - RELATED PARTY TRANSACT
NOTE 9 - RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
NOTE 9 - RELATED PARTY TRANSACTIONS | NOTE 9 - RELATED PARTY TRANSACTIONS The Company was formed on January 25, 2011 as a wholly-owned subsidiary of Worlds Inc. (formerly known as Worlds.com Inc.). On May 16, 2011 Worlds Inc. transferred to the Company the majority of its operations and related operational assets, except for its patent The assets transferred to the Company include: Worlds Inc.s technology platform, Worlds Ultimate Chat, Aerosmith World, DMC Worlds, Cinema Virtual, Pearson contracts and related revenue, the following 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. None of the transferred assets have any carrying value on the financial statements of the Company. Deferred revenue of $226,950 at December 31, 2015 and December 31, 2014 was transferred from Worlds, Inc. The due us The due to related parties for 2015 is comprised of cash received from related parties to pay for operating expenses and include advances made |
NOTE 10 - COMMITMENTS AND CONTI
NOTE 10 - COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 10 - COMMITMENTS AND CONTINGENCIES | NOTE 10 - COMMITMENTS AND CONTINGENCIES The Company is committed to an employment agreement with its President and CEO, Thom Kidrin. The agreement, dated as of August 30, 2012, is for five years with a one-year renewal option held by Mr. Kidrin. The agreement provides for a base salary of $175,000, which increases 10% on September 1 of each year; a monthly car allowance of $500; an annual bonus equal to 2.5% of Pre-Tax Income (as defined in the agreement); an additional bonus as follows: $75,000, if Pre-Tax Income for the year is between 150% and 200% of the prior fiscal years Pre-Tax Income or (B) $100,000, if Pre-Tax Income for the year is between 201% and 250% of the prior fiscal years Pre-Tax Income or (C) $200,000, if Pre-Tax Income for the year is 251% or greater than the prior fiscal years Pre-Tax Income, but in no event shall this additional bonus exceed five (5%) percent of Pre-Tax Income for such year; payment of up to $10,000 in life insurance premiums; options to purchase 4.5 million shares of Worlds Inc. common stock at an exercise price of $0.01 per share, of which one-third vested on August 30, 2012, one-third vest on August 30, 2013 and the balance vested on August 30, 2014; a death benefit of at least $2 million dollars; and a payment equal to 2.99 times his base amount (as defined in the agreement) in the event of a Change of Control (as defined in the agreement). The agreement also provides that Mr. Kidrin can be terminated for cause (as defined in the agreement) and that he is subject to restrictive covenants for 12 months after termination. The balance due Mr. Kidrin at December 31, 2015 and December 31, 2014 is $599,265 and $387,457 respectively, and are included in accrued expenses. |
NOTE 11- NON-CONTROLLING INTERE
NOTE 11- NON-CONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
NOTE 11-NON-CONTROLLING INTEREST | NOTE 11 - NON-CONTROLLING INTEREST Effective September 29, 2014, in connection with the acquisition of Sigal Consulting LLC., the Companys percentage of ownership in MariMed Advisors, Inc., its subsidiary, decreased from 100% to 51%. The acquisition resulted in an allocation of ownership interest valued at $(41,159) to the non-controlling shareholders. During December 31, 2015 year ended, $(635,569) net loss attributed to non-controlling interest. On December 31, 2015 the non-controlling interest is $526,977). During December 31, 2014 year ended, $201,750 net loss attributed to noncontrolling interest. On December 31, 2014 the noncontrolling interest is $(242,909). |
NOTE 12 - LOSS ON EXTINGUISHMEN
NOTE 12 - LOSS ON EXTINGUISHMENT OF DEBT | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTE 12 - LOSS ON EXTINGUISHMENT OF DEBT | NOTE 12 - LOSS ON EXTINGUISHMENT OF DEBT During the year ended December 31, 2014, the Company issued 129,688 shares of common stock with a $29,828 fair market value to pay off the accrued expense in amount of $10,750. The $19,078 difference between the fair market value of the common stock and the balance of accrued expense was booked as loss on extinguishment of debt. |
NOTE 13 - GOODWILL IMPAIRMENT L
NOTE 13 - GOODWILL IMPAIRMENT LOSS | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
NOTE 13 - GOODWILL IMPAIRMENT LOSS | NOTE 13 - GOODWILL IMPAIRMENT LOSS On May 19, 2014, Worlds Online Inc. (the Company) entered into a Membership Interest Purchase Agreement (the Agreement) between MariMed Advisors Inc. (MariMed), a wholly owned subsidiary of the Company, Sigal Consulting LLC (Sigal), a Massachusetts limited liability company, and the Members of Sigal (Sellers). The transaction closed on September 29, 2014. Pursuant to the Agreement, the Company acquired all of the interest in Sigal Consulting LLC through MariMed in consideration to Sellers for an aggregate amount of (i) the Companys common stock equal to 50% of the Companys outstanding common stock on the Closing Date; (ii) three million stock options of the Company to purchase the Companys common stock which are exercisable over five years with various exercise price and (iii) 49% of MariMeds outstanding common stock on the Closing Date. As a result, the Company indirectly owned 100% of Sigal Consulting LLC through its 51% ownership in MariMed. The purchase price consisted of 31,954,236 shares of our common stock, 3 million our |
NOTE 14 - SEGMENT REPORTING
NOTE 14 - SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
NOTE 14 - SEGMENT REPORTING | NOTE 14 SEGMENT REPORTING: The Company follows paragraph 280 of the FASB Accounting Standards Codification for disclosures about segment reporting. This statement requires companies to report information about operating segments in interim and annual financial statements. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company has two reportable operating segments as determined by management using the management approach as defined by the authoritative guidance on Disclosures about Segments of an Enterprise and Related Information Summarized in the following tables are net sales and operating revenues, depreciation and amortization expense, income from continuing operations before taxes, capital expenditures and assets for the Company's reportable segments as of and for the fiscal years ended December 31, 2015 and December 31, 2014: Fiscal Year Ended December 31, December 31, 2015 2014 Revenues: Worlds Online $ 798 $ 806 MariMed 1,326,003 87,578 Consolidated revenues $ 1,270,176 $ 88,384 Depreciation and amortization: Worlds Online $ $ MariMed 1,206,003 20,000 Depreciation and amortization $ 1,206,003 $ 20,000 Loss before taxes Worlds Online $ (600,378 ) $ (6,817,846 ) MariMed (1,246,525 ) (603,445 ) Loss before taxes $ (1,846,903 ) $ (7,421,291 ) Capital Expenditures: Worlds Online $ $ MariMed 3,048,776 2,666 Combined capital expenditures $ 3,048,776 $ 2,666 Assets: Worlds Online $ 40,935 $ 224,018 MariMed 3,676,798 1,428,281 Combined assets $ 3,717,733 $ 1,652,298 |
NOTE 15 - MATERIAL TRANSACTION
NOTE 15 - MATERIAL TRANSACTION | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 15 - MATERIAL TRANSACTION | NOTE 15 MATERIAL TRANSACTIONS Mia Development LLC (Mia) entered into a long term lease with First State Compassion Center. Mia is currently subleasing the building but has signed an Agreement of Sales with the owner. Upon First State Compassion Center securing licenses and permits for the growing and sale of medical marijuana in the state, Mia may purchase the building. If the tenant is unable to secure the appropriate licenses and permits, the Agreement of Sale to purchase the building will be null and void. In January of 2015, First State Compassion Center Inc. issued a promissory note to Mia in the amount of $1,100,000. The note During the |
NOTE 16 - NOTES PAYABLE
NOTE 16 - NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 16 - NOTES PAYABLE | NOTE 16 NOTES PAYABLE During the year ended December 31, 2015, MariMed borrowed $1,575,000 via promissory notes and repaid $375,000 before year end. The notes mature between July 15, 2015 and January 7, 2016 and carry a ten percent interest rate. Two of the notes were converted to Class A shares in the Mia in February of 2016. The remaining notes have reached maturity but are still outstanding and being paid interest at a rate of ten percent. |
NOTE 17 - SUBSEQUENT EVENT
NOTE 17 - SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
NOTE 17 - SUBSEQUENT EVENT | NOTE MariMed borrowed $950,000 during February and April of 2016. The promissory notes for these loans carry annual interest rates of 10% and 12% and one is payable on December 31, 2016 and the other is payable on May 1, 2018. The Company converted two During February of 2016 the Company issued a warrant to purchase 200,000 shares of common stock at a price of $0.10 per share. The warrant expires on February 18, 2019. |
NOTE 1 - DESCRIPTION OF BUSIN24
NOTE 1 - DESCRIPTION OF BUSINESS & SUMMARY OF ACCTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Description of Business | Description of Business We currently operate in two separate segments with one segment being a 3D entertainment portal which leverages its proprietary licensed technology to offer visitors a network of virtual, multi-user environments which we call "worlds" and the second segment being a management company in the medical cannabis industry. We were formed on January 25, 2011 as a wholly-owned subsidiary of Worlds Inc. (formerly known as Worlds.com Inc.). Effective May 16, The assets transferred to us include: Worlds Inc.s technology platform, Worlds Chat, Aerosmith World, DMC Worlds, Cinema Virtual, Pearson contracts and related revenue, the following 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. The transfer On May 19, 2014, Worlds Online Inc. (the Company) entered into a Membership Interest Purchase Agreement (the Agreement) between MariMed Advisors Inc. (MariMed), a wholly owned subsidiary of the Company, Sigal Consulting LLC (Sigal), a Massachusetts limited liability company, and the Members of Sigal (Sellers). The transaction closed on September 29, 2014. Pursuant to the Agreement, the Company, through MariMed, acquired all of the assets of Sigal and the Sellers received the aggregate amount of (i) the Companys common stock (WORX) equal to 50% of the Companys outstanding common stock on the Closing Date; (ii) three million options to purchase shares of the Companys common stock which are exercisable over five years with various exercise prices ranging from $0.15 to $0.35 and (iii) 49% of MariMeds outstanding common stock. As a result, the Companys ownership of MariMed was reduced from 100% to 51%. The transaction was accounted for as a purchase acquisition/merger wherein the Company is both accounting acquirer and legal acquirer. Accordingly, the company recorded the assets purchased and liabilities assumed as part of the merger and the portion that the fair value . |
Basis of Presentation | Basis of Presentation The accompanying financial our ability to grow our business |
Use of Estimates | 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. |
Trading Securities | Trading Securities Trading securities are common stock in publicly traded companies, one that was received as compensation for performing consulting services. The other was purchased as an investment. The carrying value of the investments is the market price of the shares at December 31, 2015 and December 31, 2014. Any unrealized gain or loss are recorded under other income/(expense) in the accompanying statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are comprised of highly liquid money market instruments, which have original maturities of three months or less at the time of purchase. |
Revenue Recognition | Revenue Recognition The Company has the following source of revenue: VIP subscriptions to our Worlds Ultimate 3-D Chat service and consulting and other revenues from MariMed. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectability is reasonable assured. This will usually be in the form of a receipt of a customers acceptance indicating the product has been completed to their satisfaction except for development work and service revenue which is recognized when the services have been performed. Deferred revenue represents cash payments received in advance to be recorded as revenue when earned. The corresponding cost associated with those contracts is also deferred as deferred costs until the revenue is ultimately recognized. |
Research and Development Costs | Research and Development Costs Research and development costs will be charged to operations as incurred. |
Intangible Asset - Websites | Intangible Asset - Websites The Company purchased several medical marijuana related websites in 2014. The cost of these websites are being amortized using the straight line method over a period of five years. The websites are currently generating a deal flow for us and we expect the future economic benefit of those websites to be at least 5 years. |
Property and Equipment | Property and Equipment Property and equipment will be stated at cost. Depreciation will be provided on a straight line basis over the estimated useful lives of the assets ranging from three to five 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 will be charged to expense in the period incurred. |
Impairment of Long Lived Assets | Impairment of Long 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 (ASC) 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. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB ASC for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB ASC (Paragraph 820-10-35-37) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in US GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amounts of the Companys financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments. |
Accounts Payable Related Party | Accounts Payable Related Party Accounts payable related party is comprised of cash payments made by Worlds Inc. on our behalf for shared operating expenses. |
Deferred Revenue | Deferred Revenue Deferred revenue represents advance payments for the license, the design and development of the software, content and related technology for the creation of an interactive, 3D entertainment portal on the internet. |
Extinguishment of liabilities | Extinguishment of liabilities The Company Extinguishments of |
Stock-Based Compensation | 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 ASC 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). |
Income Taxes | Income Taxes The Company accounts for income taxes under Section 740-10-30 of the FASB ASC (ASC 740). 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 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 |
Related Party Transactions | Related Party Transactions The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB ASC which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. |
Loss Per Share | 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 |
Commitments and Contingencies | Commitments and Contingencies The Company follows subtopic 450-20 of the FASB ASC 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 Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees |
Risk and Uncertainties | 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. The Company is also subject to risks arising from its medical marijuana related business inasmuch as marijuana is still a federally prohibited substance. |
Off Balance Sheet Arrangements | Off Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements. |
Uncertain Tax Positions | 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 years ended December 31, 2015 or 2014. |
Acquisition | Acquisition On September 29, 2014 our wholly-owned subsidiary, MariMed Advisors Inc. ("MariMed"), acquired all of the outstanding assets of Sigal Consulting LLC ("Sigal") from its members, The purchase price consisted of 31,954,236 shares of the Company's common stock, 3 million five-year options to purchase additional shares of our common stock at prices ranging from $0.15 - $0.35 per share and which vest over two years and 49% of MariMed's outstanding equity. The fair value of the common stock issued was $5,911,534 determined by the fair value of the Companys Common Stock on the closing date, at a price of approximately $0.185 per share. The fair value of the stock options was $569,682 measured using the Black-Scholes valuation model on the grant date, assuming approximately 1.56% risk-free interest, 0% dividend yield, 311% volatility, and expected life of five years. The fair value of common stock issued and options granted for acquisition over the book value of Sigal is recorded as goodwill, which was subsequently impaired in full. One of the owners of Sigal, Robert Fireman, is a director of the Company. |
Subsequent Events | Subsequent Events The Company evaluated for subsequent events through the issuance date of the Companys financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This amendment outlines 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. |
NOTE 6 - STOCK OPTIONS (Tables)
NOTE 6 - STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Warrants and Options | Stock options outstanding and exercisable as of December 31, 2015 are as follows: Exercise Price per Share Shares Under Option Remaining Life in Years Outstanding $ 0.08 450,000 3.00 $ 0.025 200,000 2.00 $ 0.025 500,000 1.97 $ 0.01 4,500,000 1.67 $ 0.13 600,000 4.50 $ 0.15 1,000,000 3.39 $ 0.25 1,000,000 3.39 $ 0.35 1,000,000 3.39 9,250,000 Exercisable $ 0.08 450,000 3.00 $ 0.025 200,000 2.00 $ 0.025 500,000 1.97 $ 0.01 4,500,000 1.67 $ 0.15 1,000,000 3.39 6,650,000 |
NOTE 7 - INCOME TAXES (Tables)
NOTE 7 - INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Company's total deferred tax | Deferred tax asset gross $ 1,326,000 Valuation allowance (1,326,000 ) Net deferred tax asset $ |
Reconciliation of income taxes | 2015 2014 Income tax computed at the federal statutory rate 34 % 34 % Income tax computed at the state statutory rate 5 % 5 % Valuation allowance (39 %) (39 %) Total deferred tax asset 0 % 0 % |
NOTE 8 - TRADING SECURITIES (Ta
NOTE 8 - TRADING SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities [Abstract] | |
Marketable equity securities | Marketable equity securities Cost Market value Unrealized Gain/(Loss) Paid, Inc. $ 13,200 $ 212 $ (12,987 ) Global Links Corp. $ 381 $ 0 $ (381 ) |
NOTE 14 - SEGMENT REPORTING (Ta
NOTE 14 - SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Operating segments | Fiscal Year Ended December 31, December 31, 2015 2014 Revenues: Worlds Online $ 798 $ 806 MariMed 1,326,003 87,578 Consolidated revenues $ 1,270,176 $ 88,384 Depreciation and amortization: Worlds Online $ $ MariMed 1,206,003 20,000 Depreciation and amortization $ 1,206,003 $ 20,000 Loss before taxes Worlds Online $ (600,378 ) $ (6,817,846 ) MariMed (1,246,525 ) (603,445 ) Loss before taxes $ (1,846,903 ) $ (7,421,291 ) Capital Expenditures: Worlds Online $ $ MariMed 3,048,776 2,666 Combined capital expenditures $ 3,048,776 $ 2,666 Assets: Worlds Online $ 40,935 $ 224,018 MariMed 3,676,798 1,428,281 Combined assets $ 3,717,733 $ 1,652,298 |
NOTE 6 - STOCK OPTIONS - Stock
NOTE 6 - STOCK OPTIONS - Stock option table (Details) | Dec. 31, 2015yr$ / sharesshares |
Outstanding (1) | |
Shares under options | shares | 450,000 |
Price per shares | $ / shares | $ 0.08 |
Remaining life in years | yr | 3 |
Outstanding (2) | |
Shares under options | shares | 200,000 |
Price per shares | $ / shares | $ 0.025 |
Remaining life in years | yr | 2 |
Outstanding (3) | |
Shares under options | shares | 500,000 |
Price per shares | $ / shares | $ 0.025 |
Remaining life in years | yr | 1.97 |
Outstanding (4) | |
Shares under options | shares | 4,500,000 |
Price per shares | $ / shares | $ 0.01 |
Remaining life in years | yr | 1.67 |
Outstanding (5) | |
Shares under options | shares | 600,000 |
Price per shares | $ / shares | $ 0.13 |
Remaining life in years | yr | 4.50 |
Outstanding (6) | |
Shares under options | shares | 1,000,000 |
Price per shares | $ / shares | $ 0.15 |
Remaining life in years | yr | 3.39 |
Outstanding (7) | |
Shares under options | shares | 1,000,000 |
Price per shares | $ / shares | $ 0.25 |
Remaining life in years | yr | 3.39 |
Outstanding (8) | |
Shares under options | shares | 1,000,000 |
Price per shares | $ / shares | $ 0.35 |
Remaining life in years | yr | 3.39 |
Exercisable (1) | |
Shares under options | shares | 450,000 |
Price per shares | $ / shares | $ 0.08 |
Remaining life in years | yr | 3 |
Exercisable (2) | |
Shares under options | shares | 200,000 |
Price per shares | $ / shares | $ 0.025 |
Remaining life in years | yr | 2 |
Exercisable (3) | |
Shares under options | shares | 500,000 |
Price per shares | $ / shares | $ 0.025 |
Remaining life in years | yr | 1.97 |
Exercisable (4) | |
Shares under options | shares | 4,500,000 |
Price per shares | $ / shares | $ 0.01 |
Remaining life in years | yr | 1.67 |
Exercisable (5) | |
Shares under options | shares | 1,000,000 |
Price per shares | $ / shares | $ 0.15 |
Remaining life in years | yr | 3.39 |
NOTE 7 - INCOME TAXES - Company
NOTE 7 - INCOME TAXES - Company's total deferred tax (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss | $ 1,326,000 |
Valuation allowance | (1,326,000) |
Net deferred tax asset |
NOTE 7 - INCOME TAXES - Reconci
NOTE 7 - INCOME TAXES - Reconciliation of income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Income tax computed at the federal statutory rate | 34.00% | 34.00% |
Income tax computed at the state statutory rate | 5.00% | 5.00% |
Valuation allowance | (0.39) | (0.39) |
Total deferred tax asset | $ 0 | $ 0 |
NOTE 8 - TRADING SECURITIES (De
NOTE 8 - TRADING SECURITIES (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Marketable Securities [Abstract] | |
Marketable equity securities - Cost, Paid, Inc. | $ 13,200 |
Marketable equity securities - Cost, Global Links Corp. | 381 |
Market value - Paid, Inc. | 212 |
Market value - Global Links Corp. | 0 |
Unrialized Gain/(Loss), Paid, Inc. | (12,987) |
Unrialized Gain/(Loss), Global Links Corp. | $ (381) |
NOTE 14 - SEGMENT REPORTING (De
NOTE 14 - SEGMENT REPORTING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | $ 1,270,176 | $ 88,384 |
Worlds Online | ||
Revenues | 798 | 806 |
Depreciation and amortization | ||
Loss before taxes | (600,378) | (6,817,846) |
Capital expenditures | ||
Assets | 40,935 | 224,018 |
MariMed | ||
Revenues | 1,326,003 | 87,578 |
Depreciation and amortization | 1,206,003 | 20,000 |
Loss before taxes | (1,246,525) | (603,445) |
Capital expenditures | 3,048,776 | 2,666 |
Assets | $ 3,676,798 | $ 1,428,281 |
NOTE 1 - DESCRIPTION OF BUSIN34
NOTE 1 - DESCRIPTION OF BUSINESS & SUMMARY OF ACCTING POLICIES (Details Narrative) | Sep. 29, 2014USD ($)$ / shares |
Notes to Financial Statements | |
Purchase price, shares | $ 31,954,236 |
Registrant's common stock at price per share (I) | 0.15 |
Registrant's common stock at price per share (II) | $ 0.35 |
Percentage of MariMed's outstanding equity | 49 |
Common stock fair value | $ | $ 5,911,534 |
Common stock fair value price per share | $ 0.185 |
Percentag of stock option fair value measured by the Black-Sholes valuation model | $ | $ 569,682 |
Risk free interest - percentage | 1.56 |
Dividend yield - percentage | 0.00% |
Volatility - percentage | 311 |
NOTE 3 - USE OF EQUITY AS COM35
NOTE 3 - USE OF EQUITY AS COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | ||
Aggregated shares issued | 166,210 | 129,688 |
Common stock issued for accrued expenses | $ 22,375 | $ 10,750 |
NOTE 4 - DEFERRED REVENUE (Deta
NOTE 4 - DEFERRED REVENUE (Details Narrative) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Revenue Disclosure [Abstract] | ||
Deferred Revenue | $ 226,950 | $ 226,950 |
NOTE 5 - PROPERTY AND EQUIPME37
NOTE 5 - PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Notes to Financial Statements | ||
Purchase of buidling improvements, land and equipment | $ 3,048,776 | |
Property and equipment | 84,140 | $ 2,666 |
Depreciation expense | $ 839,336 |
NOTE 6 - STOCK OPTIONS (Details
NOTE 6 - STOCK OPTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock option issued - total | 300,000 | 450,000 |
Additional options for CFO | 300,000 | |
Shares to be purchase upon option exercise - each director | 100,000 | 100,000 |
Shares to be purchase upon option exercise CFO | 300,000 | |
Price per share | 13.00% | 8.00% |
Equity compensation expense | $ 45,946 | $ 35,999 |
Risk-free interest - option and warrants | 163.00% | 152.00% |
Volatily | 17.50% | 37.50% |
Warrants issued | 55,000 | |
Warrants expense | $ 7,036 | |
Volatily | 27.10% |
NOTE 7 - INCOME TAXES (Details
NOTE 7 - INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net operating loss carry forward | $ 2,942,820 | |
Deferred tax asset consist of a net operating loss calculated using federal and state effective tax rates equating to | 1,326,000 | |
Valuation allowance increased by | $ 293,232 | $ 349,000 |
NOTE 8 - TRADING SECURITIES (40
NOTE 8 - TRADING SECURITIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Note 8 - Trading Securities Details Narrative | ||
Unrealized loss | $ 3,838 | $ 10,355 |
Unrealized gain | 480 | 343 |
Reallized gain | $ 5,404 |
NOTE 9 - RELATED PARTY TRANSA41
NOTE 9 - RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transactions [Abstract] | ||
Deferred revenue | $ 226,950 | $ 226,950 |
Receivables due | 39,380 | 9,426 |
Balance due from related parties | $ 125,902 | $ 1,930 |
NOTE 10 - COMMITMENTS AND CON42
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Details Narrative) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Aug. 30, 2012USD ($)$ / sharesshares |
Commitments and Contingencies Disclosure [Abstract] | |||
Base salary - president | $ 175,000 | ||
Annual increase rate | 0.10 | ||
Car allowance per month | $ 500 | ||
Anual bonus rate | 25.00% | ||
Additional bonus 1 | $ 75,000 | ||
Minimum Pre-Tax income increase rate | 15000.00% | ||
Maximum Pre-Tax income increase rate | 200 | ||
Additional bonus 2 | $ 100,000 | ||
Pre-Tax income increase rate - minimum | 201.00% | ||
Pre-Tax income increase rate - maximum | 250.00% | ||
Additional bonus 3 | $ 200,000 | ||
Pre-Tax income increase rate - minimum | 251.00% | ||
Additional bonus to pre-tax income - maximum | 5.00% | ||
Life insurance premiums | $ 10,000 | ||
Options granted | shares | 4,500,000 | ||
Options exercise price | $ / shares | $ 0.01 | ||
Death benefit | $ 2,000,000 | ||
Times of base amount upon change of control | 2.99 | ||
Salary balance due and included accrued expenses | $ 599,265 | $ 387,457 |
NOTE 11 - NON-CONTROLLING INTER
NOTE 11 - NON-CONTROLLING INTEREST (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 29, 2014USD ($) | |
Equity [Abstract] | |||
Percentage of ownership in MariMed Advisors, Inc.I | 0.100 | ||
Percentage of ownership in MariMed Advisors, Inc. II | 0.051 | ||
Allocation of ownership interest value | $ (41,159) | ||
Net loss - non-controlling interest | $ (635,569) | $ 201,750 | |
Interest Non-controlling | $ (526,977) | $ (242,909) |
NOTE 12 - LOSS ON EXTINGUISHM44
NOTE 12 - LOSS ON EXTINGUISHMENT OF DEBT (Details Narrative) | 12 Months Ended |
Dec. 31, 2014USD ($)shares | |
Debt Disclosure [Abstract] | |
Shares Issued | shares | 129,688 |
Fair Market Value | $ 29,828 |
Accrued Expense | 10,750 |
Difference between fair market value and accrued expense | $ 19,078 |
NOTE 13 - GOODWILL IMPAIRMENT45
NOTE 13 - GOODWILL IMPAIRMENT LOSS (Details Narrative) | Sep. 29, 2014USD ($)$ / sharesshares |
Accounting Policies [Abstract] | |
Company's common stock equals | 0.50 |
Exercise price | 0.49 |
Company indirectly own Sigal Consulting LLC | 1 |
MariMed ownership | 0.51 |
Ownership interest of Sigal | shares | 31,954,236 |
Registrant's common stock at price per share (I) | $ 0.15 |
Registrant's common stock at price per share (II) | $ 0.35 |
Percentage of MariMed's outstanding equity | 49 |
Common stock fair value | $ | $ 5,911,534 |
Common stock fair value price per share | $ 0.185 |
Percentage of stock option fair value measured by the Black-Sholes valuation model | $ | $ 569,682 |
Risk free interest - percentage | 1.56 |
Dividend yield - percentage | 0.00% |
Volatility - percentage | 311 |
NOTE 15 - MATERIAL TRANSACTION
NOTE 15 - MATERIAL TRANSACTION (Detail Narrative) | Dec. 31, 2015USD ($)shares | Jan. 02, 2015USD ($) |
Note 15 - Material Transaction Detail Narrative | ||
Promisory Note - First State Compassion Center, Inc. | $ 1,100,000 | |
Interest Rate | 12.5 | |
Note balance | $ 688,359 | |
Shares issued | shares | 1,695,000 |
NOTE 16 - NOTES PAYABLE (Detail
NOTE 16 - NOTES PAYABLE (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Notes to Financial Statements | |
Promissory notes | $ 1,575,000 |
Repayment of note | $ 375,000 |
Interest rate | 10.00% |
NOTE 17 - SUBSEQUENT EVENT (Det
NOTE 17 - SUBSEQUENT EVENT (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Subsequent Events [Abstract] | |
Promissory notes | $ 950,000 |