UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549





Form
10-K/A

Amendment No. 1





(Mark
One)

|☒ | ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------





For
the fiscal year ended December 31, 2016



|☐ | 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: 0-24115



WORLDS
INC.

(Exact
Name of Registrant as Specified in Its Charter)



|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 22-1848316                              
|(State
    or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S.
    Employer Identification No.)



11
Royal Road, Brookline, MA  02445

(Address
of Principal Executive Offices)



(617)
725-8900

(Registrant’s
Telephone Number, Including Area Code)



Securities
registered pursuant to Section 12(b) of the Act:



|Title
    of Each Class |  | Name
                                         Of Each Exchange
        On
        Which Registered
|----------------------- |  | --------------------------------------------------------------------------------------------------
|                        |  |                                                                                                   
|None                    |  | Not
    Applicable                                                                                



Securities
registered pursuant to Section 12(g) of the Act:

Common
Stock, $.001 par value

(Title
of Class)



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ☐    No 
☒



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  ☐    No 
☒



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  ☒    No 
☐



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 ☒ No ☐



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. ☐



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See the definitions of “large accelerated filer,”  “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):



☐
Large Accelerated Filer  ☐ Accelerated Filer ☐ Non-Accelerated Filer   ☒ Smaller reporting
company



(Do
not check if a smaller reporting company)



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



The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked closing price of such common equity, as of June 30, 2016 (closing
price was $0.0125) was approximately $3,075,292.

As
of February 1, 2017, 246,023,331 shares of the Issuer's Common Stock were outstanding.



EXPLANATORY
NOTE



This
Amendment No. 1 to Annual Report on Form 10-K/A (this “Amended Report”) is being filed with the Securities
and Exchange Commission to amend the Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (the “Original
10-K”) of WORLDS INC. solely to update the litigation disclosures and to correct some inadvertent typographical errors. 
No other changes are being made and this Amended Report still speaks only as of the date it was initially filed.



This
Amended Report includes currently-dated certifications of the Company’s Chief Executive Officer and Chief Financial Officer,
as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.







TABLE
OF CONTENTS



|            | Part
    I                                                                                                       | Page
    # | 
|----------- | ---------------------------------------------------------------------------------------------------------------- | ---------- | 
|Item
    1  | Business                                                                                                         | 3          | 
|Item
    1A | Risk
    Factors                                                                                                 | 8          | 
|Item
    1B | Unresolved
    Staff Comments                                                                                    | N/A        | 
|Item
    2  | Properties                                                                                                       | 12         | 
|Item
    3  | Legal
    Proceedings                                                                                            | 12         | 
|Item
    4  | Mine
    Safety Disclosures                                                                                      | 12         | 
|            |                                                                                                                  |            | 
|            | Part
    II                                                                                                      |            | 
|Item
    5  | Market
    for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 13         | 
|Item
    6  | Selected
    Financial Data                                                                                      | N/A        | 
|Item
    7  | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations                        | 14         | 
|Item
    7A | Quantitative
    and Qualitative Disclosures About Market Risk                                                   | N/A        | 
|Item
    8  | Financial
    Statements and Supplementary Data                                                                  | 18         | 
|Item
    9  | Changes
    in and Disagreements With Accountants on Accounting and Financial Disclosure                         | 37         | 
|Item
    9A | Controls
    and Procedures                                                                                      | 37         | 
|Item
    9B | Other
    Information                                                                                            | 38         | 
|            |                                                                                                                  |            | 
|            | Part
    III                                                                                                     |            | 
|Item
    10 | Directors,
    Executive Officers and Corporate Governance                                                       | 39         | 
|Item
    11 | Executive
    Compensation                                                                                       | 42         | 
|Item
    12 | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 45         | 
|Item
    13 | Certain
    Relationships and Related Transactions, and Director Independence                                    | 46         | 
|Item
    14 | Principal
    Accountant Fees and Services                                                                       | 46         | 
|Item
    15 | Exhibits
    and Financial Statements Schedules                                                                  | 48         | 







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CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION



This
report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. These statements involve risks and uncertainties and our actual results could differ significantly
from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future,
which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
"will," "believe," and similar language, including those set forth in the discussion under "Description
of Business," "Risk Factors" and "Management's Discussion and Analysis or Plan of Operation" as well
as those discussed elsewhere in this Form 10-K. We base our forward-looking statements on information currently available to us,
and we believe that the assumption and expectations reflected in such forward-looking statements are reasonable, and we assume
no obligation to update them. Statements contained in this Form 10-K that are not historical facts are forward-looking statements
that are subject to the "safe harbor" created by the Private Securities Litigation Reform Act of 1995.





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Table of Contents






PART
I



ITEM
1. BUSINESS.



General



On
March 31, 2011, it was announced that our board had determined it would be in the best interest of our shareholders to transfer
all of our online and operational technologies to our subsidiary, Worlds Online Inc. The assets were transferred as of May 16,
2011 and included: Worlds’ technology platform, Worlds Ultimate Chat, Aerosmith World,
DMC Worlds, Cinema Virtual, Pearson
contracts and related revenue, URLs: Worlds.com, Cybersexworld.com, Hang.com,
and Worldsfunds.com, a digital inventory of over 10,000 3D objects, animation sequences, an extensive avatar library, texture
maps and virtual world architectures.



Worlds
Inc. has retained all of its related Intellectual Property (IP) consisting of the nine existing patents, 6,219,045; 7,181,690;
7,493,558; 7,945,856; 8,082,501; 8,145,998; 8,161,385, 8,407,592 and 8,640,028 and all continuance claims currently before the
USPTO including any to be filed going forward.



We
intend to endeavor to prosecute our issued patents and any future issued patents against all parties that the company and our
legal counsel believe to be infringing on said patents.



Enforcement
actions are subject to the analysis of all relevant prior art and the costs associated with litigation.



We
may also seek to acquire additional patents we believe will enhance our portfolio position in the markets within which our existing
patents cover.



There
can be no assurance that we will be successful in our ability to prosecute our IP portfolio or that we will be able to acquire
additional patents.



As
of December 31, 2016, we own an approximately 9.3% equity interest in Worlds Online.



On
May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc., the majority
of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase
and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online
Inc. to sublicense its patented technologies.



Before
the spin-off, Worlds was a leading 3D entertainment portal which leveraged its proprietary technology, which we retained through
our patent portfolio, to offer visitors a network of virtual, multi-user environments which we call "worlds". These
worlds are visually engaging online environments featuring animation, motion and content where people can come together and, by
navigating through the website, shop, interact with others, attend events and be entertained. In support of this portal and the
overall business strategy, we design and develop software, content and related technology for the creation of interactive, three-dimensional
("3D") Internet web sites. Using our technology, we created our own Internet sites, as well as sites available through
third-party online service providers.



Sites
using our technology allow numerous, simultaneous visitors to enter, navigate and share interactive "worlds". Our 3D
Internet sites are designed to promote frequent, repeat and prolonged visitation by users by providing them with unique online
communities featuring dynamic graphics, highly useful and entertaining information content, and interactive capabilities. We believe
that sites are highly attractive to advertisers because they offer access to demographic-specific user bases comprised of people
that visit the site frequently and stay for relatively long periods of time.





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Recent
developments



From
January through April 2016 we issued seven Promissory Notes totaling $290,000.



The
promissory notes carry a 6% annual interest rate and are payable upon the earlier of (a) 24 months from the date of the promissory
notes or (b) the Company reaching a settlement(s) on a patent infringement claim(s) and receiving an aggregate of at least $2
million net proceeds from such settlement(s).



The
holders of the promissory notes shall receive repayment in the full face amount of the notes from the initial $500,000 the Company
actually receives from the net proceeds of its patent infringement claim(s) or from the net proceeds of a public offering. In
addition, the holders shall receive a preferred return (i) in an amount equal to up to 200% of the initial face amount of the
notes out of available cash by sharing with all other investors in this series of notes in the allocation of 50% of the available
cash received by the Company from $2M - $4M and (ii) in an amount equal to up to 100% of the initial face amount of the notes
out of available cash by sharing with all other investors in this series of notes in the allocation of 25% of the available cash
received by the Company from $4M - $6M. In other words, if the Company collects $6M in the net proceeds of available cash, the
holder will receive a return equal to 400% of its investment.



On
March 24, 2016 we filed a preliminary proxy with the Securities and Exchange Commission seeking approval of, among other things,
increasing our authorized common shares from 150 Million shares to 250 Million shares and to implement a reverse split in the
range of 1:2 - 1:20.



In
December 2016, 10,600,000 warrants were exercised at an exercise price of $0.012 per share raising $127,200. In January 2017 an
additional 24,400,000 warrants were exercised at an exercise price of $0.012 per share raising $292,800.





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Our
Technology



We
used our technology to produce three-dimensional portals and web sites. We believe that our core technology delivers a considerably
faster frame rate for user experiences and, in some cases, a meaningful productivity increase in art production and integration
over its previous generation production tools. Our technology permits the development of virtual worlds which have broad applications.
These applications include but are not limited to:



•
a virtual meeting place (such as a fan club);



•
a 3D e-commerce store (where merchandise can be viewed in 3D and purchased online); and



•
a virtual classroom (where content can be viewed via video streaming and then discussed in real time).



Our
core technology has substantial elements written in Sun Microsystem's programming language, Java, including WorldsBrowser and
WorldsShaper, so we expect that it can be made portable across Windows and UNIX Platforms because of Java's platform independence.



Our
core technology includes:



|• | WorldsShaper:
    WorldsShaper is the visual authoring component of our platform. It allows for quick assembly of pieces to create multi-user,
    shared state, virtual worlds. The WorldsShaper is an advanced compositing 3D building tool that integrates pre-existing or
    custom content, such as 3D models, textures or images created in Adobe's Photoshop, or midi or wave sound files, with architectural
    geometry and interactive behaviors and actions written in Java. The architectural building blocks for creating 3D worlds,
    the flexibility and power of integrating professional modeling and imaging tools, and the extensibility via Java make the
    WorldsShaper a tool well-suited for rapid creation of 3D environments.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | WorldsServer:
    WorldsServer is the scalable software that we use to control and operate our on-line virtual communities. WorldsServer manages
    the registration and authentication of users, the locations of users within the 3D environment, the physical structure of
    the 3D environment, all information regarding objects that are "shared" by the participants and any of the interactions
    between the users such as text chat. This platform also integrates an HTTP server for the delivery of other content such as
    audio and video streaming and secure e-commerce applications.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | WorldsBrowser:
    WorldsBrowser is used to access the 3D environments. The browser is optimized for speed, delivering relatively fast frame
    rates per second in highly textured virtual 3D worlds.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | WorldsPlayerTM:
    The WorldsPlayer allows users to view and experience our multi-user, interactive technology. Any world created with the WorldsShaper
    will be viewable and navigable with the WorldsPlayer. The WorldsPlayer has a high frame rate for fast, quality graphics, an
    easy-to-use graphic user interface, 2D web browser integration, automatic upgrade capability over the internet and a complete
    communication tool set including text chat, voice-to-voice chat, e-mail and animation.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | Worlds
    Gamma Libraries: The Worlds Gamma Libraries are composed of sample worlds, textures, models, avatars, actions, sensors, sounds,
    motion sequences, and other behaviors.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







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Our
Strategy



Worlds
Inc. will be focused solely on expanding our patent portfolio and to enforce our rights where it believes parties are infringing
on its IP portfolio.



We
have contracted to Worlds Online Inc. a perpetual world-wide license to our patented technology. Pursuant to the license, Worlds
Online has the right to issue unlimited sublicenses to the licensed technology, subject to our reasonable consent. The sublicenses
are subject to a revenue share negotiated between the two Companies.



Competition



Since
all operations were transferred to Worlds Online and our business is now the expansion of our patented technology, the Company
does not have any direct competition as it did in the past. However, inasmuch as we believe that multi-user, interactive 3D is
becoming a “hot” area, we expect other companies, many with far more resources than us, to move into this space.



Currently,
there are many companies collaborating to establish standardization of 3D usage on the Internet, the adoption of which may require
changes to our technology.



Intellectual
Property



U.S.
Patents: Worlds has been granted U.S patent 6,219,045, 7,181,690, 7,493,558, 7,945,856, 8,082,501, 8,145,998, 8,161,385, 8,407,592
and 8,640,028 for multi-server technology for 3D applications, which is our core technology.  We are now looking into
the implications and breadth of the patent in order to maximize its benefits.  The description of the initial patent
is as follows:



"The
present invention provides a highly scalable architecture for a three dimensional, multi-user, interactive virtual world system.  In
a preferred embodiment a plurality of users interact in the three-dimensional, computer-generated graphical space where each user
executes a client process to view a virtual world from the perspective of that user.  The virtual world shows Avatars
representing the other users who are neighbors of the user viewing the virtual world.  In order that the view can be
updated to reflect the motion of the remote user's Avatar, motion information is transmitted to a central server process that
provides position updates to client processes for neighbors of the user at that client process.  The client process
also uses an environment database to determine which background objects to render as well as to limit the number of displayable
Avatars to a maximum number of Avatars displayable by that client."



Trademark:
Worldsplayer - The WorldsPlayer is especially designed to allow users to view and experience the multi-user, interactive Worlds
Gamma technology. Any world created with the WorldsShaper will be viewable and navigable with WorldsPlayer.  Utilizing
the WorldsPlayer, a user assumes a persona (via a digital actor, or Avatars), and can then move, view, chat, play, express one's
self via gestures and animations, voice chat, send email, join discussion groups, listen to music, shop at Worlds 3D stores, and
watch videos, all in the company of users from around the world, within the 3D environment.  The WorldsPlayer boasts
high frame rate for fast, high quality graphics, an easy to use graphic user interface, seamless 2D Web browser integration, auto-upgrade
capability over the Internet, and a complete communication tool set including chat, voice-to-voice chat, email and animation.
The WorldsPlayer offers users the unique and creative experience of customizing their Avatars, while maintaining the ability to
animate and activate their Avatars.



In
addition to our patents and trademark, we intend to enter into confidentiality agreements with key employees and consultants to
protect our IP and general know-how.





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Employees



As
of December 31, 2016, we had one full time employee, our president, Thomas Kidrin, who divided his time between us and Worlds
Online Inc.



Corporate
History



We
were formed as a result of the contemporaneous mergers on December 3, 1997 of Worlds Inc., a Delaware corporation formed on April
26, 1994 with and into Worlds Acquisition Corp., a Delaware corporation formed on April 8, 1997 and of Worlds Acquisition Corp.
with and into Academic Computer Systems, Inc., a New Jersey corporation formed on May 20, 1968 (the "Mergers"). Academic
Computer Systems changed its name to Worlds Inc. after the Mergers. In December 1999, we changed our name from Worlds Inc. to
Worlds.com Inc. in order to better reflect our business as a consumer Internet web site that offers virtual "worlds"
in which consumers interact, conduct e-commerce and receive entertainment.



The
Company created a wholly-owned subsidiary named Worlds Online Inc. on January 25, 2011. On May 16, 2011, Worlds Inc. transferred
to Worlds Online Inc. the majority of its operations and related operational assets, except for its patent portfolio.





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ITEM
1A. RISK FACTORS



Our
business is subject to numerous risks, including but not limited to those set forth below. Our operations and performance could
also be subject to risks that do not exist as of the date of this report but emerge thereafter as well as risks that we do not
currently deem material.



Risks
related to our operations



Our
auditors have expressed doubt about our ability to continue as a going concern. If we do not generate substantial revenue from
our patent litigation and are also unable to obtain capital from other resources, we will significantly curtail our operations
or halt them entirely.



Our
capital requirements have been and will continue to be significant. Historically, we have been dependent on financings to fund
our development and working capital needs. As of December 31, 2016, we had only limited cash or cash equivalents. Accordingly,
if we do not develop sources of revenues from our patent portfolio, we would have to severely diminish our operations or halt
them entirely. The opinion of our auditors contains an explanatory paragraph regarding our ability to continue as a going concern.



We
have experienced relatively large losses during our development and, without significant increases in the market penetration of
our services and improvements to our operating margins, we will not achieve profitability.



Since
inception we have incurred significant net losses as set forth in the financial information included herein. We anticipate that
we will continue to incur significant losses for at least the short-term. We will not achieve profitable operations until we successfully
develop sources of revenues from our patent portfolio or generate revenues from other sources that are sufficient to offset our
operating costs. We may never be able to accomplish these objectives.



It
will be difficult for you to evaluate us based on our past performance because we have a relatively new business strategy with
a limited operating history.



We
have been actively engaged in the business of being an IP company for a relatively short period of time and, accordingly, have
only limited financial results on which you can evaluate our company and its new operations. We are subject to, and have not been
successful in addressing, the risks typically encountered by new enterprises and companies operating in the rapidly evolving Internet
marketplace, including those risks relating to:



•
the failure to develop brand name recognition and reputation;



•
the failure to achieve market acceptance of our services; and



•
an inability to grow and adapt our business and technology to evolving consumer demand.





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Our
limited resources may restrict our ability to manage any growth we may experience.

Growth
of our business may place a significant strain on our management systems and resources and may require us to implement new operating
and financial systems, procedures and controls. Our failure to manage our growth and expansion could adversely affect our business,
results of operations and financial condition. Failure to implement new systems effectively or within a reasonable period of time
could adversely affect our business, results of operations and financial condition.



If
we are unable to protect our intellectual property rights, competitors may be able to use our technology or trademarks, which
could weaken our competitive position.



In
addition to our patents, we rely on a combination of copyright, trademark and trade secret laws and restrictions on disclosure
to protect our intellectual property rights. We also intend to enter into confidentiality or license agreements with our employees,
consultants and customers, and control access to and distribution of our software, documentation and other proprietary information.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our
products or technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in
the United States.



We
cannot guarantee that the patents issued to us will be broad enough to provide any meaningful protection nor can we assure you
that one of our competitors may not develop more effective technologies, designs or methods without infringing our intellectual
property rights or that one of our competitors might not design around our proprietary technologies.



If
we are not able to protect our proprietary technology, trade secrets and know-how, our competitors may use our inventions to develop
competing products. We own certain patents relating to the multi-user 3D technology. However, these patents may not protect us
against our competitors, and patent litigation is very expensive. We may not have sufficient cash available to pursue any patent
litigation to its conclusion because currently we do not generate revenues.



We
cannot rely solely on our current patents to be successful. The standards that the U.S. Patent and Trademark Office and foreign
patent office's use to grant patents, and the standards that U.S. and foreign courts use to interpret patents, are not the same
and are not always applied predictably or uniformly and can change, particularly as new technologies develop. As such, the degree
of patent protection obtained in the U.S. may differ substantially from that obtained in various foreign countries. In some instances,
patents have been issued in the U.S. while substantially less or no protection has been obtained in Europe or other countries.



We
cannot be certain of the level of protection, if any that will be provided by our patents if we attempt to enforce them and they
are challenged in court where our competitors may raise defenses such as invalidity, unenforceability or possession of a valid
license. In addition, the type and extent of any patent claims that may be issued to us in the future are uncertain. Any patents
which are issued may not contain claims that will permit us to stop competitors from using similar technology.





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We
may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property
rights.



Third
parties have, and others may, challenge the validity of our patents and other intellectual property rights, resulting in costly
litigation or other time-consuming and expensive proceedings, which could deprive us of valuable rights. If we become involved
in any intellectual property litigation, interference or other judicial or administrative proceedings, we may incur substantial
expenses and the diversion of financial resources and technical and management personnel. An adverse determination may subject
us to significant liabilities or require us to seek licenses that may not be available from third parties on commercially favorable
terms, if at all. Further, if such claims are proven valid, through litigation or otherwise, we may be required to pay substantial
financial damages, which can be tripled if the infringement is deemed willful, or be required to discontinue or significantly
delay development, marketing, selling and licensing of the affected products and intellectual property rights.



Our
competitors may have filed, and may in the future file, patent applications covering technology similar to ours. There may be
third-party patents, patent applications and other intellectual property relevant to our potential products that may block or
compete with our products or processes. If another party has filed a United States patent application on inventions similar to
ours, we may have to participate in an interference proceeding declared by the United States Patent and Trademark Office to determine
priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such
efforts would be unsuccessful, resulting in a loss of our United States patent position with respect to such inventions. In addition,
we cannot assure you that we would prevail in any of these suits or that the damages or other remedies if any, awarded against
us would not be substantial. Claims of intellectual property infringement may require us to enter into royalty or license agreements
with third parties that may not be available on acceptable terms, if at all. We may also become subject to injunctions against
the further development and use of our technology, which would have a material adverse effect on our business, financial condition
and results of operations.



Some
of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have
substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation
could have a material adverse effect on our ability to raise the funds necessary to continue our operations.



If
we lose any of our key personnel or fail to hire and retain other talented employees, our operations could be harmed.



Our
success is currently dependent, in large part, on the personal efforts of Thomas Kidrin, our president and chief executive officer.  The
loss of Mr. Kidrin's services could have a material adverse effect on our business and prospects. Our success is also dependent
upon our ability to hire and retain additional qualified management, marketing, technical, financial, and other personnel, if
and when our business grows. Competition for qualified personnel is intense and we may not be able to hire or retain additional
qualified personnel. Any inability to attract and retain qualified management and other personnel would have a material adverse
effect on our ability to grow our business and operations.





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We
may not be able to economically comply with any new government regulation that may be adopted with respect to the Internet.



New
Internet legislation or regulation, or the application of existing laws and regulations to the Internet and e-commerce could add
additional costs and risks to doing business on the Internet. We are subject to regulations applicable to businesses generally
and laws or regulations directly applicable to communications over the Internet and access to e-commerce. Although there are currently
few laws and regulations directly applicable to e-commerce, it is possible that a number of laws and regulations may be adopted
with respect to the Internet, covering issues such as user privacy, pricing, content, copyrights, distribution, antitrust, taxation
and characteristics and quality of products and services.



Risks
related to our common stock



Possible
issuances of our capital stock would cause dilution to our existing shareholders.

While
we currently have 246,023,331 shares of common stock outstanding, we are authorized to issue up to 250,000,000 shares of common
stock. In the event we elect to issue additional shares of common stock in connection with any financing, acquisition or otherwise,
current shareholders could find their holdings substantially diluted, which means they will own a smaller percentage of our company.
There are also 5 million shares of preferred stock that the board can issue under any terms it wants and without any shareholder
approval. In the event the shareholders approve the Company’s proposals to increase the authorized capital and/or a
reverse split, the risk described above will be heightened even more.



Certain
shareholders control a substantial portion of our outstanding common stock.



Our
chief executive officer owns a significant portion of the outstanding shares of our common stock and Mr. Kidrin may be issued
an additional 7.5 million shares of our common stock upon the exercise of outstanding stock options. Accordingly, he will be able
to influence the election of our directors and thereby influence or direct our policies.



No
dividends have been paid on our common stock.



To
date, we have not paid any cash dividends on our common stock and we do not expect to declare or pay dividends on the common stock
in the foreseeable future. In addition, the payment of cash dividends may be limited or prohibited by the terms of any future
loan agreements.



We
are subject to "penny stock" regulations which may adversely impact the liquidity and price of our common stock.



Our
common stock is currently deemed a "penny stock." Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on certain national securities exchanges). The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document
that provides information on penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also
must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and
its salesperson in the transaction, and if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact
and the broker-dealer's presumed control over the market, and monthly account statements showing the market value of each penny
stock held in the customer's account. In addition, broker-dealers who sell such securities to persons other than established customers
and accredited investors (generally, those persons with assets in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 together with their spouse), the broker-dealer must make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement to the transaction.



These
requirements could reduce the level of trading activity, if any, in the secondary market for our common stock. As a result of
the foregoing, our shareholders may find it more difficult to sell their shares.





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The
exercise or conversion of outstanding options into common stock will dilute the percentage ownership of our other shareholders.
The sale of such common stock or other common stock in the open market could adversely affect the market price of our common stock.



As
of February 15, 2017, there are outstanding options to purchase an aggregate of 9,050,000  shares of our common stock
and more options and warrants will likely be granted in the future to our officers, directors, employees and consultants. No warrants
are outstanding as of February 15, 2017. The exercise of outstanding stock options and warrants and conversion of notes will dilute
the percentage ownership of our other shareholders. Sales, or the expectation of sales, of a substantial number of shares of our
common stock in the public market, including shares of our common stock issuable upon exercise of our stock options, could adversely
affect the prevailing market price of our common stock.



ITEM
2. DESCRIPTION OF PROPERTIES.



We
do not own any property nor do we have any contracts or options to acquire any property in the future. Presently, we are operating
out of offices in our president's residence at 11 Royal Road, Brookline, Massachusetts 02445, where we occupy approximately 800
square feet.  This space is adequate for our present and our planned future operations. We currently pay no rent to
our president for use of this space, although when funds are available we may do so in the future. In addition we have no written
agreement or formal arrangement with our president pertaining to the use of this space. We have no current plans to occupy other
or additional office space.



ITEM
3. LEGAL PROCEEDINGS.





The Federal case before Judge Denise Casper
has been stayed pending the outcome of the IPR appeal to the United States Court of Appeals for the Federal Circuit (“CAFC”).



On May 26, 2015, Bungie, Inc. filed three
Petitions for Inter Partes Review with the U.S. Patent & Trademark Office (“USPTO”), and specifically, the Patent
Trial and Appeal Board (“PTAB”). These Petitions for Inter Partes Review, Case Nos. IPR2015-01264, -01268, and -01269
respectively contained validity challenges of three U.S. patents assigned to the Company. On June 1, 2015, Bungie, Inc. filed
three additional Petitions for Inter Partes Review with the USPTO, and specifically the PTAB. The Petition for Inter Partes Review,
Case No. IPR201501319 contained validity challenges of one additional U.S. patent assigned to the Company. The Petitions for Inter
Partes Review, Case Nos. IPR2015-01321 and 01325 contained validity challenges of one additional U.S. patent assigned to the Company.
In each Inter Partes Review, Bungie, Inc. was asking the PTAB to cancel issued claims from the Company’s patents.



The Company’s legal counsel represented
the Company before the USPTO with regard to these six Petitions for Inter Partes Review, Case Nos. IPR2015-01264, -01268, -01269,
-01319, -01321, and -01325, instituted against the five U.S. patents assigned to the Company. The Company vigorously contested
each Inter Partes Review.



On November 10, 2016, the PTAB issued its
final written decision in IPR201501264, canceling claim 1 of Company’s U.S. Patent No. 7,945,856.



On November 30, 2016, the PTAB issued its
final written decision in IPR201501268, canceling claims 1-3, 5-7, 10-12, 14, 15, 17, and 19 of Company’s U.S. Patent No.
7,181,690. Of the claims reviewed, the PTAB did not cancel claims 4, 8, 13, and 16.



On November 28, 2016, the
PTAB issued its final written decision in IPR201501269, canceling claims 4, 6, 8, and 9 of Company’s U.S. Patent No. 7,493,558.
Of the claims reviewed, the PTAB did not cancel claims 5 and 7.

On December 6, 2016, the PTAB issued its
final written decision in IPR201501319, canceling claims 1-8, 10, 12, and 14-16 of Company’s U.S. Patent No. 8,082,501.



On November 28, 2016, the PTAB issued its
final written decision in IPR201501321, canceling claims 1-3, 7, 8, 12-18, and 20 of Company’s U.S. Patent No. 8,145,998.



On November 28, 2016, the PTAB issued its
final written decision in IPR201501325, canceling claims 1 and 20 of Company’s U.S. Patent No. 8,145,998. Of the claims
reviewed, the PTAB did not cancel claims 2-3, 7, 8, and 11-18 in this proceeding.



The Company did not appeal the final written
decisions in IPR2015-01268, IPR2015-01269, and IPR2015-01325.



On January 12, 2017, February 7, 2017,
and January 30, 2017, respectively, Company appealed the outcomes in IPR2015-01264, IPR2015-01319, and IPR2015-01321 to CAFC.
These three cases have been consolidated.



The Company filed formal appeal briefs
with CAFC on June 27, 2017.



On June 19, 2017, Appelle, Bungie Inc.,
filed an extension request to respond which CAFC granted on June 27, 2017 with Bungie Inc. response due August 28, 2017.



ITEM
4. MINE SAFETY DISCLOSURES.



N/A





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PART
II



ITEM
5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.



Our
common stock began trading on the OTC Bulletin Board on October 20, 1998 under the symbol "WLDI." On February 11, 2000,
in connection with the change in our name from Worlds Inc. to Worlds.com Inc., our symbol was changed to "WDDD." During
2001, our stock was no longer quoted on the OTC Bulletin Board and was quoted on the Pink Sheets, but returned to the Bulletin
Board in the third quarter of 2008. The following table sets forth, for the periods indicated, the high and low bids for our common
stock as reported on the OTC Bulletin Board or the Pink Sheets (representing interdealer quotations, without retail mark-ups,
mark-downs or commissions, and may not necessarily represent actual transactions):



|Year
    Ended December 31, 2016: |  | High |      | Low
|--------------------------------- |  | ---- | ---- | ---
|First
    quarter                 |  | $    | 0.04 |    
|Second
    quarter                |  | $    | 0.03 |    
|Third
    quarter                 |  | $    | 0.04 |    
|Fourth
    quarter                |  | $    | 0.06 |    



|Year
    Ended December 31, 2015: |  | High |      | Low
|--------------------------------- |  | ---- | ---- | ---
|First
    quarter                 |  | $    | 0.19 |    
|Second
    quarter                |  | $    | 0.15 |    
|Third
    quarter                 |  | $    | 0.13 |    
|Fourth
    quarter                |  | $    | 0.09 |    



Holders



As
of December 31, 2016, we had 618 shareholders of record of our common stock.



Dividends



We
have never paid a cash dividend on our common stock and do not anticipate paying any dividends in the near future.



Recent
Sales of Unregistered Securities



During
the year the Company raised an aggregate of $446,500 from issuing notes and convertible notes payable. In August of 2016 the Company
paid $175,257 to repurchase the convertible notes that were not converted and were still outstanding. The Company raised $350,000
from issuing common stock to accredited investors and $127,200 from the exercise of common stock warrants during the year ended
December 31, 2016.

All
of these issuances were exempt from registration in as much as they were all sold to accredited investors in private offerings
without the use of advertising.





On
May 8, 2015, the Company issued convertible debentures to certain accredited investors. The total principal amount of the debentures
is $300,000 with a maturity date of November 8, 2015 with a zero percent interest rate. The debentures were convertible into shares
of the Company’s common stock at the lower of the fixed price ($0.89) or fifty five percent (55%) of the average if the
three lower trading price for 20 trading days prior to conversion.

The
Company signed a Forbearance Agreement on October 26, 2015 for the 10% Convertible Debenture with the principal amount of $300,000
that was due November 8, 2015. The new maturity date of the debenture was May 8, 2016.

On
October 30, 2015, the company entered into a new Debenture with the same Lender, face amount of $405,000 having similar terms
as the first Convertible Debenture with a maturity date of April 30, 2016. The debenture included a forbearance fee of $90,000
and had an original issue discount of 10%.



The
Company issued promissory notes in the amount of $135,000 during the year ended December 31, 2015. One of the Promissory Notes
in the amount $25,000 was in lieu of payment of cash for an outstanding balance due to a consultant of the Company. The promissory
notes carry a 6% annual interest rate and are payable upon the earlier of (a) 24 months from the date of the promissory note or
(b) the Company reaching a settlement(s) on a patent infringement claim(s) and receiving an aggregate of at least $2 million net
proceeds from such settlement(s).



All
of these issuances were exempt from registration in as much as they were all sold to accredited investors in private offerings
without the use of advertising.





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Company
Equity Compensation Plans



The
following table sets forth information as of December 31, 2016 with respect to compensation plans (including individual compensation
arrangements) under which equity securities of the Company are authorized for issuance.



|Plan
    Category                                          |  | Number
                                         of securities to be
        issued
        upon exercise of
        outstanding
        options, warrants and rights |            | Weighted-average
    exercise price of outstanding options, warrants and rights |  | Number
    of securities remaining available for future issuance under equity compensation plans
|---------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | ------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------
|Equity
    compensation plans approved by stockholders     |  |                                                                                                                                                                      | 33,650,000 |                                                                                 |  |                                                                                                 
|Equity
    compensation plans not approved by stockholders |  |                                                                                                                                                                      | 0          |                                                                                 |  |                                                                                                 
|Total                                                      |  |                                                                                                                                                                      | 33,650,000 |                                                                                 |  |                                                                                                 



ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



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



Starting
in mid-2001 we were not able to generate enough revenue to sustain full operations and other sources of capital were not available.
As a result, we have had to significantly curtail our operations since that time and at times almost halt them all together. Since
mid-2007, as more funds became available from our financings, we were able to increase operations and become more active operationally.



On
May 16, 2011, we transferred, through a spin-off to our then wholly owned subsidiary, Worlds Online 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 Worlds Online Inc. to sublicense
patented technologies.



At
present, the Company’s anticipated sources of revenue after the spin-off will be from sublicenses of the patented technology
by Worlds Online and 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 Worlds Online 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 enabled us to begin upgrading
our technology, develop new products and actively solicit additional business.  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, or start to generate sufficient revenues, we may need to once again scale back operations.





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RESULTS
OF OPERATIONS



Our
net revenues for each of the years ended December 31, 2016 and 2015 were $0.  All the operations were transferred over
to Worlds Online Inc. in the spin off. The Company’s future sources of revenue after the spinoff are anticipated to be from
sublicenses of the patented technology to Worlds Online Inc.’s customers and any revenue that may be generated from enforcing
our patents in litigation or otherwise.  Inasmuch as the expiration date on the Company’s patents is November 16, 2016,
the Company does not expect any material amount of revenues from sublicense.

Year
ended December 31, 2016 compared to year ended December 31, 2015



Revenue
was $0 for the years ended December 31, 2016 and 2015.  All the operations were transferred over to Worlds Online Inc.
in the spin off. The business up to the spin off continued to run in a severely diminished mode due to the lack of liquidity.
Post spin off we still need to raise a sufficient amount of capital to provide the resources required that would enable us to
continue running the business.



Cost
of revenues is $0 in the years ended December 31, 2016 and 2015.



Selling
general and administrative (S, G & A) expenses increased by $200,658 from $387,625 to $588,283 for the year ended December
31, 2016.  Expenses are primarily professional fees and business consulting including broker fees. Expenses increased
during the year due to legal fees related to the patent litigation and the increase in activity related to financings of the Company
and all the activity surrounding those financings.



Salaries
and related expenses increased by $15,664 to $240,689 from $225,025 for the year ended December 31, 2016. Increase is due to the
CEO working under an employment agreement whereby he is to receive a 10% increase each year.



Common
stock issued for services rendered decreased by $110,400 to $0 in 2016 compared to $110,400 in 2015. Decrease is due to strategic
business consulting agreements in place in 2015 where no such agreements existed in 2016.



For
the year ended December 31, 2015, the Company recorded an option expense of $47,007, equal to the estimated fair value of the
options at the date of grants. The option expense was due to 600,000 options granted to the Company’s directors and an officer
of the company. For the year ended December 31, 2016, there was no option expense.



For
the year ended December 31, 2016 we had a loss on settlement of convertible notes of $246,413. For the year ended December 31,
2015 we had a loss on settlement of convertible notes of $2,313,151.



For
the year ended December 31, 2016, the Company had a gain on change in fair value of derivative liability of $6,191 and interest
expense of $58,712. For the year ended December 31, 2015, the Company had a loss on change in fair value of derivative liability
of $761,722 and interest expense of $61,935. For the year ended December 31, 2016, the Company had a debt issuance expense of
$5,000 related to the debenture signed during the year. For the year ended December 31, 2015, the Company had a debt issuance
expense of $130,500 related to the two debentures signed during the year.



As
a result of the foregoing, we realized a net loss of $1,132,906 for the year ended December 31, 2016 compared to a loss of $4,037,365
in the year ended December 31, 2015, a decrease in net losses of $2,904,459.





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Liquidity
and Capital Resources



At
December 31, 2016, our cash and cash equivalents were $93,378. We raised an aggregate of $446,500 from issuing notes and convertible
notes payable, $350,000 from issuing common stock and $127,200 from the exercise of common stock warrants during the year ended
December 31, 2016.



Our
cash and cash equivalents were $26,298 at December 31, 2015. We raised an aggregate of $479,000 from issuing notes and convertible
notes payable during the year ended December 31, 2015.



No
capital expenditures were made in 2016 or 2015.



Historically,
our primary cash requirements have been used to fund the cost of operations, development of our products and patent protection,
with additional funds having been used in connection with the exploration of new business lines.



The
funds raised in our 2016 and 2015 financings were and will be used to enhance our patent portfolio, pay salaries to management
and pay professional fees to our attorneys and auditors to prepare and file reports with the Securities and Exchange Commission.  We
hope to raise additional funds to be used for further developing our portfolio of patents and to document our technology in order
to enforce our patents where there is infringement.  No assurances can be given that we will be able to raise any additional
funds.



Subsequent
Events



The
company received an additional $292,800 in January and February upon the exercise of 24,400,000 warrants to purchase 24,400,000
shares of common stock at $0.012 per share.



Recent
Accounting Pronouncements



Recently
issued accounting standards



The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements up to ASU 2014-05, 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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ITEM 8. FINANCIAL STATEMENTS.

|CONTENTS                                                   
|-----------------------------------------------------------
|                                                           
|                                                           
|REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|                                                           
|BALANCE
    SHEETS                                         
|                                                           
|STATEMENTS
    OF OPERATIONS                               
|                                                           
|STATEMENT
    OF STOCKHOLDERS’ DEFICIT                     
|                                                           
|STATEMENTS
    OF CASH FLOWS                               
|                                                           
|NOTES TO FINANCIAL
    STATEMENTS                          
|                                                           







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To the Board of Directors and

Stockholders of Worlds Inc.



We have audited the accompanying balance
sheets of Worlds Inc. (the “Company”) as of December 31, 2016 and 2015 and related statements of operations, stockholders’
deficit, and cash flows for the two years then ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, 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. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.



In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of Worlds Inc. (a Delaware corporation) as
of December 31, 2016 and 2015 and the results of its operations and its cash flows for two years then ended in conformity with
accounting principles generally accepted in the United States of America.



The accompanying financial statements have
been prepared assuming the Company will continue as a going concern. The Company has suffered recurring operating losses, has an
accumulated stockholders’ deficit, has negative working capital, has had minimal revenues from operations, and has yet to
generate an internal cash flow that raises substantial doubt about its ability to continue as a going concern. Management's plans
in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.





/s/ L&L CPAS, PA

L&L CPAS, PA

Certified Public Accountants

Cornelius, NC

The United States of America

April 17, 2017









www.llcpas.net





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|Worlds Inc.                                                                                                                                                                        |  |                       |             |                      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----------- | ---------------------
|Balance Sheets                                                                                                                                                                     |  |                       |             |                      
|December 31, 2016 and 2015                                                                                                                                                         |  |                       |             |                      
|                                                                                                                                                                                   |  | Audited               |             | Audited              
|                                                                                                                                                                                   |  | December
    31, 2016 |             | December
    31, 2015
|                                                                                                                                                                                   |  |                       |             |                      
|ASSETS:                                                                                                                                                                            |  |                       |             |                      
|Current
    Assets                                                                                                                                                                 |  |                       |             |                      
|Cash
    and cash equivalents                                                                                                                                                      |  | $                     | 93,378      |                      
|                                                                                                                                                                                   |  |                       |             |                      
|Total
    Current Assets                                                                                                                                                           |  |                       | 93,378      |                      
|                                                                                                                                                                                   |  |                       |             |                      
|Total
    assets                                                                                                                                                                   |  | $                     | 93,378      |                      
|                                                                                                                                                                                   |  |                       |             |                      
|                                                                                                                                                                                   |  |                       |             |                      
|LIABILITIES AND STOCKHOLDERS'
    DEFICIT:                                                                                                                                         |  |                       |             |                      
|Current
    Liabilities                                                                                                                                                            |  |                       |             |                      
|Accounts payable                                                                                                                                                                   |  | $                     | 797,908     |                      
|Accrued expenses                                                                                                                                                                   |  |                       | 2,545,672   |                      
|Due to related party                                                                                                                                                               |  |                       | 5,053       |                      
|Derivative liability                                                                                                                                                               |  |                       | 0           |                      
|Notes payable                                                                                                                                                                      |  |                       | 773,279     |                      
|Notes Payables                                                                                                                                                                     |  |                       | 750,000     |                      
|Convertible
    notes payable (net of $0 and $21,000 discount)                                                                                                                     |  |                       | —           |                      
|                                                                                                                                                                                   |  |                       |             |                      
|Total
    Current Liabilities                                                                                                                                                      |  |                       | 4,871,912   |                      
|                                                                                                                                                                                   |  |                       |             |                      
|                                                                                                                                                                                   |  |                       |             |                      
|Stockholders'
    (Deficit)                                                                                                                                                        |  |                       |             |                      
|                                                                                                                                                                                   |  |                       |             |                      
|Common stock (Par value
    $0.001 authorized 250,000,000 shares, issued and outstanding 210,156,148 and 120,193,050 at December 31, 2016 and December
    31, 2015, respectively) |  |                       | 210,156     |                      
|Common stock
    subscribed     but not yet issued (11,350,000 and 750,000 at December 31, 2016 and December 31, 2015, respectively)                                               |  |                       | 11,350      |                      
|Additional paid in
    capital                                                                                                                                                     |  |                       | 35,171,780  |                      
|Common stock-warrants                                                                                                                                                              |  |                       | 1,206,913   |                      
|Accumulated
    deficit                                                                                                                                                            |  |                       | (41,378,732 | )                    
|Total stockholders
    deficit                                                                                                                                                     |  |                       | (4,778,533  | )                    
|                                                                                                                                                                                   |  |                       |             |                      
|Total
    Liabilities and stockholders' deficit                                                                                                                                    |  | $                     | 93,378      |                      
|                                                                                                                                                                                   |  |                       |             |                      
|The
    accompanying notes are an integral part of these financial statements                                                                                                     











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|Worlds Inc.                                                                   |  |         |             |        
|----------------------------------------------------------------------------- |  | ------- | ----------- | -------
|Statements of Operations                                                      |  |         |             |        
|For the Year Ended December 31, 2016 and 2015                                 |  |         |             |        
|                                                                              |  | Audited |             | Audited
|                                                                              |  | 2016    |             | 2015   
|                                                                              |  |         |             |        
|Revenues                                                                      |  | $       | —           |        
|Revenue                                                                       |  |         | —           |        
|                                                                              |  |         |             |        
|Total Revenue                                                                 |  |         | —           |        
|                                                                              |  |         |             |        
|Cost and Expenses                                                             |  |         |             |        
|                                                                              |  |         |             |        
|Cost
    of Revenue                                                           |  |         | —           |        
|                                                                              |  |         |             |        
|Gross
    Profit/(Loss)                                                       |  |         | —           |        
|                                                                              |  |         |             |        
|                                                                              |  |         |             |        
|Option
    Expense                                                            |  |         | —           |        
|Common
    Stock issued for services rendered                                 |  |         | —           |        
|Selling,
    General & Admin.                                                 |  |         | 588,283     |        
|Salaries
    and related                                                      |  |         | 240,689     |        
|                                                                              |  |         |             |        
|Operating
    loss                                                            |  |         | (828,972    | )      
|                                                                              |  |         |             |        
|                                                                              |  |         |             |        
|Other Income (Expense)                                                        |  |         |             |        
|Loss
    on settlement of convertible notes                                   |  |         | (246,413    | )      
|Gain
    (Loss) on change in fair value of derivative liability               |  |         | 6,191       |        
|Interest
    Expense                                                          |  |         | (58,712     | )      
|Debt
    issuance expense                                                     |  |         | (5,000      | )      
|Net
    Income/(Loss)                                                         |  | $       | (1,132,906  | )      
|                                                                              |  |         |             |        
|Weighted Average
    Loss per share                                           |  | $       | (0.01       | )      
|Weighted Average
    Common Shares Outstanding                                |  |         | 161,698,337 |        
|                                                                              |  |         |             |        
|The
    accompanying notes are an integral part of these financial statements









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|Worlds Inc.                                                                   |  |                  |             |                  |  |            |         |                  |  |   |            |   |            |   |           |             |  |              
|----------------------------------------------------------------------------- |  | ---------------- | ----------- | ---------------- |  | ---------- | ------- | ---------------- |  | - | ---------- | - | ---------- | - | --------- | ----------- |  | -------------
|Statement of Stockholders' Deficit                                            |  |                  |             |                  |  |            |         |                  |  |   |            |   |            |   |           |             |  |              
|For the Years Ended December 31, 2015 and 2016                                |  |                  |             |                  |  |            |         |                  |  |   |            |   |            |   |           |             |  |              
|                                                                              |  |                  |             |                  |  |            |         |                  |  |   | Common     |   | Common     |   |           |             |  |              
|                                                                              |  |                  |             |                  |  |            |         |                  |  |   | Shares     |   | Stock      |   |           |             |  | Total        
|                                                                              |  |                  |             |                  |  | Additional |         |                  |  |   | Subscribed |   | Subscribed |   |           | Accumulated |  | stockholders'
|                                                                              |  | Common
    stock |             | Common
    stock |  | Paid-in    |         | Common
    stock |  |   | but not    |   | but not    |   |           | Deficit     |  | equity       
|                                                                              |  | Shares           |             | Amount           |  | capital    |         | Warrants         |  |   | Issued     |   | Issued     |   |           |             |  | (deficit)    
|                                                                              |  |                  |             |                  |  |            |         |                  |  |   |            |   |            |   |           |             |  |              
|Balances,
    December 31, 2014                                               |  |                  | 96,851,941  |                  |  | $          | 96,852  |                  |  | $ | 31,409,427 |   |            | $ | 97,869    |             |  |              
|                                                                              |  |                  |             |                  |  |            |         |                  |  |   |            |   |            |   |           |             |  |              
|Conversion of note
    payable to common stock                                |  |                  | 6,746,356   |                  |  |            | 6,746   |                  |  |   | 143,254    |   |            |   | —         |             |  |              
|Issuance of common
    stock for services rendered                            |  |                  | 804,000     |                  |  |            | 804     |                  |  |   | 108,846    |   |            |   | —         |             |  |              
|stock issued
    for accrued expense                                          |  |                  | 182,057     |                  |  |            | 182     |                  |  |   | 24,324     |   |            |   | —         |             |  |              
|Adjustment to
    derivative liability for value of conversion                |  |                  | —           |                  |  |            | —       |                  |  |   | 202,633    |   |            |   | —         |             |  |              
|Settlement of
    convertible notes                                           |  |                  | 15,608,696  |                  |  |            | 15,609  |                  |  |   | 2,950,044  |   |            |   | —         |             |  |              
|Issuance of stock
    options                                                 |  |                  | —           |                  |  |            | —       |                  |  |   | 47,007     |   |            |   | —         |             |  |              
|Net
    loss                                                                  |  |                  | —           |                  |  |            | —       |                  |  |   | —          |   |            |   | —         |             |  |              
|Balances,
    December 31, 2015                                               |  |                  | 120,193,050 |                  |  | $          | 120,193 |                  |  | $ | 34,885,535 |   |            | $ | 97,869    |             |  |              
|                                                                              |  |                  |             |                  |  |            |         |                  |  |   |            |   |            |   |           |             |  |              
|Common stock issued for cash                                                  |  |                  | 35,000,000  |                  |  |            | 35,000  |                  |  |   | 315,000    |   |            |   | —         |             |  |              
|Warrants attached
    with private placement                                  |  |                  | —           |                  |  |            | —       |                  |  |   | (1,109,044 | ) |            |   | 1,109,044 |             |  |              
|Exercise of warrant                                                           |  |                  | —           |                  |  |            | —       |                  |  |   | 116,600    |   |            |   | —         |             |  |              
|Settlement of
    convertible notes                                           |  |                  | 54,963,098  |                  |  |            | 54,963  |                  |  |   | 329,196    |   |            |   | —         |             |  |              
|Reclassified
    of derivative liabilities to Additional paid in capital      |  |                  | —           |                  |  |            | —       |                  |  |   | 634,493    |   |            |   | —         |             |  |              
|Net
    Loss                                                                  |  |                  | —           |                  |  |            | —       |                  |  |   | —          |   |            |   | —         |             |  |              
|Balances,
    December 31, 2016                                               |  |                  | 210,156,148 |                  |  | $          | 210,156 |                  |  | $ | 35,171,780 |   |            | $ | 1,206,913 |             |  |              
|                                                                              |  |                  |             |                  |  |            |         |                  |  |   |            |   |            |   |           |             |  |              
|The
    accompanying notes are an integral part of these financial statements











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|Worlds Inc.                                                                           |  |          |            |         
|------------------------------------------------------------------------------------- |  | -------- | ---------- | --------
|Statements of Cash Flows                                                              |  |          |            |         
|Year Ended December 31, 2016 and 2015                                                 |  |          |            |         
|                                                                                      |  |         
|                                                                                      |  | Audited  |            | Audited 
|                                                                                      |  | 12/31/16 |            | 12/31/15
|Cash flows from operating
    activities:                                             |  |          |            |         
|Net (loss)                                                                            |  | $        | (1,132,906 | )       
|Adjustments to reconcile
    net loss to net cash (used in) operating activities      |  |          |            |         
|Loss on settlement
    of convertible notes                                           |  |          | 246,413    |         
|Fair value of stock
    options issued                                                |  |          | —          |         
|Common stock issued
    for services rendered                                         |  |          | —          |         
|Amortization of discount
    to note payable                                          |  |          | 5,000      |         
|Changes in fair value
    of derivative liabilities                                   |  |          | (6,191     | )       
|Accounts payable and
    accrued expenses                                             |  |          | 237,577    |         
|Due
    from/to related party                                                         |  |          | (31,257    | )       
|Net
    cash (used in) operating activities:                                          |  |          | (681,364   | )       
|                                                                                      |  |          |            |         
|                                                                                      |  |          |            |         
|Cash flows from financing
    activities                                              |  |          |            |         
|Proceeds from issuance
    of note payable                                            |  |          | 290,000    |         
|Proceeds from issuance
    of convertible note payable                                |  |          | 156,500    |         
|Cash paid to repurchase
    convertible note payable                                  |  |          | (175,257   | )       
|Proceeds from exercise
    of warrants                                                |  |          | 127,200    |         
|Proceeds
    from issuance of common stock                                            |  |          | 350,000    |         
|Net
    cash provided by financing activities                                         |  |          | 748,443    |         
|                                                                                      |  |          |            |         
|Net increase/(decrease)
    in cash and cash equivalents                              |  |          | 67,079     |         
|                                                                                      |  |          |            |         
|Cash and cash equivalents,
    including restricted, beginning of year                |  |          | 26,298     |         
|                                                                                      |  |          |            |         
|Cash
    and cash equivalents, including restricted, end of period                    |  | $        | 93,378     |         
|                                                                                      |  |          |            |         
|Non-cash financing
    activities                                                     |  |          |            |         
|                                                                                      |  |          |            |         
|Issuance of 54,963,098
    shares of common stock to retire convertible notes payable |  |          | 384,159    |         
|Issuance of 15,608,696
    Common stocks to retire notes payable and warrant          |  |          | —          |         
|Issuance of 6,746,356
    Common stocks to retire convertible notes payable           |  |          | —          |         
|Issuance of 182,057
    Common stocks to retire accrued expense                       |  |          | —          |         
|Converting $25,000
    of accrued expense to promissory note                          |  |          | —          |         
|                                                                                      |  |          |            |         
|Supplemental disclosure
    of cash flow information:                                 |  |          |            |         
|Cash paid during the
    year for:                                                    |  |          |            |         
|Interest                                                                              |  | $        | (34,916    | )       
|Income taxes                                                                          |  | $        | —          |         
|                                                                                      |  |          |            |         
|The accompanying
    notes are an integral part of these financial statements        











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NOTE
1 – DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES



Description
of Business



On
May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc., the majority
of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase
and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online
Inc. to sublicense its patented technologies.



Basis
of Presentation



The
accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America ("US GAAP"), which contemplates continuation of the Company as a going concern. The Company has always
been considered a developmental stage business, has incurred significant losses since its inception and has had minimal revenues
from operations. The Company will require substantial additional funds for development and enforcement of its patent portfolio.
There can be no assurance that the Company will be able to obtain the substantial additional capital resources to pursue its business
plan or that any assumptions relating to its business plan will prove to be accurate. The Company has not been able to generate
sufficient revenue or obtain sufficient financing which has had a material adverse effect on the Company, including requiring
the Company to reduce operations. These factors raise substantial doubt about the Company's ability to continue as a going concern.
As the Company has focused its attention on increasing its patent portfolio and enforcing it, the Company has been operating at
a significantly reduced capacity, with only one full time employee and using consultants to perform any additional work that may
be required.



Use
of Estimates



The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these
estimates.



Cash
and Cash Equivalents



Cash
and cash equivalents includes highly liquid money market instruments, which have original maturities of three months or less at
the time of purchase.



Due
to Related Party



Due
to related party is comprised of cash payments made by Worlds Online Inc. on behalf of Worlds Inc. for shared operating expenses.





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Revenue
Recognition



Effective
for the second quarter of 2011, the Company spun off its online businesses to Worlds Online Inc. The Company’s sources of
revenue after the spin off will be from sublicenses of the patented technology by Worlds Online and any revenue that may be generated
from enforcing its patents. The Company recognizes revenue when all of the following criteria are met: evidence of an arrangement
exists such as a signed contract, delivery has occurred, the price is fixed or determinable, and collectability is reasonable
assured. This will usually be in the form of a receipt of a customer’s acceptance indicating the product has been completed
to their satisfaction except for development work and service revenue which is recognized when the services have been performed.



Research
and Development Costs



Research
and development costs are charged to operations as incurred.



Property
and Equipment



Property
and equipment are stated at cost. Depreciation is provided on a straight line basis over the estimated useful lives of the assets
ranging from three to five years. When assets are retired or disposed of, the cost and accumulated depreciation are removed from
the accounts, and any resulting gains or losses are included in income. Maintenance and repairs are charged to expense in the
period incurred.



Impairment
of Long Lived Assets



The
Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting
Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment
of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is considered to
be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values.
The Company adopted the statement on inception. No impairments of these types of assets were recognized during 2016 and 2015.



Stock-Based
Compensation



The
Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of
the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity
to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair
value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required
to provide service in exchange for the award the requisite service period (usually the vesting period). No compensation cost is
recognized for equity instruments for which employees do not render the requisite service.



Income
Taxes



The
Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets
and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred
tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets
will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the
enactment date.



ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized
in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.
Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant
facts.





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Notes
Payable



The
Company has $773,279 in short term notes outstanding at December 31, 2016 and December 31, 2015. These are old notes payable for
which the statute of limitations has passed and therefore the Company does not expect it will ever have to repay those notes.



The
Company has an additional $750,000 and $460,000 in notes, and $0 and $349,500 (net of $21,000 discount) in convertible notes outstanding
at December 31, 2016 and December 31, 2015, respectively. The convertible notes were prepaid in August 2016.



Comprehensive
Income (Loss)



The
Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting
Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in
the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered
in the financial statements.



Loss
Per Share



Net
loss per common share is computed pursuant to section 260-10-45 of the FASB ASC. Basic net loss per share is computed by dividing
net loss by the weighted average number of shares of common stock outstanding during the period. As of December 31, 2016, there
were 9,050,000 options and no warrants, whose effect is anti-dilutive and not included in diluted net loss per share for December
31, 2016. The options and warrants may dilute future earnings per share.



Commitments
and Contingencies



The
Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain
conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will
only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and
such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that
are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived
merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected
to be sought therein.



If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment
indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be
estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material,
would be disclosed.



Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would
be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material
adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance
that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations
or cash flows.



During
2000 the Company was involved in a lawsuit relating to unpaid consulting services. In April, 2001 a judgment against the Company
was rendered for approximately $205,000. As of December 31, 2016, and 2015 the Company recorded a reserve of $205,000 for this
lawsuit, which is included in accrued expenses in the accompanying balance sheets.





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Risk
and Uncertainties



The
Company is subject to risks common to companies in the technology industries, including, but not limited to, litigation, development
of new technological innovations and dependence on key personnel.



Off
Balance Sheet Arrangements



The
Company does not have any off-balance sheet arrangements.



Uncertain
Tax Positions



The
Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant
to the provisions of Section 740-10-25 for the year ended December 31, 2016 or 2015.



Fair
Value of Financial Instruments



The
Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance
on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability,
as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that
market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes
a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation
techniques, are assigned a hierarchical level.



The
following are the hierarchical levels of inputs to measure fair value:



|• |  | Level
    1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.
|- |  | ------------------------------------------------------------------------------------------------------------------------



|• |  | Level
    2 – Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices
    for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or
    liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other
    means.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• |  | Level
    3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to
    determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably
    available.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
carrying amounts of the Company’s financial assets and liabilities, such as cash, other receivables, accounts payable &
accrued expenses, due to related party, notes payable and notes payables, approximate their fair values because of the short maturity
of these instruments. The Company's convertible notes payable are measured at amortized cost.



The
Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. See Note 5.





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Embedded
Conversion Features



The
Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to
determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative
at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment
under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration
of any beneficial conversion feature.



Derivative
Financial Instruments



The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the
derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the
fair value reported as charges or credits to income.



For
option-based simple derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative
instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such
instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.



Subsequent
Events



The
Company evaluated for subsequent events through the issuance date of the Company’s financial statements.



Recent
Accounting Pronouncements



The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements up to ASU 2015-16, 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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NOTE
2 - GOING CONCERN



The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Since its inception,
the Company has had periods where it had only minimal revenues from operations. There can be no assurance that the Company will
be able to obtain the additional capital resources to fully implement its business plan or that any assumptions relating to its
business plan will prove to be accurate. The Company is pursuing sources of additional financing and there can be no assurance
that any such financing will be available to the Company on commercially reasonable terms, or at all. Any inability to obtain
additional financing will likely have a material adverse effect on the Company, including possibly requiring the Company to reduce
and/or cease operations.



These
factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.









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NOTE
3 - NOTES PAYABLE



|Notes
    payable at December 31, 2016 consist of the following:  |  |  
|----------------------------------------------------------------- |  | -
|Unsecured note payable
    to a shareholder bearing 8% interest.  |  |  
|Entire
    balance of principal and unpaid interest due on demand |  | $
|Unsecured note payable
    to a shareholder bearing 10% interest  |  |  
|Entire balance of
    principal and unpaid interest due on demand |  | $
|Promissory notes                                                  |  | $
|Notes Payable - related
    party                                 |  | $
|Total notes                                                       |  | $
|2016                                                              |  | $
|2017                                                              |  | $
|2018                                                              |  | $
|2019                                                              |  | $
|2020                                                              |  | $
|                                                                  |  | $



We
issued promissory notes in the amount of $290,000 during the year ended December 31, 2016. The promissory notes carry a 6% annual
interest rate and are payable upon the earlier of (a) 24 months from the date of the promissory note or (b) the Company reaching
a settlement(s) on a patent infringement claim(s) and receiving an aggregate of at least $2 million net proceeds from such settlement(s). The
holders of the promissory notes shall receive repayment in the full face amount of the note from the initial $500,000 the Company
actually receives from the net proceeds of its patent infringement claim(s) or from the net proceeds of a public offering. In
addition the holder shall receive a preferred return (i) in an amount equal to up to 200% of the initial face amount of the note
out of available cash by sharing with all other investors in this series of notes in the allocation of 50% of the available cash
received by the Company from $2M - $4M and (ii) in an amount equal to up to 100% of the initial face amount of the note out of
available cash by sharing with all other investors in this series of notes in the allocation of 25% of the available cash received
by the Company from $4M - $6M. In other words, if the Company collects $6M in the net proceeds of available cash, the holder will
receive a return equal to 400% of its investment.

We
issued promissory notes in the amount of $135,000 during the year ended December 31, 2015. One of the promissory notes in the
amount of $25,000 was in lieu of payment of cash for an outstanding balance due to a consultant of the Company. The notes carry
the same terms as those issued in 2016.

As of December 31, 2016, $1,098,279
of the notes payables are defaulted. $325,000 of the notes payables are defaulted as of April 17, 2017 and the remaining $100,000
of the notes payables will be matured as of April 22, 2017.





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NOTE
4 - CONVERTIBLE DEBENTURES







On
May 8, 2015, the Company issued convertible debentures to certain accredited investors. The total principal amount of the debentures
was $300,000 with a maturity date of November 8, 2015 with a zero percent interest rate. The debentures are convertible into shares
of the Company’s common stock at the lower of the fixed price ($0.89) or fifty five percent (55%) of the average of the
three lower trading price for 20 trading days prior to conversion.



The
Company signed a Forbearance Agreement on October 26, 2015 for the 10% convertible debenture with the principal amount of $300,000
that was due November 8, 2015. The new maturity date of the debenture is May 8, 2016. As of June 30, 2016, the convertible debenture
was completely converted into common stock of the Company.



On
October 30, 2015, the Company entered into a new Debenture with the same Lender, with a face amount of $405,000 having similar
terms as the first Convertible Debenture with a maturity date of April 30, 2016. The debenture included a forbearance fee of $90,000
and had an original issue discount of 10%.



During
the year ended December 31, 2016, the Company issued 54,963,098 shares of common stock by converting $384,159 of the principal
of convertible notes payable.



On
June 1, 2016, the Company entered into a new Debenture with an accredited investor, with a face amount of $50,000. The debenture
is convertible into shares of the Company’s common stock at the lower of the fixed price ($0.005) or fifty five percent
(55%) of the average of the three lowest closing trading prices for 20 trading days prior to conversion. The Debenture has
a maturity date of December 1, 2016. The debenture had an original issue discount of 10%.



On
August 4, 2016, The Company paid off the balance of the debenture with the proceeds raised from issuing 35,000,000 shares of common
stock.



During
the year ended December 31, 2015, the Company issued 6,746,356 shares of common stock by converting $150,000 of the principal
of convertible notes payable.



As
of December 31, 2016, the aggregate carrying value of the debentures was $0. As of December 31, 2015, the aggregate carrying value
of the debentures was $370,500.



The
Convertible notes payable are summarized in the following table:





|Notes
    payables & accrued interest payable roll forward |  | Notes
    payable
|---------------------------------------------------------- |  | -----------------
|Payable                                                    |  |                  
|Accrued interest expense
    during 2016                   |  |                  
|Discount as of 12-31-2015                                  |  |                  
|Additional convertible
    notes during 2016               |  |                  
|New Discount during
    2016                               |  |                  
|Amortization of discount                                   |  |                  
|Conversion to common
    stock during 2016                 |  |                  
|Repaid by cash                                             |  |                  
|Discount as of
    12-31-2016                              |  |                  







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NOTE
5 - DERIVATIVE LIABILITIES



| | (A) | Convertible
    Notes Issued in May 8, 2015
| | --- | -------------------------------------------



The
Company identified conversion features embedded within convertible debt issued in May 8, 2015. The Company has determined that
the features associated with the embedded conversion option, in the form a ratchet provision, should be accounted for at fair
value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle
all potential future conversion transactions.  The convertible debt was completely converted as of December 31, 2016.



| | (B) | Convertible
    Notes Issued in October 30, 2015
| | --- | ------------------------------------------------



The
Company identified conversion features embedded within convertible debt issued on October 30, 2015. The Company has determined
that the features associated with the embedded conversion option, in the form a ratchet provision, should be accounted for at
fair value, as a derivative liability as of the maturity date of April 30, 2016. The convertible debt was completely converted
as of December 31, 2016.



| | (C) | Convertible
    Notes Issued in June 1, 2016
| | --- | --------------------------------------------



The
Company identified conversion features embedded within convertible debt issued on June 1, 2016. The Company has determined that
the features associated with the embedded conversion option, in the form a ratchet provision, should be accounted for at fair
value, as a derivative liability at June 1, 2016. The convertible note was paid in full on August 10, 2016.





| | (D) | Settlement of Derivative Liabilities
| | --- | ------------------------------------



During the year ended December 31, 2015
the Company settled a lawsuit brought forth by the note holders, effectively terminating and canceling all remaining agreements,
warrants and notes. As a result of the settlement, the Company recorded a loss on settlement of convertible notes of $2,336,035
during the year ended December 31, 2015.



As of the date of the settlement with
the noteholders, the Company revalued the embedded derivative liability and recorded a loss on change in fair value of derivative
liability of $143,383.





| | (E) | Options identified as derivative liability
| | --- | ------------------------------------------



The Company identified options issued
to directors and officers are a derivative liability due to a lack of number of authorized shares to cover all the options issued
by the Company if they are all exercised as of December 31, 2015. Therefore,
the fair value of the options have been recorded as liabilities on the balance sheet. The change in the fair value of the derivative
liabilities will be recorded in other income or expenses in the statement of operations at the end of each period, with the offset
to the derivative liabilities on the balance sheet. The fair value of the embedded derivative liabilities was determined using
the Black-Scholes valuation model. As of December 31, 2016, the Company reserved shares in the Transfer
Agent for these options. And therefore, these options will not generate any derivative liabilities.









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The
fair value at the commitment and re-measurement dates for the Company’s derivative liabilities as of December 31, 2016
and 2015,are summarized in the following table:





|Derivative liabilities roll-forward                          |  | DL-NP |          | DL-options |  | Total
|------------------------------------------------------------ |  | ----- | -------- | ---------- |  | -----
|Initial Derivative liabilities generated during 2015         |  |       | 446,282  |            |  |      
|Fair value mark to market adjustment                         |  |       | (18,698  | )          |  |      
|Reclassified to Additional paid in capital due to conversion |  |       | (202,633 | )          |  |      
|Derivative liabilities as of 12.31.2015                      |  |       | 224,951  |            |  |      
|Initial Derivative liabilities                               |  |       | 340,614  |            |  |      
|Fair value mark to market adjustment                         |  |       | 133,517  |            |  |      
|Reclassified to Additional paid in capital due to conversion |  |       | (583,445 | )          |  |      
|Gain in debt settlement - GL                                 |  |       | (115,637 | )          |  |      
|Derivative liabilities as of 12.31.2016                      |  |       | —        |            |  |      







The
fair value at the commitment and re-measurement dates for the Company’s derivative liabilities were based upon the following
management assumptions as of December 31, 2016 and 2015:

|                            |  | Commitment
    Date |                   | Remeasurement
    Date
|--------------------------- |  | ------------------- | ----------------- | ----------------------
|Expected
    dividends      |  |                     | 0                 | %                     
|Expected
    volatility     |  |                     | 183
    -     233 | %                     
|Expected
    term           |  |                     | 1.89
    - 4.64   | years                 
|Risk
    free interest rate |  |                     | 0.89
    – 1.75   | %                     





NOTE 6 - DEBT DISCOUNT



The debt discount was recorded
in 2016 and 2015 and pertains to convertible debt issued that contains ratchet features that are required to be reported at
fair value.



Debt discount is summarized as follows:



|Discount roll-forward                     |  | Discount
|----------------------------------------- |  | --------
|Payable                                   |  |         
|Discount during 2016                      |  |         
|Amortization of debt discount during 2016 |  |         
|Discount as of 12-31-2016                 |  |         



Amortization of debt discount on notes
payable for the year ended December 31, 2016 and December 31, 2015 was $362,050 and $144,322, respectively.





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NOTE
7 - EQUITY



During
the year ended December 31, 2016, the Company issued 35,000,000 shares of common stock at a price of $0.01 per share raising $350,000.
In connection with this raise, the Company issued 35,000,000 warrants with each to purchase one share of common stock at a price
of $0.012 in the next five years. The warrants will expire in five years from the date of the purchase of the common shares. During
the year ended December 31, 2016, 10,600,000 warrants were exercised raising an additional $127,200. As of December 31, 2016,
these common stock were not issued.



During
the year ended December 31, 2016, the Company issued 54,963,098 shares of common stock by converting $384,159 of the principal
of convertible notes payable.



During
the year ended December 31, 2015, the company issued 15,608,696 common shares to the Class C Note holders in order to terminate
the litigation between us, terminate all agreements between us, cancel all warrants we have previously issued to them as well
as the outstanding balance of the Class C Notes. In order to have sufficient shares to deliver, we implemented the previously
authorized amendment to our certificate of incorporation and increased our authorized common stock to one hundred fifty million
shares.



During
the year ended December 31, 2015, the Company issued an aggregate of 804,000 shares of common stock as payment for services rendered,
an aggregate value of $80,400



During
the year ended December 31, 2015, the Company issued 182,057 shares to an officer of the company as payment for an accrued expense
in the amount of $24,506.07.



During
the year ended December 31, 2015, the Company issued 6,746,356 shares of common stock by converting $150,000 of the principal
of convertible notes payable.





NOTE
8 – STOCK OPTIONS



No
stock options were issued during the year ended December 31, 2016 and no stock options were exercised during the year ended
December 31, 2016. The Company issued 35,000,000 warrants as part of the subscription agreement that included the sale of
35,000,000 shares of common stock. Each warrant entitles the holder to purchase one share of common stock at a price of
$0.012. The warrants expire in five years. 10,600,000 warrants were exercised for 10,600,000 shares of common stock during
the year ended December 31, 2016. As of December 31, 2016 these shares were not issued.



During
the year ended December 31, 2015, the Company issued 300,000 options to the Company’s directors. Each received 100,000 options
for serving as board members in 2015. An additional 300,000 options were issued to the Chief Financial Officer of the Company.

During
the year ended December 31, 2015, the Company recorded an option expense of $47,007 equal to the estimated fair value of the options
at the date of grants. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately
1.63% risk-free interest, 0% dividend yield, 175% volatility, and expected life of 5 years.



No
stock options were exercised during the year ended December 30, 2015.



On
January 23, 2015 we entered into an agreement with the Class C note holders who held four million five hundred thirty five thousand
seven hundred and fourteen warrants to purchase our common stock. The settlement agreement, among other things, cancelled all
warrants we have previously issued to them.



|Stock
    Warrants and Options                                                             
|-------------------------------------------------------------------------------------------
|Stock
    warrants/options outstanding and exercisable on December 31, 2016 are as follows:
|                                                                                           
|                                                                                           
|                                                                                           
|$                                                                                          
|$                                                                                          
|$                                                                                          
|$                                                                                          
|$                                                                                          
|$                                                                                          
|$                                                                                          
|$                                                                                          









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NOTE
9 - INCOME TAXES



At
December 31, 2016, the Company had federal and state net operating loss carry forwards of approximately $40,000,000 that
expire in various years through the year 2036.



Due
to operating losses, there is no provision for current federal or state income taxes for the year ended December 31, 2016 and
2015.



Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amount used for federal and state income tax purposes.



The
Company’s deferred tax asset at December 31, 2016 consists of net operating loss carry forwards calculated using federal
and state effective tax rates equating to approximately $16,137,000 less a valuation allowance in the amount of approximately
$16,137,000. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation
allowance. The valuation allowance increased by approximately $441,000 and $1,575,000 for the years ended December 31, 2016 and
2015, respectively.



The
Company’s total deferred tax asset as of December 31, 2016 is as follows:

|Net
    operating loss carry forwards |  | $ | $16,137,700  |  
|------------------------------------- |  | - | ------------ | -
|Valuation
    allowance               |  |   | ($16,137,700 | )
|                                      |  |   |              |  
|Net
    deferred tax asset            |  | $ | —            |  



The
reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the years
ended December 31, 2016 and 2015 is as follows:



|                                                      |  | 2016 |     | 2015
|----------------------------------------------------- |  | ---- | --- | ----
|Income
    tax computed at the federal statutory rate |  |      | 34  |     
|Income
    tax computed at the state statutory rate   |  |      | 5   |     
|Valuation
    allowance                               |  |      | (39 | )   
|Total
    deferred tax asset                          |  |      | 0   |     



NOTE 10 - COMMITMENTS AND CONTINGENCIES



The Company is committed to an employment
agreement with its President and CEO, Thom Kidrin. The agreement, dated as of August 30, 2012, is for five years with a one-year
renewal option held by Mr. Kidrin.  The agreement provides for a base salary of $175,000, which increases 10% on September
1 of each year; a monthly car allowance of $500; an annual bonus equal to 2.5% of Pre-Tax Income (as defined in the agreement);
an additional bonus as follows: $75,000, if Pre-Tax Income for the year is between 150% and 200% of the prior fiscal year’s
Pre-Tax Income or (B) $100,000, if Pre-Tax Income for the year is between 201% and 250% of the prior fiscal year’s Pre-Tax
Income or (C) $200,000, if Pre-Tax Income for the year is 251% or greater than the prior fiscal year’s Pre-Tax Income, but
in no event shall this additional bonus exceed five (5%) percent of Pre-Tax Income for such year; payment of up to $10,000 in
life insurance premiums; options to purchase 7.5 million shares of Worlds Inc. common stock at an exercise price of  $0.070
per share, all of which vested on August 30, 2012; a death benefit of at least $2 million dollars; and a payment equal to 2.99
times his base amount (as defined in the agreement) in the event of a Change of Control (as defined in the agreement).  The
agreement also provides that Mr. Kidrin can be terminated for cause (as defined in the agreement) and that he is subject to restrictive
covenants for 12 months after termination.







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NOTE
11 - RELATED PARTY TRANSACTIONS



On
May 16, 2011, the Company transferred, through a spin-off to its then wholly owned subsidiary, Worlds Online Inc., the majority
of its operations and related operational assets. The Company retained its patent portfolio which it intends to continue to increase
and to more aggressively enforce against alleged infringers. The Company also entered into a License Agreement with Worlds Online
Inc. to sublicense its patented technologies.



Due
to related party is comprised of cash payments for operating expenses made by Worlds Online Inc. on behalf of Worlds Inc. The
balance at December 31, 2016 is $5,053 and at December 31, 2015 is $36,310. The balance of  accrued expense and accounts
payables to related party is $742,032 and $571,923 at December 31, 2016 and 2015, respectively.



NOTE
12 - PATENTS

Worlds
Inc. currently has nine patents, 6,219,045 - 7,181,690 - 7,493,558 – 7,945,856, - 8,082,501, – 8,145,998 – 8,161,383,
– 8,407,592 and 8,640,028. On March 30, 2012, the Company filed a patent infringement lawsuit against Activision Bizzard
Inc., Blizzard Entertainment Inc. and Activision Publishing Inc. in the United States District Court for the District of Massachusetts.
Susman Godfrey LLP is lead counsel for the Company. The costs to prosecute those parties that the Company and our legal counsel
believe to be infringing on said patents were capitalized under patents until a resolution is reached.



There
can be no assurance that the Company will be successful in its ability to prosecute its IP portfolio or that we will be able to
acquire additional patents.



NOTE
13 - SUBSEQUENT EVENT

The
company received an additional $292,800 in January and February upon the exercise of 24,400,000 warrants to purchase 24,400,000
shares of the Company’s common stock at $0.012 per share.





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ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



None.



ITEM 9A.  CONTROLS
AND PROCEDURES.



Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures



Under
the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (the Exchange Act). Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal
financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.



Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2016 our disclosure
controls and procedures were effective. The above statement notwithstanding,
you are cautioned that no system is foolproof.



Management’s
Annual Report on Internal Control over Financial Reporting



Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule
13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external
purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes
those policies and procedures that:



(i)  pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our
assets;



(ii)  provide
reasonable assurance that transactions are recorded as necessary to permit the preparation of our consolidated financial statements
in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and directors; and





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(iii)  provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the consolidated financial statements.



Management
assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016. In making
this assessment, management used the criteria set forth in Internal Control Over Financial Reporting — Guidance for Smaller
Public Companies issued by the Committee of Sponsoring Organizations of the Treadway Commission.



Subject
to the inherent limitations described in the following paragraph, our management has concluded that our internal controls over
financial reporting was effective at December 31, 2016 at the reasonable assurance level.



Inherent
Limitations Over Internal Controls



Internal
control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its
inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly,
even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions or that the degree of compliance with the policies or procedures may deteriorate.  Accordingly, our internal
controls and procedures are designed to provide reasonable assurance of achieving their objectives.



Changes
in Internal Control over Financial Reporting



We
have made no change in our internal control over financial reporting during the fourth quarter that has materially affected, or
is reasonably likely to materially affect, our internal control over financial reporting.



Attestation
Report of the Registered Public Accounting Firm



This
annual report does not include an attestation report of our independent registered public accounting firm regarding internal control
over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting
firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report on
Form 10-K.



ITEM
9B.  OTHER INFORMATION.



None.





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PART
III



ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.



The
following table sets forth the name, age and position of our directors and executive officers. Our directors are elected annually
and serve until the next annual meeting of stockholders.  Except for Mr. Kidrin, all of our directors are independent.



|Name                    | Age | Position                                                                    
|----------------------- | --- | ----------------------------------------------------------------------------
|Thomas
    Kidrin       | 64  | President,
    Chief Executive Officer, Secretary, Treasurer, Director      
|Christopher
    J. Ryan | 56  | Vice
    President-Finance, Principal Accounting and Chief Financial Officer
|Bernard
    Stolar      | 70  | Director                                                                    
|Robert
    Fireman      | 68  | Director                                                                    
|Edward
    Gildea       | 64  | Director                                                                    





Thomas
Kidrin became a director on October 1997 and has been president, secretary and treasurer from December 1997 through July 2007
then added the title chief executive officer since August 2007. Mr. Kidrin was also president and a director of Worlds Acquisition
Corp. from April 1997 to December 1997. He has been the chairman and president of Datastream Corporation, a designer and developer
of interactive products and services, since 1993. From December 1991 to June 1996, Mr. Kidrin was a founder, director, and President
of UC Television Network Corp., a company engaged in the design and manufacture of interactive entertainment/advertising networks
in the college market under the brand name College Television Network, the largest private network on college campuses in the
United States sold to MTV in 1996 now operating under MTVU. Mr. Kidrin has attended Drake University and the New School of Social
Research.



Christopher
J. Ryan has been Vice President-Finance since May 2000 and principal accounting and finance officer since August 2000. From August
1991 through April 2000, Mr. Ryan held a variety of financial management positions at Reuters America, an information services
company.  From 2001 through 2003, Mr. Ryan was the founder and President of CJR Advisory Services, a personal corporation
through which he provided financial consulting services to various entities.  From 2004 to 2010, Mr. Ryan was the CFO
of Peminic, Inc.  From 2008 to 2012 Mr. Ryan served as the CFO of Conversive Inc. Mr. Ryan is an inactive certified
public accountant. He is a graduate of Montclair State University in New Jersey and received an M.B.A. degree from Fordham University.



Bernard
Stolar became a director on September 11, 2007 and is noted for his expertise in both identifying and developing market-driving
content and forging successful business partnerships, brings to the board over twenty years of senior-level experience within
the interactive entertainment industry in all phases of company operations, including sales and marketing, product development,
licensing, distribution, strategic planning and management. Mr. Stolar has served in high profile leadership roles at publicly
and privately held interactive entertainment companies. Currently, Mr. Stolar is Dean of Games and Game Evangelist for Google,
Inc. From February 2006 until its purchase by Google, Inc. in February 2007, Mr. Stolar was the Chairman of the Board of Adscape
Media. Prior to this, he was president and chief operating office of BAM! Entertainment, where he transformed the company from
a hand-held content company to a developer and marketer of interactive entertainment for next generation video game consoles.
In 2000, Mr. Stolar joined Mattel, Inc. as president of Mattel Interactive, where he was responsible for directing and reorganizing
the $1 billion Mattel Interactive division. From 1996 to 1999, Mr. Stolar served as president and chief operating officer of Sega
of America, Inc. where he helped increase sales from $200 million to over $1 billion in three years, and orchestrated the launch
of the Sega Dreamcast(TM), the fastest selling video game console in US history at that time. Mr. Stolar also served as executive
vice president of Sony Computer Entertainment of America, where he was a key leader of the Sony Playstation® launch team,
directing all third-party publishing in the U.S. Prior to that, Mr. Stolar served as president of Atari America's game division.





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Robert
Fireman became a director on September 11, 2007 and is a seasoned executive in the building of technology and consumer driven
companies. He brings to Worlds vast experience in the development of real time, loyalty based, stored value products and services. 
Mr. Fireman was a founder and former Director and General Manager of SmartSource Direct, Inc., a subsidiary of News America Marketing
(News Corp).  Mr. Fireman was responsible for the development, marketing and distribution of card-based loyalty, financial,
and database products & services in retail, grocery and drug store chains encompassing over 50,000 stores throughout the U.S.  Mr.
Fireman has been a practicing attorney for over 25 years and is the managing attorney of Fireman & Associates LLP.



Mr.
Gildea became a director on January 10, 2014 and contributes expertise in areas of mergers & acquisitions, strategic planning,
funding, business development and executive leadership. He has many years of experience as a board member. Mr. Gildea was the
CEO, President, and Chairman of the Board Of Directors of Converted Organics Inc., a publicly held company that manufactures organic
fertilizer by recycling food waste, from January 2006 until June 2013.  He was also a lawyer for, and COO of, QualityMetric
Inc. (healthcare) from 2000-2005 and Grolier Incorporated (publishing) from1980-1989. He spent 10 years at the Kellogg Company
(1990-2000) as their vice president of legal where he managed and supervised a legal team responsible for executing mergers, acquisitions
and divestitures. He is currently a member of the board of directors of Finjan Holdings Inc. (Intellectual property security software)
and WPCS International Inc. (wireless communications and Bitcoin exchange).  He received his undergraduate degree from The
College of the Holy Cross and his law degree from Suffolk University.



The
board of directors did not meet during 2016 but acted by written consent one time during the year.  The board does not
have any standing committees and when necessary, the entire board acts to perform such functions.



Family
Relationships



None.



Legal
Proceedings







None.





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Audit
Committee



We
do not have a separately designated standing audit committee. Pursuant to Section 3(a)(58)(B) of the Exchange Act, the entire
Board of Directors acts as an audit committee for the purpose of overseeing the accounting and financial reporting processes,
and audits of our financial statements. The Commission recently adopted new regulations relating to audit committee composition
and functions, including disclosure requirements relating to the presence of an "audit committee financial expert" serving
on its audit committee.  We are not in a position at this time to attract, retain and compensate additional directors
in order to acquire a director who qualifies as an "audit committee financial expert" or to so designate one of our
current directors, but we intend to either retain an additional director who will qualify as such an expert or designate one of
our current directors as such an expert, as soon as reasonably practicable. Our current directors, by virtue of their past employment
experience, have considerable knowledge of financial statements, finance, and accounting, and have significant employment experience
involving financial oversight responsibilities. Accordingly, we believe that our current directors capably fulfill the duties
and responsibilities of an audit committee in the absence of such a designated expert at this time.



Code
of Ethics



We
have adopted a code of ethic (the "Code of Ethics") that applies to our principal chief executive officer, principal
financial officer, principal accounting officer or controller, or persons performing similar functions.  A copy of the
Code of Ethics was filed  as Exhibit 14.1 to a previous annual report. The Code of Ethics is being designed with the
intent to deter wrongdoing, and to promote the following:



|• | Honest
    and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional
    relationships
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | Full,
    fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the Commission
    and in other public communications we make
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | Compliance
    with applicable governmental laws, rules and regulations
|- | -----------------------------------------------------------------------



|• | The
    prompt internal reporting of violations of the code to an appropriate person or persons identified in the code
|- | ----------------------------------------------------------------------------------------------------------------------



|• | Accountability
    for adherence to the code
|- | --------------------------------------------



Section
16(a) Beneficial Ownership Reporting Compliance



Under
Section 16(a) of the Exchange Act, all executive officers, directors, and each person who is the beneficial owner of more than
10% of the common stock of a company that files reports pursuant to Section 12 of the Exchange Act, are required to report the
ownership of such common stock, options, and stock appreciation rights (other than certain cash-only rights) and any changes in
that ownership with the Commission. Specific due dates for these reports have been established, and we are required to report,
in this Form 10-K, any failure to comply therewith during the fiscal year ended December 31, 2015.   We believe that
all of these filing requirements were satisfied by its executive officers, directors and by the beneficial owners of more than
10% of our common stock. In making this statement, we have relied solely on copies of any reporting forms received by us, and
upon any written representations received from reporting persons that no Form 5 (Annual Statement of Changes in Beneficial Ownership)
was required to be filed under applicable rules of the Commission.





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ITEM
11. EXECUTIVE COMPENSATION.





The
following table sets forth the compensation paid by us during the fiscal periods ending December 31, 2016, and 2015, to our chief
executive officer, chief financial officer and to our other most highly compensated executive officers whose compensation exceeded
$100,000 for those fiscal periods.



|SUMMARY
    COMPENSATION TABLE (1)(2) | 
|------------------------------------- | 
|Name
    and principal position(a)    | 
|                                      | 
|Thomas
    KidrinPresident and CEO    | 
|                                      | 
|                                      | 
|Chris
    Ryan, CFO                   | 
|                                      | 
|                                      | 



(1)
The above compensation does not include other personal benefits, the total value of which do not exceed $10,000.



(2)
Pursuant to the regulations promulgated by the SEC, the table omits columns reserved for types of compensation not applicable
to us.



(3)
Mr. Kidrin has an employment agreement effective August 30, 2012 with a base annual salary of $175,000 with annual 10% increases
every September 1.  A portion of his compensation has been deferred due to lack of funds.



(4)
Mr. Ryan received no compensation in 2016. His compensation has been deferred due to Lack of Funds.





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Stock
Option Grants



The
following table sets forth information as of December 31, 2016 concerning unexercised options, unvested stock and equity
incentive plan awards for the executive officers named in the Summary Compensation Table.



OUTSTANDING
EQUITY AWARDS AT YEAR-ENDED DECEMBER 31, 2016



|Name                 |  | Number
    of Securities Underlying Unexercised Options (#) Exercisable |           | Number
    of Securities Underlying Unexercised Options (#) Unexercisable |  | Equity
    Incentive Plans Awards: Securities Underlying Unexercised Unearned Options (#) |   | Option
    Exercise Price |  | Option
    Expiration Date
|-------------------- |  | ----------------------------------------------------------------------- | --------- | ------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- | - | ------------------------- |  | --------------------------
|                     |  |                                                                         |           |                                                                           |  |                                                                                           |   |                           |  |                           
|Thom
    Kidrin      |  |                                                                         | 7,500,000 |                                                                           |  |                                                                                           | 0 |                           |  |                           
|                     |  |                                                                         |           |                                                                           |  |                                                                                           |   |                           |  |                           
|Christopher
    Ryan |  |                                                                         | 300,000   |                                                                           |  |                                                                                           | 0 |                           |  |                           
|Christopher
    Ryan |  |                                                                         | 300,000   |                                                                           |  |                                                                                           | 0 |                           |  |                           





Compensation
of Directors



On
September 5, 2007, the Board of Directors adopted a compensation program for the directors whereby each director will receive
compensation in the form of stock options for serving on the board. Five-year non-qualified stock options to purchase 100,000
shares of the Corporation’s common stock are to be granted annually on January 1 to each director then in office at an exercise
price equal to the last reported trading price of our common stock on that day, with such option to vest in 12 months, provided
the director serves for at least six months, following the date of grant.  In addition, every director upon first joining
our board receives 150,000 stock options that vest immediately and are exercisable for five years at a price equal to the last
reported trading price of our common stock on that day.



The
following table sets forth information concerning the compensation paid to each of our non-employee directors during 2016 for
their services rendered as directors.



DIRECTOR
COMPENSATION



|Name               |  |  | Fees Earned
        or Paid in Cash
        ($) |  |  |  | Stock
        Awards ($) |  |  |  | Option
        Awards ($)
        (1) |  |  | All Other
        Compensation
        ($) |  |  | Total
        ($) | 
|------------------ |  |  | ----------------------------------------------- |  |  |  | ------------------------ |  |  |  | ------------------------------------- |  |  | ------------------------------------------ |  |  | ----------------- | 
|Bernard
    Stolar |  |  | 0                                               |  |  |  | 0                        |  |  |  | 0                                     |  |  |                                            |  |  | 0                 | 
|Robert
    Fireman |  |  | 0                                               |  |  |  | 0                        |  |  |  | 0                                     |  |  |                                            |  |  | 0                 | 
|Edward
    Gildea  |  |  | 0                                               |  |  |  | 0                        |  |  |  | 0                                     |  |  |                                            |  |  | 0                 | 





(1)
This column represents the dollar amount recognized for financial statement reporting purposes with respect to the 2016 fiscal
year for the fair value of stock options granted to the named director in fiscal year 2016, in accordance with SFAS 123R. Pursuant
to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. These
amounts reflect our accounting expense for these awards, and do not correspond to the actual value that will be recognized from
these awards by the named director.



No
stock options were issued to the directors during 2016. Their option Awards for 2016 service will be granted in 2017.





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Employment
Agreements



The
Company is committed to an employment agreement with its President and CEO, Thom Kidrin. The agreement, dated as of August 30,
2012, is for five years with a one-year renewal option held by Mr. Kidrin.  The agreement provides for a base salary of $175,000,
which increases 10% on September 1 of each year; a monthly car allowance of $500; an annual bonus equal to 2.5% of Pre-Tax Income
(as defined in the agreement); an additional bonus as follows: $75,000, if Pre-Tax Income for the year is between 150% and 200%
of the prior fiscal year’s Pre-Tax Income or (B) $100,000, if Pre-Tax Income for the year is between 201% and 250% of the
prior fiscal year’s Pre-Tax Income or (C) $200,000, if Pre-Tax Income for the year is 251% or greater than the prior fiscal
year’s Pre-Tax Income, but in no event shall this additional bonus exceed five (5%) percent of Pre-Tax Income for such year;
payment of up to $10,000 in life insurance premiums; options to purchase 7.5 million shares of Worlds Inc. common stock at an
exercise price of  $0.070 per share, all of which vested on October 1, 2012; a death benefit of at least $2 million dollars;
and a payment equal to 2.99 times his base amount (as defined in the agreement) in the event of a Change of Control (as defined
in the agreement).  The agreement also provides that Mr. Kidrin can be terminated for cause (as defined in the agreement)
and that he is subject to restrictive covenants for 12 months after termination.



Stock
Option Plan



On
September 4, 2007, our board of directors adopted the 2007 Stock Option Plan which was presented to our shareholders for their
approval at our next annual meeting.  The plan provides for the issuance of up to 25 million options of which not more
than 22 million can be incentive stock options.



Compensation
Committee Interlocks and Insider Participation



All
of our officers and directors currently hold the same positions with our former subsidiary, Worlds Online Inc, although it is
the intent that our current non-employee directors will only serve during a transition period not to exceed 12 months that transition
has extended longer than initially anticipated. We do not have a compensation committee and all of our directors perform the function
of a compensation committee, except that Mr. Kidrin, our president and CEO, does not participate in any deliberations with respect
to his compensation and physically removes himself from the presence of the other directors while they deliberate over his compensation
and bonuses. Accordingly, Mr. Kidrin, who is both our president and CEO and of Worlds Online Inc. may be deemed to fall within
the parameters of a compensation committee interlock. To address this situation, as described above, Mr. Kidrin recuses himself
from all deliberations of the board with respect to his compensation.



SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS



|Name                 |  | Number
                                         of
        Securities
        Underlying
        Unexercised
        Options (#) Exercisable |           | Number
                                         of
        Securities
        Underlying
        Unexercised
        Options(#)
        Unexercisable |  | Equity
                                         Incentive Plan Awards:
        Number of
        Securities
        Underlying
        Unexercised
        Unearned
        Options (#) |   | Option
        Exercise
        Price
        ($) |  | Option
        Expiration
        Date
|-------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------------------------------- |  | --------------------------------------
|Thom
    Kidrin      |  |                                                                                                                                              | 7,500,000 |                                                                                                                                                       |  |                                                                                                                                                                                         | 0 |                                                   |  |                                       
|Christopher
    Ryan |  |                                                                                                                                              | 300,000   |                                                                                                                                                       |  |                                                                                                                                                                                         | 0 |                                                   |  |                                       
|Christopher
    Ryan |  |                                                                                                                                              | 300,000   |                                                                                                                                                       |  |                                                                                                                                                                                         | 0 |                                                   |  |                                       





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ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.



The
following table sets forth as of February 1, 2017, certain information with respect to the beneficial ownership of Common Stock
by (i) each Director, nominee and executive officer of us; (ii) each person who owns beneficially more than 5% of the common stock;
and (iii) all Directors, nominees and executive officers as a group. The percentage of shares beneficially owned is based on there
having been 246,023,331 shares of common stock outstanding as of February 1, 2017.



OFFICERS,
DIRECTORS AND BENEFICIAL OWNERS, AS OF MARCH 20, 2016



|Name
    & Address of Beneficial Owner(1)                        | Amount
    & Nature of Beneficial Owner | %
    of Class(2)
|---------------------------------------------------------------- | --------------------------------------- | -----------------
|Thomas
    Kidrin                                                | 12,990,000(3)                           | 5.1%             
|Christopher
    Ryan                                             | 1,669,076
    (4)                       | *                
|Robert
    Fireman                                               | 664,484
    (5)                         | *                
|Bernard
    Stolar                                               | 400,000(5)                              | *                
|Edward
    Gildea                                                | 350,000(6)                              | *                
|                                                                 |                                         |                  
|All
    directors and executive officers as a group (one person) | 16,073,560
    (7)                      |                  



*
less than 1%



(1)
Unless stated otherwise, the business address for each person named is Worlds Inc., 11 Royal Road, Brookline, MA  02445.



(2)
Calculated pursuant to Rule 13d-3(d) (1) of the Securities Exchange Act of 1934. Under Rule 13d-3(d), shares not outstanding which
are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose
of calculating the number and percentage owned by a person, but not deemed outstanding for the purpose of calculating the percentage
owned by each other person listed. We believe that each individual or entity named has sole investment and voting power with respect
to the shares of common stock indicated as beneficially owned by them (subject to community property laws where applicable) and
except where otherwise noted.



(3)
Includes 7.5 million currently exercisable stock options.



(4)
Includes 600,000 currently exercisable stock options.



(5)
Consists of 400,000 options which are currently exercisable.



(6)
Consists of 350,000 stock options, which are currently exercisable.



(7)
Includes 9,250,000 currently exercisable stock options.





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ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.



We
are not currently subject to the requirements of any stock exchange or inter-dealer quotation system with respect to having a
majority of “independent directors” although we believe that we meet that standard inasmuch as Messrs. Stolar, Fireman
and Gildea are “independent” and only Mr. Kidrin, by virtue of being our president and CEO, is not independent. Although
we are not currently subject to such rule, the independence of our directors meets the definition of such term as contained in
NASDAQ Rule 5605(a)(2).



We
currently own 9.5% of the outstanding common stock of our former wholly-owned subsidiary, Worlds Online Inc., and it has officers
and directors which mirror ours, although it is the intent that our current non-employee directors will only serve during a transition
period.



ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.



Fees
Billed For Audit and Non-Audit Services



The
following table represents the aggregate fees billed for professional audit services rendered to the independent auditor, L&L
CPAS, P.A. (“L&L”), for our audit of the annual financial statements for the years ended December 31, 2016 and
2015. L&L (then operating under its previous name) was retained as our auditor in 2007. Audit fees and other fees of auditors
are listed as follows:



|Year
    Ended December 31             |  | 2016 |        | 2015
|-------------------------------------- |  | ---- | ------ | ----
|                                       |  |      | L&L    |     
|                                       |  |      |        |     
|Audit
    Fees (1)                     |  | $    | 26,500 | (2) 
|Audit-Related
    Fees (3)             |  |      | 15,000 |     
|Tax
    Fees (4)                       |  | $    | 1,500  |     
|All
    Other Fees (5)                 |  |      | —      |     
|Total
    Accounting Fees and Services |  | $    | 43,000 |     





| | (1) | Audit
    Fees. These are fees for professional services for the audit of our annual financial statements, and for the review of
    the financial statements included in our filings on Form 10-QSB, and for services that are normally provided in connection
    with statutory and regulatory filings or engagements.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The
    amounts shown for L&L in 2016 and 2015 relate to (i) the audit of our annual financial statements for the years ended
    December 31, 2016 and 2015, and (ii) the review of the financial statements included in our filings on Form 10-Q for the first,
    second and third quarters of 2016 and 2015.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Audit-Related
    Fees. These are fees for the assurance and related services reasonably related to the performance of the audit or the
    review of our financial statements.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Tax
    Fees. These are fees for professional services with respect to tax compliance, tax advice, and tax planning.
| | --- | --------------------------------------------------------------------------------------------------------------------



| | (5) | All
    Other Fees. These are fees for permissible work that does not fall within any of the other fee categories, i.e., Audit
    Fees, Audit-Related Fees, or Tax Fees.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------







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Pre-Approval
Policy For Audit and Non-Audit Services



We
do not have a standing audit committee, and the full Board performs all functions of an audit committee, including the pre-approval
of all audit and non-audit services before we engage an accountant. All of the services rendered to us by L&L CPAS, P.A. were
pre-approved by our Board of Directors.



We
are presently working with our legal counsel to establish formal pre-approval policies and procedures for future engagements of
our accountants. The new policies and procedures will be detailed as to the particular service, will require that the Board or
an audit committee thereof be informed of each service, and will prohibit the delegation of pre-approval responsibilities to management.
It is currently anticipated that our new policy will provide (i) for an annual pre-approval, by the Board or audit committee,
of all audit, audit-related and non-audit services proposed to be rendered by the independent auditor for the fiscal year, as
specifically described in the auditor's engagement letter, and (ii) that additional engagements of the auditor, which were not
approved in the annual pre-approval process, and engagements that are anticipated to exceed previously approved thresholds, will
be presented on a case-by-case basis, by the President or Controller, for pre-approval by the Board or audit committee, before
management engages the auditors for any such purposes. The new policy and procedures may authorize the Board or audit committee
to delegate, to one or more of its members, the authority to pre-approve certain permitted services, provided that the
estimated fee for any such service does not exceed a specified dollar amount (to be determined). All pre-approvals shall be contingent
on a finding, by the Board, audit committee, or delegate, as the case may be, that the provision of the proposed services is compatible
with the maintenance of the auditor's independence in the conduct of its auditing functions. In no event shall any non-audit related
service be approved that would result in the independent auditor no longer being considered independent under the applicable rules
and regulations of the Securities and Exchange Commission.





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ITEM
15. EXHIBITS .



| | 3.1              |  | Certificate
    of Incorporation (a)                                                                                  
| | ---------------- |  | ----------------------------------------------------------------------------------------------------------------------
| |                  |  |                                                                                                                       
| | 3.2              |  | By-Laws-
    Restated as Amended (a)                                                                                  
| |                  |  |                                                                                                                       
| | 4.1              |  | 2007
    Stock Option Plan (c)                                                                                        
| |                  |  |                                                                                                                       
| | 10.1             |  | Consulting
    Agreement between the Registrant and SGC Advisory, Inc. (b)                                            
| |                  |  |                                                                                                                       
| | 10.2             |  | Employment
    Agreement between the Registrant and Thom Kidrin (d)                                                   
| |                  |  |                                                                                                                       
| | 10.3             |  | License
    Agreement between Worlds Online Inc. and Registrant date as of May 16, 2011 (e)                           
| |                  |  |                                                                                                                       
| | 10.4             |  | Securities
    Purchase Agreement dated as of March 14, 2013 between the registrant and the Buyers listed thereon. (f)
| |                  |  |                                                                                                                       
| | 10.5             |  | Form
    of Security and Pledge Agreement between the registrant the Collaleral Agent . (f)                           
| |                  |  |                                                                                                                       
| | 10.6             |  | Form
    of Registration Rights Agreements between the registrant and the Buyers listed thereon. (f)                  
| |                  |  |                                                                                                                       
| | 10.7             |  | Form
    of Warrant dated March 20, 2013 (f)                                                                          
| |                  |  |                                                                                                                       
| | 10.8             |  | Form
    of Series A Note dated March 20, 2013 (f)                                                                    
| |                  |  |                                                                                                                       
| | 10.9             |  | Form
    of Series B Note dated March 20, 2013 (f)                                                                    
| |                  |  |                                                                                                                       
| | 10.10            |  | Form
    of Series C Note dated March 20, 2013 (f)                                                                    
| |                  |  |                                                                                                                       
| | 14.1             |  | Code
    of Ethics (d)                                                                                                
| |                  |  |                                                                                                                       
| | 31.1             |  | Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer **                                                 
| |                  |  |                                                                                                                       
| | 31.2             |  | Rule 13a-14(a)/15d-14(a) Certifications of Chief Financial  Officer **                                                
| |                  |  |                                                                                                                       
| | 32.1             |  | Section 1350 Certifications of Chief Executive Officer **                                                             
| |                  |  |                                                                                                                       
| | 32.2             |  | Section 1350 Certifications of Chief Financial Officer **                                                             
| |                  |  |                                                                                                                       
| | 101.INS
    XBRL |  | Instance
    Document (g)                                                                                             
| |                  |  |                                                                                                                       
| | 101.SCH
    XBRL |  | Taxonomy
    Extension Schema (g)                                                                                     
| |                  |  |                                                                                                                       
| | 101.CAL
    XBRL |  | Taxonomy
    Extension Calculation Linkbase (g)                                                                       
| |                  |  |                                                                                                                       
| | 101.DEF
    XBRL |  | Taxonomy
    Extension Definition Linkbase (g)                                                                        
| |                  |  |                                                                                                                       
| | 101.LAB
    XBRL |  | Taxonomy
    Extension Label Linkbase (g)                                                                             
| |                  |  |                                                                                                                       
| | 101.PRE
    XBRL |  | Taxonomy
    Extension Presentation Linkbase (g)                                                                      





|(a) | Filed
    previously with the Proxy Statement Form DEF 14A on May, 19, 2010, and incorporated herein by reference.                                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Filed
    previously as an exhibit to Registrant's Annual Report on Form 10-KSB filed on March 30, 2000, and incorporated herein by
    reference.                
|(c) | Filed previously as
    an exhibit to Registrant's Current Report on Form 8-K filed on September 7, 2007, and incorporated herein by reference.                   
|(d) | Filed previously as
    an exhibit to Registrant's Annual Report on Form 10-KSB filed on April 3, 2008, and incorporated herein by reference.                     
|(e) | Incorporated by reference
    from Registration statement on form 10-12G (File No. 000-54433), Amendment No. 2 of Worlds Online Inc. filed on October 7,
    2011.
|(f) | Filed previously as
    an exhibit to regisrtant current report on from 8K filed on March 15, 2013 and in coporated herein by referenced.                         
|(g) | This XBRL file has not been amended from originally filed document on 4/17/17.                                                                                    



**
Filed herewith





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SIGNATURES



In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.



|Dated:
    August 23, 2017 | WORLDS
    INC.
|-------------------------- | ---------------
|                           | (Registrant)   



|By:   /s/
                            Thomas Kidrin
        Name:
        Thomas Kidrin
        Title:   President
        and Chief Executive Officer
|------------------------------------------------------------------------------------------------------------------------------------------------------





In
accordance with the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.



|Signatures                                                          |  | Title                                                                       |  |  | Date                | 
|------------------------------------------------------------------- |  | --------------------------------------------------------------------------- |  |  | ------------------- | 
|                                                                    |  |                                                                             |  |  |                     | 
|/s/
        Thomas Kidrin
        Thomas
        Kidrin             |  | President,
    Chief Exectutive Officer and Director                        |  |  | August
    23, 2017 | 
|                                                                    |  |                                                                             |  |  |                     | 
|/s/
        Christopher J. Ryan
        Christopher
        J. Ryan |  | Vice
    President - Finance and Principal Accounting and Financial Officer |  |  | August
    23, 2017 | 
|                                                                    |  |                                                                             |  |  |                     | 
|/s/
        Bernard Stolar
        Bernard
        Stolar           |  | Director                                                                    |  |  | August
    23, 2017 | 
|                                                                    |  |                                                                             |  |  |                     | 
|/s/
        Robert Fireman
        Robert
        Fireman           |  | Director                                                                    |  |  | August
    23, 2017 | 
|                                                                    |  |                                                                             |  |  |                     | 
|/s/
        Edward Gildea
        Edward
        Gildea             |  | Director                                                                    |  |  | August
    23, 2017 | 
|                                                                    |  |                                                                             |  |  |                     | 





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EXHIBIT
TO INDEX



| | Exhibit
    No.  |  | Description                                                                                                           
| | ---------------- |  | ----------------------------------------------------------------------------------------------------------------------
| |                  |  |                                                                                                                       
| | 3.1              |  | Certificate
    of Incorporation (a)                                                                                  
| |                  |  |                                                                                                                       
| | 3.2              |  | By-Laws-
    Restated as Amended (a)                                                                                  
| |                  |  |                                                                                                                       
| | 4.1              |  | 2007
    Stock Option Plan (c)                                                                                        
| |                  |  |                                                                                                                       
| | 10.1             |  | Consulting
    Agreement between the Registrant and SGC Advisory, Inc. (b)                                            
| |                  |  |                                                                                                                       
| | 10.2             |  | Employment
    Agreement between the Registrant and Thom Kidrin (d)                                                   
| |                  |  |                                                                                                                       
| | 10.3             |  | License
    Agreement between Worlds Online Inc. and Registrant dated as of May 16, 2011 (e)                          
| |                  |  |                                                                                                                       
| | 10.4             |  | Securities
    Purchase Agreement dated as of March 14, 2013 between the registrant and the Buyers listed thereon. (f)
| |                  |  |                                                                                                                       
| | 10.5             |  | Form
    of Security and Pledge Agreement between the registrant the Collaleral Agent . (f)                           
| |                  |  |                                                                                                                       
| | 10.6             |  | Form
    of Registration Rights Agreements between the registrant and the Buyers listed thereon. (f)                  
| |                  |  |                                                                                                                       
| | 10.7             |  | Form
    of Warrant dated March 20, 2013 (f)                                                                          
| |                  |  |                                                                                                                       
| | 10.8             |  | Form
    of Series A Note dated March 20, 2013 (f)                                                                    
| |                  |  |                                                                                                                       
| | 10.9             |  | Form
    of Series B Note dated March 20, 2013 (f)                                                                    
| |                  |  |                                                                                                                       
| | 10.10            |  | Form
    of Series C Note dated March 20, 2013 (f)                                                                    
| |                  |  |                                                                                                                       
| | 14.1             |  | Code
    of Ethics (d)                                                                                                
| |                  |  |                                                                                                                       
| | 31.1.            |  | Rule
    13a-14(a)/15d-14(a) Certifications of Chief Executive Officer **                                             
| |                  |  |                                                                                                                       
| | 31.2.            |  | Rule
    13a-14(a)/15d-14(a) Certifications of Chief Financial  Officer **                                            
| |                  |  |                                                                                                                       
| | 32.1.            |  | Section
    1350 Certifications of Chief Executive Officer **                                                         
| |                  |  |                                                                                                                       
| | 32.2.            |  | Section
    1350 Certifications of Chief Financial Officer **                                                         
| |                  |  |                                                                                                                       
| | 101.INS
    XBRL |  | Instance
    Document (g)                                                                                             
| |                  |  |                                                                                                                       
| | 101.SCH
    XBRL |  | Taxonomy
    Extension Schema (g)                                                                                     
| |                  |  |                                                                                                                       
| | 101.CAL
    XBRL |  | Taxonomy
    Extension Calculation Linkbase (g)                                                                       
| |                  |  |                                                                                                                       
| | 101.DEF
    XBRL |  | Taxonomy
    Extension Definition Linkbase (g)                                                                        
| |                  |  |                                                                                                                       
| | 101.LAB
    XBRL |  | Taxonomy
    Extension Label Linkbase (g)                                                                             
| |                  |  |                                                                                                                       
| | 101.PRE
    XBRL |  | Taxonomy
    Extension Presentation Linkbase (g)                                                                      





|(a) | Filed
    previously with the Proxy Statement Form DEF 14A on May, 19, 2010, and incorporated herein by reference.                                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Filed
    previously as an exhibit to Registrant's Annual Report on Form 10-KSB filed on March 30, 2000, and incorporated herein by
    reference.                
|(c) | Filed
    previously as an exhibit to Registrant's Current Report on Form 8-K filed on September 7, 2007, and incorporated herein by
    reference.               
|(d) | Filed
    previously as an exhibit to Registrant's Annual Report on Form 10-KSB filed on April 3, 2008, and incorporated herein by reference.                     
|(e) | Incorporated
    by reference from Registration statement on form 10-12G (File No. 000-54433), Amendment No. 2 of Worlds Online Inc. filed
    on October 7, 2011.
|(f) | Filed
    previously as an exhibit to registrant current report on form 8K filed on March 15, 2013 and incorporated herein by referenced.                         
|(g) | This XBRL file has not been amended from originally
    filed document on 4/17/17.                                                                                



**
Filed herewith

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