Forward Looking Statements

When used in this form 10-K and in future filings by the Company with the Commission, The words or phrases such as "anticipate," "believe," "could," "would," "should," "estimate," "expect," "intend," "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; changes in current pricing levels that we can charge for our services or which we pay to our suppliers and business partners; changes in political, social and economic conditions in the jurisdictions in which we operate; changes to regulations that pertain to our operations; changes in technology that render our technology relatively inferior, obsolete or more expensive compared to others; foreign currency fluctuations; changes in the business prospects of our business partners and customers; increased competition, including from our business partners; delays in the delivery of broadband capacity to the homes and offices of persons who use our services; general disruptions to Internet service; and the loss of customer faith in the Internet as a means of commerce.

The following discussion should be read in conjunction with the financial statements and related notes which are included in this report under Item 8.

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



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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. We retained our patent portfolio which we intend to continue to increase and to more aggressively enforce against alleged infringers. We also entered into a License Agreement with MariMed Inc. to sublicense patented technologies, which agreement has since expired.

At present, the Company's anticipated sources of revenue will be from any revenue that may be generated from enforcing its patents.





Revenues

We generated no revenue during the year because we transferred the operations of the Company to MariMed Inc. and our other anticipated revenue generation streams did not produce any income during the quarter.





Expenses

We classify our expenses into two broad groups:





•  cost of revenues; and




•  selling, general and administration.

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, and more recently to protect, increase and enforce our patent portfolio. 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.



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RESULTS OF OPERATIONS

Year ended December 31, 2020 compared to year ended December 31, 2019

Revenue was $0 for the years ended December 31, 2020 and 2019. All the operations were transferred over to MariMed Inc. in the spin off. The Company's sources of revenue are anticipated to be from enforcing our patents in litigation or otherwise. We still need to raise a sufficient amount of capital to provide the resources required that would enable us to expand our business.

Selling general and administrative (S, G & A) expenses increased by $400,817 from $630,655 to $1,031,472 for the year ended December 31, 2020. The increase is due to an increase in legal costs related to the patent infringement litigation cases.

Salaries and related expenses decreased by $6,546 to $207,662 from $214,208 for the year ended December 31, 2020. Salaries and related are in line with last year and are based on the terms of the CEO's employment agreement.

For the year ended December 31, 2020, the Company recorded an option expense of $267,647, representing the amortization of the value of the options issued in 2020 and 2018 that have not yet vested.

For the year ended December 31, 2019, the Company recorded an option expense of $309,783 equal to the increase in estimated fair value of the unvested options at December 31, 2019.

For the year ended December 31, 2020 the Company had interest expense of $76,091. For the year ended December 31, 2019 the Company had interest expense of $82,858. The Company is accruing interest on old notes payable that are well past the statute of limitations and for which the Company never expects to pay back.


For the year ended December 31, 2020 the Company had interest income of $14,233.

For the year ended December 31, 2019 the Company had interest income of $3,033.

As a result of the foregoing, we had a net loss of $1,568,639 for the year ended December 31, 2020 compared to a net loss of $1,234,471 for the year ended December 31, 2019.



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Liquidity and Capital Resources

At December 31, 2020, our cash and cash equivalents were $474,587. We did not raise any additional cash during the year ended December 31, 2020.

At December 31, 2019, our cash and cash equivalents were $1,570,844.

No capital expenditures were made in 2020 or 2019.

Our primary cash requirements have been used to fund the cost of operations, lawsuits, and patent enforcement.





Director Resignation

Effective February 21, 2019, Mr. Edward Gildea voluntarily resigned as a director for personal reasons.

Recent Accounting Pronouncements

Recently issued accounting standards

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

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