UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
| x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2014
or
| 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 number333-196583
Worlds Mall, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 35-2508740 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 5841 East Charleston Blvd. #230, Las Vegas, NV | 89123 | |
| (Address of principal executive offices) | (Zip Code) |
(208) 371 8802
Registrant’s telephone number, including area code
| Securities registered pursuant to Section 12(b) of the Exchange Act: | ||
| Title of each class: | Name of each exchange on which registered: | |
| None | None | |
| Securities registered pursuant to Section 12(g) of the Exchange Act: None | ||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yeso Nox
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o Nox
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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. Yesx Noo
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x Noo
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an 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 | x |
| (Do not check if a smaller reporting company) | |||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YesxNoo
State the aggregate market value of the voting and non-voting common equity held by non-affiliates: none.
As of March 31, 2015, the number of shares of common stock of the registrant outstanding is 21,900,000, par value $0.001 per share.
| 1 |
TABLE OF CONTENTS
| 2 |
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
PART I
Overview
Worlds Mall, Inc. (the “Company”) was incorporated on March 10, 2011 under the laws of the State of Nevada. The Company plans to develop an e-commerce website that will connect retail stores with customers around the world. The Company was formed to develop an e-commerce website that will connect retail stores with customers around the world. We believe that companies tend to market their e-commerce websites within the country or region that they are from and only to customers that speak the language of their country. Our goal is to globalize the retail market by eliminating language barriers along and providing better exposure to such companies. Worlds Mall wants to be a portal for retail sellers to connect to the world.
| 3 |
We are a development stage company, and to date, we have limited operating history for investors to evaluate the potential of our business development. As such, we have not built our customer base or our brand name. In addition, our sources of cash are only adequate to maintain operations for the next 18 months. If we are unable to raise additional cash, we will either have to suspend or cease our expansion plans entirely.
Our Business
Worlds Mall Inc. is a new company that has no revenue. The Company has no track record and may never have any revenues. An investment in Worlds Mall Inc. should be considered extremely risky as an investor could lose all of their investment if the Company fails to meet their goals and projections.
We plan on designing and building a virtual 3D website that will allow customers to navigate through a virtual mall of a country of their choice. For instance, if a customer in the United States chooses to visit a mall in Italy they will click on or do a search for Italy which will take them to a virtual mall that will display stores based in Italy. The site will translate the language based on the customer’s country of origin. We will help the smaller retailers with e-commerce sites reach a much larger customer base.
We plan to purchase a license to use language translation software from a software company that has already developed it and that is ready to use. Many companies offer translation software at an annual cost of $5,000 per language. Technical support by the development company is included in the price. We plan to initially translate nine different languages (English, French, Spanish, Italian, Mandarin, Cantonese, Hindi, German and Japanese).
We plan to create a website that a customer will navigate a virtual person through a 3D mall. This type of technology has already been used by many gaming companies for use in 3D video games. Therefore, the Company will not have to pay to have a programmer invent this technology as it already exists and is used in many different applications by many companies. We plan to purchase a license to use 3D gaming software from a gaming software company that has already been developed and in use. The cost to license this software on an annual basis is $$65,000. Technical support by the development company is included in the price.
Worlds Mall's website will be designed to be user friendly to a person who speaks any of the nine languages that the company will translate. Each store that advertises on our website will be responsible for the e-commerce transaction and shipping the product(s) between them and their customer. Worlds Mall Inc. will only charge retailers a small monthly fee of US$29.00 to have a link on their site but estimates that it will generate the majority of its revenue from 'pay per click' advertising.
Competition
When running 'Google' searches for phrases such as “e-commerce language translation websites”, “retail language translation websites”, “shopping on e-commerce websites”, “shopping on e-commerce websites in Italy”, etc., we are only able to find a handful of retail stores that provide an e-commerce website of their own offering language translation. Similar services are available on the website of larger stores, which typically have a large marketing budget. We plan to focus on attracting smaller retailers that would not normally market their website to the rest of the world in different languages.
Marketing Strategy
We plan to market our retail e-commerce website (www.shopworldsmall.com) on most search engines. We plan to use “pay per click” on search engines initially until its website can get a good ranking generically. We also plan to use “pay per click” advertising on other websites that we feels will reach the appropriate customers.
We plan to search for and contact retailers to advertise on our website. We plan to use many means to acquire customers such as doing web searches and visiting retailers in person. We will initially offer retailers to advertise their company on its website free of charge so that they can establish a base of retailers on our site. We believe that this will make our website appear more viable to retailers that might be willing to pay to advertise in the future.
On May 4, 2012, we purchased the www.shopworldsmall.com through godaddy.com for a term of nine years for $119.
Government Regulation
We do not expect any governmental regulations to have an impact on any of our planned business operations.
| 4 |
We are aware of and will be responsible for its corporate taxes, payroll taxes, SEC filings, and business licenses.
New laws or regulations may impact our ability to market our website in the future. However, we are not aware of any pending laws or regulations that would presently have an impact on our business.
Employees
We currently have 2 part-time employees, consisting of our President and Treasurer, Thomas Wikstrom, and our Secretary, Horst Helmrich.
Smaller reporting companies are not required to provide the information required by this item.
Item 1B. Unresolved Staff Comments
Smaller reporting companies are not required to provide the information required by this item.
Our principal executive office is located at 5841 East Charleston Blvd. #230 Las Vegas, NV 89123, and our telephone number is (208) 371 8802. The President and Treasurer, (Thomas Wikstrom) operates out of his home office. As of March 31, 2015, the Company leased its corporate mailing address for an annual fee of $441.
To the best of our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject. From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
Item 4. Mine Safety Disclosures.
Not Applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
There is presently no public market for our shares of common stock. We have engaged with certain market maker and are applying for quotation of our common stock on the OTC Bulletin Board (“OTCBB”). However, we can provide no assurance that our shares of common stock will be quoted on the OTCBB or, if quoted, that a public market will materialize.
Holders of Capital Stock
As of the date of this annual report, we had 40 holders of our common stock.
Rule 144 Shares
As of the date of this annual report, we do not have any shares of our common stock that are currently available for sale to the public in accordance with the volume and trading limitations of Rule 144.
Stock Option Grants
We do not have a stock option plan in place and have not granted any stock options at this time.
| 5 |
Dividends
To date, we have not declared or paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors has the discretion to declare and pay dividends in the future.
Payment of dividends in the future will depend upon our earnings, capital requirements, and any other factors that our Board of Directors deems relevant.
Recent Sales of Unregistered Securities
None.
Item 6. Selected Financial Data.
Smaller reporting companies are not required to provide the information required by this item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
You should read the following discussion together with our financial statements and the related notes included elsewhere in this annual report on Form 10-K.. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements.
Business Overview
Worlds Mall, Inc. (the “Company”) was incorporated on March 10, 2011 under the laws of the State of Nevada. The Company plans to develop an e-commerce website that will connect retail stores with customers around the world. The Company was formed to develop an e-commerce website that will connect retail stores with customers around the world. We believe that companies tend to market their e-commerce websites within the country or region that they are from and only to customers that speak the language of their country. Our goal is to globalize the retail market by eliminating language barriers along and providing better exposure to such companies. Worlds Mall wants to be a portal for retail sellers to connect to the world.
We are a development stage company, and to date, we have limited operating history for investors to evaluate the potential of our business development. As such, we have not built our customer base or our brand name. In addition, our sources of cash are only adequate to maintain operations for the next 18 months. If we are unable to raise additional cash, we will either have to suspend or cease our expansion plans entirely.
Plan of Operations
Our budget for the 12 months following a sufficient raise in capital is $517,000, including $125,000 for website creation and $1,200 for website hosting. We anticipate completing our website in four to five months with sufficient capital. We have not yet determined when we will begin to generate revenues.
The current budget for the 12 months following a sufficient raise in capital is $517,000. Over the twelve month period starting upon the effective date of this registration statement, we must raise $474,000 in additional capital for site development, server management, one new programmer and marketing. Our estimated expenses consist of the following:
| · | Expected lease of 1,500 sq. ft. of office space: $18,000 ($1,500 monthly) |
| · | Phone bill including long distance calling: $4,800 ($400 per month) |
| · | Website creation: $125,000 |
| · | Web hosting: $1,200 |
| · | Bookkeeping/Accounting: $15,000 |
| · | Marketing: $80,000 |
| 6 |
| · | Computers/printers/furniture etc: $10,000 |
| · | Travel expenses: $60,000 |
| · | Employee payroll: $65,000 |
| · | Attorney fees: $20,000 |
| · | Electronic filing fees: $3,000 |
| · | Miscellaneous fees: $5,000 |
| · | Licensing of 3D gaming software: $65,000 (annually) |
| · | Language translation software: $45,000 (annually for the translation of 9 languages) |
Based on our financial history since inception, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern. Our independent registered public accounting firm raised the issue that the Company had a deficit accumulated during the development stage at December 31, 2014 and a net loss and net cash used in operating activities for the reporting period then ended.
Results of Operations – Fiscal Year ended December 31, 2014 and 2013
No revenue has been generated by the Company for the fiscal years ended December 31, 2014 and 2013. The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company has a minimum cash balance available for payment of ongoing operating expenses, has experienced losses from operations, and it does not have a source of revenue. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.
Our operating expenses for the year ended December 31, 2014 were $27,251 compared to operating expenses of $6,464 for the year ended December 31, 2013. The increase is primarily attributed to the increase of professional fees in 2014.
The Company’s net loss for the year ended December 31, 2014 was $27,251 compared to $6,464 for the year ended December 31, 2013.
Liquidity and Capital Resources
As of December 31, 2014, the net cash used for operating activities was $23,837; the net cash provided by financing activities was $11,846, resulting in a total cash balance of $34,129 as of December 31, 2014.
The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the fiscal year ended December 31, 2014:
| For the fiscal year ended December 31, 2014 | ||||
| Net Cash (Used in) Operating Activities | $ | (23,837 | ) | |
| Net Cash Provided by Investing Activities | - | |||
| Net Cash Provided by Financing Activities | 11,846 | |||
| Net Decrease in Cash and Cash Equivalents | $ | (11,991 | ) | |
The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.
| 7 |
Going Concern
Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the financial statements, we had an accumulated deficit at December 31, 2014, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about our ability to continue as a going concern.
We are attempting to commence operations and generate sufficient revenue; however, our cash position may not be sufficient to support its daily operations. While we believe in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of our company to continue as a going concern is dependent upon our ability to further implement our business plan and generate sufficient revenue and in our ability to raise additional funds.
Significant and Critical Accounting Policies and Practices
While our significant accounting policies are more fully described in Note 2 to our financial statements for the reporting period ended December 31, 2014, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.
Recent Accounting Pronouncements
Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Contractual Obligations
We do not have any contractual obligations at this time.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Smaller reporting companies are not required to provide the information required by this item.
| 8 |
Item 8. Financial Statements and Supplementary Data
Worlds Mall, Inc.
December 31, 2014 and 2013
Index to the Financial Statements
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Worlds Mall Inc.
We have audited the accompanying balance sheets of Worlds Mall Inc. (the “Company”) as of December 31, 2014 and 2013, and the related statements of operations, stockholders' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had an accumulated deficit at December 31, 2014, net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/Li and Company, PC
Li and Company, PC
Skillman, New Jersey
March 31, 2015
| F-2 |
| See accompanying notes to the financial statements. |
| F-3 |
| See accompanying notes to the financial statements. |
| F-4 |
| See accompanying notes to the financial statements. |
| F-5 |
| See accompanying notes to the financial statements. |
| F-6 |
December 31, 2014 and 2013
Notes to the Financial Statements
Note 1 - Organization and Operations
Worlds Mall Inc.
Worlds Mall Inc. (the “Company”) was incorporated on March 10, 2011 under the laws of the State of Nevada. The Company plans to develop an e-commerce website that will connect retail stores with customers around the world.
Note 2 - Significant and Critical Accounting Policies and Practices
The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).
Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:
| (i) | Assumption as a going concern:Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business; |
| (ii) | Valuation allowance for deferred tax assets:Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, (d) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors. |
These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
| F-7 |
Development Stage Company
The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. The Company is devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities.
The Company has elected to adopt early application of Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. Upon adoption, the Company no longer presents or discloses inception-to-date information and other remaining disclosure requirements of Topic 915.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“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 generally accepted accounting principles (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 (3) 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 (3) 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. |
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
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. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses approximate their fair value because of the short maturity of this instrument.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Related Parties
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification 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 (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); 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 825–10–15, 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.
| F-8 |
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Commitment and Contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Revenue Recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Deferred Tax Assets and Income Tax Provision
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
| F-9 |
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
Tax years that remain subject to examination by major tax jurisdictions
The Company disclosestax years that remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15.
Earnings per Share
Earnings per share ("EPS") is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.
There were no potentially dilutive common shares outstanding for the reporting period ended December 31, 2014 or 2013.
Cash Flows Reporting
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
Subsequent Events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
Recently Issued Accounting Pronouncements
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.
| F-10 |
The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.
The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations.
Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities that it is currently engaged in and (2) the entity’s governing documents and contractual arrangements allow additional equity investments.
The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage.
The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.
Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915.
In August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15 “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern(“ASU 2014-15”).
In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that thefinancial statements are issued(or within one year after the date that thefinancial statements are available to be issuedwhen applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that thefinancial statements are issued(or at the date that thefinancial statements are available to be issuedwhen applicable). Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The termprobableis used consistently with its use in Topic 450, Contingencies.
When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is probable that the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.
If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):
| a. | Principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans) |
| b. | Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations |
| c. | Management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern. |
| F-11 |
If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there issubstantial doubt about the entity’s ability to continue as a going concernwithin one year after the date that the financial statements are issued (or available to be issued). Additionally, the entity should disclose information that enables users of the financial statements to understand all of the following:
| a. | Principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern |
| b. | Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations |
| c. | Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. |
The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements.
Note 3 – Going Concern
The Company has elected to adopt early application of Accounting Standards Update No. 2014-15,“Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).
The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the financial statements, the Company had an accumulated deficit at December 31, 2014, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds.
The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 4 – Stockholders’ Equity (Deficit)
Shares Authorized
Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is One Billion (1,000,000,000) shares of which Five Hundred Million (500,000,000) shares shall be Preferred Stock, par value $0.001 per share, and Five Hundred Million (500,000,000) shares shall be Common Stock, par value $0.001 per share.
Common Stock
For the period from January 11, 2013 through November 11, 2013, the Company sold 3,900,000 shares of common stock at $0.01 per share to 39 individuals, or $39,000, $38,000 was received in cash and $1,000 was received as a stock subscription receivable which was collected on January 17, 2014. The Company presented the stock subscription receivable of $1,000 as a current assets as the receivable was paid in cash prior to the publication of the financial statements and the payment date is stated herewith in the note to the financial statements.
| F-12 |
Capital Contribution
During the year ended December 31, 2013, a significant stockholder of the Company contributed $13,000 to the Company which was recorded as additional paid-in capital.
During the year ended December 31, 2014, a significant stockholder of the Company contributed $10,000 to the Company which was recorded as additional paid-in capital.
Note 5 – Related Party Transactions
Free Office Space
The Company has been provided office space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statement.
Note 6 – Deferred Tax Assets and Income Tax Provision
Deferred Tax Assets
At December 31, 2014, the Company had net operating loss (“NOL”) carry–forwards for Federal income tax purposes of $51,779 that may be offset against future taxable income through 2034. No tax benefit has been reported with respect to these net operating loss carry-forwards because the Company believes that the realization of the Company’s net deferred tax assets of approximately $17,605 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance.
Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding the probability of its realization. The valuation allowance increased approximately $9,265 and $2,198 for the reporting period ended December 31, 2014 and 2013, respectively.
Components of deferred tax assets in the consolidated balance sheets are as follows:
| December 31, 2014 | December 31, 2013 | |||||||
| Net deferred tax assets – non-current: | ||||||||
| Expected income tax benefit from NOL carry-forwards | $ | 17,605 | $ | 8,340 | ||||
| Less valuation allowance | (17,605 | ) | (8,340 | ) | ||||
| Deferred tax assets, net of valuation allowance | $ | - | $ | - | ||||
Income Tax Provision in the Consolidated Statements of Operations
A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income tax provision is as follows:
| For the year ended December 31, 2014 | For the year ended December 31, 2013 | |||||||
| Federal statutory income tax rate | 34.0 | % | 34.0 | % | ||||
| Change in valuation allowance on net operating loss carry-forwards | (34.0 | ) | (34.0 | ) | ||||
| Effective income tax rate | 0.0 | % | 0.0 | % | ||||
| F-13 |
Tax years that remain subject to examination by major tax jurisdictions
The Company's corporation income tax returns are subject to audit under the statute of limitations by the Internal Revenue Service and the State of Nevada for a period of three (3) years from the date they are filed. The Company has not filed its corporation income tax returns since its inception. All of its tax years remain subject to examination upon filing.
Note 7 – Subsequent Events
The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no reportable subsequent event(s) to be disclosed.
| F-14 |
Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure.
There have been no changes in or disagreements with accountants on accounting or financial disclosure matters.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer (the Company's principal executive officer and interim principal accounting officer), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company's Chief Executive Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company's management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2014. The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, Based on that evaluation, our management concluded that our internal control over financial reporting was not effective, as of December 31, 2014. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that amounted to material weaknesses.
The matters involving internal control over financial reporting that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives of having segregation of the initiation of transactions, the recording of transactions and the custody of assets; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer and Chief Financial Officer in connection with the review of our financial statements as of December 31, 2014.
To address the material weaknesses set forth in items (2) and (3) discussed above, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.
Management's Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate, the following series of measures:
We plan to increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. First, we plan to create a position to segregate duties consistent with control objectives of having separate individuals perform (i) the initiation of transactions, (ii) the recording of transactions and (iii) the custody of assets. Second, we will create a senior position to focus on financial reporting and standardizing and documenting our accounting procedures with the goal of increasing the effectiveness of the internal controls in preventing and detecting misstatements of accounting information. Third, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.
| 9 |
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. We did not implement the said remedial measures in 2014. We anticipate that these remedial measures will be implemented when our financial conditions permit.
Changes in Internal Controls over financial reporting
No change in our internal control over financial reporting occurred during the fourth fiscal quarter of the year ended December 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth the name and age of officers and director as of the date of our registration statement, of which this prospectus is a part. Our executive officers are elected annually by our Board of Directors (which currently consists solely of Thomas Wikstrom). Our executive officers hold their offices until they resign, are removed by the Board, or his successor is elected and qualified.
| Name | Age | Position | ||
| Thomas Wikstrom | 67 | President, Treasurer and Director | ||
| Horst Helmrich | 46 | Secretary |
Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.
Thomas Wikstrom, President, Treasurer and Director
Thomas Wikstrom is the founder of Worlds Mall, Inc., and has served as the Company’s President, Treasurer and Director since inception. Mr. Wikstrom also holds a number of other officers in Luxembourg. He has served as the President of F&B Europe Invest from 2005 to present day, as President of Simachev Group from 2004 to present day, and as President of Inglenook Consulting from 1994 through Present Day. Prior to that, from 1991 to 1994 he served as the Financial director of PC Power Ltd, in Luxembourg. Mr. Wikstrom received his Bachelor of Arts from the University of Oregon in 1971 and is fluent in Finnish, Swedish, English, German and French.
Mr. Wikstrom is qualified to serve on our Board of Directors because of his executive and consulting experience around the world.
Horst Helmrich, Secretary
Mr. Helmrich is 46 years old and is a German citizen. Mr. Helmrich obtained a bachelor of economics degree from Leipzig University in Saxony, Germany. He has been with Siemens AG of Germany for fifteen years and is presently working in production in their energy division in the assembly of six megawatt wind turbines. He was formerly working in their automation and industrial plant-related products division. Mr. Helmrich previously owned and operated a retail clothing store in Berlin, Germany with his wife.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Family Relationships
There are no family relationships between any of our directors or executive officers.
| 10 |
Certain Legal Proceedings
To our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years.
Code of Ethics
The company has not adopted a Code of Ethics applicable to its Principal Executive Officer and Principal Financial Officer.
Item 11. Executive Compensation
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us:
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Totals ($) | |||||||||||||||||||||||||||
| Thomas Wikstrom, President, Treasurer & Director | 2014 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||
| 2013 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | |||||||||||||||||||||||||
| Horst Helmrich, Secretary & Director | 2014 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||
| 2013 | $ | 0 | 0 | 0 | 0 | 0 | 0 | $ | 0 | $ | 0 | |||||||||||||||||||||||||
Option Grants
There are no stock option plans or common shares set aside for any stock option plan.
Long-Term Incentive Plan (“LTIP”) Awards Table
There were no awards made to a named executive officers in the last completed fiscal year under any LTIP
Compensation of Directors
Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors (which currently consists solely of Thomas Wikstrom) has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.
Employment Agreements
Currently, we do not have an employment agreement in place with our officers and directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of our ordinary shares, the sole outstanding class of our voting securities, by (i) each stockholder known to be the beneficial owner of 5% or more of the outstanding ordinary shares of the Company, (ii) each executive officer and director, and (iii) all executive officers and directors as a group.Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. ordinary shares subject to options, warrants or convertible securities exercisable or convertible within 60 days as of the date hereof are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person and is based on shares issued and outstanding as of March 31, 2015.
| 11 |
The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of the date of our registration statement, of which this prospectus is a part, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly and the shareholders listed possesses sole voting and investment power with respect to the shares shown.
| Name | Number of Shares Beneficially Owned(1) | Percent of Class (1) | ||||||
| Thomas Wikstrom, President, Chief Executive Officer, Chief Financial Offcier,Treasurer and Director | 18,000,000 | 82.19 | % | |||||
| Horst Helmrich, Secretary | 0 | 0 | ||||||
| All Executive Officers and Directors as a group (2 persons) | 18,000,000 | 82.19 | % | |||||
| 5% Shareholder: None | ||||||||
| (1) | Applicable percentages are based on 21,900,000 shares outstanding, adjusted as required by rules of the SEC. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, Worlds Mall believes that each of the shareholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Certain Related Party Transactions
There have been no material transactions, series of similar transactions or currently proposed transactions during 2014 and 2013 in which we were or are to be a party, in which the amount involved exceeded the lesser of $120,000 or 1% of the average of our total assets at year end for the last two completed fiscal years and in which any director or executive officer or any security holder who is known to us to own of record or beneficially more than 5% of our common stock, or any member of the immediate family or sharing the household (other than a tenant or employee) of any of the foregoing persons, had a direct or indirect material interest.
During the fiscal year ended December 31, 2013, Thomas Wikstrom, an officer and Director of the Company, contributed $13,000 to the Company which was recorded as additional paid-in capital. There was no written agreement between the Company and Mr. Wikstrom.
The Company has been provided office space by Thomas Wikstrom, an officer and Director of the Company, at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statement.
Indebtedness of Management
No officer, director or security holder known to us to own of record or beneficially more than 5% of our common stock or any member of the immediate family or sharing the household (other than a tenant or employee) of any of the foregoing persons is indebted to us.
Transactions with Promoters
We did not expressly engage a promoter at the time of its formation. Due to Mr. Wikstrom’s initiative in founding and organizing the business of the Company, he may be deemed to be a promoter under Securities Act Rule 405.
Independence of the Board of Directors
Although our common stock is not listed on a public exchange, we have engaged with certain market maker and are applying to obtain a quotation on the OTCBB concurrently with the filing of this prospectus. In order to be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock. At this time, there can be no assurance that such an application for quotation will be approved.
For a director to be “independent” under these standards, the Board must affirmatively determine that the director has no material relationship with us, either directly or as a partner, shareholder, or officer of an organization that has a relationship with us. Applying corporate governance standards, and all other applicable laws, rules and regulations, the Board of Directors has determined that none of our directors are independent. This does not constitute an independent board of directors.
| 12 |
Item 14. Principal Accountant Fees and Services
Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-K or 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings was $9,375 and $2,500 for the fiscal year ended December 31, 2014 and 2013, respectively.
Audit Related Fees
There were no fees for audit related services for the years ended December 31, 2014 and 2013.
Tax Fees
For the Company’s fiscal years ended December 31, 2014 and 2013, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2014 and 2013.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:
- approved by our audit committee; or
- entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
We do not have an audit committee. Our entire board of directors pre-approves all services provided by our independent auditors.
The pre-approval process has just been implemented in response to the new rules. Therefore, our board of directors does not have records of what percentage of the above fees were pre-approved. However, all of the above services and fees were reviewed and approved by the entire board of directors either before or after the respective services were rendered.
| 13 |
PART IV
Item 15. Exhibits, Financial Statement Schedules.
a) Documents filed as part of this Annual Report
1. Consolidated Financial Statements
2. Financial Statement Schedules
3. Exhibits
| Exhibits # | Title | |
| 3.1 | Articles of Incorporation (1) | |
| 3.2 | Certificate of Correction (1) | |
| 3.3 | By-Laws (1) | |
| 31.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| (1) | Incorporated by reference to the Company’s registration statement on Form S-1 filed with the SEC on June 6, 2014. |
* Filed herewith.
| 14 |
Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Worlds Mall, Inc. | ||
| March 31, 2015 | By: | /s/Thomas Wikstrom, |
| Thomas Wikstrom, | ||
President, Chief Executive Officer, Chief Financial Officer and Director (Principal Executive Officer and Principal Accounting Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/Thomas Wikstrom, | President, Chief Executive Officer, | March 31, 2015 | ||
| Thomas Wikstrom, | Chief Financial Officer and Director | |||
| (Principal Executive Officer and Principal Accounting Officer) |
| Signature | Title | Date | ||
| /s/Horst Helmrich | Secretary | March 31, 2015 | ||
| Horst Helmrich | ||||
| 15 |
