10-Q 1 form10-q.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2024

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to ____________

 

Commission file number 000-55049

 

METAWORKS PLATFORMS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   27-3098487
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

3250 Oakland Hills Court, Fairfield, CA 94534

(Address of principal executive offices) (Zip Code)

 

424.570.9446

(Registrant’s telephone number, including area code)

 

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

 

Title of Each Class   Trading Symbol(s)   Name of each exchange on which registered
Nil   N/A   N/A

 

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

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

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 117,452,923 shares of common stock issued and outstanding as at May 20, 2024.

 

 

 

 

 

 

TABLE OF CONTENTS

 

PART I 3
ITEM 1. FINANCIAL STATEMENTS 3
ITEM 2. MANGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 25
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK 29
ITEM 4. CONTROLS AND PROCEDURES 29
PART II 30
ITEM 1. LEGAL PROCEEDINGS 30
ITEM 1A. RISK FACTORS 30
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AN USE OF PROCEEDS 30
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 30
ITEM 4. MINE SAFETY DISCLOSURES 30
ITEM 5. OTHER INFORMATION 30
ITEM 6. EXHIBITS 31

 

2
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

Our unaudited condensed interim consolidated financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

 

It is the opinion of management that the unaudited condensed interim consolidated financial statements for the quarter ended March 31, 2024 include all adjustments necessary in order to ensure that the unaudited condensed interim consolidated financial statements are not misleading.

 

3
 

 

MetaWorks Platforms, Inc.

Condensed Consolidated Balance Sheets

 

   March 31, 2024   December 31, 2023 
   (unaudited)   (audited) 
Assets          
           
Current Assets          
Cash and cash equivalents  $6,886   $3,076 
Accounts receivable   65,000    115,112 
Prepaid expenses   11,697    9,696 
Interest receivable, related party – net   -    - 
Notes receivable, related party – net   -    - 
Notes receivable – net   -    - 
Total Current Assets   

83,583

    127,884 
           
Long-Term Assets          
Intangible asset, net   1,554,250    1,554,250 
Total Long-Term Assets   1,554,250    1,554,250 
           
Total Assets  $1,637,833   $1,682,134 
           
Liabilities and Stockholders’ Equity          
           
Current Liabilities          
Accounts payable and accrued expenses  $1,116,261   $865,990 
Accounts payable and accrued expenses, related party   227,305    486,580 
Deferred revenue   77,700    77,700 
Notes payable – current portion, net   294,028    271,247 
Convertible notes payable – software acquisition   854,250    854,250 
Convertible notes payable – other   -    25,000 
Total Current Liabilities   2,569,544    2,580,767 
           
Total Liabilities   2,569,544    2,580,767 
           
Commitments and Contingencies   -    - 
           
Stockholders’ Equity          
Common stock, $0.001 par value, 400,000,000 shares authorized; 117,452,923 and 108,807,923 shares issued and outstanding as at March 31, 2024 and December 31, 2023, respectively   117,453    108,808 
Additional paid-in-capital   46,729,969    46,232,087 
Accumulated deficit   (47,617,875)   (47,078,270)
Total MetaWorks Platforms, Inc. Stockholders’ Equity   (770,453)   (737,375)
Non-controlling interest   (161,258)   (161,258)
Total Stockholders’ Equity   (931,711)   (898,633)
           
Total Liabilities and Stockholders’ Equity  $1,637,833   $1,682,134 

 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

 

4
 

 

MetaWorks Platforms, Inc.

Condensed Consolidated Statement of Operations

(Unaudited)

 

   Three Months Ended
March 31, 2024
   Three Months Ended
March 31, 2023
 
         
Revenues          
NFT revenues  $-   $4,431 
Consulting service   -    30,000 
Movie distribution revenue   -    - 
Total revenues   -    34,431 
           
Operating expenses          
General and administrative expense   523,192    35,501 
Service costs   -    371,861 
Total operating expenses   523,192    407,362 
           
Net loss from operations   (523,192)   (372,931)
           
Other income (expense)          
Other income   -    - 
Note interest revenue   -    24,904 
Note interest expense   (16,413)   (957)
Bad debt (recovery)   (446,071)     
Investment write-off   446,071    - 
Total other income   (16,413)   23,947 
           
Net loss  $(539,605)  $(348,984)
           
Net loss (income) from non-controlling interest   -    (14,195)
Net loss attributable to MetaWorks Platform Inc.,   (539,605)   (334,789)
           
Net loss per common share – Basic and Diluted  $(0.01)  $(0.01)
Weighted average number of common shares outstanding, basic and diluted   112,193,747    94,245,066 

 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

 

5
 

 

MetaWorks Platforms, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   Three Months Ended
March 31, 2024
   Three Months Ended
March 31, 2023
 
Operating activities          
Net loss for the period  $(539,605)  $(348,984)
Adjustments to reconcile net loss to net cash used in operating activities          
Stock-based compensation   45,890    28,721 
Stock-based compensation and forfeitures, related party   183,237    (188,739)
Derivative liability   -    - 
Amortization   -    - 
Changes in operating assets and liabilities          
Accounts receivable   50,112    (30,122)
Prepaid expenses   (2,000)   15,200 
Accounts payable and accrued expenses   589,742    68,217 
Accounts payable and accrued expenses, related party   

(396,347

)   55,303 
Accrued interest on loans payable, related party   -    (24,904)
Net cash used in operating activities   (68,971)   (425,308)
           
Financing activities          
Proceeds from share issuance   -    703,400 
Proceeds from issuance of convertible note   50,000    - 
Proceeds from issuance of note payable   75,000      
Payments made on notes payable   (52,219)   (38,275)
Proceeds from repayment on note receivable   -    19,500 
Net cash provided by financing activities   72,781    684,625 
           
Net changes in cash and equivalents   3,810    259,317 
           
Cash and equivalents at beginning of the period   3,076    34,941 
           
Cash and equivalents at end of the period  $6,886   $294,258 

 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

 

6
 

 

MetaWorks Platforms, Inc.

Condensed Consolidated Statements of Cash Flows (cont’d)

(Unaudited)

 

SUPPLEMENTAL CASH FLOW INFORMATION        
   Three Months Ended
March 31, 2024
   Three Months Ended
March 31, 2023
 
Cash paid in interest  $16,413   $- 
Cash paid for income taxes  $-   $- 
Non-cash share issue costs  $-   $- 
           
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES          
Stock-based compensation  $45,890   $28,721 
Stock-based compensation and forfeitures, related party  $183,237   $(188,739)
Conversion of convertible debt  $25,000   $- 
Accounts payable settled against amounts owed from the acquisition of EnderbyWorks  $-   $190,147 
Non-controlling interest in EnderbyWorks acquired for no cash consideration  $-   $763,032 
Notes receivable due from acquisition of EnderbyWorks  $-   $1,828,000 

 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

 

7
 

 

MetaWorks Platforms, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

 

   Number of Shares   Amount   Paid-in Capital   Accumulated Deficit   Controlling interest   Total 
   Common Stock   Additional       Non-     
   Number of Shares   Amount   Paid-in Capital   Accumulated Deficit   Controlling interest   Total 
Balance, December 31, 2022   78,145,066    78,145    42,264,139    (41,428,167)   (881,720)   32,397 
                               
Stock-based compensation and forfeitures   -    -    183,153    -    -    183,153 
Stock-based compensation, related party   -    -    494,679    -    -    494,679 
Share issuance for services – software development   7,000,000    7,000    693,000    -    -    700,000 
Share issuance for services   5,220,000    5,220    398,780    -    -    404,000 
Shares issuances for services – related party   225,000    225    11,025    -    -    11,250 
Private placements for cash   18,057,143    18,057    892,342    -         910,399 
Shares issued for compensation – related party   160,714    161    11,089    -    -    11,250 
Acquisition of non-controlling interest of EnderbyWorks   -    -    1,283,880    -    734,637    2,018,517 
Allocation of net loss to non-controlling interest of Moto Club   -    -    -    14,175    (14,175)   - 
Net income (loss) for the year   -    -    -    (5,664,278)   -    (5,664,278)
Balance, December 31, 2023   108,807,923    108,808    46,232,087    (47,078,270)   (161,258)   (898,633)
                               
Stock-based compensation   -    -    45,890    -    -    45,890 
Stock-based compensation, related party   -    -    183,237    -    -    183,237 
Shares issued for cash – private placement   2,500,000    2,500    47,500              50,000 
Shares issuances for services - marking   4,600,000    4,600    179,400    -    -    184,000 
Shares issuances for services, related party   920,000    920    17,480    -    -    18,400 
Shares issued on conversion of loan payable   625,000    625    24,375    -    -    25,000 
Net income (loss) for the period   -    -    -    (539,605)   -    (539,605)
Balance March 31, 2024   117,452,923    117,453    46,729,696    (47,617,875)   (161,258)   (931,711)

 

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

 

8
 

 

MetaWorks Platforms, Inc.

Notes to Unaudited Condensed Interim Consolidated Financial Statements

As of March 31, 2024 and for the three months ended March 31, 2024 and 2023

 

1. NATURE AND CONTINUANCE OF OPERATIONS

 

MetaWorks Platforms, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on July 20, 2010, under its previous name Redstone Literary Agents, Inc., with an authorized capital of 75,000,000 common shares, having a par value of $0.001 per share. During the period ended December 31, 2010, the Company commenced operations by issuing shares and developing its publishing service business, focused on representing authors to publishers.

 

On August 1, 2017 the Company incorporated a Nevada subsidiary, AppCoin Innovations (USA) Inc., which was formed to provide blockchain consulting services.

 

On February 14, 2018, we effected a name change for our subsidiary from “AppCoin Innovations (USA) Inc.” to “ICOx USA, Inc.”

 

On November 28, 2018, we incorporated a new Delaware subsidiary, Cathio, Inc, to provide blockchain technology opportunities to the Catholic community. Cathio was dissolved on October 20, 2020.

 

On November 28, 2018, we incorporated a new Delaware subsidiary, GN Innovations, Inc. to provide blockchain technology opportunities to the sports and entertainment industry by working with large and well-established brands.

 

Effective December 5, 2018, we effected a name change for our subsidiary from “GN Innovations, Inc.” to “GNI, Inc.”

 

Effective February 6, 2019, we effected a name change for our subsidiary from “GN1, Inc.” to “sBetOne, Inc.”. On August 12, 2021, the Company’s subsidiary sBetOne, Inc. (“sBetOne”) entered into a business combination with a related party, VON Acquisition Inc. (“VON”), whereby sBetOne became a wholly owned subsidiary of VON.

 

On September 3, 2019, the Company changed its name from “ICOx Innovations Inc.” to “CurrencyWorks Inc.” and a subsidiary of the Company changed its name from “ICOx USA, Inc.” to “CurrencyWorks USA Inc.”.

 

On June 22, 2021, we incorporated a new Delaware subsidiary, Motoclub LLC, to create a marketplace for digital automotive collectibles.

 

On June 22, 2021, we incorporated a new Delaware subsidiary, EnderbyWorks, LLC, (“EnderbyWorks”) to create a direct-to-consumer, feature-length film viewing and distribution platform delivering feature-length films and digital collectible entertainment content as NFTs.

 

On August 24, 2022, the Company changed its name from CurrencyWorks Inc. to MetaWorks Platforms, Inc (“MWRKS”).

 

The Company’s business model is to provide a turnkey set of services to develop and integrate Web 3.0 / Metaverse technologies, NFT, blockchain, and cryptocurrency technologies. The Company’s services include strategic planning, project planning, structure development and administration, business plan modeling, technology development support, whitepaper preparation, due diligence reporting, governance planning and management, and movie distribution.

 

Going Concern

 

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $47,617,875 and $47,078,270 as of March 31, 2024 and December 31, 2023, respectively. Further losses are anticipated in as the Company’s new peruses service business opportunities, this raises substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations, when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and proceeds from the issuance of its stock.

 

The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

9
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States if America of (“US. GAAP”) as found in the Accounting Standards Codification (“ASC”), and the Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”) and are expressed in US Dollars. The unaudited condensed interim consolidated financial statements should be read in conjunction with the notes contained herein as part of the Company’s Quarterly Report in its Form 10-Q filing under the Securities Exchange Commission.

 

Reclassification

 

Certain reclassifications have been made to prior periods to conform with current reporting.

 

Basis of Consolidation

 

The consolidated statements include the accounts of the Company and its subsidiaries. CurrencyWorks USA Inc.(“CW”) (formerly ICOx USA, Inc.) and Enderby Works LLC (“EW”) are wholly owned subsidiaries. EW became a wholly owned subsidiary in 2023, see Note 6 Notes Receivable. MotoClub (“MB”) is a majority-owned subsidiary, 80% held by (“MWRKS”). All intercompany transactions and balances have been eliminated.

 

Use of Estimates

 

The preparation of the unaudited condensed interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and these differences could be material.

 

The most significant estimates made by management in the preparation of the financial statements relate to the estimates used to calculate the fair value of certain liabilities, the derivative liability, present value of notes payable and notes receivable, the valuation of the investments and any impairment and the net book value of long-lived assets. Management bases its estimates on historical experience and on other various assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from such estimates under different assumptions and conditions.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include short-term, highly liquid investments, such as cash on account with commercial banks, certificates of deposit or money market funds that are readily convertible to known amounts of cash and have original maturities of three months or less. All cash balances are held by major banking institutions.

 

10
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

 

Contingent Liabilities:

 

The Company accounts for its contingent liabilities in accordance with ASC No. 450 “Contingencies”. A provision is recorded when it is both probable that liability has been incurred and the amount of the loss can be reasonably estimated.

 

With respect to legal matters, provisions are reviewed, and financial information is adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of March 31, 2024, and December 31, 2023, the Company was not a party to any litigation.

 

Income Taxes

 

The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

FASB Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”), clarifies the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have determined that the Company does not have uncertain tax positions on its tax returns for the years 2022, and prior. Based on the evaluation of the 2023 transactions and events, the Company does not believe it has any material uncertain tax positions that require measurement.

 

Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. We had no accrual for interest or penalties on our consolidated balance sheets at March 31, 2024 or December 31, 2023, and have not recognized interest and/or penalties in the consolidated statement of operations for the period ended March 31, 2024 or year ended December 31, 2023.

 

We are subject to taxation in the U.S. and the state of California. The Company’s tax returns for tax years from 2021 to recent filings remain subject to potential examination by the tax authorities.

 

Accounts Receivable

 

The collectability of accounts receivable is determined by the Company’s legal obligation for payment by the customer, as well as the ability of the customer to pay its debts. The carrying amount of accounts receivable represents the maximum credit exposure of this balance.

 

Accounts receivable balances relate to the consulting services business and are reported at their net realizable value. From management’s best estimate, there is no allowance for doubtful accounts on March 31, 2024, and December 31, 2023. Management individually reviews accounts receivable balances and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that may not be collected and would directly write off these balances. Management considers several factors, including the age of the receivables, current economic conditions and other information management obtains regarding the financial condition of customers. The policy for determining the past due status is based on the contractual payment terms of each customer. If conditions are identified that pose significant risk of non-collections the determination to directly write off uncollectible receivables is made.

 

11
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

 

Earnings per Share

 

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted EPS on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all diluted potential common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants or stock options (Note 10 and Note 16 respectively). Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

 

On March 31, 2024 the Company had convertible debt outstanding, warrants exercisable to 6,466,071 shares of common stock and stock options exercisable to 31,538,679 shares of common stock. On December 31, 2023 the Company had convertible debt outstanding, warrants exercisable to 10,279,664 shares of common stock and stock options exercisable to 24,213,334 shares of common stock. For both periods the effect of exercisable options and warrants is anti-dilutive and they have been excluded from dilutive EPS.

 

Stock-Based Compensation

 

The Company has adopted FASB guidance on stock-based compensation. Under ASC 718-10-30-2 “Stock Compensation”, all share-based payments to employees, including grants of employee stock options, are to be recognized in the income statement based on their fair values. The fair value of the options is calculated using the Black Scholes valuation model (Note 14).

 

The Company has issued stock options to employees and non-employees. Stock options granted to non-employees for services or performance not yet rendered would be expensed over the service period or until the goals had been reached. Stock options granted to employees are expensed over the vesting period of the options. The fair value of stock options is determined on the grant date.

 

Forfeitures of options are recognized as they occur. Compensation cost previously recognized is reversed on the date of forfeiture for any options that are forfeited prior to the completion of the requisite service period or vesting period.

 

Cancellation of an award accompanied by the concurrent grant of (or offer to grant) a replacement award of other valuable consideration is accounted for as a modification of the terms of the canceled award. The total compensation cost measured on the date of a cancellation and replacement is the portion of the grant-date fair value of the original award for which the requisite service is expected to be rendered (or has already been rendered) at that date plus the incremental cost resulting from the cancellation and replacement.

 

A cancellation of an award that is not accompanied by the concurrent grant of (or offer to grant) a replacement award of other valuable consideration is accounted for as a repurchase for no consideration. Accordingly, any previously unrecognized compensation cost is recognized on the cancellation date.

 

Fair Value of Financial Instruments

 

The fair value is an exit price representing the amount that would be received to sell an asset or required to transfer a liability in an orderly transaction between market participants. As such, fair value of a financial instrument is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or a liability.

 

A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

 

  Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
  Level 2: Observable inputs that 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 our own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participants assumptions that are reasonably available.

 

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

 

The Company’s financial instruments consist of equity investments, note receivables, derivative liabilities and notes payable. The Company’s note receivables were indirectly written down to zero due to potential non-collections. The Company’s derivative liabilities have a fair value of zero principally due to a decline in the stock price. These instruments are in level 3 of the fair value hierarchy.

 

When determining fair value, whenever possible, the Company uses observable market data, and relies on unobservable inputs only when observable market data is not available. As of March 31, 2024 and December 31, 2023, the Company did not have any level 1 or 2 financial instruments. On March 31, 2024 and December 31, 2023 the Company’s level 3 financial instruments were derivative liabilities for warrants issued and outstanding that were not indexed to the Company’s stock, notes payable and notes receivable valued at their present values and equity investments in other entities.

 

The following table presents the Company’s assets and liabilities that are measured at fair value on a non-recurring basis at March 31, 2024.

 

   Quoted Prices in Active Markets for Identical Assets
(Level 1)
   Significant Other Observable Inputs (Level2)   Significant Unobservable Inputs (Level3) 
                               
Liabilities               
Notes Payable   -    -   $294,028 

 

The following table presents the Company’s assets and liabilities that are measured at fair value on a non-recurring basis at December 31, 2023.

 

  

Quoted Prices in Active Markets for Identical Assets

(Level 1)

  

Significant Other Observable Inputs

(Level2)

  

Significant Unobservable Inputs

(Level3)

 
Liabilities                          
Notes payable   -    -   $271,247 

 

Derivative Liabilities

 

When the Company issues warrants, it evaluates the proper balance sheet classification of the warrant to determine whether the warrant should be classified as equity or as a derivative liability on the consolidated balance sheet. In accordance with ASC 815-40, Derivatives and Hedging, the Company classifies a warrant as equity if it is indexed to the Company’s equity and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity in general when it contains certain types of exercise contingencies or adjustments to exercise price. If a warrant is not indexed to the Company’s equity or it has net cash settlement that results in the warrants to be accounted for under ASC 480, Distinguishing Liabilities from Equity, or ASC 815-40, it is classified as a derivative liability which is carried on the consolidated balance sheet at fair value with any changes in its fair value recognized currently in the statement of operations. As of March 31, 2024 and December 31, 2023, the Company had warrants that were classified as liabilities and warrants that were classified as equity.

 

13
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

 

Some of the warrants issued by the Company have strike prices denominated in Canadian dollars (“CAD”). The Company’s functional currency is USD. In accordance with ASC 815 and EITF Issue No. 07-5, when the strike price of warrants is denominated in a currency other than an entity’s functional currency, the warrants would not be considered indexed to the entity’s own stock and would consequently be evaluated for a derivative liability under the conditions that the strike price is indexed to a foreign currency. The derivative liability associated with these warrants was valued on the date of issuance and is revalued at each reporting period. Due to the stock price on the report date, the derivative liability was valued at zero on March 31, 2024 and December 31, 2023

 

Digital assets

 

The Company applies accounting for digital assets in accordance with the AICPA Practice Aid “Accounting for and Auditing of Digital Assets”, the guide is dated as of June 30, 2022, and the SEC issued Staff Accounting Bulletin No. 121, which is effective for periods after June 15, 2022, which are the current nonauthoritative guidance for accounting for digital assets under U.S. generally accepted accounting principles (GAAP). The AICPA Practice Aid is non-authoritative guidance that represents the views of the Digital Assets Working Group and AICPA staff. There is currently no official pronouncement or authoritative guidance on accounting for digital assets and digital asset transactions. Accordingly digital assets that lack physical substance meet the definition of intangible assets and would generally be accounted for under FASB ASC 350, Intangibles — Goodwill and Other. The Company holds no digital assets on March 31, 2024 and December 31, 2023. Though its business is in the development of digital asset platforms and the creation of non-fungible tokens, digital asset are not regularly used to conduct transactions or held during the year.

 

Revenue recognition

 

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

 

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when the Company satisfies a performance obligation

 

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

 

When determining the transaction price, the Company also considers the effects of all of the following:

 

  Variable consideration
  Constraining estimates of variable consideration
  The existence of a significant financing component in the contract
  Noncash consideration
  Consideration payable to a customer

 

The Company generates revenues from three main sources, NFT sales, consulting services, and movie distribution.

 

14
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

 

Consulting Services

 

Consulting Service revenue is derived from providing professional knowledge and skills for creation of digital assets platforms and advisory services to third-party customers. The contract and performance obligations are created based on the needs of the customer and the abilities of the Company to provide the required services. The allocation of the transaction price to the individual performance obligations in the contract may be specified by task or by phase depending on the work being done. Revenue is recognized upon completion of the performance obligations. Revenues from ongoing services are recognized ratably over the related period. Revenue is recognized for the creation of software and web-based platforms upon completion and delivery. There are various tasks associated with providing this service for which customers are charged, nevertheless, no single task has a standalone fair value and each is only valuable to the customer when the project’s objective is accomplished. Therefore, consulting services are considered a single revenue stream requiring all related tasks to accomplish a specified customer objective.

 

NFT Revenue

 

NFT revenue is derived from the sale of NFTs. These NFTs are created by the Company’s subsidiaries and are sold through an online sales platform or through an auction. Revenue is recognized when the Company transfers the ownership of the NFT to the customer.

 

Movie Distribution Revenue

 

Movie distribution revenue is derived from the use of the Company’s intangible assets. Revenues earned to date are from nonrefundable minimum guaranteed payments recognized on the date distribution rights were granted to the purchaser and royalty revenues when certain cost recuperation thresholds and other contractual conditions are met. Future revenues may be recognized from revenue generated by the purchaser or by additional distribution sales over the term of the movie rights license.

 

Funds received for unearned revenue are deferred revenue on the consolidated balance sheet and are recognized as revenue upon completion of milestones or specified tasks.

 

Disaggregated Revenue Disclosure

 

Principally all customers are located in the USA. During the quarter ended March 31, 2024, the Company generated no revenues.

 

Recent Accounting Pronouncements

 

ASU 2022-01 “Derivatives and Hedging (Topic 815): Fair Value Hedging — Portfolio Layer Method”. Effective for public companies for fiscal years beginning after 15 December 2022, including interim periods within those fiscal years. ASU 2021-08. “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” “ effective for public companies for fiscal years beginning after 15 December 2022, including interim periods within those fiscal years. ASU 2023-04. “ Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 121”, Effective upon the issuance date, July 14, 2023. Management has not yet evaluated the impact that the adoption of these pronouncements will have on the Company’s consolidated financial statement presentation or disclosures. The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its financial statements.

 

15
 

 

3. CONCENTRATION AND CREDIT RISK

 

Financial instruments which potentially subject the Company to credit risk consist of cash. Cash is maintained with a major financial institution in the USA that is creditworthy. The Company maintains cash in bank accounts insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC). On March 31, 2024 and on December 31, 2023, no cash balances were in excess of federally insured limits.

 

During the period ended March 31, 2024, the Company generated no revenues, and there are no significant customers. During the period ended March 31, 2023 one customer made up 10% or more of total revenue. Their balance amounted to $30,000 from consulting services. During the period ended March 31, 2024, one customers individually made up 10% or more of total accounts receivable, their balances amounted to $65,000. During the year ended December 31, 2023, two customers individually made up 10% or more of total accounts receivable, their balances amounted to $115,000.

 

4. ACCOUNTS RECEIVABLE

 

As at March 31, 2024, the Company had accounts receivables of $65,000 compared to $115,112 as at December 31, 2023. Receivables consists of revenues generated by consulting services and NFT sales.

 

5. PREPAID EXPENSES

 

For the period ended March 31, 2024 and year ended December 31, 2023, prepaid expenses were comprised of:

 

   March 31, 2024   December 31, 2023 
Prepaid expenses - Deposit  $11,697   $9,696 
Prepaid expenses total  $11,697   $9,696 

 

Prepaid expense consists of a 50% upfront payment, to a single vendor, for services to be rendered during 2024.

 

6. NOTES RECEIVABLE – RELATED PARTY

 

SCHEDULE OF NOTES RECEIVABLE - RELATED PARTY

   March 31, 2024   December 31, 2023 
Interest receivable, related party – current portion   201,743    223,992 
Allowance for doubtful accounts, related party   (201,743)   (223,992)
Interest receivable, related party – net   -    - 
           
Notes receivable, related party – current portion   850,000    1,250,000 
Allowance for doubtful accounts, related party   (850,000)   (1,250,000)
Notes receivable, related party – net   -    - 
           
Notes receivable – current portion   1,981,152    1,944,592 
Allowance for doubtful accounts   (1,981,152)   (1,944,592)
Notes receivable – net   -    - 

 

Effective as of May 5, 2021, we loaned $400,000 to Fogdog Energy Solutions Inc. (“Fogdog”), as a related party pursuant to convertible promissory note. The note bears interest at a rate of 4% per annum. The note was not repaid nor converted by the Company as at the reporting date and on May 5, 2022 the note was amended making the maturity date December 31, 2024. Under certain conditions as outlined in the promissory note, the Company may convert the outstanding loan into Fogdog’s common stock. On March 22, 2024, the Company elected to convert the $400,000 promissory note along with $46,071 in accrued interest and now the company holds 11% equity stake in Fogdog.

 

The allowance for doubtful accounts for the notes receivable converted in the quarter ended March 31, 2024 was recovered resulting in a gain of $446,071. The investment was booked at cost and its full cost was impaired, incurring an impairment loss of $446,071.

 

Effective as of August 20, 2021, we loaned an additional $850,000 to Fogdog pursuant to convertible promissory note. The note bears interest at a rate of 10% per annum on August 20, 2022 the note was amended making the maturity date December 31, 2028. The note may not be prepaid without the written consent of the Company. Accrued interest for both Fogdog note receivables total $223,992 and $142,493 on December 31, 2023 and 2022, respectively. Our Chief Financial Officer, Secretary and Treasurer, Swapan Kakumanu, is a director, chief financial officer and a shareholder of Fogdog.

 

On April 10, 2024, the Company and Fogdog agreed to an extension of terms on the $850,000 note had its maturity date extended to December 31, 2029.

 

There have been several extensions of the maturity dates of these notes from their issuance and we have deemed them potentially non collectible. In 2023 an allowance for potential non collections was allocated to these notes resulting in net realizable value of zero and an impairment loss of $1,473,992. There could be collection on these notes in the near future due to advancements in Fogdog’s business.

 

On March 15, 2023, the Company signed an agreement with its partner in the jointly-owned subsidiary EnderbyWorks to become the 100% owner of the entity. Enderby Entertainment exchanged their 49% interest in EnderbyWorks to the corporation for forgiveness of outstanding payables amounting to $190,147 and the assumption of secured promissory note of $1,828,000 due to the Company by Enterby Entertainment Inc. This note receivable has an annual interest rate of 8% due and payable on July 6, 2024. There is also a royalty clause on the existing assets that EnderbyWorks will pay Enderby Entertainment 50% of the first $6,000,000 in net revenue, if revenue is earned by EnderbyWorks in the future. The note is deemed potentially non collectible. In 2023 an allowance for potential non collections was allocated to the note resulting in a net realizable value of zero and an impairment loss of $1,944,591 was incurred.

 

16
 

 

7. INTANGIBLE ASSET

 

On July 7, 2023, MetaWorks acquired software, including a Web3 business metaverse platform, Chat GPT-powered AI avatar technology, and a domain portfolio, including UtopiaVR.com. The intended use of this software will be used to generate subscription-based fees for education and investor relations industries to start with. This acquisition also includes a patent-pending IP technology relating to metaverse haptics that will hold potential for future development and licensing opportunities. Consideration for the acquisition of the assets included: (i) the issuance of 7,000,000 shares of common stock of the Company (each, a “Share”); (ii) the issuance of a convertible promissory note in the principal amount of $700,000 USD, which matures on July 5, 2024 and is convertible into Shares after the date that is six (6) months after the date of issuance at a conversion price of $0.10 USD per Share; and (iii) the issuance of a convertible promissory note in the principal amount of $154,250 USD, which matures on July 5, 2024, and is convertible into Shares after the date that is six (6) months after the date of issuance at a conversion price of $0.10 USD per Share. The net book value of the software at the period ended March 31, 2024 is $1,554,250, as the software had not been placed in service by this date.

 

8. NOTES PAYABLE

 

On June 14, 2022, the Company issued a promissory note payable for $117,000 (“Note A”). The promissory note is unsecured, payable on demand, and was set to mature on August 13, 2022. The promissory note bore interest at a rate per annum equal to the Bank of Canada’s Prime rate. On August 9, 2022, a promissory note extension was signed, extending the maturity date of the note payable to February 14, 2023. On January 31, 2023, the Company signed an amendment to extend the maturity date of the loan from February 14, 2023 to February 14, 2024 at an interest rate equal to the Bank of Canada’s Prime rate plus 3%. Accrued interest of $12,741 and $2,289 was outstanding as at December 31, 2023 and December 31, 2022, respectively. Balance owed at March 31, 2024 is $128,738.

 

On November 8, 2022, the Company entered into a promissory note (“Note B”) agreement to raise $116,760. The Note B has a discount of $12,510 and fees of $4,250, resulting in net proceeds of $100,000. The Note is unsecured, has a one-time interest charge of $14,011, and matures on November 8, 2023. Note B’s total of $130,771 (including principal, interest, and fees) will be repaid in ten payments, each in the amount of $13,077 with the first payment made on December 30, 2022, and nine subsequent payments each month thereafter with a five-day grace period with respect to each payment. On March 31, 2024 and December 31, 2023, the principal owed was $0 and $10,637, respectively. Accrued interest at March 31, 2024 and December 31, 2023 were $0 and $1,289, respectively.

 

On April 19, 2023, we entered into a promissory note (“Note C”) agreement with one subscriber to raise a net amount of $75,000, pursuant to the terms and subject to the conditions of the unsecured promissory note issued to the subscriber. The promissory note is in the amount of $88,760, plus a one-time interest charge of 13% ($11,538), which accrues on the issuance of the promissory note, is unsecured and matures on April 19, 2024. We also agreed to an original issuance discount of $9,510. The total amount of the promissory note of $100,298 (including principal, interest and fees) will be repaid in ten payments each in the amount of $10,030, the first payment is due on May 30, 2023, with nine subsequent payments each month thereafter. There is a five-day grace period with respect to each payment. Principal and interest owed at March 31, 2024 and December 31, 2023 was $0 and $26,188, respectively.

 

On September 5, 2023, we entered into a promissory note (“Note D”)and entered into a promissory note agreement that was dated September 5, 2023 with one subscriber (the “Holder”) to raise a net amount of US$104,250, pursuant to the terms and subject to the conditions of the unsecured promissory note issued to the Holder (the “Promissory Note”). The principal of the Promissory Note is US$119,887.50, plus a one-time interest charge of 11% (US$13,187), which accrues on issuance of the Promissory Note. It is unsecured and matures on July 15, 2024. We also agreed to an original issuance discount of US$15,637. The total amount of the Promissory Note of US$133,074 (including principal and interest) will be repaid in ten payments each in the amount of US$13,307, the first payment due on October 15, 2023, with nine subsequent payments each month thereafter. There is a five day grace period with respect to each payment. In the event of a default, the Promissory Note is convertible into shares of our common stock. In a default situation the Holder will have the right to convert all or any part of the outstanding and unpaid amount of the Promissory Note into shares of our common stock at a conversion price that is equal to the lowest trading price for the shares of common stock during the 25 trading days prior to the conversion date. Upon the occurrence and during the continuation of any event of default, the Promissory Note will immediately become immediately and payable and, if we wish to repay the Promissory Note in cash, we must pay an amount equal to 200% of the then outstanding principal amount of the Promissory Note plus accrued and unpaid interest on the unpaid principal amount of the Promissory Note plus any default interest, if any. On March 31, 2024 and December 31, 2023, the principal and interest owed was $55,231 and $95,750, respectively.

 

17
 

 

8. NOTES PAYABLE (CONT’D)

 

On December 5, 2023, we entered into a promissory note agreement with one subscriber (the “Holder”) to raise a net amount of US$45,000, pursuant to the terms and subject to the conditions of the unsecured promissory note issued to the Holder (the “Promissory Note”). The Promissory Note is in the amount of US$52,500, plus a one-time interest charge of 10% (US$3,697), which accrues on issuance of the Promissory Note, is unsecured and matures on September 15, 2024. We also agreed to an original issuance discount of US$2,500. The maturity is September 15, 2024. There is a five day grace period on this payment. In the event of a default, the Promissory Note is convertible into shares of our common stock. In a default situation the Holder will have the right to convert all or any part of the outstanding and unpaid amount of the Promissory Note into shares of our common stock at a conversion price that is Variable Conversion Price (as defined herein) subject to equitable adjustment by the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 61% multiplied by the Market Price (as defined herein) (representing a discount rate of 39%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is then being traded. We issued the Promissory Note and intend to issue shares of our common stock upon conversion of the Promissory Note to one U.S. person (as that term is defined in Regulation S of the Securities Act of 1933, as amended) and in issuing these securities, we relied or will rely on the exemptions from the registration requirements of the Securities Act of 1933 provided by Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506 promulgated under the Securities Act of 1933. The amount owed on March 31, 2024 is $46,110.

 

On April 28, 2023, the company received a $25,000 USD from Elek Istvan. There is no fixed terms of repayment and is not accruing interest. Balance at December 31, 2023 is $25,000 USD. On March 1, 2024 we converted this $25,000 of debt into 625,000 shares of our common stock at a value of $.04 per share resulting in no balance owed at March 31, 2024.

 

On July 5, 2023, MetaWorks has acquired software, including a Web3 business metaverse platform, Chat GPT-powered AI avatar technology, and domain portfolio, including UtopiaVR.com. This acquisition also includes a patent-pending IP technology relating to metaverse haptics that will hold potential for future development and licensing opportunities. Consideration for the acquisition of the assets included: (i) the issuance of 7,000,000 shares of common stock of the Company (each, a “Share”); (ii) the issuance of a convertible promissory note in the principal amount of $700,000 USD, which matures on July 5, 2024 and is convertible into Shares after the date that is six (6) months after the date of issuance at a conversion price of $0.10 USD per Share; and (iii) the issuance of a convertible promissory note in the principal amount of $154,250 USD, which matures on July 5, 2024, and is convertible into Shares after the date that is six (6) months after the date of issuance at a conversion price of $0.10 USD per Share. On March 31, 2024 and December 31, 2023 the balance owed to the software developer was $854,000. These notes are non-interest bearing.

 

On March 4, 2024, we closed on a promissory note and entered into a promissory note agreement that was dated March 1, 2024 with one subscriber (the “Holder”) to raise a net amount of US$75,000, pursuant to the terms and subject to the conditions of the unsecured promissory note issued to the Holder (the “Promissory Note”). The Promissory Note is in the amount of US$80,000, plus a one-time interest charge of 15% (US$14,400), which accrues on issuance of the Promissory Note, is unsecured and matures on December 30, 2024. We also agreed to an original issuance discount of US$16,000. The total amount of the Promissory Note of US$110,400 (including principal and interest) will be repaid in one(1) balloon payment of $55,200 due August 30, 2024. After the balloon payment, five (5) payments each of US$13,800, the first payment due on September 30, 2024, with subsequent payments each month thereafter. There is a five-day grace period with respect to each payment. The balance on March 31, 2024 was $75,000.

 

18
 

 

9. DEFERRED REVENUE

 

Prior to March 31, 2024, the Company received $77,700 cash from customers as deposits for work to be performed. On March 31, 2023, the products had not been delivered to the customers, therefore the deposits have been recorded as deferred revenue. Deferred revenue was $77,700 on March 31, 2024 and December 31, 2023.

 

10. COMMITMENTS AND CONTINGENCIES

 

Litigation

 

From time to time, the Company may be subject to legal proceedings, claims, and liabilities that arise in the ordinary course of business. The Company is not aware of any pending litigation as of the date of this report, and therefore, in the opinion of management and based upon the advice of its outside counsels, the liability, if any, from any pending litigation is not expected to have a material effect in the Company’s financial position, result or operations, and cash flows.

 

11. RELATED PARTY TRANSACTIONS

 

On January 22, 2018, the Company appointed James Geiskopf as Lead Director. As of March 31, 2024 and December 31, 2023, the Company had accounts payable and accrued expenses owing to this related party of $56,244 and $102,744, respectively.

 

On April 1, 2021, the Company appointed Cameron Chell as Executive Chairman. As of March 31, 2024 and December 31, 2023, the Company had accounts payable and accrued expenses owed to this related party of $98,067 $143,067, respectively.

 

On August 1, 2022, the Company appointed Scott Gallagher as President. As of March 31, 2024 and December 31, 2023, the Company had accounts payable and accrued expenses owing to this related party of $18,806 and $24,106.

 

On October 9, 2017, the Company signed an agreement with a company owned by Swapan Kakumanu to provide accounting services. As of December 31, 2023, the Company had accounts payable and accrued expenses owed of $141,688. The Company owed $54,188 as of March 31, 2024. As of March 31, 2024 December 31, 2023, there is also a loan payable owed to the Company by this party in the amount of $8,500, which is due on demand and non interest bearing.

 

On May 5, 2021, the Company loaned Fogdog $400,000 of which our CFO is a director, chief financial officer and shareholder (Note 6). Effective as of August 20, 2021, we loaned an additional $850,000 to Fogdog pursuant to convertible promissory note (Note 6). An allocation for non-collections was applied to this debt in 2023 resulting in a reported net realizable value of zero. During the quarter end March 31, 2024 this debt was converted to 11% equity in Fogdog and the investment was impaired to zero.

 

19
 

 

12. WARRANTS

 

The Company granted zero and 10,128,571 common stock warrants, during the period ended March 31, 2024 and year ended December 31, 2023, respectively. During the period ended March 31, 2024 warrant holders did not exercise any warrants and 3,813,593 warrants expired. During 2023 warrant holders did not exercise any warrants, and 19,656,521 warrants expired. The weighted average exercise price of warrants outstanding on March 31, 2024, is $0.7793, and the weighted average remaining contractual life is 1.10 years. The weighted average exercise price of warrants outstanding on December 31, 2023, is $0.5569, and the weighted average remaining contractual life is 1.36 years.

 

Since the expected life of the warrants was greater than the Company’s historical stock information available, the Company determined the expected volatility based on price fluctuations of comparable public companies.

 

The following table summarizes changes in warrants outstanding in each year:

  

   March 31, 2024   December 31, 2023 
Outstanding at beginning of year   10,279,664    19,807,614 
Issuances   

-

    10,128,571 
Expirations   (3,813,593)   (19,656,521)
Outstanding at end of year   6,466,071    10,279,664 
Weighted Average Price  $0.7793   $0.5569 

 

13. SHARE CAPITAL

 

On February 10, 2023, the Company completed a private placement for 6,500,000 shares at a price of $0.05 per share for total gross proceeds of $325,000.

 

On March 7, 2023, the Company issued 1,000,000 common shares for services rendered to the Company. The common shares were issued at a price of $0.10 USD per share, for a total value of $100,000 USD.

 

On March 30, 2023, the Company completed a private placement for 8,600,000 shares at a price of $0.04 per share for total gross proceeds of $378,400.

 

On April 4, 2023, we issued 725,000 shares of common stock of our company at a deemed price of $0.05 per share for services rendered to the Company in the amount of $36,250. We issued 500,000 of these shares to GSD Group, LLC, whose CEO is Shelly Murphy, a director of our company and 225,000 of these shares to Scott Gallagher, the president of our company.

 

On April 25, 2023, the Company issued 3,720,000 common shares to vendors for services rendered to the Company. There were 2,000,000 common shares issued at a price of $0.05 USD and 1,720,000 common shares were issued at a price of $0.075 USD per share, for a total value of $279,000 USD.

 

On July 5, 2023, the Company issued 7,000,000 common shares for software purchased by the Company. There were 7,000,000 common shares issued at a price of $0.10 USD for a total value of $700,000 USD.

 

On July 28, 2023, the Company completed private placements for 2,957,143 common shares at a price of $0.07 USD for total gross proceeds of $207,000 USD.

 

On August 16, 2023, the Company issued 160,714 shares of common stock of our company at a deemed price of $0.07 USD per share as compensation for services in the amount of $11,250. We issued these shares to Scott Gallagher, the president of our company.

 

On January 6, 2024, the Company issued 920,000 shares of common stock of our company at a deemed price of $0.02 USD per share in settlement of amounts owed for services totalling $18,400USD. We issued these shares to Scott Gallagher, the president of our company.

 

On March 1, 2024, we sold 2,500,000 shares of our common stock at a price of US$0.02 per share for aggregate gross proceeds of US$50,000. The purchaser is one individual investor.

 

On March 1, 2024 we converted $25,000 of debt into 625,000 shares of our common stock at a value of $.04 per share.

 

On March 1, 2024 we agreed to issue 4,600,000 shares of our common stock in payment for a one-year production and media broadcast agreement.

 

20

 

 

14. STOCK-BASED COMPENSATION

 

The Company has adopted the 2017 Equity Incentive Plan (“the Plan”) under which non-transferable options to purchase common shares of the Company may be granted to directors, officers, employees, or consultants of the Company. The terms of the Plan provide that our board of directors may grant options to acquire common shares of the Company at not less than 100% of the greater of: (i) the fair market value of the shares underlying the options on the grant date and (ii) the fair market value of the shares underlying the options on the date preceding the grant date at terms of up to ten years. No amounts are paid or payable by the recipient on receipt of the options. On June 30, 2023, the maximum number of options available for grant was increased to 28,300,000 shares. On December 31, 2023, there are 24,213,334 stock options issued and outstanding. On December 31, 2023, there are 4,086,666 unused stock options.

 

The Company has also granted stock options to non-employees. These stock options were granted to consultants who have provided their services for cash compensation below cost, with the stock options providing additional compensation in lieu of cash.

 

On August 26, 2022, the Company granted a total of 8,300,000 stock options to officers and directors of the Company. The stock options are exercisable at the exercise price of $0.09 per share for a period of ten years from the date of grant. The stock options have a fair value of $0.0780 and are exercisable as follows:

 

  (i) 1/2 the date of the grant; and
  (ii) 1/2 on the first anniversary date;

 

On August 26, 2022, the Company granted a total of 1,000,000 stock options to an officer of the Company. The stock options are exercisable at the exercise price of $0.09 per share for a period of ten years from the date of grant. The stock options have a fair value of $0.0780 and are exercisable as follows:

 

  (i) 1/3 the date of the grant;
  (ii) 1/3 on the first anniversary date; and
  (iii) 1/3 on the second anniversary date.

 

On February 22, 2023, the Company granted a total of 750,000 stock options to an officer of the Company. The stock options are exercisable at the exercise price of $0.11 per share for a period of ten years from the date of grant. The stock options have a fair value of $0.090 and are exercisable as follows:

 

  (i) 1/3 the first anniversary date of the grant;
  (ii) 1/3 on the second anniversary date; and
  (iii) 1/3 on the third anniversary date.

 

21

 

 

14. STOCK-BASED COMPENSATION (CONT’D)

 

Stock-based compensation expense recognized for the period ended March 31, 2023, and years ended December 31, 2022 were $(160,018) and $1,855,761, respectively. Stock options granted are valued at fair value calculation based off the Black-Scholes valuation model. The weighted average assumptions used in the calculation are as follows:

 

On April 21, 2023, the Company granted a total of 7,000,000 stock options to officers and directors of the Company. The stock options are exercisable at the exercise price of $0.09 per share for a period of ten years from the date of grant. The stock options have a fair value of $0.089 and are exercisable Immediately at issuance.

 

On April 21, 2023 the Company granted a total of 2,500,000 stock options to consultants of the Company. The stock options are exercisable at the exercise price of $0.09 per share for a period of ten years from the date of grant. The stock options have a fair value of $0.089 and are exercisable Immediately at issuance.

 

  (i) 1/3 on the date of the grant;
  (ii) 1/3 on the first anniversary date; and
  (iii) 1/3 on the second anniversary date.

 

On April 21, 2023 the Company granted a total of 1,500,000 stock options to a consultant of the Company. The stock options are exercisable at the exercise price of $0.09 per share for a period of ten years from the date of grant. The stock options have a fair value of $0.089 and are exercisable Immediately at issuance.

 

  (i) 500,000 on the date of the grant; and
  (ii) 1,000,000 on the third anniversary date.

 

On January 6, 2024, the Company granted a total of 9,000,000 stock options to directors, officers and consultants of the Company. The stock options are exercisable at the exercise price of $0.02USD per share for a period of ten years from the date of grant. The stock options have a fair value of $0.01. The options vested immediately upon issuance.

 

Stock-based compensation expense recognized for the period ended March 31, 2024 and year ended December 31, 2023, were $229,127 and $677,833, respectively. Stock options granted are valued at fair value calculation based off the Black-Scholes valuation model. The weighted average assumptions used in the calculation are as follows:

  

  

Period ended

March 31, 2024

  

Year ended

December 31, 2023

 
Share price  $0.02   $0.09 
Exercise price  $0.02   $0.09 
Time to maturity (years)   10    10 
Risk-free interest rate   4.05%   3.3%
Expected volatility   418.09%   86.4%
Dividend per share  $0.00   $0.00 
Forfeiture rate   -    - 

 

 

   Number
of Options
   Weighted Average
Grant-Date
Fair Value ($)
   Weighted
Average
Exercise
Price ($)
   Weighted
Average
Remaining
Life (Yrs)
 
Options outstanding, December 31, 2023   21,538,679    0.12    0.14    8.30 
Granted   9,000,000    0.02    0.02    10.0 
Cancelled   -    -    -    - 
Options outstanding, March 31, 2024   30,538,679    0.10    0.10    8.60 
Options exercisable, March 31, 2024   28,879,999    0.09    0.10    8.54 

 

22

 

 

14. STOCK-BASED COMPENSATION (CONT’D)

 

As vesting conditions are not wholly dependent on the employee and there is no timeline for them, for accounting purposes, the fair value is calculated and the expense is recognized upon the achievement of the milestones.

 

Nonvested options are valued at the date of the grant at the fair value of the common stock and are expensed over the vesting period. As at the grant date of the nonvested options, the fair value of the common stock was based upon the issuance of the founder shares at $0.0001 per share.

 

15. INCOME TAXES

 

For the period ended March 31, 2024 and year ended December 31 2023, there was no provision for income taxes and deferred tax assets have been entirely offset by valuation allowances.

 

As of March 31, 2024 and December 31, 2023, the Company had net operating loss carry forwards of approximately $5,055,287 and $4,941,970, respectively. The carry forwards expire through the year 2042. The Company’s net operating loss carry forwards may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code.

 

The Tax Cuts and Jobs Act was enacted on December 22, 2017, which reduced the U.S. corporate statutory tax rate from 35% to 21% beginning on January 1, 2018. We used 21% as an effective rate. Tax computations are as follows:

  

  

For the period ended

March 31, 2024

   For the year ended December 31, 2023 
Net operating loss before taxes  $(539,605)  $(5,650,103)
Federal income tax rate   21%   21%
Tax expense (benefit) at the statutory rate   (113,317)   (1,186,522)
Non-deductible items          
Tax effect of stock-based compensation (non-qualifying options)   48,116    

142,345

 
Change in Derivatives   -    

-

 
Change in valuation allowance   65,201    1,044,177 
Total  $-   $- 

 

23

 

 

15. INCOME TAXES (CONT’D)

 

The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities. The tax effect of significant components of the Company’s deferred tax assets at March 31, 2024 and December 31, 2023, respectively, are as follows:

  

   2024   2023 
Deferred tax asset:          
Net operating loss carryforwards  $5,055,287   $4,941,970 
Total gross deferred tax assets   5,055,287    

4,941,970

 
Less: Deferred tax asset valuation allowance   (5,055,287)   (4,941,970)
Total net deferred tax assets  $-   $- 

 

In assessing the ability to realize the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

 

The returns filed from the year 2019 going forward are subject to examination by the IRS.

 

16. NON-CONTROLLING INTEREST

 

On March 15, 2023, the Company signed an agreement with its partner in the jointly owned subsidiary EnderbyWorks, LLC to become the 100% owner of this entity. The agreement includes a secured promissory note receivable due to the Company by Enderby Entertainment in the amount of $1,828,000. The note receivable has an annual interest rate of 8% due on July 6, 2024. There is also a royalty clause on the existing assets that EnderbyWorks will pay the former partner 50% of the first $6,000,000 in net revenue, if revenues are generated in the future. The acquisition of the non-controlling interest in Enderby Works was received for no cash consideration and only the exchange of a note receivable due to the Company and a contingent royalty obligation owed to Enderby Entertainment by Enderby Works should it generate revenues in the future.

 

The reported non-controlling interest represents that in MC the Company holds 80% interest in this business which was acquired on June 22, 2021.

 

The following table sets forth a summary of the changes in non-controlling interest:

  

   March 31, 2024   December 31, 2023 
Non-controlling interest beginning of the period  $(161,258)   (881,720)
Issuance of shares by EnderbyWorks, LLC   -    - 
Net income (loss)   -   (14,195)
Acquisition   

-

    

734,637

 
Non-controlling interest end of period  $(161,258)   (161,258)

 

17. SUBSEQUENT EVENTS

 

On April 10, 2024, the Company and Fogdog agreed to an extension of the maturity date of the $850,000 Fogdog note receivable to December 31, 2029.

 

24

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Forward-Looking Statements

 

This Form 10-Q contains forward-looking statements regarding our business, customer prospects, or other factors that may affect future earnings or financial results that are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which could cause actual results to vary materially from those expressed in the forward-looking statements. Investors should read and understand the risk factors detailed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“Annual Report”) and in other filings with the Securities and Exchange Commission.

 

We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control. This list highlights some of the risks which may affect future operating results. These are the risks and uncertainties we believe are most important for you to consider. Additional risks and uncertainties, not presently known to us, which we currently deem immaterial, or which are similar to those faced by other companies in our industry or business in general, may also impair our business operations. If any of the following risks or uncertainties actually occur, our business, financial condition and operating results would likely suffer. These risks include, among others, the following: 

 

  our proposed plan of operations;
  our financial and operating objectives and strategies to achieve them;
  the costs and timing of our services;
  our use of available funds;
  our capital and funding requirements; and
  our other financial or operating performances.

 

The material assumptions supporting these forward-looking statements include, among other things:

 

  our future growth potential, results of operations, future prospects and opportunities;
  execution of our business strategy;
  there being no material variations in current regulatory environments;
  our operating expenses, including general and administrative expenses;
  our ability to obtain any necessary financing on acceptable terms;
  timing and amount of capital expenditures;
  retention of skilled personnel;
  continuation of current tax and regulatory regimes; and
  general economic and financial market conditions.

 

Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

 

These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

 

  inability to efficiently manage our operations;
  general economic and business conditions;
  our negative operating cash flow;
  our ability to obtain additional financing;
  our ability to collect outstanding loans;
  increases in capital and operating costs;
  risks relating to regulatory changes or actions;
  other risk factors discussed in our annual report on Form 10K filed on April 16th, 2024

 

any of which may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Further, although we have attempted to identify factors that could cause actual results, levels of activity, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause results, levels of activity, performance or achievements not to be as anticipated, estimated or intended.

 

25

 

 

All financial information contained herein is shown in United States dollars unless otherwise stated. Our financial statements are prepared in accordance with United States generally accepted accounting principles. Unless otherwise stated, “$” refers to United States dollars.

 

In this quarterly report, unless otherwise specified, all references to “shares” refer to shares of common stock in the capital of our company.

 

As used in this quarterly report, the terms “we”, “us”, “the Company”, “our” and “MetaWorks” mean MetaWorks Platforms, Inc. and its wholly owned subsidiaries, CurrencyWorks USA Inc. and EnderbyWorks LLC., Energy Works Corp. and its majority-owned subsidiary Motoclub LLC, unless otherwise specified.

 

Overview

 

MetaWorks is focused on developing emerging technology solutions and businesses that solve real world problems. The Company is focused on two primary areas of technology; 

 

Waste-to-Energy Technology

 

MetaWorks has since 2021, been developing a waste-to-energy conversion technology and business through its relationship with Fogdog Energy Solutions, Inc, a privately held company controlled by its CFO Mr. Swapan Kakamanu. MetaWorks owns an 11% equity stake in Fog Dog Energy Solutions, Inc. and currently has an $850,000 outstanding investment in Fogdog Energy. MetaWorks management feels that the Fogdog technology is ready for commercialization by Q4 of 2024 and into 2025 and is working to begin the implementation of the technology based business. MetaWorks mission in this area is to play an important role in the conversion of plastic waste-to-energy and aid in the solving of this massive problem in an efficient and profitable manner.

 

Technology Integration Business

 

MetaWorks also focuses on developing technology based solutions for itself and for customers that leverage the concept of decentralization and technologies such as Web3 and AI to improve future operations as these new technologies mature and become more important. MetaWorks anticipates that it will enable companies to focus on their core competencies while providing the necessary resources and expertise to execute a strategy that will enable companies to integrate these new Web3 and AI technologies into their business models and operations. MetaWorks plan is to be compensated on a fee-for-services model, technology licensing model and recurring transactions revenue model. 

 

Results of Operations

 

Three Months Ended March 31, 2024 compared to the Three Months Ended March 31, 2023

 

Revenue

 

We recognized no revenue for the three months ended March 31, 2024. During the three months ended March 31, 2023 we recognized total revenue of $34,431, with $4,431 coming from the sale of NFTs and $30,000 from consulting services.

 

Operating Expenses

 

We incurred general and administrative expenses of $523,192 and $35,501 for the three months ended March 31, 2024 and 2023, respectively, representing an increase of $487,691 between the two periods. These expenses consisted primarily of stock-based compensation expenses for issuance of options, consulting fees, pre-licensing fees, professional fees, amortization, and other general and administrative costs. The increase in general and administrative expenses was mainly due to the immediate vesting options issued to management and the board. Additionally, in the three months ended March 31, 2023 there we cancelation of previously expensed stock-based compensation resulting in a recapture of $188,739.

 

Other Income (Expense)

 

Other income includes zero note interest revenue for the three months ended March 31, 2024 compared to $24,904 note interest revenue.. Other expenses were $16,413 and $957 for the three months ended March 31, 2024 and 2023, respectively, consisting of interest expense from the loan payable.

 

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Net Loss from Operations

 

We incurred net losses from operations of $523,192 and $372,931 for the three months ended March 31, 2024 and 2023, respectively, representing a net change of $150,261, primarily attributable to the factors discussed above under the headings “Revenue” and “Operating Expenses”.

 

Liquidity and Capital Resources

 

Working Capital

 

   As at
March 31, 2024
   As at
December 31, 2023
 
Current Assets  $83,582   $127,884 
Current Liabilities   2,569,544    2,580,767 
Working Capital (Deficit)  $(2,485,962)  $(2,452,883)

 

Current Assets

 

Current assets were $83,582 as at March 31, 2024 and $127,884 at December 31, 2023. The decrease in current assets is mainly due to collection of accounts receivable.

 

Current Liabilities

 

Current liabilities of $2,569,544 as at March 31, 2024 were attributable to accounts payable, accrued expenses, loans payable and convertible notes payable, compared to $2,580,767 in accounts payable, accrued expenses, loans payable and convertible notes payable as at December 31, 2023.

 

Cash Flow

 

  

Three months ended

March 31, 2024

  

Three months ended

March 31, 2023

 
Net cash used in operating activities  $(68,971)  $(425,308)
Net cash provided by financing activities   72,781    684,625 
Net changes in cash and cash equivalents  $3,810   $259,317 

 

Operating Activities

 

Net cash used in operating activities was $68,971 for the three-month period ended March 31, 2024, as compared to net cash used of $425,308 for the three-month period ended March 31, 2023, a decrease of $356,337. The decrease in net cash used in operating activities was primarily due to repayment of accounts payables and accrued liabilities in the prior year.

 

Investing Activities

 

There were no investing activities for the three-month periods ended March 31, 2024 and March 31, 2023.

 

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Financing Activities

 

Financing activities provided cash of $72,781 for the three months ended March 31, 2024 and $684,625 for the three months ended March 31, 2023, a decrease of $611,844. This decrease is mainly due to less share issuances during the three months ended March 31, 2024.

 

On April 19, 2023, we entered into a promissory note agreement with one subscriber to raise a net amount of $75,000, pursuant to the terms and subject to the conditions of the unsecured promissory note issued to the subscriber. The promissory note is in the amount of $88,760, plus a one-time interest charge of 13% ($11,538), which accrues on issuance of the promissory note, is unsecured and matures on April 19, 2024. We also agreed to an original issuance discount of $9,510. The total amount of the promissory note of $100,298 (including principal, interest and fees) will be repaid in ten payments each in the amount of $10,029.80, the first payment due on May 30, 2023, with nine subsequent payments each month thereafter. We will have a five day grace period with respect to each payment. In the event of a default, the promissory note is convertible into shares of our common stock. In a default situation the subscriber will have the right to convert all or any part of the outstanding and unpaid amount of the promissory note into shares of our common stock at a conversion price that is equal to the lowest trading price for the shares of common stock during the 25 trading days prior to the conversion date. Upon the occurrence and during the continuation of any event of default, the promissory note will immediately become immediately and payable and, if we wish to repay the promissory note in cash, we must pay an amount equal to 200% of the then outstanding principal amount of the promissory note plus accrued and unpaid interest on the unpaid principal amount of the promissory note plus any default interest, if any.

 

Cash Requirements

 

We expect that we will require $1,200,000, including our current working capital, to fund our operating expenditures for the next twelve months. Projected working capital requirements for the next twelve months are as follows:

 

Estimated Working Capital Expenditures During the Next Twelve Months

 

General and administrative expenses  $1,200,000 
Total  $1,200,000 

 

Our estimated general and administrative expenses for the next 12 months are $1,200,000 and are comprised of consulting fees, accounting services, board of directors and our advisory board, investor relations consultants, and to our public relations and marketing consultants; legal and professional fees (including auditing fees); for insurance; marketing and advertising expenses; trade shows; travel expenses; office rent and miscellaneous and office expenses.

 

We will require additional cash resources to meet our planned capital expenditures and working capital requirements for the next 12 months. We expect to derive such cash through the sale of equity or debt securities or by obtaining a credit facility. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in debt service obligations, could cause additional dilution to our stockholders, and could require us to agree to financial covenants that could restrict our operations or modify our plans to source a new business opportunity. Financing may not be available in amounts or on terms acceptable to us, if at all. Failure to raise additional funds could cause our company to fail.

 

Going Concern

 

Our unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established a source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. We have incurred losses since inception resulting in an accumulated deficit of $47,617,875 as of March 31, 2024 (December 31, 2023: $47,078,270). Our ability to operate as a going concern is dependent on obtaining adequate capital to fund operating losses until we become profitable.

 

In their reports on our financial statements for the years ended December 31, 2023 and 2022, our current independent registered public accounting firms included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by our company is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Our principal executive officer, who is our president, and our principal financial officer, who is our chief financial officer, are responsible for establishing and maintaining disclosure controls and procedures for our company.

 

Our management conducted an evaluation, with the participation of our principal executive officer and our principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report on Form 10-Q. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that as a result of the material weaknesses in our internal control over financial reporting described in our annual report on Form 10-K for the fiscal year ended December 31, 2023, our disclosure controls and procedures were not effective as of March 31, 2024.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

We know of no material pending legal proceedings to which our company is a party or of which any of our properties is subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

 

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or has a material interest adverse to our company.

 

ITEM 1A. RISK FACTORS.

 

As we are a smaller reporting company, we are not required to provide the information required by this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

Since the beginning of the fiscal quarter ended March 31, 2024, we have not sold any equity securities that were not registered under the Securities Act of 1933, as amended, that were not previously reported in a quarterly report on Form 10-Q or a current report on Form 8-K.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

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ITEM 6. EXHIBITS.

 

Exhibit Number   Description
(3)   Articles of Incorporation and Bylaws
3.1   Articles of Incorporation (incorporated by reference from our Current Report on Form S-1, filed on March 30, 2011)
3.2   Articles of Merger (incorporated by reference from our Current Report on Form 8-K filed on August 23, 2017)
3.3   Articles of Merger (incorporated by reference from our Current Report on Form 8-K filed on February 15, 2018)
3.4   Articles of Merger dated effective September 3, 2019 (incorporated by reference from our Current Report on Form 8-K, filed on September 9, 2019)
3.5   Certificate of Amendment to Articles of Incorporation (incorporated by reference from our Current Report on Form 8-K, filed on June 3, 2021)
3.6   Amended and Restated Bylaws (incorporated by reference from our Annual Report on Form 10-K, filed on April 15, 2022)
(10)   Material Contracts
10.1   Private Placement Subscription Agreement with Oceanside Strategies Inc. dated September 14, 2015 (incorporated by reference from our Current Report on Form 8-K, filed on September 15, 2015)
10.2   18% Unsecured Convertible Note with Oceanside Strategies Inc. dated September 14, 2015 (incorporated by reference from our Current Report on Form 8-K, filed on September 15, 2015)
10.3   Private Placement Subscription Agreement with Oceanside Strategies Inc. dated December 30, 2016 (incorporated by reference from our Current Report on Form 8-K, filed on January 5, 2017)
10.4   18% Unsecured Convertible Note with Oceanside Strategies Inc. dated December 30, 2016 (incorporated by reference from our Current Report on Form 8-K, filed on January 5, 2017)
10.5   Private Placement Subscription Agreement with Oceanside Strategies Inc. dated December 30, 2016 (incorporated by reference from our Current Report on Form 8-K, filed on January 2, 2018)
10.6   18% Unsecured Convertible Note with Oceanside Strategies Inc. dated December 30, 2016 (incorporated by reference from our Current Report on Form 8-K, filed on January 2, 2018)
10.7   Private Placement Subscription Agreement with Oceanside Strategies Inc. dated March 2, 2017 (incorporated by reference from our Current Report on Form 8-K, filed on March 24, 2017)
10.8   18% Unsecured Convertible Note with Oceanside Strategies Inc. dated March 2, 2017 (incorporated by reference from our Current Report on Form 8-K, filed on March 24, 2017)
10.9   Private Placement Subscription Agreement with Oceanside Strategies Inc. dated June 8, 2017 (incorporated by reference from our Current Report on Form 8-K, filed on January 2, 2018)
10.10   18% Unsecured Convertible Note with Oceanside Strategies Inc. dated June 8, 2017 (incorporated by reference from our Current Report on Form 8-K, filed on January 2, 2018)
10.11   Transfer Agreement dated August 21, 2017 with Blockchain Fund GP Inc. (incorporated by reference from our Current Report on Form 8-K filed on August 23, 2017)
10.12   Business Services Agreement with Business Instincts Group Inc. dated October 18, 2017. (incorporated by reference from our Current Report on Form 8-K filed on October 19, 2017)
10.13   Private Placement Subscription Agreement with Oceanside Strategies Inc. dated October 30, 2017 (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.14   10% Unsecured Convertible Note dated October 30, 2017 issued in connection with Private Placement Subscription Agreement with Oceanside Strategies Inc. dated October 30, 2017 (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)

 

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10.15   Private Placement Subscription Agreement with Hospitality Investors Special Situation Group Pvt. Ltd. dated October 30, 2017 (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.16   10% Unsecured Convertible Note dated October 30, 2017 issued in connection with Private Placement Subscription Agreement with Hospitality Investors Special Situation Group Pvt. Ltd. dated October 30, 2017 (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.17   Form of Private Placement Subscription Agreement for Common Stock Offering (incorporated by reference from our Current Report on Form 8-K filed on October 31, 2017)
10.18   Loan Agreement dated November 20, 2017 with WENN Digital Inc. (incorporated by reference from our Current Report on Form 8-K filed on November 27, 2017)
10.19   Independent Consultant Agreement dated effective October 9, 2017 with Bruce Elliott (incorporated by reference from our Current Report on Form 8-K, filed on January 2, 2018)
10.20   Independent Consultant Agreement dated effective October 9, 2017 with Michael Blum (incorporated by reference from our Current Report on Form 8-K, filed on January 2, 2018)
10.21   Business Services Agreement dated effective December 29, 2017 with WENN Digital Inc. (incorporated by reference from our Current Report on Form 8-K, filed on January 2, 2018)
10.22   Form of Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on March 14, 2018)
10.23   Amendment No. 1 to Business Services Agreement dated as of March 24, 2018 with WENN Digital Inc. (incorporated by reference from our Current Report on Form 8-K, filed on March 20, 2018)
10.24   Offer Letter dated January 22, 2018 with James P. Geiskopf (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.25   Offer Letter dated February 9, 2018 with Edmund C. Moy (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.26   2017 Equity Incentive Plan (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.27   Stock Option Agreement dated October 15, 2017 with James P. Geiskopf (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.28   Stock Option Agreement dated October 15, 2017 with Cameron Chell (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.29   Stock Option Agreement dated October 15, 2017 with Michael Blum (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.30   Stock Option Agreement dated October 15, 2017 with Bruce Elliott (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.31   Stock Option Agreement dated October 15, 2017 with Business Instincts Group Inc. (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.32   Stock Option Agreement dated February 9, 2018 with Edmund C. Moy (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.33   Indemnification Agreement dated December 20, 2017 with James P. Geiskopf (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.34   Indemnification Agreement dated December 20, 2017 with Cameron Chell (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.35   Indemnification Agreement dated December 20, 2017 with Michael Blum (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.36   Indemnification Agreement dated December 20, 2017 with Bruce Elliott (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.37   Indemnification Agreement dated February 9, 2018 with Edmund C. Moy (incorporated by reference from our Annual Report on Form 10-K filed on April 2, 2017)
10.38   Offer Letter dated May 17, 2018 with James Carter (incorporated by reference from our Registration Statement on Form S-1/A filed on July 17, 2018)

 

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10.39   Stock Option Agreement dated May 17, 2018 with James Carter (incorporated by reference from our Registration Statement on Form S-1/A filed on July 17, 2018)
10.40   Indemnification Agreement dated May 17, 2018 with James Carter (incorporated by reference from our Registration Statement on Form S-1/A filed on July 17, 2018)
10.41   Offer Letter dated June 22, 2018 with Alphonso Jackson (incorporated by reference from our Registration Statement on Form S-1/A filed on July 17, 2018)
10.42   Stock Option Agreement dated June 7, 2018 with Alphonso Jackson (incorporated by reference from our Registration Statement on Form S-1/A filed on July 17, 2018)
10.43   Indemnification Agreement June 22, 2018 with Alphonso Jackson (incorporated by reference from our Registration Statement on Form S-1/A filed on July 17, 2018)
10.44   Amendment Agreement dated effective as of June 25, 2018 to Business Services Agreement dated October 18, 2017 with Business Instincts Group Inc. (incorporated by reference from our Current Report on Form 8-K, filed on June 29, 2018)
10.45   Loan Agreement dated July 9, 2018 with Ryde Holding Inc. (formerly WENN Digital Inc.) (incorporated by reference from our Current Report on Form 8-K, filed on July 11, 2018)
10.46   Corporate Guaranty dated July 9, 2018 by Ryde GmbH (incorporated by reference from our Current Report on Form 8-K, filed on July 11, 2018)
10.47   Amendment No. 2 to Business Services Agreement dated as of July 9, 2018 with Ryde Holding Inc. (formerly WENN Digital Inc.) (incorporated by reference from our Current Report on Form 8-K, filed on July 11, 2018)
10.48   Loan Agreement entered into as of August 29, 2018 with Ryde GmbH (incorporated by reference from our Current Report on Form 8-K, filed on August 31, 2018)
10.49   Corporate Guaranty entered into as of August 29, 2018 by Ryde Holding Inc. (formerly WENN Digital Inc.) (incorporated by reference from our Current Report on Form 8-K, filed on August 31, 2018)
10.50   Security Agreement entered into as of August 29, 2018 with Ryde Holding Inc. (formerly WENN Digital Inc.) (incorporated by reference from our Current Report on Form 8-K, filed on August 31, 2018)
10.51   Security Assignment Agreement entered into as of August 29, 2018 with Ryde GmbH (incorporated by reference from our Current Report on Form 8-K, filed on August 31, 2018)
10.52   Master Services Agreement dated effective October 19, 2018 between ICOx USA, Inc. and BitRail, LLC (incorporated by reference from our Current Report on Form 8-K, filed on October 24, 2018)
10.53   Software Services Statement of Work dated effective October 19, 2018 between ICOx USA, Inc. and BitRail, LLC (incorporated by reference from our Current Report on Form 8-K, filed on October 24, 2018)
10.54   Amendment No. 3 to Business Services Agreement dated as of October 29, 2018 with Ryde Holding Inc. (incorporated by reference from our Current Report on Form 8-K, filed on October 31, 2018)
10.55   Amendment Agreement dated November 5, 2018 with Oceanside Strategies Inc. (incorporated by reference from our Current Report on Form 8-K, filed on November 7, 2018)
10.56   Amendment Agreement dated November 5, 2018 with Oceanside Strategies Inc. (incorporated by reference from our Current Report on Form 8-K, filed on November 7, 2018)
10.57   Amendment Agreement dated November 5, 2018 with Oceanside Strategies Inc. (incorporated by reference from our Current Report on Form 8-K, filed on November 7, 2018)
10.58   Amendment Agreement dated November 5, 2018 with Oceanside Strategies Inc. (incorporated by reference from our Current Report on Form 8-K, filed on November 7, 2018)
10.59   Amendment Agreement dated November 5, 2018 with Oceanside Strategies Inc. (incorporated by reference from our Current Report on Form 8-K, filed on November 7, 2018)
10.60   2017 Equity Incentive Plan (incorporated by reference from our Current Report on Form 8-K, filed on November 23, 2018)

 

33

 

 

10.61   Form of Private Placement Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on November 29, 2018)
10.62   Amendment to Independent Consultant Agreement dated December 4, 2018 with Michael Blum (incorporated by reference from our Current Report on Form 8-K, filed on December 4, 2018)
10.63   Master Services Agreement dated effective January 21, 2019 between ICOx USA, Inc. and FreedomCoin, LLC (incorporated by reference from our Current Report on Form 8-K, filed on February 4, 2019)
10.64   Software Services Statement of Work dated effective January 21, 2019 between ICOx USA, Inc. and FreedomCoin, LLC (incorporated by reference from our Current Report on Form 8-K, filed on February 4, 2019)
10.65   Stock Option Agreement dated October 15, 2017 with Red to Black Inc. (incorporated by reference from our Annual Report on Form 10-K, filed on March 26, 2019)
10.66   Stock Option Agreement dated June 8, 2018 with Red to Black Inc. (incorporated by reference from our Annual Report on Form 10-K, filed on March 26, 2019)
10.67   Independent Consultant Agreement dated effective December 4, 2018 with Swapan Kakumanu (incorporated by reference from our Annual Report on Form 10-K, filed on March 26, 2019)
10.68   Indemnification Agreement with Swapan Kakumanu (incorporated by reference from our Annual Report on Form 10-K, filed on March 26, 2019)
10.69   Form of Private Placement Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on May 20, 2019)
10.70   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Consulting Agreement dated effective October 9, 2017 between CurrencyWorks Inc. and Bruce Elliott (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.71   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Offer Letter dated January 22, 2018 between CurrencyWorks Inc. and James P. Geiskopf (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.72   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Offer Letter dated February 9, 2018 between CurrencyWorks Inc. and Edmund C. Moy (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.73   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Offer Letter dated May 17, 2018 between CurrencyWorks Inc. and James Carter (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.74   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Offer Letter dated June 22, 2018 between CurrencyWorks Inc. and Alphonso Jackson (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.75   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Consulting Agreement dated effective October 9, 2017, as amended on November 30, 2018 and July 1, 2019 between CurrencyWorks Inc. and Michael Blum (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.76   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Business Services Agreement dated effective October 18, 2017 as amended on June 26, 2018 between CurrencyWorks Inc. and Business Instincts Group Inc. (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.77   Amendment Agreement dated January 21, 2020 with an effective date of December 1, 2019 to Consulting Agreement dated effective December 4, 2018 between CurrencyWorks Inc. and Swapan Kakumanu (incorporated by reference from our Current Report on Form 8-K, filed on January 27, 2020)
10.78   Amendment to Loan Agreement and Termination of Business Services Agreement dated February 7, 2020 with Ryde GmbH and Ryde Holding Inc. (incorporated by reference from our Current Report on Form 8-K, filed on February 12, 2020)
10.79   Form of Private Placement Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on June 16, 2020)

 

34

 

 

10.80   Business Services Agreement with Business Instincts Group Inc. dated December 10, 2020 (incorporated by reference from our Current Report on Form 8-K, filed on December 11, 2020)
10.81   Form of Private Placement Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on January 7, 2021)
10.82   Form of Private Placement Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on February 11, 2021)
10.83   Convertible Promissory Note with Fogdog Energy Solutions Inc. dated May 5, 2021 (incorporated by reference from our Current Report on Form 8-K, filed on May 6, 2021)
10.84   Amended 2017 Equity Incentive Plan (incorporated by reference from our Current Report on Form 8-K, filed on June 3, 2021)
10.85   Limited Liability Company Agreement dated July 6, 2021 with EnderbyWorks, LLC, Enderby Entertainment, Inc. and CurrencyWorks USA, Inc. (incorporated by reference from our Current Report on Form 8-K, filed on July 7, 2021)
10.86   LLC Member Services Master Agreement dated July 6, 2021 with EnderbyWorks, LLC, Enderby Entertainment, Inc. and CurrencyWorks USA, Inc. (incorporated by reference from our Current Report on Form 8-K, filed on July 7, 2021)
10.87   Technology Operating and License Agreement dated July 6, 2021 with EnderbyWorks, LLC and CurrencyWorks USA, Inc. (incorporated by reference from our Current Report on Form 8-K, filed on July 7, 2021)
10.88   Secured Promissory Note dated July 6, 2021with EnderbyWorks, LLC and CurrencyWorks USA, Inc. (incorporated by reference from our Current Report on Form 8-K, filed on July 7, 2021)
10.89   Security Agreement dated July 6, 2021 with EnderbyWorks, LLC and CurrencyWorks USA, Inc. (incorporated by reference from our Current Report on Form 8-K, filed on July 7, 2021)
10.90   Distribution License Agreement dated July 6, 2021 with EnderbyWorks, LLC and 92 Films, LLC (incorporated by reference from our Current Report on Form 8-K, filed on July 7, 2021)
10.91   Form of Securities Purchase Agreement (incorporated by reference from our Current Report on Form 8-K, filed on July 13, 2021)
10.92   Form of Common Warrant (incorporated by reference from our Current Report on Form 8-K, filed on July 13, 2021)
10.93   Engagement Letter dated June 15, 2021 with H.C. Wainwright & Co., LLC (incorporated by reference from our Current Report on Form 8-K, filed on July 13, 2021)
10.94   Amendment to Engagement Letter dated July 10, 2021 with H.C. Wainwright & Co., LLC (incorporated by reference from our Current Report on Form 8-K, filed on July 13, 2021)
10.95   Business Combination Agreement among VON Acquisition Inc., s‎BetOne, Inc., VON Acquisition Merger Sub Inc., Limitless III Inc., ‎VON Acquisition Corp. and VON Bismark Limited.(incorporated by reference from our current report on Form 8-K, filed on August 18, 2021)
10.96   Services Agreement with Fogdog Energy Solutions Inc. dated August 20, 2021 (incorporated by reference from our Current Report on Form 8-K, filed on August 24, 2021)
10.97   Loan Agreement with Fogdog Energy Solutions Inc. dated August 20, 2021 (incorporated by reference from our Current Report on Form 8-K, filed on August 24, 2021)
10.98   General Security Agreement with Fogdog Solutions Inc. dated August 20, 2021 (incorporated by reference from our Current Report on Form 8-K, filed on August 24, 2021)
10.99   Form of Securities Purchase Agreement (incorporated by reference from our Current Report on Form 8-K, filed on December 29, 2021)
10.100   Form of Common Warrant (incorporated by reference from our Current Report on Form 8-K, filed on December 29, 2021)
10.101   Form of Private Placement Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on December 30, 2021)
10.102   Form of Securities Purchase Agreement (incorporated by reference from our Current Report on Form 8-K, filed on January 28, 2022)
10.103   Form of Common Warrant (incorporated by reference from our Current Report on Form 8-K, filed on January 28, 2022)
10.104   Form of Private Placement Subscription Agreement (incorporated by reference from our Current Report on Form 8-K, filed on January 31, 2022)
10.105   Form of Securities Purchase Agreement (incorporated by reference from our Current Report on Form 8-K, filed on February 28, 2022)

 

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10.106   Form of Common Warrant (incorporated by reference from our Current Report on Form 8-K, filed on February 28, 2022)
10.107   Independent Consultant Agreement dated effective September 7, 2022 with Scott Gallagher (incorporated by reference from our Form 10-K, filed on March 21, 2023)
10.108   Amendment #1 dated March 15, 2023 to Convertible Promissory Note with Fogdog Energy Solutions Inc. dated May 5, 2021 (incorporated by reference from our Form 10-K, filed on March 21, 2023)
10.109   Amendment #1 dated March 15, 2023 to Loan Agreement with Fogdog Energy Solutions Inc. dated August 20, 2021 (incorporated by reference from our Form 10-K, filed on March 21, 2023)
10.110   Asset Purchase Agreement dated June 16, 2023 with Apex VR Holdings, Inc. (incorporated by reference from our Current Report on Form 8-K, filed on June 23, 2023)
10.111   Amended Equity Incentive Plan (incorporated by reference from our current report on Form 8-K, filed on June 30, 2023)
10.112   Business Development Service Agreement dated August 24, 2023 with GSD Group, LLC (incorporated by reference from our current report on Form 8-K filed on August 29, 2023)
10.113   Amendment # 2 dated April 10, 2024 to Loan Agreement with Fogdog Energy Solutions Inc. dated August 20, 2021(incorporated by reference from our Form 10-K, filed on April 16, 2024)
(31)   Rule 13a-14(a) Certifications
31.1*   Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32)   Section 1350 Certifications
32.1*   Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*   Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 (101)   Interactive Data File
101.INS*   Inline XBRL Instance Document
101.SCH*   Inline XBRL Taxonomy Extension Schema
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*Filed herewith.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

METAWORKS PLATFORMS, INC.
   
/s/ Swapan Kakumanu  
Swapan Kakumanu  
Chief Financial Officer  
(Duly Authorized Officer)  
Dated: May 20, 2024  

 

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