Forward Looking Statements

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

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. These factors include, but are not limited to, changes that may occur to general economic and business conditions resulting from changes in political, social and economic conditions (whether or not related to terrorism, war, pandemic, weather, environmental or other factors) in the jurisdictions in which we operate and changes to regulations that pertain to our operations.

The following discussion should be read in conjunction with the unaudited financial statements and related notes which are included under Item 1.

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





Overview



General

On May 16, 2011, we transferred, through a spin-off to our then wholly owned subsidiary, Worlds Online Inc. (currently named MariMed Inc.), the majority of our operations and related operational assets. On January 18, 2022 we entered into an asset purchase agreement with Thom Kidrin, our CEO, for the IP that was transferred over to MariMed Inc. Mr. Kidrin received the IP through a settlement agreement that he reached with MariMed Inc.

We will be focused on monetizing our collection of non-fungible tokens and our legacy celebrity virtual reality worlds and on expanding our patent portfolio.





Revenues

We generated no revenue during the quarter.





Expenses

We classify our expenses into two broad groups:

• Cost of revenues; and

• Selling, general and administration.




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Liquidity and Capital Resources

We have had to limit our operations since mid-2001 due to a lack of liquidity. However, we were able to issue equity and convertible debt in the last few years and raise small amounts of capital from time to time that, prior to the spinoff, was used to enable us to begin upgrading our technology, develop new products and actively solicit additional business, o protect, increase and enforce our patent portfolio and more recently to expand our legacy celebrity worlds and collection of non-fungible tokens. Although we have been able to generate funds through our sale of shares of MariMed Inc., we continue to pursue additional sources of capital though we have no current arrangements with respect to, or sources of, additional financing at this time and there can be no assurance that any such financing will become available. If we cannot raise additional capital, form an alliance of some nature with another entity, raise more funds through the sale of shares of MariMed Inc., or start to generate sufficient revenues, we may be unable to purchase additional patents or otherwise expand operations through acquisition or otherwise.





RESULTS OF OPERATIONS

Our net revenues for each of the three months ended September 30, 2022, and 2021 were $0. All the operations were transferred over to Worlds Online Inc. in the spin off and we were unsuccessful in prosecuting our patent infringement. Accordingly, going forward, the Company's sources of revenue are anticipated to be from the monetizing our collection of non-fungible tokens and our legacy celebrity virtual reality worlds. We still need to raise a sufficient amount of capital to provide the resources required that would enable us to expand our business.

Three months ended September 30, 2022 compared to three months ended September 30, 2021

Selling general and administrative (SG&A) expenses decreased substantially to $47,296 for the three months ended September 30, 2022, from $157,284 for the three months ended September 30, 2021. The decrease of $109,988 is due to a decrease in legal fees related to the patent litigation.

Salaries and related increased by $1,364 to $52,434 from $51,070 for the three months ended September 30, 2022, and 2021, respectively. The CEO's salary is based on the terms of his 2018 employment agreement and he is the Company's only salaried employee.

For the three months ended September 30, 2022, the Company recorded an option expense of $699, representing the expense associated with the options issued during the first quarter of 2022. For the three months ended September 30, 2021, there was $0 of option expense.

For the three months ended September 30, 2022, the Company had an interest expense of $19,126 and for September 30, 2021, the Company had an interest expense of $19,127.

For the three months ended September 30, 2022, the Company had interest income of $3,578. For the three months ended September 30, 2021, the Company had interest income of $3,578.

For the three months ended September 30, 2022, the Company had a gain on sale of marketable securities of $136,557. For the three months ended September 30, 2021, the Company had a gain on sale of marketable securities of $141,662.

As a result of the foregoing, we realized net income of $20,580 for the three months ended September 30, 2022, compared to net income of $232,759 in the three months ended September 30, 2021.





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Nine months ended September 30, 2022 compared to nine months ended September 30, 2021

Revenue is $0 for the nine months ended September 30, 2022 and 2021. All the operations were transferred over to Worlds Online Inc. in the spin off. The business up to the spin off continued to run in a severely diminished mode due to the lack of liquidity. Post spin off we still need to raise a sufficient amount of capital to provide the resources required that would enable us to continue running the business.

Cost of revenues is $0 in the nine months ended September 30, 2022 and 2021.

Selling general and administrative (SG&A) expenses decreased by $1,052,029 from $1,476,855 to $424,826 for the nine months ended September 30, 2021 and 2022, respectively. The decrease is due to a decrease in legal costs related to the patent infringement litigation cases.

Salaries and related decreased by $1,052 to $154,083 from $155,135 for the nine months ended September 30, 2022 and 2021, respectively.

For the nine months ended September 30, 2022, the Company recorded an option expense of $821,995, the estimated fair value of the options issued in the first quarter of 2022. For the nine months ended September 30, 2021, the Company recorded $109,874 of option expense.

For the nine months ended September 30, 2022, the Company had interest expense of $56,756. For the nine months ended September 30, 2021, the Company had interest expense of $56,937.

For the nine months ended September 30, 2022, the Company had interest income of $10,617. For the nine months ended September 30, 2021, the Company had interest income of $10,617.

For the nine months ended September 30, 2021, the Company recorded a loss on issuance of shares for services of $8,685.

For the nine months ended September 30, 2022, the Company had a gain on sale of marketable securities of $742,693. For the nine months ended September 30, 2021, the Company had a gain on sale of marketable securities of $1,006,588.

For the nine months ended September 30, 2021, the Company had income from the settlement of litigation in the amount of $315,000.

As a result of the foregoing, we realized a net loss of $704,350 for the nine months ended September 30, 2022 compared to a net loss of $475,281 in the nine months ended September 30, 2021.

Liquidity and Capital Resources

At September 30, 2022, our cash and cash equivalents were $58,000. The Company raised funds by selling shares of stock that the Company retained in the spin off company MariMed Inc. during the nine months ended September 30, 2022. The Company raised $742,693 from selling shares of MariMed Inc. common stock. The Company used $718,497 in cash to pay for operating expenses during the nine months ended September 30, 2022.

At September 30, 2021, our cash and cash equivalents were $342,238. The Company raised funds by selling shares of stock that the Company retained in the spin off company MariMed Inc. during the nine months ended September 30, 2021. The Company raised $864,926 from selling shares of MariMed Inc. common stock.





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The Company used $1,128,320 in cash to pay for operating expenses during the nine months ended September 30, 2021.

Our primary cash requirements have been used to fund the cost of operations and lawsuits with additional funds having been used in connection with the exploration of new business lines, looking to expand on our legacy celebrity worlds and the collection of non-fungible tokens.

We hope to raise additional funds to be used for further expansion of our legacy celebrity worlds and collection of non-fungible tokens. No assurances can be given that we will be able to raise any additional funds.

© Edgar Online, source Glimpses