10-Q 1 f10q-043013_worldwide.htm FORM 10-Q 4-30-13 WORLDWIDE f10q-043013_worldwide.htm
 


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2013

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 number: 000-52362

Worldwide Strategies Incorporated
(Exact name of registrant as specified in its charter)

Nevada
41-0946897
(State or other jurisdiction of incorporation or organization)
(I.R.S.  Employer Identification No.)
   
3801 East Florida Avenue, Suite 400, Denver, Colorado
80210
(Address of principal executive offices)
(Zip Code)

(303) 991-5887
(Registrant’s telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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.
Yes ý   No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý   No o

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  ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ý   No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  As of May 16, 2013 – 18,859,005 shares of common stock


 
 

 

WORLDWIDE STRATEGIES INCORPORATED

FORM 10-Q
FOR THE FISCAL QUARTER ENDED
April 30, 2013

INDEX

   
Page
PART I.  FINANCIAL INFORMATION
     
Item 1.
Financial Statements
 
     
 
Consolidated Condensed Balance Sheets (unaudited)
2
     
 
Consolidated Condensed Statements of Operations (unaudited)
3
     
 
Consolidated Condensed Statement of Changes in Shareholders’ Deficit (unaudited)
4
     
 
Consolidated Condensed Statements of Cash Flows (unaudited)
5
     
 
Notes to Consolidated Condensed Financial Statements (unaudited)
6
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
10
     
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
12
     
Item 4.
Controls and Procedures
12
     
     
PART II.  OTHER INFORMATION
     
Item 1.
Legal Proceedings
14
     
Item 1A.
Risk Factors
14
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
14
     
Item 3.
Defaults Upon Senior Securities
14
     
Item 4.
Mine Safety Disclosures
14
     
Item 5.
Other Information
14
     
Item 6.
Exhibits
14
     
SIGNATURES
15


 
1

 

WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Consolidated Condensed Balance Sheets


   
April 30,
   
July 31,
 
   
2013
   
2012
 
   
unaudited
   
audited
 
Assets
           
Current Assets:
           
Cash
  $ 339     $ 4,710  
Prepaid expenses
          3,738  
                    Total current assets     339       8,447  
                 
Office equipment, net of accumulated depreciation of $22,623
          -  
Deposits
    150       150  
                    Total assets   $ 489     $ 8,597  
                 
                 
Liabilities and Shareholders’ Deficit
               
Current Liabilities:
               
Accounts and notes payable:
               
Accounts payable
  $ 76,096     $ 80,464  
Accounts payable, related party (Note 2)
    3,900       3,900  
Accrued compensation (Note 3)
    410,625       410,625  
Accrued liabilities
    40,615       15,597  
Accrued liabilities, related party (Note 4)
    110,147       100,523  
Notes payable (Note 4 and 5)
    208,661       171,161  
                    Total current liabilities
    850,043       782,269  
                 
Shareholders’ deficit (Note 6):
               
Preferred stock, $.001 par value; 25,000,000 shares authorized,
               
1,491,743 shares issued and outstanding
    1,492       1,492  
Common stock, $.001 par value, 33,333,333 shares authorized
               
18,528,984 and 16,870,234 shares issued and outstanding respectively.
    18,530       16,871  
Additional paid-in capital
    6,927,199       6,884,345  
Deficit accumulated during development stage
    (7,796,774 )     (7,676,380 )
                    Total shareholders’ deficit
    (849,553 )     (773,672 )
                    Total liabilities and shareholders' deficit
  $ 489     $ 8,597  
 
See accompanying notes to consolidated condensed financial statements

 
 
2

 

WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Consolidated Condensed Statement of Operations
(Unaudited)
                           
March 1, 2005
 
                           
(Inception)
 
   
Nine Months Ended
   
Three Months Ended
   
Through
 
   
April 30,
   
April 30,
   
April 30,
 
   
2013
   
2012
   
2013
   
2012
   
2013
 
                               
Sales
  $     $     $             34,518  
     Cost of sales
                            30,568  
                              3,950  
                                         
Operating expenses:
                                       
     Salaries, benefits and payroll taxes
                            1,108,375  
     Stock based compensation
    7,000       49,500             7,500       3,469,703  
     Professional and consulting fees
    47,341       61,948       9,711       8,019       1,085,881  
     Travel
    7,231       30,711             8,850       317,561  
     Contract labor
                            558,000  
     Insurance
                            253,506  
     Depreciation
                            140,278  
     Loss on failed acquisition
                            181,016  
     Other general and administrative expenses
    3,330       2,188       495       1,468       219,286  
Total operating expenses
    64,902       144,347       10,206       25,837       7,333,606  
Loss from operations
    (64,902 )     (144,347 )     (10,206 )     (25,837 )     (7,329,656 )
                                         
Other expense:
                                       
     Interest expense
    (55,492 )     (119,016 )     (38,072 )     (20,972 )     (467,118 )
Loss before income taxes
    (120,394 )     (263,363 )     (48,278 )     (46,809 )     (7,796,774 )
                                         
Income tax provision (Note 7)
                             
                                         
Net loss
  $ (120,394 )   $ (263,363 )   $ (48,278 )     (46,809 )     (7,796,774 )
                                         
Basic and diluted loss per share
  $ (0.004 )   $ (0.011 )   $ (0.002 )   $ (0.002 )        
                                         
Basic and diluted weighted average
                                       
  common shares outstanding
    27,261,792       24,682,343       27,770,524       25,306,753          
 
See accompanying notes to consolidated condensed financial statements

 
 
3

 

WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Consolidated Condensed Statement of Changes in Shareholders’ Deficit
(Unaudited)
 
 
                                              Deficit          
                                              Accumulated          
                                      Additional       During          
      Preferred Stock       Common Stock       Paid-In       Development          
      Shares       Par Value       Shares       Par Value       Capital       Stage       Total  
Balance at July 31, 2012
    1,491,743     $ 1,492       16,870,234     $ 16,871     $ 6,884,345     $ (7,676,380 )   $ (773,672 )
                                                         
Common stock issued in exchange
                                         
for interest
                    1,123,750       1,124       24,839               25,963  
Common stock issued in exchange
                                         
for CFO compensation
                    150,000       150       1,350               1,500  
Common stock issued for
                                               
consulting services
                    385,000       385       11,165               11,550  
Options issued in exchange for
                                                 
board member services
                                4,000               4,000  
Options issued in exchange for
                                                 
CFO compensation
                                1,500               1,500  
                                                         
Net loss
                                            (120,394 )     (120,394 )
                                                         
Balance at April 30, 2013
    1,491,743     $ 1,492       18,528,984     $ 18,530     $ 6,927,199     $ (7,796,774 )   $ (849,553 )

See accompanying notes to consolidated condensed financial statements
 
 
 
4

 

WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Consolidated Condensed Statement of Cash Flows
(Unaudited)

               
March 1, 2005
 
               
(Inception)
 
   
For the Nine Months Ended
   
Through
 
   
April 30,
   
April 30,
 
   
2013
   
2012
   
2013
 
                   
Cash flows from operating activities:
                 
Net loss
  $ (120,394 )   $ (263,363 )   $ (7,796,774 )
Adjustments to reconcile net loss to net cash
                       
used in operating activities:
                       
Depreciation
                140,278  
Loss on failed acquisition
                150,000  
Stock based compensation
    7,000       49,500       3,469,703  
Consulting expense paid in common stock
    11,550       15,950       136,550  
Consulting expenses paid in perferred stock
                7,500  
Expenses paid with capital contribution
                93,042  
Interest expense paid in common stock (Note 6)
    25,963       89,126       348,395  
Interest expense paid in preferred stock
                4,745  
Interest expense capitalized as principal
          260       54,293  
Net liabilities acquired in Barnett recapitalization
                49  
Changes in current assets and liabilities:
                       
Receivables, prepaid expenses and other
                       
current assets
    3,738       22,519       (50,247 )
Accounts payable
    (4,368 )     7,817       79,995  
Accrued liabilities
    34,642       36,108       1,120,809  
Net cash used in
                       
operating activities
    (41,870 )     (42,083 )     (2,241,662 )
                         
Cash flows from investing activities:
         
`
         
Cash acquired in Centric acquisition
                6  
Purchases of equipment
                (23,612 )
Deposit paid on Cascade acquisition
                (100,000 )
Net cash used in
                       
investing activities
                (123,606 )
                         
Cash flows from financing activities:
                       
Proceeds from sale of preferred stock
                9,600  
Proceeds from sale of common stock
                1,587,706  
Deposit on proposed acquisition
                77,240  
Payments for offering costs
                (150,339 )
Proceeds from notes payable, related party
    2,500       9,174       301,975  
Proceeds from notes payable
    35,000       61,986       581,471  
Payment of notes payable
          (21,000 )     (42,045 )
Net cash provided by
                       
financing activities
    37,500       50,160       2,365,608  
                         
Net change in cash.
    (4,370 )     8,077       340  
                         
Cash, beginning of period
    4,710       166        
                         
Cash, end of period
  $ 339     $ 8,243     $ 340  
                         
Supplemental disclosure of cash flow information:
                 
Cash paid during the period for:
                       
Income taxes
  $     $     $  
Interest
  $     $     $ 7,518  
Non-cash investing/financing activities
                       
Preferred stock issued to repay notes
  $     $     $ 652,274  
Common stock issued to repay loan
  $     $     $ 75,000  
Common stock issued to acquire Centric
  $     $     $ 41,673  
Offering costs exchanged for stock
  $     $     $ 6,500  

See accompanying notes to consolidated condensed financial statements

 
 
5

 
 
WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)

 
(1)           Organization and Basis of Presentation

Worldwide Strategies Incorporated (the “Company”) was originally incorporated in the state of Nevada on April 6, 1998.  On March 1, 2005, Worldwide Business Solutions Incorporated (“WBSI”) was incorporated in the State of Colorado.  On July 8, 2005, the Company acquired all the shares of WBSI for 76.8% of the Company’s outstanding stock.  The acquisition of WBSI has been accounted for as a recapitalization of WBSI.  Therefore the historical information prior to the date of recapitalization is the financial information of WBSI.

The Company is in the development stage in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises.”  As of April 30, 2013, the Company has devoted substantially all of its efforts to financial planning, raising capital and developing markets.

Interim financial data presented herein are unaudited.  The unaudited interim financial information presented herein has been prepared by the Company in accordance with the accounting policies in its audited financial statements for the period ended July 31, 2012, included in its annual report on Form 10-K, and should be read in conjunction with the notes thereto.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim period presented have been made.  The results of operations for the periods presented are not necessarily indicative of the results to be expected for the year.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At April 30, 2013, the Company had a working capital deficiency of $849,704, net losses of $48,278 and $120,394 for the three-month and nine-month periods ended April 30, 2013 and an accumulated deficit of $7,796,774 since inception.  These matters, among others, raise substantial doubt about its ability to continue as a going concern.

In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon the Company’s ability to generate sufficient sales volume to cover its operating expenses and to raise sufficient capital to meet its payment obligations.  Historically, management has been able to raise additional capital. In February 2013, the Company issued convertible promissory notes, in exchange for $13,000.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

New Accounting Pronouncements

In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value measurements,” which amends ASC 820, “Fair Value Measures and Disclosures.” ASU 2010-06 requires disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The changes to the ASC as a result of this update are effective for annual and interim reporting periods beginning after December 15, 2009, except for requirements related to Level 3 disclosures, which are effective for annual and interim reporting periods beginning after December 15, 2010. This guidance requires new disclosures only, and had no impact on our financial statements. In February 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855).” This update provides amendments to Subtopic 855-10-50-4 and related guidance within U.S. GAAP to clarify that an SEC registrant is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC’s requirements. The Company has adopted this standard and it had no impact on this financial statements.
 
 
 
6

 
WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
 
In December 2010, the FASB issued ASU 2010-29, which contains updated accounting guidance to clarify the acquisition date that should be used for reporting pro forma financial information when comparative financial statements are issued. This update requires that a company should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This update also requires disclosure of the nature and amount of material, nonrecurring pro forma adjustments. The provisions of this update, which are to be applied prospectively, are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. The impact of this update on the Company’s financial statements will depend on the size and nature of future business combinations.

(2)           Accounts payable related parties

At April 30, 2013, the Company was indebted to an officer for expenses incurred on behalf of the Company totaling $3,900.

(3)           Accrued compensation

The Company accrued compensation for the CEO and the prior CFO through July 31, 2011. The accrued compensation, totaling $410,625, will only be paid if the Company successfully obtains sufficient financing to fund its plan of operation.

In October 2012 the Company reached agreement in principle to settle a significant amount of the accrued salaries owed the CEO and prior CFO in exchange for convertible promissory notes and other consideration.  This settlement is anticipated in advance of consummation with Euzkadi on the stock exchange agreement executed December 14, 2012.

(4)           Related party transactions

Accrued liabilities

The accrual, totaling $110,147, includes $108,894 of unreimbursed expenses paid by the CEO in prior periods that will be repaid when the Company has sufficient working capital and $1,253 representing accrued interest on notes payable, including amounts accrued in prior periods, to related parties.

In October 2012 the Company reached agreement in principle to settle a significant amount of the accrued expense liability owed the CEO in exchange for convertible promissory notes and other consideration.  This settlement is anticipated in advance of consummation with Euzkadi on the stock exchange agreement executed December 14, 2012.

Notes payable

During the three-month period ending April 30, 2013, the Company issued one promissory note to a related party for $500.  As of April 30, 2013, the Company had outstanding convertible promissory notes to five related parties totaling $11,674. The notes bear interest at 10% and the principal and accrued interest is convertible into common shares, with $4,173 convertible at $.07 per share, $5,000 convertible at $.04 per share and $2,500 convertible at $.01 per share upon the election of the holder. Interest expense for these notes was accrued in the amount of $291 for the three-month period ended April 30, 2013.
 
(5)           Notes payable

During the period ending April 30, 2013 the Company issued three promissory notes to one unrelated party for a total of $12,500.  The notes, due July 31, 2013, bear interest at 10% and the principal and accrued interest is
 
 
 
7

 
WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
 
convertible into common shares at $.01 per share upon the election of the holder of each note. Interest expense for these notes was $337 for the three-month period ending April 30, 2013.
 
(6)           Shareholders’ Deficit

Preferred stock

The Company is authorized to issue 25,000,000 shares of $0.001 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.

Effective December 15, 2008, the Company established a series of 5,000,000 shares of preferred stock to be known as “Series A Convertible Preferred Stock” (“Series A”).  The shares of Series A have a par value of $0.001 per share.  Shares of Series A may be redeemed, for $0.50 per share, at the Company’s option.  Each share of Series A may be converted into 6.25 shares of common stock, at the option of the holder.

Shares of Series A will participate in dividends paid, in cash or other property, to holders of outstanding common stock.  In the event the Company declares and pays a dividend to common stockholders, five percent (5%) of the value of such dividend shall be paid to the holders of outstanding Series A shares. After payment of the 5% preference, each outstanding Series A share will participate in the distribution of the remaining 95% of the dividend with the holders of common stock, as if each outstanding Series A share were one share of common stock. Any dividend payable to holders of Series A shares will have the same record and payment date and terms as the dividend payable on the common stock.

Holders of Series A shares shall be entitled to vote together with the holders of the common stock as a single class, upon all matters submitted to holders of common stock for a vote. Shares of Series A will vote that number of votes equal to the number of shares of common stock issuable upon conversion of one share of Series A, as adjusted from time-to time.

Whenever holders of Series A are required or permitted to take any action by separate class or series, such action may be taken without a meeting by written consent, setting forth the action so taken and signed by the holders of the outstanding Series A shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

Common stock

In February 2013, the Company issued 387,500 shares of the Company’s common stock in exchange for interest and an extension of due date from January 10, 2013 to May 10, 2013 on a note payable. The shares, which were issued at $0.04 as per the note payable agreement, were valued at $0.03 per share based on the fair value of the shares when they were issued.  This amount ($11,625) will be reflected in the accompanying financial statements as interest over the term of the note extension.

In March 2013, the Company issued 116,250 shares of the Company’s common stock in exchange for interest and an extension of due date from March 22, 2013 to July 20, 2013 on a note payable. The shares, which were issued at $0.04 as per the note payable agreement, were valued at $0.05 per share based on the fair value of the shares when they were issued.  This amount ($5,812) will be reflected in the accompanying financial statements as interest over the term of the note extension.


 
8

 
 
WORLDWIDE STRATEGIES INCORPORATED
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)


Stock Options and Warrants

Following is a schedule of changes in common stock options and warrants from July 31, 2012 through April 30, 2013:

             
Weighted
 
Weighted
             
Average
 
Average
         
Exercise
 
Exercise
 
Remaining
 
Awards Outstanding
 
Price
 
Price
 
Contractual
 
Total
 
Exercisable
 
Per Share
 
Per Share
 
Life
Outstanding at July 31, 2012
3,508,328
 
3,508,328
   
$0.015-$0.24
   
$0.16
 
1.07 Years
Granted
550,000
 
550,000
   
$0.01
   
$0.01
 
6.33 Years
Exercised
 
   
   
 
Cancelled/Expired
 
   
   
 
Outstanding at April 30, 2013
4,058,328
 
4,058,328
   
$0.01-$0.24
   
$0.14
 
1.79 Years


The following changes occurred in outstanding options and warrants during the period from July 31, 2012 through April 30, 2013:

 
Options
 
Warrants
 
Awards
Outstanding at July 31, 2012
3,508,328
 
 
3,508,328
Granted
550,000
 
 
550,000
Exercised
 
 
Cancelled/Expired
 
 
Outstanding at April 30, 2013
4,058,328
 
 
4,058,328

(7)           Income Taxes

The Company records its income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.”  The Company incurred net operating losses during all periods presented resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefits and expense resulted in $0 income taxes.

(8)           Subsequent Event

On December 14, 2012, the Company executed a stock exchange agreement with Jorge Zamacona Pliego, the President of Euzkadi Corporation of America S.A. de C.V. (“Euzkadi”) and other principal owners of Euzkadi (“Euzkadi Principals”). Under the terms of the Agreement, Euzkadi Principals would assign and transfer Euzkadi shares to Worldwide such that Worldwide would then own 10% of Euzkadi, and Worldwide would issue shares of its common stock to Euzkadi Principals, such that they would then own 80% of Worldwide on a fully diluted basis.

Consummation of the stock exchange is contingent upon the satisfaction of several conditions, including Worldwide increasing its authorized shares of common stock to accommodate this transaction and Euzkadi completing its first shipment of products.

In May 2013 the Company obtained unanimous board approval and approval from shareholders representing 60.39% of Common Stock and Series A Convertible Preferred Stock authorizing management to proceed with changing the Company name to Euzkadi International Corporation and an increase of authorized Common Shares from 33,333,333 to 600,000,000, both actions being conditions necessary to consummate the stock exchange agreement between Worldwide and Euzkadi executed December 14, 2012.





 
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Item 2.          Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion and analysis should be read in conjunction with our financial statements and related footnotes for the year ended July 31, 2012 included in our Annual Report on Form 10-K.  The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future.

Overview

On July 8, 2005, pursuant to a Share Exchange Agreement with Worldwide Business Solutions Incorporated, a Colorado corporation (“WBSI”), we acquired all of the issued and outstanding capital stock of WBSI, in exchange for 2,573,335 shares of our common stock.  As a result of this share exchange, shareholders of WBSI as a group owned approximately 76.8% of the shares then outstanding, and WBSI became our wholly-owned subsidiary.

For accounting purposes, the acquisition of WBSI has been accounted for as a recapitalization of WBSI.  Since we had only minimal assets and no operations, the recapitalization has been accounted for as the sale of 778,539 shares of WBSI common stock for our net liabilities at the time of the transaction.  Therefore, the historical financial information prior to the date of the recapitalization is the financial information of WBSI.

Effective July 31, 2007, we filed a Certificate of Change Pursuant to NRS 78.209, which decreased the number of our authorized shares of common stock from 100,000,000 to 33,333,333 and reduced the number of common shares issued and outstanding from 17,768,607 to 5,923,106.  All shares and per share amounts in our consolidated financial statements and related notes have been retroactively adjusted to reflect the one-for-three reverse stock split for all periods presented.

On July 31, 2007, we acquired 100% of the issued and outstanding shares of Centric in exchange for 2,250,000 shares of our common stock.  As a result of the acquisition, Centric became our wholly-owned subsidiary and the results of its operations have been included in our consolidated financial statements since the date of acquisition.

We currently devote substantially all of our efforts to financial planning, raising capital and developing markets as we continue to be in the development stage.

Plan of Operations

On December 14, 2012, the Company executed a stock exchange agreement with Jorge Zamacona Pliego, the President of Euzkadi Corporation of America S.A. de C.V. (“Euzkadi”) and other principal owners of Euzkadi (“Euzkadi Principals”). Under the terms of the Agreement, Euzkadi Principals would assign and transfer Euzkadi shares to Worldwide such that Worldwide would then own 10% of Euzkadi, and Worldwide would issue shares of its common stock to Euzkadi Principals, such that they would then own 80% of Worldwide on a fully diluted basis.

Consummation of the stock exchange is contingent upon the satisfaction of several conditions, including Worldwide increasing its authorized shares of common stock to accommodate this transaction and Euzkadi completing its first shipment of products.

Other than the possible stock exchange transaction described above, we do not have any definitive proposals for business operations, merger or acquisition.  We are in discussions with other firms but have nothing finalized at this time.  We must raise additional capital to support our ongoing existence while we search for such opportunities.  If we complete any acquisition or merger transactions, we will need to raise additional capital to support the new business.  We cannot assure you that we will be able to complete additional financings successfully.

 
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Significant Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  On an ongoing basis, we evaluate our estimates, including those related to the valuation of accounts receivable and inventories, the impairment of long-lived assets, any potential losses from pending litigation and deferred tax assets or liabilities.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

Development Stage.  We are in the development stage in accordance with Statements of Financial Accounting Standards (SFAS) No. 7 “Accounting and Reporting by Development Stage Enterprises”.  As of April 30, 2013, we had devoted substantially all of our efforts to financial planning, raising capital and developing markets.

Stock-based Compensation.  We account for compensation expense for our stock-based compensation plans using the fair value method prescribed in FASB ASC 718, “Stock Compensation,” which requires us to recognize the cost of services received in exchange for awards of equity instruments based on the grant-date fair value of the awards.  The fair value of each option grant is estimated on the date of grant using the Black-Scholes method.

Loss per common share.  We report net loss per share using a dual presentation of basic and diluted loss per share.  Diluted net loss per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.  As of April 30, 2013, after recognition of the one-for-three reverse stock split, there were 4,058,328 and -0- vested common stock options and warrants outstanding, respectively, which were excluded from the calculation of net loss per share-diluted because they were antidilutive.

New accounting pronouncements

Note 1 to the consolidated financial statements includes a complete description of new accounting pronouncements applicable to our Company.

Results of Operations

Three Months Ended April 30, 2013 and 2012. Professional and consulting fees totaled $9,711 and $8,019 for the three-month periods ended April 30, 2013 and 2012, respectively.  Expenses in 2013 were slightly higher due to the Euzkadi Corporation of America transaction.

Travel expenses totaled $0 and $8,850 during the three-month periods ended April 30, 2013 and 2012, respectively.  The CEO is managing the travel budget to control expenses incurred by the Company.

Other general and administrative expenses totaled $495 and $1,468 during the three-month periods ended April 30, 2013 and 2012, respectively.

We recorded $38,072 and $20,972 in interest expense for the three-month periods ended April 30, 2013 and 2012, respectively.  The interest costs were significantly higher debt and restructuring of two promissory notes that required the payment of interest in a fixed quantity of stock along with a renewal premium.  The final, pro-rata payment under the old notes was applied to April 2013 results.

Our net losses were $48,278 and $46,809 for three-month periods ended April, 2013 and 2012, respectively.

 
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Nine Months Ended April 30, 2013 and 2012. We incurred $7,000 and $49,500 respectively, of stock-based compensation expense for the nine-month periods ended April 30, 2013 and 2012.  We issued each of our four non-employee directors options for 100,000 shares of our common stock as compensation in August 2012, which were valued at $0.01 per share, using the Black-Scholes fair pricing model, or $4,000 in the aggregate.  We issued 150,000 shares of common stock and options for 150,000 shares of common stock as compensation for our CFO in August 2012, which were valued at $0.01 per share, or $3,000 in the aggregate.

Professional and consulting fees totaled $47,341 and $61,948 for the nine-month periods ended April 30, 2013 and 2012, respectively.  Expenses in 2013 were lower due to efforts to limit costs.

Travel expenses totaled $7,231 and $30,711 during the nine-month periods ended April 30, 2013 and 2012, respectively.  The CEO is managing the travel budget to control expenses incurred by the Company.

Other general and administrative expenses totaled $3,330 and $2,188 during the nine-month periods ended April 30, 2013 and 2012, respectively.    Costs are slightly up related to administrative costs for regulatory filings and expense timing.

We recorded $55,492 and $119,016 in interest expense for the nine-month periods ended April 30, 2013 and 2012, respectively.  The interest costs were significantly reduced due to the reduction of our common share price lowering the interest cost for two promissory notes that require the payment of interest in a fixed quantity of stock.

Our net losses were $120,394 and $263,363 nine-month periods ended April 30, 2013 and 2012, respectively.

March 1, 2005 (inception) to April 30, 2013.  For the period from March 1, 2005 (inception) to April 30, 2013, we were engaged primarily in raising capital to implement our business plan.  Accordingly, we have earned revenue of only $34,518.  We incurred expenses for professional and consulting fees, salaries and payroll taxes, stock-based compensation, travel, contract labor, interest and other expenses resulting in an accumulated loss of $7,796,774.  Approximately 45% of the cumulative net loss is due to the recognition of non-cash stock-based compensation expense for issuing shares, options, and warrants to employees and third parties in the amount of $3,469,703.  As we develop our business plan, we expect that cash generated through operations will replace many of the non-cash transaction structures currently utilized to implement our business plan.

Liquidity and Capital Resources

Since inception, we have relied on the sale of equity capital and debt instruments to fund working capital and the costs of developing our business plan.  We used $41,870 of cash in operating activities with $37,500 being provided by loans, net of note repayments, for the nine months ended April 30, 2013.  We have a working capital deficit of $849,704 at April 30, 2013, as compared to $773,822 at July 31, 2012.

As discussed above, we have had minimal revenues and have accumulated a deficit of $7,796,774 since inception.  Furthermore, we have not commenced our planned principal operations.  Our future is dependent upon our ability to obtain equity and/or debt financing and upon future profitable operations from the development of our business plan.

Going Concern

Our significant operating losses raise substantial doubt about our ability to continue as a going concern.  Historically, we have been able to raise additional capital sufficient to continue as a going concern.  However, there can be no assurance that this additional capital will be sufficient for us to implement our business plan or achieve profitability in our operations.  Additional equity or debt financing will be required to continue as a going concern.  Without such additional capital, there is doubt as to whether we will continue as a going concern.

 
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Off Balance Sheet Arrangements

We do not have any material off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3.          Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4.          Controls and Procedures

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the end of the period covered by this report.  This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer.  Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures were not effective to ensure that all required information is presented in our quarterly report in a timely manner.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

During our last fiscal quarter, there were no other changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except as described above.


 
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Part II.  OTHER INFORMATION

Item 1.       Legal Proceedings

None.

Item 1A.    Risk Factors

Not required of smaller reporting companies.

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds

In February 2013, the registrant issued 350,000 shares of its common stock to an accredited investor to extend the maturity date of a promissory note in the principal amount of $50,000 and 37,500 shares to the same person as payment of accrued interest on the note.  The shares were issued at $0.04 per share pursuant to the terms of the note, but were valued at $0.03 per share (an aggregate of $11,625) based on the fair value of the shares when they were issued.

In March 2013, the registrant issued 105,000 shares of its common stock to an accredited investor to extend the maturity date of a promissory note in the principal amount of $15,000 and 11,250 shares to the same person as payment of accrued interest on the note.  The shares were issued at $0.04 per share pursuant to the terms of the note, but were valued at $0.05 per share (an aggregate of $5,812) based on the fair value of the shares when they were issued.

No underwriters were used in the above stock transactions.  We relied upon the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as the investors were deemed to be sophisticated with respect to the investment in the securities due to their financial condition and involvement in our business.  A restrictive legend was placed on the certificates evidencing the securities issued.

Item 3.       Defaults Upon Senior Securities

None.

Item 4.       Mine Safety Disclosures

Not applicable.

Item 5.       Other Information

None.

Item 6.       Exhibits

Regulation
S-K Number
Exhibit
2.1
Share Exchange Agreement by and between Worldwide Strategies Incorporated, Centric Rx, Inc., Jim Crelia, Jeff Crelia, J.  Jireh, Inc. and Canada Pharmacy Express, Ltd.  dated as of June 28, 2007 (1)
3.1
Amended and Restated Articles of Incorporation (2)
3.2
Amended Bylaws (2)
3.3
Articles of Exchange Pursuant to NRS 92A.200 effective July 31, 2007 (3)
3.4
Certificate of Change Pursuant to NRS 78.209 effective July 31, 2007 (3)
3.5
Certificate of Designation Pursuant to NRS 78.1955 effective December 8, 2008 (4)
3.6
Amendment to Certificate of Designation Pursuant to NRS 78.1955 effective December 15, 2008 (5)
10.1
2005 Stock Plan (2)
10.2
Employment Agreement with James P.R. Samuels dated October 12, 2007 (6)
 
 
 
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Regulation
S-K Number
Exhibit
31.1
Rule 13a-14(a) Certification of James P.R. Samuels
31.2
Rule 13a-14(a) Certification of Thomas E. McCabe
32.1
Certification of James P.R. Samuels Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
32.2
Certification of Thomas E. McCabe Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
101*
Financial statements from the Quarterly Report on Form 10-Q of Worldwide Strategies Incorporated for the quarter ended April 30, 2013, formatted in XBRL: (i) the Balance Sheets; (ii) the Statements of Operations; (iii) the Statements of Changes in Shareholders’ Deficit; (iv) the Statements of Cash Flows; and (v) the Notes to Financial Statements.
______________________
(1)  
Filed as an exhibit to the Current Report on Form 8-K dated June 28, 2007, filed July 2, 2007.
(2)  
Filed as an exhibit to the initial filing of the registration statement on Form SB-2, File No. 333-129398, on November 2, 2005.
(3)  
Filed as an exhibit to the Current Report on Form 8-K dated July 31, 2007, filed August 6, 2007.
(4)  
Filed as an exhibit to the Current Report on Form 8-K dated December 8, 2008, filed December 10, 2008.
(5)  
Filed as an exhibit to the Current Report on Form 8-K dated December 15, 2008, filed December 17, 2008.
(6)  
Filed as an exhibit to the Annual Report on Form 10-KSB, File No. 000-52362, on November 2, 2007.

*In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements 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.

 
WORLDWIDE STRATEGIES INCORPORATED
   
 
 
Date:  June 11, 2013
By:
  /s/ James P.R. Samuels
   
James P.R. Samuels
   
Chief Executive Officer
   
(Principal Executive Officer)
   
 
 
Date:  June 11, 2013
By:
  /s/ Thomas E. McCabe
   
Thomas E. McCabe
   
Chief Financial Officer
   
(Principal Financial Officer and Principal Accounting Officer)
 
 
 
15