WORLD
HEALTH ENERGY HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(U.S.
dollars except share and per share data)
The
accompanying notes are an integral part of the condensed consolidated financial statements.
WORLD
HEALTH ENERGY HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(U.S.
dollars except share and per share data)
The
accompanying notes are an integral part of the condensed consolidated financial statements.
WORLD
HEALTH ENERGY HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(U.S.
dollars, except share and per share data)
|
|
|
Preferred
Stock
|
|
|
Preferred
Stock B
|
|
|
|
|
|
Additional
paid-in capital
|
|
|
Foreign
currency
translation
adjustments
|
|
|
Accumulated
deficit
|
|
|
Total
Company’s stockholders’ deficit
|
|
|
|
|
Number
of Shares
|
|
|
Amount
|
|
|
Number
of Shares
|
|
|
Amount
|
|
|
Number
of Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
AT JANUARY 1, 2021
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
89,789,407,996
|
|
|
|
62,852,586
|
|
|
|
(63,339,225
|
)
|
|
|
(5,495
|
)
|
|
|
(1,496,637
|
)
|
|
|
(1,982,562
|
)
|
|
Comprehensive
loss for three months ended March 31, 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(266,091
|
)
|
|
|
(266,091
|
)
|
|
BALANCE
AT MARCH 31, 2021 (Unaudited)
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
89,789,407,996
|
|
|
|
62,852,586
|
|
|
|
(63,339,225
|
)
|
|
|
(5,495
|
)
|
|
|
(1,762,728
|
)
|
|
|
(2,248,653
|
)
|
|
Comprehensive
loss for three months ended June 30, 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(206,889
|
)
|
|
|
(206,889
|
)
|
|
BALANCE
AT JUNE 30, 2021 (Unaudited)
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
89,789,407,996
|
|
|
|
62,852,586
|
|
|
|
(63,339,225
|
)
|
|
|
(5,495
|
)
|
|
|
(1,969,617
|
)
|
|
|
(2,455,542
|
)
|
|
Issuance
of shares
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,700,000,000
|
|
|
|
17,000
|
|
|
|
153,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
170,000
|
|
|
Issuance
of shares in exchange for services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
500,000,000
|
|
|
|
5,000
|
|
|
|
245,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
250,000
|
|
|
Share based compensation for services
providers (Note 4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,041,342
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,041,342
|
|
|
Comprehensive
loss for three months ended September 30, 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,032,470
|
)
|
|
|
(2,032,470
|
)
|
|
BALANCE
AT SEPTEMBER 30, 2021 (Unaudited)
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
91,989,407,996
|
|
|
|
62,874,586
|
|
|
|
(61,899,883
|
)
|
|
|
(5,495
|
)
|
|
|
(4,002,087
|
)
|
|
|
(3,026,670
|
)
|
The
accompanying notes are an integral part of the condensed consolidated financial statements.
WORLD
HEALTH ENERGY HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S.
dollars except)
The
accompanying notes are an integral part of the condensed consolidated financial statement
WORLD
HEALTH ENERGY HOLDINGS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
1 – GENERAL
|
|
A.
|
Operations
|
|
|
|
|
|
|
|
World
Health Energy Holdings, Inc., (the “Company” or “WHEN”), was formed on May 21, 1986, under the laws of the
State of Delaware. The Company has invested in and abandoned a variety of software programs that it strove to commercialize.
|
|
|
|
|
|
|
|
UCG,
INC. (the “UCG”) was incorporated on September 13, 2017, under the laws of the State of Florida. The Company wholly-owns
the issued and outstanding shares of RNA Ltd. (Hereinafter: “RNA”).
|
|
|
|
|
|
|
|
RNA
is primarily a research and development company that has been performing software design work for UCG in the field of cybersecurity
under the terms of development agreement between UCG and RNA. UCG is primarily engaged in the marketing and distribution of cybersecurity
related products.
|
|
|
|
|
|
|
|
In
anticipation of the transaction contemplated under the Merger Agreement, SG 77 Inc. a Delaware Corporation and a wholly-owned subsidiary
of UCG (“SG”), was incorporated on April 16, 2020 and all of the cybersecurity rights and interests held by UCG, including
the share ownership of RNA, were assigned to SG.
|
|
|
|
|
|
|
|
On
October 7, 2021, the Company filed an amendment (the “Amendment”) to its Certificate of Incorporation, as amended, to
increase the Company’s authorized share capital and to change the par value of the Company’s Common Stock. The Amendment
increased the Company’s authorized share capital to 750,000,000,000
shares of common stock (from 110,000,000,000
shares) and changed the par value of the
common stock to $0.00001
per share (from $0.0007).
The Amendment was effective retroactive to September 28, 2021.
|
|
|
|
|
|
|
B.
|
Merger
Transaction
|
|
|
|
|
|
|
|
On
April 27, 2020, the Company completed a reverse triangular merger pursuant to the Agreement and Plan of Merger (the “Merger
Agreement”) among WHEN, R2GA, Inc., a Delaware corporation and a wholly owned subsidiary of WHEN (“Sub”), UCG,
SG, and RNA. Under the terms of the Merger Agreement, R2GA merged with SG, with SG remaining as the surviving corporation and a wholly-owned
subsidiary of the WHEN (the “Merger”). The Merger was effective as of April 27, 2020 whereby SG became a direct and wholly
owned subsidiary of WHEN and RNA indirect wholly owned subsidiary of the Company. Each of Gaya Rozensweig and George Baumeohl, directors
of the Company, are also the sole shareholders and directors of the Company.
|
|
|
|
|
|
|
|
As
consideration for the Merger, WHEN issued to UCG 3,870,000 Series B Convertible Preferred Stock, par value $0.0007 per share, of
WHEN (the “Series B Preferred Shares”). Each share of the Series B Preferred Shares will automatically convert into 100,000
shares of WHEN’s common stock, par value $0.0007 (the “Common Stock”), for an aggregate amount of 387,000,000,000
shares of WHEN’s Common Stock, upon the filing with the Secretary of State of Delaware of an amendment to WHEN’s certificate
of incorporation increasing the number of authorized shares of Common Stock that the Company is authorized to issue from time to
time.
|
|
|
|
|
|
|
|
The
Company, collectively with SG, Sub and RNA are hereunder referred to as the “Group”.
|
WORLD
HEALTH ENERGY HOLDINGS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
1 – GENERAL (continue)
|
|
|
The
transaction was accounted for as a reverse asset acquisition in accordance with generally accepted accounting principles in the United
States of America (“GAAP”). Under this method of accounting, SG was deemed to be the accounting acquirer for financial
reporting purposes. This determination was primarily based on the facts that, immediately following the Merger: (i) SG’s stockholders
owned a substantial majority of the voting rights in the combined company, (ii) SG designated a majority of the members of the initial
board of directors of the combined company, and (iii) SG’s senior management holds all key positions in the senior management
of the combined company. As a result of the Recapitalization Transaction, the shareholders of SG received the largest ownership interest
in the Company, and SG was determined to be the “accounting acquirer” in the Recapitalization Transaction. See also Note
5 (Subsequent Events)
|
|
|
|
|
|
|
|
As
a result, the historical financial statements of the Company were replaced with the historical financial statements of SG. The number
of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number of shares received
by the accounting acquirer in the Recapitalization Transaction.
|
|
|
|
|
|
|
C.
|
Board
and Shareholder Authority for Reverse Stock Split
|
|
|
|
|
|
|
|
On
June 21, 2021, Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation (the “Reverse
Stock Split Certificate of Amendment”) in order to effect a reverse stock split of the Company’s common stock pursuant
to a range of between 1,000-to-1 and 15,000-to-1 (the “Reverse Stock Split”), when and as determined by the Company’s
Board of Directors. Pursuant to the Reverse Stock Split, each one thousand or fifteen thousand shares of common stock, or any other
figure within that range, as shall be determined by the Board of Directors at a later time, will be automatically converted, without
any further action by the stockholders, into one share of common stock. The Reverse Stock Split Certificate of Amendment will be
effective upon receipt of approval from the Financial Industry Regulatory Authority (“FINRA”) for the Reverse Stock Split
and the filing with the Secretary of the State of Delaware. As of the date of this report, the Board of Directors has not determined
any particular range for the Reverse Stock Split and no application has been presented to FINRA.
|
|
|
|
|
|
|
D.
|
Going
concern uncertainty
|
|
|
|
|
|
|
|
Since
inception, the Group has devoted substantially all its efforts to research and development. The Group is still in its development
stage and the extent of the Group’s future operating losses and the timing of becoming profitable, if ever, are uncertain.
As of September 30, 2021, the Group had $53,369
of cash and cash equivalents, net losses
of $2,505,450,
accumulated deficit of $4,002,087,
and a negative working capital of $942,239.
|
|
|
|
|
|
|
|
The
Group will need to secure additional capital in the future in order to meet its anticipated liquidity needs primarily through the
sale of additional Common Stock or other equity securities and/or debt financing. Funds from these sources may not be available to
the Group on acceptable terms, if at all, and the Group cannot give assurance that it will be successful in securing such additional
capital (see Note 3 in respect to subscription agreements signed between August and October 2021).
|
|
|
|
|
|
|
|
These
conditions raise substantial doubt about the Company’s ability to continue to operate as a “going concern.” The
Company’s ability to continue operating as a going concern is dependent on several factors, among them is the ability to raise
sufficient additional funding.
|
|
|
|
|
|
|
|
The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
|
WORLD
HEALTH ENERGY HOLDINGS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
|
|
E.
|
Risk
factors
|
|
|
|
|
|
|
|
The
Group face a number of risks, including uncertainties regarding finalization of the development process, demand and market acceptance
of the Group’s products, the effects of technological changes, competition and the development of products by competitors.
Additionally, other risk factors also exist, such as the ability to manage growth and the effect of planned expansion of operations
on the Group’s future results. In addition, the Group expects to continue incurring significant operating costs and losses
in connection with the development of its products and increased marketing efforts. As mentioned above, the Group has not yet generated
significant revenues from its operations to fund its activities, and therefore the continuance of its activities as a going concern
depends on the receipt of additional funding from its current stockholders and investors or from third parties.
|
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Unaudited
Interim Financial Statements
The
accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, prepared in
accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions
to Form 10-Q. In the opinion of management, the financial statements presented herein have not been audited by an independent registered
public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of the financial condition, results of operations and cash flows for the nine-months ended
September 30, 2021. However, these results are not necessarily indicative of results for any other interim period or for the year ended
December 31, 2021. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and
assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts
of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.
Certain
information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles
have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). These financial statements
should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on published
on the OTCIQ Alternative Reporting System, for the year ended December 31, 2021.
Principles
of Consolidation
The
consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include
the Company and its wholly-owned and majority-owned subsidiaries. All inter-company balances and transactions have been eliminated.
Use
of Estimates
The
preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain
revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results
could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate
to the going concern assumptions, stock based compensation and estimations in respect of service period upon issuance of shares to
services provider.
WORLD
HEALTH ENERGY HOLDINGS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continue)
Leases
The
Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”)
assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets.
ROU
assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent Company’s
obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date
based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, the Company
generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term
of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives.
Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise
that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Stock-based
compensation
The
Company measures and recognizes the compensation expense for all equity-based payments to employees based on their estimated fair values
in accordance with ASC 718, “Compensation-Stock Compensation”. Share-based payments including grants of stock options are
recognized in the statement of comprehensive loss as an operating expense based on the fair value of the award at the date of grant.
The fair value of stock options granted is estimated using the Black-Scholes option-pricing model. The Company has expensed compensation
costs, net of estimated forfeitures, applying the accelerated vesting method, over the requisite service period or over the implicit
service period when a performance condition affects the vesting, and it is considered probable that the performance condition will be
achieved.
Share-based
payments awarded to consultants (non-employees) are accounted for in accordance with ASC Topic 505-50, “Equity-Based Payments to
Non-Employees”.
Recent
Accounting Pronouncements
In
August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for
Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The guidance in ASU 2020-06
simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain
conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives
and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract
as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities.
Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible
instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled
in cash or other assets.
WORLD
HEALTH ENERGY HOLDINGS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
The
amendments in ASU 2020-06 are effective for the Company for fiscal years beginning after December 15, 2021. Early adoption is permitted.
The guidance must be adopted as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this
new guidance, but does not expect it to have a material impact on its financial statements.
NOTE
3 – COMMON STOCK
On August 31, 2021 the Company
issued 500,000,000 shares of common stock, par value $0.00001, to its legal advisor in respect of consulting services related to assisting
the Company with its follow-on-offering registration statements. The Company estimated the fair value of the shares issued based on the
share price at the agreement date (which was $0.0005), at $250,000 thousand of which $27,778 were recorded as share based compensation
expenses in the three month ended September 30,2021, and the remaining was recorded as other current assets and will be expensed over
the estimated remaining consulting services. Per the agreement, the Company committed to pay the Consultant additional $350,000 upon
certain specified milestones which have not been met as of balance sheet date.
Between
August and October 2021, the Company and certain investors entered into subscription agreements for a private placement of units of the
Company securities (the 2021 Private Placements”) where each unit (a “Unit” and collectively the “Units”)
is comprised of (i) one (1) share of the Company’s Common Stock and (ii) one common stock purchase warrant to purchase an additional
share of the Company’s Common Stock through the second anniversary thereof at a per share exercise price of $0.0002. The price
per unit is $0.0001. Subscription agreements for an aggregate of $900,000 provide that the investors are to remit the subscription
proceeds at the time of investment and in three month intervals thereafter, in each case in amounts equal to 20% of their committed amounts.
Subscription agreements for a total of $170,000 were remitted at the time of execution. Through
September 30, 2021, the Company received a total of $170,000
from these subscription proceeds and in consideration
thereof issued 1,700,000,000
shares of Common Stock and warrants for an additional
1,700,000,000
shares of Common Stock. See Note 5 (Subsequent
Events”)
NOTE
4 - STOCK OPTIONS
On
June 21, 2021, the board of directors of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”) pursuant to
which the Company may issue awards, from time to time, consisting of non-qualified stock options, restricted stock grants and restricted
stock units. In addition, stock option awards that qualify under Section 102 of the Israeli Tax Ordinance (New Version) 1961 (the “ITO”),
and/or under Section 3(i) of the ITO, may be granted.
On
June 28, 2021, the Board of Directors of the Company approved the issuance of options to purchase 6,800,000,000 shares of the Company’s
Common Stock to three members of its advisory board, under the Company’s 2021 Plan. Options to purchase 6,800,000,000 shares of
Common Stock shall vest in four annual equal installments, with the first installment of Options vesting on the first anniversary of
the grant date, with the balance of the Options vesting over the subsequent three month periods following the first anniversary , and
shall be exercisable for an exercise price of $0.001 per share.
The
fair value of the options was determined using the Black-Scholes pricing model, assuming a risk free rate of 0.27%,
a volatility factor of 342%,
dividend yields of 0%
and an expected life of 4 years
and was estimated at $5,436,000.
The
following table presents the Company’s stock option activity during the nine months ended September 30, 2021:
SCHEDULE OF STOCK OPTION ACTIVITY
|
|
|
Number of Options
|
|
|
Weighted Average Exercise Price
|
|
|
Outstanding at December 31,2020
|
|
|
-
|
|
|
|
-
|
|
|
Granted
|
|
|
6,800,000,000
|
|
|
|
0.001
|
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
Forfeited or expired
|
|
|
-
|
|
|
|
-
|
|
|
Outstanding at September 30,2021
|
|
|
6,800,000,000
|
|
|
|
0.001
|
|
|
Number of options exercisable at September 30, 2021
|
|
|
-
|
|
|
|
-
|
|
The
aggregate intrinsic value of the awards outstanding as of September 30, 2021 is zero. These amounts represent the total intrinsic
value, based on the Company’s stock price of $0.0006 as of September 30, 2021, less the weighted exercise price. This represents
the potential amount received by the option holders had all option holders exercised their options as of that date.
The
stock options outstanding as of September 30, 2021, have been separated into exercise prices, as follows:
SCHEDULE OF STOCK OPTION OUTSTANDING RANGE
OF EXERCISE PRICE
|
Exercise price
|
|
|
Stock options outstanding
|
|
|
Weighted average remaining contractual
life – years
|
|
|
Stock options vested
|
|
|
|
|
|
As of September 30, 2021
|
|
|
|
0.001
|
|
|
|
6,800,000,000
|
|
|
|
3.75
|
|
|
|
-
|
|
|
|
|
|
|
|
6,800,000,000
|
|
|
|
3.75
|
|
|
|
-
|
|
Compensation
expense recorded by the Company in respect of its stock-based compensation awards for the period of nine and three months ended September
30, 2021 was $1,041,342 and
are included in General and Administrative expenses in the Statements of Operations.
The Company had committed to issue 3,900,000,000
to a consultant for his past business development services. The Company estimated the fair value of the commitment at $390,000. The commitment
was recorded as credit to Other accounts liabilities and debit to Share based compensation expenses.
NOTE
5 – RELATED PARTIES
|
|
A.
|
Transactions
and balances with related parties
|
SCHEDULE OF RELATED PARTY EXPENSES
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
Nine
months ended
September
30
|
|
|
Three
months ended
September
30
|
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and fees to officers
|
|
|
92,849
|
|
|
|
81,377
|
|
|
|
34,056
|
|
|
|
51,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
and fees to officers
|
|
|
61,921
|
|
|
|
46,779
|
|
|
|
21,600
|
|
|
|
31,357
|
|
WORLD
HEALTH ENERGY HOLDINGS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
|
|
B.
|
Balances
with related parties and officers:
|
|
|
|
|
|
|
|
|
|
|
|
As
of September 30,
|
|
|
As
of December 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Other
current assets
|
|
|
1,634
|
|
|
|
-
|
|
|
Other
accounts liabilities
|
|
|
120,000
|
|
|
|
191,994
|
|
|
Long
term loan from related party
|
|
|
2,025,049
|
|
|
|
1,812,704
|
|
|
Liability
for employee rights upon retirement
|
|
|
115,550
|
|
|
|
95,451
|
|
NOTE
6 – COMMITMENTS AND CONTINGENCIES
In December 16, 2020 the Company
signed a lease agreement effective as from January 1, 2021, for office space in Herzliya, Israel for a period of 3 years with monthly
payments of approximately $5,000 and an option to extend the agreement for an additional 1 year with monthly payments of approximately
$5,500. As of September 30, 2021, the balance of the lease liability amounted to $221,261 and right-of-use asset amounted to $213,184.
On
October 27, 2020 WHEN filed suit in State Court, Palm Beach County, Florida, against FSC Solutions, Inc. (“FSC”), Eli Gal
Levy (“EL”) and Padem Consultants Sprl (collectively, the “Defendants”). The suit relates to the Stock Purchase
Agreement entered into by WHEN with FSC and its shareholders, which included EL, pursuant to which WHEN acquired all of the issued and
outstanding stock of FSC in exchange for the issuance of 70 billion shares of WHEN unregistered common stock. FSC was the putative owner
of a software and trading platform which WHEN intended to use to enter into the on-line trading business. Subsequent to the completion
of the acquisition, we determined that FSC did not have control over the trading platform and software we expected to acquire and operate.
The Suit sought declaratory judgment to unwind the FSC transaction and cancel the shares of WHEN common stock issued in the FSC transaction
that are still outstanding.
A
hearing was set for January 6, 2021 whereupon mediation was ordered. The Company has been in discussions with EL to resolve this issue.
WORLD
HEALTH ENERGY HOLDINGS, INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
7 – SUBSEQUENT EVENTS
|
|
A.
|
Following
the effectiveness of the Amendment referred to in Note 3, the Company
issued 387,000,000,000
shares of the Company’s common stock
to UCG, Inc., a Florida corporation owned jointly by Gaya Rozensweig and George Baumeohl, the Company’s directors. upon the
automatic conversion of all 3,870,000
outstanding shares of the Company’s
Series B Preferred Shares issued in April 2020 in connection with the acquisition of RNA, Ltd. From UCG, Inc. The terms of the Series
B Preferred Stock are described in Note 1B above.
|
|
|
|
|
|
|
B.
|
Between
October 1, 2021 and the filing of this report the Company received additional subscription gross proceeds of $216,000 from
the 2021 Private Placement and in respect thereof will issue 2,160,000,000 shares of Common Stock and warrants, exercisable
for a two
year period, for an additional 2,160,000,000
shares of Common Stock exercisable at a per share exercise price of $0.0002.
|
|
|
|
|
|
|
C.
|
On November 10, 2021, the Company entered into an agreement
with a consultant with a term of 12 months under which it undertook to issue to the Consultant restricted stock for
services rendered during the initial six months, representing $150,000 value of the stock based on a 10 day moving average. Following
a public offering of its stock the Company undertook to pay to the Consultant $15,000 per month.
|
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Forward-Looking
Statements
The
following discussion should be read in conjunction with the financial statements and related notes contained elsewhere in this Quarterly
Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 as filed with the Securities
and Exchange Commission (the “SEC”) on April 15, 2021. Certain statements made in this discussion are “forward-looking
statements” within the meaning of the private securities litigation reform act of 1995,. These statements are based upon beliefs
of, and information currently available to, the Company’s management as well as estimates and assumptions made by the Company’s
management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak
only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,”
“forecast,” “future,” “intend,” “plan,” “predict,” “project,”
“target,” “potential,” “will,” “would,” “could,” “should,” “continue”
or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking
statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties,
assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations
and results of operations and the effects that the COVID-19 outbreak, or similar pandemics, could have on our business. Should one or
more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly
from those anticipated, believed, estimated, expected, intended, or planned.
The
full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition
will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and
the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers
and markets. We have made estimates of the impact of COVID-19 within our financial statements, and although there is currently no major
impact, there may be changes to those estimates in future periods. Actual results may differ from these estimates.
Although
the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the
United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Our
financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments
and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments
and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of
the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial
statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion
should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.
Overview
World
Health Energy Holdings Inc. (“WHEN”), through its wholly owned subsidiaries SG 77, Inc. (“SG”) and RNA Ltd (“RNA”),
is primarily engaged in data security and analytics and provides intelligent security software and services to enterprises and individuals
worldwide WHEN leverages artificial intelligence (“AI”) and machine learning to deliver innovative solutions in the areas
of cybersecurity, safety focusing on the areas of endpoint security, endpoint management and encryption.
As
the digital transformation of enterprises continues to advance, workforces are becoming more dispersed and mobile, and data and applications
are increasingly migrating to the cloud. As part of this trend, the number of connected endpoints is growing rapidly, as is their complexity
and the volume of data that they process and store. These endpoints, which include smartphones, laptops, desktops, servers, vehicles,
industrial equipment and other connected devices in the Internet of Things (“IoT”), are increasingly a target for cyber adversaries.
The COVID-19 pandemic has accelerated the decentralization of the workplace prompting many enterprises to shift to substantially remote
and mobile work models. At the same time, the threat environment has become increasingly hostile as the number of adversaries grows and
the scale and sophistication of their attacks, increasingly focused on the endpoint, continue to develop.
The
landscape of increasing vulnerability has created opportunities for secure communications platforms, endpoint cybersecurity and management
solutions, analytic tools and related services that help enterprises and individuals to secure their connected endpoints. Our
software specializes in data protection, threat detection and response. Our product offerings enable enterprises to protect data stored
on premises and in the cloud, confidential data belonging to customers, financial records, strategic and product plans and other intellectual
property and, on a parental or guardian level, to monitor minor children’s cyber activities.
We
believe that the COVID-19 pandemic, which continues to impact all of society has increased our long-term opportunity to help our customers
protect their data and detect threats. Companies around the world now have employees working remotely from potentially vulnerable home
networks, accessing critical on-premises data storages and infrastructure through VPNs and sharing information in cloud data stores.
We believe this trend is likely to continue in the long-term and that we are striving to capitalize on the opportunity ahead.
Product
Offerings & Revenue Model
Our
product offerings are comprised of two principal segments, one targeting for commercial enterprises (B2B) and one for the individual
users (B2C).
B2B
Offerings—The B2B Cybersecurity system software development and implementation program focused on innovative solutions for
the constantly evolving cyber challenges of businesses, non-governmental organizations (NGO’s) and governmental entities.
We
recently launched OTOGRAPH, our comprehensive cybersecurity and information security system, to
enable business enterprises to monitor, analyze and prevent suspicious or harmful behavior on corporate networks and connected devices.
The OTOGRAPH is designed to analyze and prevent internal or external abuse or abnormal activity on enterprise devices, such as PCs, mobile
phones, servers or any other OS-based IOT device.
The
rapid transition to open and cloud-based remote workforce has exposed businesses and organizations across the world to higher risks of
cyber-attacks and information security breaches. To enable businesses to better protect their data and workflow, we developed a Business
Behavioral Analysis (BBA) system that enables business leaders to track all activity from any given location on a one-stop dashboard.
Developed over the past two years, OTOGRAPH provides aggregated data and a wide variety of real-time analytics such as real time monitoring
of online behavior, applications and system behavior, data breaches, internal and external connections analytics, productivity analysis
and psycholinguistic analysis. Corporations and organizations can then use the dashboard to detect suspicious human or device activities
that put their company at risk.
OTOGRAPH
was developed based on a state of the art intelligence technology combined with AI technology that processes and analyzes massive amounts
of behavioral and communication data and enables organizations to make real time accurate preventive assessments and decisions to protect
company assets and ensure operational efficiency. OTOGRAPH
deploys a unique Business Behavioral Analysis (BBA) machine learning software. Behavioral digital data is extracted from all endpoint
devices that are connected to the company’s network infrastructure – whether physically, wirelessly or remotely. The data
is processed and analyzed to learn and to reveal the unique digital behavioral pattern of the organization as a whole and of every endpoint
or individual.
OTOGRAPH
sets baselines of normal patterns for each, and constantly searches for anomalies – deviations from those expected patterns. The
anomalies are detected automatically and instantly, categorized by their type and generate push alerts which are sent to the business
leader’s dashboard and enabling him to respond to the threat.
B2C
Cybersecurity —The B2C Cybersecurity division targets families concerned with external cyber threats and exposures in addition
to monitoring a child’s behavioral patterns that may alert parents to potential tragedies caused by cyber bullying, pedophiles,
other predators, and depression.
Our
go-to-market strategy focuses principally on generating revenue from software, services and licensing. We intend to sell substantially
all of our products and services to distributors and resellers, which will sell to end-user customers, which we refer to in this report
as our customers.
Other
Corporate Holdings
We
currently also have the following subsidiaries.
FSC
Solutions, Inc. On June 26, 2015, we entered into a Stock Purchase Agreement (the “Agreement”) with FSC and its shareholders
which included Uri Tadelis, our former Chief Executive Officer and Director and our former Directors Chaim J. Lieberman and Gal Levy.
The Agreement was effective as of July 1, 2015 which served as the closing date for the acquisition. Pursuant to the terms of the Agreement,
we acquired all of the capital stock of FSC in exchange for the issuance of 70 billion shares of our unregistered common stock with the
possibility of the issuance of an additional 130 Billion common shares upon FSC meeting certain milestones as outlined in the Agreement.
Upon completion of the acquisition of FSC, we intended to employ FSC’s software and trading platform to enter the on-line trading
industry. Subsequent to the completion of the acquisition, we determined that FSC did not have control over the trading platform and
software we expected to acquire and operate. Please refer to Item 1, Part II, of this report.
World
Health Energy, Inc. World Health Energy, Inc. owns an algae-tech business whose primary focus was the production of algae using their
proprietary GB3000 growth system. The system quickly and efficiently grows algae for the production of biofuels and food protein. We
also sought to produce and market high-quality, low-cost B100 biodiesel. Though, we believe that the Company has been successful in demonstrating
the effectiveness of the GB3000 system on a small-scale the Company has not yet been able to raise the necessary capital to implement
their technologies on a commercial scale.
Corporate
Structure (Diagram)
The
corporate structure of the WHEN Group is reflected below in this diagram
Recent
Developments
On
June 21, 2021, Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation (the “Reverse
Stock Split Certificate of Amendment”) in order to effect a reverse stock split of the Company’s common stock pursuant to
a range of between 1,000-to-1 and 15,000-to-1 (the “Reverse Stock Split”), when and as determined by the Company’s
Board of Directors. Pursuant to the Reverse Stock Split, each one thousand or fifteen thousand shares of common stock, or any other figure
within that range, as shall be determined by the Board of Directors at a later time, will be automatically converted, without any further
action by the stockholders, into one share of common stock. The Reverse Stock Split Certificate of Amendment will be effective upon receipt
of approval from the Financial Industry Regulatory Authority (“FINRA”) for the Reverse Stock Split and the filing with the
Secretary of the State of Delaware. As of the date of this report, the Board of Directors has not determined any particular ratio for
the Reverse Stock Split and no application has been presented to FINRA
On
June 21, 2021, the Board of Directors and the Company’s stockholders adopted, the 2021 Equity Incentive Plan (the “2021 Plan”)
pursuant to which 50 billion shares of common stock have been reserved for issuance to employees, including officers, directors and consultants.
The Company undertook to issue under the 2021 Plan options for a total of 16,800,000,000 shares of the Company’s common stock at
a per share exercise price of $0.001 per share. The options can only be issued following the adoption by the Board of the of the Israeli
Appendix to the 2020 Incentive Stock Plan and its submission to the Israel Tax Authorities.
Between August and October 2021, the Company and certain investors entered
into subscription agreements for a private placement of units of the Company securities where each unit (a “Unit” and collectively
the “Units”) is comprised of (i) one (1) share of the Company’s Common Stock and (ii) one common stock purchase warrant
to purchase an additional share of the Company’s Common Stock through the second anniversary thereof at a per share exercise price
of $0.0002. The price per unit is $0.0001. Subscription agreements for an aggregate of $900,000 provide that the investors are to remit
the subscription proceeds at the time of investment and in three month intervals thereafter, in each case in amounts equal to 20% of their
committed amounts. Subscription agreements for a total of $170,000 were remitted at the time of execution. Through September 30, 2021,
the Company received a total of $170,000 from these subscription proceeds and in consideration thereof issued 1,700,000,000 shares of
common stock and warrants for an additional 1,700,000,000 shares of common stock. From October 1, 2021 through the filing of this report
the Company received an additional $216,000 from these subscription proceeds and issued 2,160,000,000 shares of common stock and warrants
for an additional 2,160,000,000 shares of common stock.
On
October 7, 2021, the Company filed an amendment (the “Amendment”) to its Certificate of Incorporation, as amended, to increase
the Company’s authorized share capital and to change the par value of the Company’s Common Stock. The Amendment increased
the Company’s authorized share capital to 750,000,000,000 shares of common stock (from 110,000,000,000 shares) and changed the
par value of the common stock to $0.00001 per share (from $0.0007).
Following
the effectiveness of the Amendment, the Company issued 387,000,000,000
shares of the Company’s common stock to UCG, Inc., a Florida corporation owned jointly by Gaya Rozensweig and George Baumeohl,
the Company’s directors. upon the automatic conversion of all 3,870,000 outstanding shares of the Company’s Series B Preferred
Shares issued in April 2020 in connection with the acquisition of RNA, Ltd. From UCG, Inc.
On
November 10, 2021, the Company entered into an agreement with a consultant with a term of 12 months under which it undertook to issue
to the Consultant restricted stock for services rendered during the initial six months, representing $150,000 value of
the stock based on a 10 day moving average. Following a public offering of its stock the Company undertook to pay to the Consultant $15,
000 per month.
In
November 2021, the Company issued to a consultant a total of 5,700,000,000 shares of stock for services provided. The shares were issued
under the terms of an investment agreement entered into as of October 2018
Comparison
of the Three Months Ended September 30, 2021 to the Three Months Ended September 30, 2020
The
following table presents our results of operations for the three months ended September 30 2021 and 2020
|
|
|
Three Months Ended
|
|
|
|
|
September 30
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
33,717
|
|
|
|
24,798
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
(120,701
|
)
|
|
|
(181,175
|
)
|
|
General and administrative expenses
|
|
|
(1,925,967
|
)
|
|
|
(109,466
|
)
|
|
Operating loss
|
|
|
(2,012,951
|
)
|
|
|
(265,843
|
)
|
|
Financing income (expenses), net
|
|
|
(19,519
|
)
|
|
|
(2,307
|
)
|
|
Net loss
|
|
|
(2,032,470
|
)
|
|
|
(268,150
|
)
|
Revenues.
Revenues for the three months ended September 30, 2021 and 2020 were $33,717 and $24,798, respectively. Revenues were comprised primarily
of software license fees.
Research and
Development. Research and development expenses consist of salaries
and related expenses, consulting fees, service providers’ costs, related materials and overhead expenses. Research
and development expenses decreased from $181,175 for the three months ended September 30, 2020 to $120,701 during the corresponding period
in 2021. The decrease resulted primarily from decrease in salaries and related expenses associated with our development activities.
General
and Administrative Expenses. General and administrative expenses consist primarily of salaries
and related expenses, share based compensation for service providers and other non-personnel related expenses such as legal expenses.
General and administrative expenses increased from $109,466 for the three months ended September 30, 2020 to $1,925,967 in 2021. The
increase is primarily attributable to the increase in share based compensation to service providers, salaries and related expenses, professional
services other non-personnel related expenses.
Financing
Expenses, Net. Financing income, net for the three months ended September 30, 2020 amounted to $2,307. Financing expenses, net
for the three months ended September 30, 2021 amounted to $19,519. The increase is mainly due to currency exchange differences between
the Dollar and the New Israeli Shekel.
Net
Loss. Net loss for the three months ended September 30, 2021 was $2,032,470 and is primarily
attributable to research and development, share based compensation and general and administrative expenses.
Comparison
of the Nine Months Ended September 30, 2021 to the Nine Months Ended September 30, 2020
The
following table presents our results of operations for the three months ended September 30 2021 and 2020
|
|
|
Nine Months Ended
|
|
|
|
|
September 30
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
115,167
|
|
|
|
52,906
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
(374,561
|
)
|
|
|
(328,529
|
)
|
|
General and administrative expenses
|
|
|
(2,195,621
|
)
|
|
|
(227,525
|
)
|
|
Operating loss
|
|
|
(2,455,015
|
)
|
|
|
(503,148
|
)
|
|
Financing income (expenses), net
|
|
|
(50,435
|
)
|
|
|
6,925
|
|
|
Net loss
|
|
|
(2,505,450
|
)
|
|
|
(496,223
|
)
|
Revenues.
Revenues for the nine months ended September 30, 2021 and 2020 were $115,167 and $52,906, respectively. Revenues were comprised
primarily of software license fees.
Research
and Development. Research and development expenses consist of salaries and related expenses, consulting fees, service providers’
costs, related materials and overhead expenses. Research and development expenses increased from
$328,529 for the nine months ended September 30, 2020 as compared to $374,561 during the corresponding period in 2021. The increase resulted
primarily from increase in salaries and related expenses associated with our development activities.
General and Administrative
Expenses. General and administrative expenses consist primarily of share based compensation
for service providers, salaries and related expenses and other non-personnel related expenses such as legal expenses. General and administrative
expenses increased from $227,525 for the nine months ended September 30, 2020 as compared to $2,195,621 in 2021. The increase is primarily
attributable to the increase in share based compensation, salaries and related expenses, professional services other non-personnel related
expenses.
Financing Expenses, Net.
Financing income, net for the nine months ended September 30, 2020 amounted to $6,925 Financing expenses, net for the nine months
ended September 30, 2021 amounted to $50,435. The increase is mainly due to currency exchange differences between the Dollar and the
New Israeli Shekel.
Net Loss.
Net loss for the nine months ended September 30, 2021 was $2,505,450 and is primarily attributable to research and development, share
based compensation and general and administrative expenses.
Financial Condition, Liquidity
and Capital Resources
Liquidity
is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. At September 30, 2021 and
2020, we had current assets of $355,188 and $419,800 respectively, and total assets of $622,735 and $441,849 respectively. The increase
in total assets is due to the increase other current assets and in right of use asset arising from operating lease. We had current liabilities
of $1,297,427 as compared to $458,609 as of September 30, 2021 and 2020, respectively and total liabilities of $3,649,405 as compared
to $2,048,059 as of September 30, 2021 and 2020, respectively. The increase is mainly attributed to the increase in the balance of employees
and related institutions, accrued expenses ,right of use liabilities arising from operating lease and increase in loans received from
a related party.
At September
30, 2021, we had a cash balance of $53,369 compared to the cash balance of $359,949 as of December 31, 2020. We have no cash equivalents.
At September
30, 2021, we had a working capital deficiency of $942,239 as compared with a working capital deficiency of $115,945 at December 31, 2020.
We
expect that our existing cash and cash equivalents as well as expected revenues will enable us to fund our operations and capital expenditure
requirements through year end 2021. Our requirements for additional capital during this period will depend on many factors.
We
may seek to raise any necessary additional capital through a combination of private or public equity offerings, debt financings, collaborations,
strategic alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional
capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third
parties, we may have to relinquish valuable rights, future revenue streams, or product candidates or to grant licenses on terms that
may not be favorable to us. If we raise additional capital through private or public equity offerings, the ownership interest of our
existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely
affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting
or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Going
Concern
The accompanying consolidated financial statements have been prepared assuming
that we will continue as a going concern. We have a stockholders’ deficit of $3,026,670 and a working capital deficiency of $942,239
at September 30, 2021 as well as negative operating cash flows. These conditions raise substantial doubt about our ability to continue
as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue
as a going concern.
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 the Company’s financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.