NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

MariMed Inc. (formerly known as Worlds Online Inc.) (the “Company”) currently operates two separate business segments—an online portal that offers virtual multi-user environments to visitors, and a management company in the medical cannabis industry. The Company stock is quoted on the OTC Bulletin Board.

The Company was formed on January 25, 2011 as a wholly-owned subsidiary of Worlds Inc. (formerly known as Worlds.com Inc.). Effective May 16, 2011, Worlds Inc. transferred to the Company the majority of its operations and related operational assets, consisting of World Inc.’s proprietary technology platform, a network of virtual 3D environments, a catalog of URLs, digital inventory of 3D objects, animation sequences, an avatar library, texture maps and virtual world architectures. This transfer excluded Worlds Inc.’s patent portfolio, however the Company received a perpetual world-wide license to such portfolio, including the right to issue unlimited sublicenses to the licensed technology, subject to Worlds Inc.’s reasonable consent. 

In May, 2014, the Company entered into a transaction between MariMed Advisors Inc. (“MariMed Advisors”), its wholly-owned subsidiary at that time, Sigal Consulting LLC (“Sigal”), and the Members of Sigal (“Sellers”) whereby the Company, through MariMed Advisors acquired all of the assets and liabilities of Sigal, and the Sellers received (i) an aggregate amount of the Company’s common stock MRMD (formerly WORX) equal to 50% of the Company’s outstanding shares on the closing date, September 29, 2014; (ii) options to purchase three million shares of the Company’s common stock, exercisable over five years with exercise prices ranging from $0.15 to $0.35; and (iii) 49% of MariMed Advisor’s outstanding common stock. As a result, the Company’s ownership of MariMed Advisors was reduced from 100% to 51%.

This transaction was accounted for as a purchase acquisition/merger wherein the Company was both the accounting acquirer and legal acquirer. Accordingly, the Company recorded the assets purchased and liabilities assumed as part of the merger, and recorded as goodwill the value of the common stock and options issued in excess of the book value of Sigal. Subsequently, this goodwill was deemed impaired in full and written down.

In May, 2017, the Company changed its name from Worlds Online Inc. to MariMed Inc.