The accompanying notes are an integral part of the consolidated financial statements
Notes
to Unaudited Condensed Financial Statements
(1)
NATURE OF OPERATIONS
World
Health Energy Holdings, Inc., (“the Company,” “WHEN”), was formed on May 21, 1986, under the laws of the
State of Delaware and is based in Boca Raton, Florida. The Company has invested in a variety of software programs that it strove
to commercialize. It is currently seeking software in the cyber-security arena to commercialize.
(2)
BASIS OF PRESENTATION AND USE OF ESTIMATES
a)
Basis of Presentation
The
comparative amounts presented in these consolidated financial statements are the historical results of World Health Energy Holdings,
Inc., inclusive of its wholly owned subsidiaries World Health Energy, Inc. (“WHEH”) and FSC Solutions, Inc. (“FSC”).
All intercompany balances and transactions have been eliminated in consolidation
The
accompanying unaudited condensed interim financial statements have been prepared in accordance with Generally Accepted Accounting
Principles (“GAAP”) in the United States of America (“U.S.”) as promulgated by the Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) and with the rules and regulations of the U.S. Securities
and Exchange Commission (“SEC”). In our opinion, the accompanying unaudited interim condensed financial statements contain
all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Operating results for the three months
ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.
b)
Use of Estimates
The
preparation of 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 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. Significant estimates in the accompanying consolidated financial statements
involved the valuation of construction in progress, depreciable life of the floating vessel, valuation of long lived assets, debt
discounts, valuation of common stock issued as compensation and valuation allowance of deferred income tax assets.
(3)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a)
Cash and cash equivalents
The
Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents.
We had no financial instruments that qualified as cash equivalents at March 31, 2018 and December 31, 2017.
b)
Related Party Transactions
All
transactions with related parties are in the normal course of operations and are measured at the exchange amount.
c)
Financial instruments and Fair value measurements
ASC
825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities
at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable,
unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that
instrument should be reported in earnings at continued each subsequent reporting date. The Company did not elect to apply the
fair value option to any outstanding instruments. ASC 825 also requires disclosures of the fair value of financial instruments.
The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts payable and
accrued liabilities approximates their fair values because of the short-term maturities of these instruments.
WORLD
HEALTH ENERGY HOLDINGS, INC.
Notes
to Unaudited Condensed Financial Statements
(3)
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
c)
Financial
instruments and Fair value measurements
continued
FASB
ASC 820 “Fair Value Measurement” clarifies that fair value is an exit price, representing the amount that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires
disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and
liabilities must be grouped, based on significant levels of inputs as follows:
Level
1: Quoted prices in active markets for identical assets or liabilities.
Level
2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.
Level
3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The
determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant
to the fair value measurement.
d)
Income Taxes
The
Company uses the asset and liability method of ASC 740 to account for income taxes. Under this method, deferred income taxes are
determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated
financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted
tax rates and laws. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available
evidence, is more likely than not to be realized.
The
Company follows the provisions of ASC 740-10, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is
highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject
to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance
with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during
which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon
examination including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated
with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount
of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The
portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected
as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest
and penalties that would be payable to the taxing authorities upon examination.
As
of March 31, 2018, the tax years 2017, 2016 and 2015 for the Company remain open for IRS audit. The Company has received no notice
of audit or any notifications from the IRS for any of the open tax years.,
WORLD
HEALTH ENERGY HOLDINGS, INC.
Notes
to Unaudited Condensed Financial Statements
(3)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e)
Net income (loss) per share
Basic
loss per share excludes dilution and is computed by dividing the loss attributable to stockholders by the weighted-average number
of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock
that shared in the earnings of the Company. Diluted loss per share is computed by dividing the loss available to stockholders
by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless consideration
of such dilutive potential shares would result in anti-dilution. There were no common stock equivalents at March 31, 2018 and
December 31, 2017.
f)
Recent accounting pronouncements,
continued
In
February 2016, the FASB issued ASU 2016-02, “Leases” which, for operating leases, requires a lessee to recognize a
right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet.
The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over
the lease term, on a generally straight-line basis. The ASU is effective for public companies for fiscal years beginning after
December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company believes that
the adoption of ASU 2016-02 will have no effect on the Company’s consolidated financial statements.
(4)
LIQUIDITY AND GOING CONCERN CONSIDERATIONS
Our
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. The Company sustained a net loss of approximately $3,000 for
the three months ended March 31, 2018 and has an accumulated deficit of approximately $900,000 and a negative working capital
of approximately $900,000 at March 31, 2018. These conditions raise substantial doubt about our ability to continue as a going
concern.
Failure
to successfully develop operations and revenues could harm our profitability and materially adversely affect our financial condition
and results of operations. We face all of the risks inherent in a new business, including the need for significant additional
capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection
with establishing our planned operations.
We
are continuing our plan to further grow and expand restaurant operations and seek sources of capital to pay our contractual obligations
as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a
going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying
financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
The
independent auditors’ report on our consolidated financial statements for the year ended December 31, 2017 contained an explanatory
paragraph expressing substantial doubt as to our ability to continue as a going concern.
WORLD
HEALTH ENERGY HOLDINGS, INC.
Notes
to Unaudited Condensed Financial Statements
(5)
RECEIVABLE FROM THIRD PARTY
The
Company advanced funds to a third party with no stated maturity or interest rate with a balance of $592 at March 31, 2018.
(6)
DUE TO RELATED PARTIES
Certain
stockholders and officers paid expenses of the Company and were reimbursed finds during the year. The net amount due to related
parties was $794,076 and $794,076 at March 31, 2018 and December 31, 2017, respectively.
(7)
RELATED PARTY CONVERTIBLE NOTE PAYABLE
During
2014, the Company entered into a convertible note payable with a third party for $21,474. The note is non-interest bearing and
is convertible to common stock at $0.0001 per share (or the comparable rate following any share split or reverse split) on the
conversion date. During 2015 the note holder became the CEO and became a related party.
(8)
STOCKHOLDERS’ DEFICIT
At
March 31, 2018 and December 31, 2017, the Company has 110,000,000,000 shares of par value $0.0007 common stock authorized and
89,789,407,996 shares issued and outstanding. At March 31, 2018 and December 31, 2017, the Company has 10,000,000 shares of par
value $0.0007 preferred stock and 2,500,000 shares issued and outstanding.
(9)
COMMITMENTS AND CONTINGENCIES
a)
Legal Matters
From
time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business.
As of March 31, 2018, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect
on the results of our operations.
(10)
SUBSEQUENT EVENTS
a)
Due to related parties
In
2018, one related party died and the other resigned. The related party that resigned and the estate of the deceased related party
entered into settlement agreements with the Company on the amounts due them by the Company.
