NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2021
and 2020
(Unaudited)
Note 1 – Organization and Basis
of Presentation,
Organization and Basis of Presentation
Worldwide Strategies Incorporated (“WWSG”
or the “Company”) was incorporated under the laws of the State of Nevada on April 6, 1998 and ceased operations in 2015. The
Company fully impaired all assets since the shutdown of its operations in 2015. On May 7, 2019, the eight judicial District Court of Nevada
appointed Small Cap Compliance, LLC (“Custodian”) as custodian for Worldwide Strategies Incorporated., proper notice having
been given to the officers and directors of Worldwide Strategies Incorporated with no opposition. On July 10, 2019, the Company filed
a Certificate of Reinstatement with the state of Nevada.
The accompanying financial statements
are prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”) and have been
prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues
sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company
is making efforts to raise additional funding until a registration statement relating to an equity funding facility is in effect. While
management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be
no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization
of the products it develops or initiates collaboration agreements thereon. The accompanying financial statements do not include any adjustments
to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities
that may result from the possible inability of the Company to continue as a going concern.
Note 2 – Summary of significant
accounting policies
Cash and Cash Equivalents
The Company doesn’t maintain any
bank accounts and does not have any cash in hand. For day-to-day business activities, the Company depends upon the directors’ personal
accounts. For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject
to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be
cash and cash equivalents.
Use of Estimates
The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
Loss per Common Share
Net loss per common share is computed
by dividing net loss by the weighted average number of common shares outstanding for the period. As a result, diluted loss per common
share is the same as basic loss per common share for the three months ended October 31, 2021 and 2020. Excluded from the weighted average
common shares outstanding amount is convertible preferred stock equivalent to 301,250,000 and convertible debt equivalent to 45,393,500
common shares as the effect of these on the computation of net loss per share would have been anti-dilutive.
Income Taxes
The Company accounts for income taxes
pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined
based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The
deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating
the differences.
The Company maintains a valuation allowance
with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the
deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period.
Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under
the Federal tax laws.
Changes in circumstances, such as the
Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change
in the valuation allowance will be included in income in the year of the change in estimate.
Fair Value of Financial Instruments
On August 1, 2012, the Company adopted
ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a three-level valuation hierarchy for
disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
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Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
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Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
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Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.
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The following tables represent our
assets and liabilities by level measured at fair value on a recurring basis at October 31, 2021 and July 31, 2021:
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
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Fair Value Measurements at October 31, 2021
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Level 1
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Level 2
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Level 3
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Description
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Convertible Debt
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$
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–
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$
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492,406
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$
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–
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Total Liabilities
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–
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492,406
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–
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Totals
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$
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–
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$
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492,406
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$
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–
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Fair Value Measurements at July 31, 2021
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Level 1
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Level 2
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Level 3
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Description
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Convertible Debt
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$
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–
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$
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492,406
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$
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–
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Total Liabilities
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–
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492,406
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–
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Totals
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$
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–
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$
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492,406
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$
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–
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Reclassifications
Certain reclassifications
have been made to the prior year presentation to conform to the current year presentation.
Recent Accounting Pronouncements
The Company reviewed all the recently
issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact
on the Company.
Note 3-
Going Concern
For the three months ended October
31, 2021 and 2020 we incurred net losses of approximately $26,000 and $12,000 respectively. As of October 31, 2021, we had no cash
on hand and current liabilities of $0.9
million. As of July 31, 2021, we had no cash on hand and
current liabilities of $0.9 million. These
losses combined with our current liabilities cast significant doubt on the company’s ability to operate under the going
concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future
and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations
when they come due. Management intends to finance operating costs over the next twelve months with loans from directors and/or
private placement of common stock. The failure to achieve the necessary levels of profitability or obtaining additional funding
would be detrimental to the Company.
Note 4 – Related party transactions
The Company’s CFO has
provided office space at no cost to the Company. Our CEO and CFO incurred expenses on behalf of the Company amounting to
approximately $14,000
during the three months ending October 31, 2021. As of October 31, 2021 total amounts due to our CEO and CFO are approximately
$28,000.
These amounts are due on December
31, 2022 and bear interest at eight percent per annum. These amounts are included within long term notes payable - related
party on the accompanying condensed balance sheet.
As of October 31, 2021 and July
31, 2021, the Company had a convertible promissory note in the principal outstanding balance of $40,000,
payable to a shareholder. Such note bears interest at nine
percent per annum with a maturity date of July 31, 2015. The principal and accrued interest is convertible, at the option of the
holder, into common shares at $.01 per share. This amount is included within convertible notes payable - related party on the
accompanying condensed balance sheet.
Note 5 – Convertible Notes
Payable
The Company has convertible promissory
notes that in the aggregate result in a principal outstanding balance of $160,750
as of October 31, 2021 and July 31, 2021, respectively. Interest on these notes range from nine
to ten percent per annum and such notes had maturity dates of July
31, 2015. The principal and accrued interest is convertible, at the option of the holder, into common shares at $.01 per share.
The Company has convertible
promissory notes that in the aggregate result in a principal outstanding balance of $157,945 as
of October 31, 2021 and July 31, 2021, respectively. Interest on these notes range from eight to ten percent per annum and such
notes had maturity dates of July
31, 2015. The principal and accrued interest is convertible, at the option of the holder, into common shares at $.04 per
share.
The Company has convertible promissory
notes that in the aggregate result in a principal outstanding balance of $50,000 as of October 31, 2021 and July 31, 2021, respectively.
Interest on these notes are 8% per annum and such notes had maturity date of March 31, 2015. The principal and accrued interest is convertible,
at the option of the holder, into non-restricted common stock in an amount equal to the total sum due, based on a mutually agreed discount
(not to exceed 50%) to the then market price.
The Company has convertible promissory
notes that in the aggregate result in a principal outstanding balance of $44,711 as of October 31, 2021 and July 31, 2021, respectively.
Interest on these notes are 10% per annum and such notes had maturity dates ranging from July 31, 2015 to December 31, 2015. The principal
and accrued interest is convertible, at the option of the holder, into common shares at $.07 per share.
The Company has convertible promissory
notes that in the aggregate result in a principal outstanding balance of $39,000 as of October 31, 2021 and July 31, 2021, respectively.
Interest on these notes are 10% per annum and such notes had maturity dates ranging from July 31, 2015 to December 31, 2015. The principal
and accrued interest is convertible, at the option of the holder, into common shares at $.10 per share.
Accrued interest on such notes total
$388,129 and $375,504 as of October 31, 2021 and July 31, 2021, respectively and are included within accrued liabilities on the accompanying
balance sheet. Based on the maturity dates of the promissory notes, all promissory notes are in default.
Note 6 – Shareholders’
Equity
Preferred stock
The Company has two classes of preferred
stock and is authorized to issue 25,000,000 shares of $.001 par value preferred stock. The Company's Board of Directors may divide and
issue the preferred shares in series. Each Series, when issued, shall be designated to distinguish them from the shares of all other series.
The relative rights and preferences of these series include preference of dividends, redemption terms and conditions, amount payable upon
shares of voluntary or involuntary liquidation, terms and condition of conversion as well as voting powers.
Series A Preferred Stock
The Company is authorized to issue 5,000,000
shares of Convertible Series A Preferred Stock at a par value of $0.001. Each share of Series A Preferred Stock is convertible into 6.25
shares of common stock at the election of the holder. Each Series A share is entitled to 6.25 votes in any vote of the common stock holders.
Series A shares are redeemable by the Company at $.50 per share with 15 days written notice. Series A shares are entitled to a 5% dividend
preference and a participation interest in the remaining 95% dividend.
Series B Preferred Stock
The Company is authorized to issue 5,000,000
shares of Convertible Series B Preferred Stock at a par value of $0.001. Each share of Series B Preferred Stock is convertible into 1,000
shares of common stock at the election of the holder.
Common stock
As of October 31, 2021 and July 31,
2021, the Company was authorized to issue 975,000,000 shares of common stock respectively. Total shares outstanding at October 31, 2021
and July 31, 2021 were 19,830,679, respectively.
Note 7 - Income taxes
The Company accounts for income taxes
under FASB ASC Topic 740, which requires use of the liability method. FASB ASC Topic 740 provides that deferred tax assets and liabilities
are recorded based on the differences the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes,
referred to as temporary differences. As of October 31, 2021, the Company incurred a net operating loss and, accordingly, no provision
for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization
of any tax assets.
Based on the available objective evidence,
including the Company's history of losses, management believes it is more likely than not, the net deferred tax assets will not be fully
realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at October 31, 2021 and
July 31, 2021. The Company had no uncertain tax positions as of October 31, 2021 and July 31, 2021.
Note 8 – Acquisition
On May 29, 2021, the Company entered into a binding letter
of intent (the “LOI”) with Fitwell Limited a company organized under the laws of the United Kingdom (“Fitwell”)
to acquire Fitwell and its fitness and nutrition app, that same letter of intent expired, pursuant to the terms therein on July 29, 2021.
Subsequent thereto, on September 24, 2021, the Company
entered into a contingent Stock Purchase Agreement (the “Agreement”) with Fitwell pursuant to which we have agreed to acquire
one hundred percent of issued and outstanding shares of Fitwell for a purchase price of $1,000,000 payable in cash and our common stock.
Worldwide Strategies will pay an aggregate cash purchase price of $500,000 and will issue shares of the Registrant’s common stock
valued at $500,000 with the price per share being the price that we price our shares for sale in our planned Regulation A+ offering (“the
Offering”), notwithstanding, the price of the offering, the price per share of the shares to be issued to Fitwell shall not exceed
a per share price of $0.40. The acquisition is contingent on our conducting a Regulation A+ offering, wherein we raise a minimum of $2,000,000
(the “Offering”).
The Fitwell shareholders will
receive the cash component of our purchase price from the proceeds of our Offering and the shares to be issued shall be issued
subsequent to the closing of the Offering. In connection with the Buyer’s acquisition of the Business, the Buyer and the
Seller will enter into customary transition services and other ancillary arrangements. The Agreement also contains
representations, warranties, covenants, indemnification obligations and closing conditions which are customary for transactions of
this nature.
The Buyer and the Seller have the
right to terminate the Agreement prior to the closing under certain circumstances, including, without limitation: (i) by mutual
written consent; (ii) by either the Buyer or the Seller if the closing has not occurred on or before the date that is 90 days
following the qualification of the Registrant’s offering by the Securities and Exchange Commission; (iii) by the Seller
if the Offering does not raise a minimum of $2,000,000 in proceeds or (iv) by either the Buyer or the Seller if a material
breach occurs and is not cured within the required amount of time.