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, 2010 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
We previously announced our agreement to purchase the manufacturing equipment that had been used in the operations of Jasmim Glass Corporation of Marinha Grande, Portugal. We had expected the acquisition to be completed by February 2011. On March 16, 2011, Worldwide Strategies Incorporated ended discussions to proceed with the acquisition.
On April 28, 2011, we accepted a proposal from Euzkadi Corporation of America, S.A. (“Euzkadi”) to enter into a business combination transaction. It is proposed that Euzkadi would acquire 80% of the then issued and outstanding shares of Worldwide in exchange for all of the issued and outstanding shares of Euzkadi. Consummation of this proposed transaction will be contingent upon the satisfaction of several conditions, including the completion of a satisfactory due diligence investigation and the completion of an audit of Euzkadi’s financial statements that meet the requirements of the reporting rules and regulations of the Securities and Exchange Commission.
Other than the possible acquisition 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, 2011, 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, 2011, after recognition of the one-for-three reverse stock split, there were 6,261,356 and 1,383,336 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, 2011 and 2010. Salaries, benefits and payroll taxes totaled $26,875 for each of the three-month periods ended April 30, 2011 and 2010.
We did not incur any stock-based compensation expense during the three-month periods ended April 30, 2011 and 2010.
Professional and consulting fees totaled $10,244 and $15,135 for the three-month periods ended April 30, 2011 and 2010.
Travel expenses totaled $11,172 and $6,520 during the three-month periods ended April 30, 2011 and 2010.
Contract labor expenses totaled $18,750 for each of the three-month periods ended April 30, 2011 and 2010.
Insurance expenses totaled $-0- and $8,472 during the three-month periods ended April 30, 2011 and 2010.
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Depreciation of $-0- and $155 was recorded during the three-month periods ended April 30, 2011 and 2010. All of our equipment is now fully depreciated and, therefore, we did not incur any depreciation expense for the current period.
Other general and administrative expenses totaled $1,991 and $511 during the three-month periods ended April 30, 2011 and 2010.
We recorded $65,974 and $1,726 in interest expense for the three-month periods ended April 30, 2011 and 2010. Effective April 30, 2009, we converted many of our outstanding debts into preferred stock. However, since November 2009, we have issued convertible promissory notes totaling $119,000 that accrue interest at rates ranging from 8% to 10%. In addition, we financed the purchase of insurance policies in the amount of $22,400 in February 2010 for an effective annual interest rate is 9.47%.
Our net loss was $135,006 and $78,144 for three-month periods ended April 30, 2011 and 2010.
Nine Months Ended April 30, 2011 and 2010. Salaries, benefits and payroll taxes totaled $80,625 for each of the nine-month periods ended April 30, 2011 and 2010.
We did not incur any stock-based compensation expense during the nine-month periods ended April 30, 2011 and 2010.
Professional and consulting fees totaled $40,952 and $58,610 for the nine-month periods ended April 30, 2011 and 2010.
Travel expenses totaled $29,606 and $12,446 during the nine-month periods ended April 30, 2011 and 2010.
Contract labor expenses totaled $56,250 for each of the nine-month periods ended April 30, 2011 and 2010.
Insurance expenses totaled $11,200 and $16,545 during the nine-month periods ended April 30, 2011 and 2010.
Depreciation of $51 and $464 was recorded during the nine-month periods ended April 30, 2011 and 2010. All of our equipment is now fully depreciated and, therefore, we did not incur any depreciation expense for the three-months ended April 30, 2011.
Other general and administrative expenses totaled $4,269 and $7,086 during the nine-month periods ended April 30, 2011 and 2010.
We recorded $107,260 and $2,849 in interest expense for the nine-month periods ended April 30, 2011 and 2010. Effective April 30, 2009, we converted many of our outstanding debts into preferred stock. However, since November 2009, we have issued convertible promissory notes totaling $119,000 that accrue interest at rates ranging from 8% to 10%. In addition, we financed the purchase of insurance policies in the amount of $22,400 in February 2010 for an effective annual interest rate is 9.47%.
Our net loss was $330,213 and $234,875 for nine-month periods ended April 30, 2011 and 2010.
March 1, 2005 (inception) to April 30, 2011. For the period from March 1, 2005 (inception) to April 30, 2011, 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, insurance, interest and other expenses resulting in an accumulated loss of $7,189,157. Almost half 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 $3,401,203. 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.
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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 $18,228 of cash in operating activities with $4,000 being provided by financing activities. We have a working capital deficit of $458,430 at April 30, 2011, as compared to $584,136 at July 31, 2010.
As discussed above, we have had minimal revenues and have accumulated a deficit of $7,189,157 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.
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 are effective to ensure that all required information is presented in our quarterly report.
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 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.
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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 April 2011, the registrant issued 105,000 shares of its common stock to one accredited investor in exchange for a three-month extension of the maturity date of a promissory note in the principal amount of $50,000. The shares were issued at $0.04 pursuant to the terms of the note, but were valued at $8,400 ($0.08 per share) based on the fair value of the shares when they were issued.
In April 2011, the registrant issued 11,250 shares of its common stock to one accredited investor for interest expense. The shares were issued at $0.04 pursuant to the terms of the note, but were valued at $900 ($0.08 per share) 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 Regulation S, Section 4(2) and/or Rule 506 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. (Removed and Reserved)
None.
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) |
| 10.3 | Employment Agreement with W. Earl Somerville dated October 12, 2007 (6) |
| 31.1 | Rule 13a-14(a) Certification of James P.R. Samuels |
| 31.2 | Rule 13a-14(a) Certification of W. Earl Somerville |
| Regulation S-K Number | Exhibit |
| 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 W. Earl Somerville Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002 |

_______________________
| (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. |

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 14, 2011 | By: | /s/ James P.R. Samuels |
| James P.R. Samuels |
| Chief Executive Officer |
| (Principal Executive Officer) |
| Date: June 14, 2011 | By: | /s/ W. Earl Somerville |
| W. Earl Somerville |
| Chief Financial Officer, Secretary and Treasurer |
| (Principal Financial Officer and Principal Accounting Officer) |

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Question: What is the ratio of the total net loss for the three-month periods ended April 30, 2011 and 2010 to the net loss for nine-month periods ended April 30, 2011 and 2010 in ratio form 1:1?

Python solution:
def solution():
    #Define variables name and value
    net_loss_three_months = 135006 + 78144
    net_loss_nine_months = 330213 + 234875

    #Do math calculation to get the answer
    ratio = net_loss_three_months / net_loss_nine_months
    return ratio


Answer: 0.3771978878