REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Stockholders of Worldwide
Strategies, Inc.,
Opinion on the Financial Statements
We have
audited the accompanying balance sheets of Worldwide Strategies, Inc.., (the Company) as of July 31, 2022 and 2021, and the related statements
of operations, changes in stockholders’ deficit, and cash flows for each of the years in the two-year period ended July 31, 2022,
and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of July 31, 2022 and 2021, and the results of its operations and its cash flows for each of the
years ended July 31, 2022 in conformity with accounting principles generally accepted in the United States of America.
Going Concern
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 has suffered net losses from operations in current and prior periods and has an accumulated deficiency, which raises substantial
doubt about its ability to continue as a going concern. Management’s plans regarding those matters are discussed in Note 3. The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect
to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB .
We conducted
our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting,
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included
performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and the significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe our audits provide a reasonable basis
for our opinion.
Critical Audit Matters
The critical audit
matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required
to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.
As discussed in Note 3, to the
financial statements, the Company has a going concern due to the lack of revenue and accumulated net losses from operations.
Auditing management’s evaluation
of going concern involves significant judgement given the fact that the Company uses management’s estimates of future revenues and
expenses, which are not to be substantiated.
To evaluate the appropriateness
of the significant doubt about the Company’s ability to continue as a going concern, we examined and evaluated the financial information
that was the initial cause of the doubt along with management’s plans to mitigate the significant doubt about continuing as a going
concern.
/s/ M&K CPAS PLLC
We have served as the Company’s auditor since 2021.
Houston, TX
October 31, 2022
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JULY 31, 2022 and 2021
(Audited)
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 years ended July 31, 2022 and 2021. Excluded from the weighted average common shares outstanding
amount is convertible preferred stock equivalent to 301,250,000 and 279,323,394 common shares for the years ended July 31, 2022 and 2021,
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:
| |
· |
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| |
· |
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. |
| |
· |
Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. |
The following tables represent our assets and
liabilities by level measured at fair value on a recurring basis at July 31, 2022 and July 31, 2021:
| Schedule of fair value of assets and liabilities | |
|
|
|
|
|
|
|
|
|
| |
| | |
Fair Value Measurements at July 31, 2022 | |
| | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| Description | |
| | |
| | |
| |
| Convertible Debt | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
| Total Liabilities | |
| – | | |
| 492,406 | | |
| – | |
| Totals | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
| | |
Fair Value Measurements at July 31, 2021 | |
| | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| Description | |
| | |
| | |
| |
| Convertible Debt | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
| Total Liabilities | |
| – | | |
| 492,406 | | |
| – | |
| Totals | |
$ | – | | |
$ | 492,406 | | |
$ | – | |
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 years ended July 31, 2022 and 2021 we
incurred net losses of approximately $79,000 and $1.4 million respectively. As of July 31, 2022, we had no cash on hand and current liabilities
of $1.0 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 $30,000
and $15,000
during the years ending July 31, 2022 and 2021. As of July 31, 2022 total amounts due to our CEO and CFO are approximately $45,000.
These amounts are due on September
30, 2023 and bear interest at 8 eight percent per annum.
As of July 31, 2022 and 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 9 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.
As of July 31, 2022 and
2021, our CEO and CFO owned 2.3 million shares of convertible Class A preferred stock and 180,000 shares of convertible Class B preferred
stock.
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 July 31, 2022 and 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 July 31, 2022 and 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 July 31, 2022 and 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 July 31, 2022 and 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 July 31, 2022 and 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 approximately
$423,000 and $376,000 as of July 31, 2022 and 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
On December 15, 2008 the Company filed a certificate
of designation with the Nevada Secretary of State, in which it was designated and 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.
On June 7, 2021 the Company issued an aggregate
of 3,508,257 shares of our convertible Series A preferred stock to our founders as founder stock in connection with the reorganization
of our business. The Company recorded $1.3 million as stock compensation in relation to the issuance of the Series A preferred stock based
upon the fair value of such shares.
Series B Preferred Stock
On July 10, 2019 the Company filed a certificate
of designation with the Nevada Secretary of State, in which it was designated and 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. As of July 31, 2022 and 2021, 270,000 shares were issued and outstanding.
Common stock
As of July 31, 2022 and 2021, the Company
was authorized to issue 975,000,000 shares
of common stock respectively.
Total shares outstanding at July 31, 2022 and
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 July 31, 2022, 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. The Company has approximately $5.2 million and $5.1 million of federal net
operating loss carry forwards at July 31, 2022 and 2021, respectively. In addition, the Company had gross deferred tax assets of $1.1
million as of July 31, 2022 and 2021 for which a full valuation allowance has provided.
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 July 31, 2022 and 2021. The Company
had no uncertain tax positions as of July 31, 2022 and 2021.
Note 8 – Asset Purchase
On February 17, 2022, the Company entered into an asset purchase agreement
with Fitwell Limited, which was subsequently amended on October 18, 2022, for the purchase of a copy of its native mobile fitness application,
including all source codes and associated databases for use on the iOS and Android platforms. The purchase
price for the software application is $0.5
million to be payable upon the earlier of October 18, 2023 or the Company completing a capital raise, under Regulation A
which generates no less than $2 million in proceeds to the Company and shares of the Company in the amount of $0.5 million. On
October 18, 2022, the parties closed the asset purchase, and in connection with the purchase of the Fitwell assets, the Company issued a promissory note for $0.5 million
and issued 2 million shares of common stock as consideration for the purchase and an additional 2.8 million shares for services
rendered, and to be rendered in the future, for the benefit of the Company.