NOTE 9 - RELATED PARTY TRANSACTIONS

The Company was formed on January 25, 2011 as a wholly-owned subsidiary of Worlds Inc. (formerly known as Worlds.com Inc.). On May 16, 2011 Worlds Inc. transferred to the Company the majority of its operations and related operational assets, except for its patent portfolio. Worlds Inc. has also given to the Company a perpetual world-wide license to its patented technology. Pursuant to the license, the Company has the right to issue unlimited sublicenses to the licensed technology, subject to World Inc.’s reasonable consent.

The assets transferred to the Company include: Worlds Inc.’s technology platform, Worlds Ultimate Chat, Aerosmith World, DMC Worlds, Cinema Virtual, Pearson contracts and related revenue, the following URLs: Worlds.com, Cybersexworld.com, Hang.com, and Worldsfunds.com, a digital inventory of over 10,000 3D objects, animation sequences, an extensive avatar library, texture maps and virtual world architectures. None of the transferred assets have any carrying value on the financial statements of the Company. Deferred revenue was also transferred from Worlds Inc. and it was $226,950 at December 31, 2014 and December 31, 2013.

Account receivable and payable related party is comprised of cash payments made by Worlds Inc. on behalf of Worlds Online Inc. for shared operating expenses in 2013. The balance for 2014 is comprised of cash payments made by Worlds Online Inc. to pay back the balance and payment of some shared operating expenses on behalf of Worlds Inc. during the year. The balance at December 31, 2014 is a receivable due from Worlds Inc. in the amount of $9,426. The remaining balance in the account are balances due from Sigal Health and Sigal Holdings related to the transfer of all balances in the acquisition of Sigal consulting LLC. The balance due at December 31, 2013 was a payable due Worlds Inc. in the amount of $295,913. Included in the accompanying Balance Sheets at December 31, 2014 is the account receivable related party of $9,416 and for 2013 is an account payable related party in the amount of $295,913, payable to Worlds Inc. for payments made on shared expenses.