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, $0.0007, Par Value
|
|
|
Preferred
Stock B, $0.0007, Par Value
|
|
|
Common
Stock, $0.0007, Par Value
|
|
|
Additional
|
|
|
Foreign
currency
|
|
|
|
|
|
Total
Company’s
|
|
|
|
|
Number
of Shares
|
|
|
Amount
|
|
|
Number
of Shares
|
|
|
Amount
|
|
|
Number
of Shares
|
|
|
Amount
|
|
|
paid-in capital
|
|
|
translation
adjustments
|
|
|
Accumulated
deficit
|
|
|
stockholders’
equity
|
|
|
BALANCE
AT JANUARY 1, 2021
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
89,789,407,996
|
|
|
|
62,852,585
|
|
|
|
(63,339,224
|
)
|
|
|
(5,495
|
)
|
|
|
(1,496,637
|
)
|
|
|
(1,982,562
|
)
|
|
Balance, value
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
89,789,407,996
|
|
|
|
62,852,585
|
|
|
|
(63,339,224
|
)
|
|
|
(5,495
|
)
|
|
|
(1,496,637
|
)
|
|
|
(1,982,562
|
)
|
|
Comprehensive
loss for three months ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(266,091
|
)
|
|
|
(266,091
|
)
|
|
Comprehensive
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(266,091
|
)
|
|
|
(266,091
|
)
|
|
BALANCE
AT MARCH 31, 2021 (Unaudited)
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
89,789,407,996
|
|
|
|
62,852,585
|
|
|
|
(63,339,224
|
)
|
|
|
(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
|
|
|
|
62,852,585
|
|
|
|
(63,339,224
|
)
|
|
|
(5,495
|
)
|
|
|
(1,969,617
|
)
|
|
|
(2,455,542
|
)
|
|
Balance, value
|
|
|
5,000,000
|
|
|
|
3,500
|
|
|
|
3,870,000
|
|
|
|
2,709
|
|
|
|
89,789,407,996
|
|
|
|
62,852,585
|
|
|
|
(63,339,224
|
)
|
|
|
(5,495
|
)
|
|
|
(1,969,617
|
)
|
|
|
(2,455,542
|
)
|
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
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
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”.
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.
WORLD
HEALTH ENERGY HOLDINGS, INC .
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
1 – GENERAL (continue)
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 June
30, 2021, the Group had $45,255 of cash and cash equivalents, net losses of $472,980, accumulated deficit of $1,969,617, and a negative
working capital of $433,557.
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.
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.
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.
WORLD
HEALTH ENERGY HOLDINGS, INC .
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
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 six-months ended
June 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.
WORLD
HEALTH ENERGY HOLDINGS, INC .
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continue)
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.
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 – RELATED PARTIES
SCHEDULE OF RELATED PARTY EXPENSES
|
|
A.
|
Transactions
and balances with related parties
|
|
|
|
Six months ended
June 30
|
|
Three months ended
June 30
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and fees to officers
|
|
|
58,793
|
|
|
|
29,586
|
|
|
|
19,380
|
|
|
|
14,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and fees to officers
|
|
|
40,321
|
|
|
|
15,422
|
|
|
|
17,668
|
|
|
|
6,886
|
|
WORLD
HEALTH ENERGY HOLDINGS, INC .
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE
3 – RELATED PARTIES (continue)
B. Balances
with related parties and officers:
|
|
|
As of June 30,
|
|
|
As of December 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
|
|
5,226
|
|
|
|
-
|
|
|
Other accounts liabilities
|
|
|
167,232
|
|
|
|
191,994
|
|
|
Long term loan from related party
|
|
|
1,980,440
|
|
|
|
1,812,704
|
|
|
Liability for employee rights upon retirement
|
|
|
107,463
|
|
|
|
95,451
|
|
NOTE 4 – EMPLOYEE STOCK
OPTION PLAN
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.
As of June 30, 2021 no options
were granted under the 2021 Plan.
NOTE
5 – COMMITMENTS AND CONTINGENCIES
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.
|
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 range 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.
As of June 30, 2021 no options were granted under the 2021 Plan.
Comparison
of the Three Months Ended June 30, 2021 to the Three Months Ended June 30, 2020
The
following table presents our results of operations for the three months ended June 30 2021 and 2020
|
|
|
Three Months Ended
|
|
|
|
|
June 30
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
48,801
|
|
|
|
24,592
|
|
|
Operating Expenses
|
|
|
—
|
|
|
|
—
|
|
|
Research and development expenses
|
|
|
(81,089
|
)
|
|
|
(47,406
|
)
|
|
General and administrative expenses
|
|
|
(145,169
|
)
|
|
|
(60,653
|
)
|
|
Operating loss
|
|
|
(177,457
|
)
|
|
|
(83,467
|
)
|
|
Financing income (expenses), net
|
|
|
(29,432
|
)
|
|
|
21,745
|
|
|
Net loss
|
|
|
(206,889
|
)
|
|
|
(61,722
|
)
|
Revenues. Revenues
for the three months ended June 30, 2021 and 2020 were $ 48,801 and $24,592, 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 $47,406
for the three months ended June 30, 2020 to $81,089 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 salaries and related
expenses and other non-personnel related expenses such as legal expenses. General and administrative expenses increased from $60,653
for the three months ended June 30, 2020 to $145,169 in 2021. The increase is primarily attributable to the increase in salaries and
related expenses, professional services other non-personnel related expenses.
Financing Expenses,
Net. Financing income, net for the three months ended June 30, 2020 amounted to $21,745. Financing expenses, net for the three
months ended June 30, 2021 amounted to $29,432 . 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 June 30, 2021 was $206,889 and is primarily attributable to research and development and general
and administrative expenses.
Comparison
of the Six Months Ended June 30, 2021 to the Six Months Ended June 30, 2020
The
following table presents our results of operations for the three months ended June 30 2021 and 2020
|
|
|
Six Months Ended
|
|
|
|
|
June 30
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
81,450
|
|
|
|
28,108
|
|
|
Operating Expenses
|
|
|
—
|
|
|
|
—
|
|
|
Research and development expenses
|
|
|
(253,860
|
)
|
|
|
(147,354
|
)
|
|
General and administrative expenses
|
|
|
(269,654
|
)
|
|
|
(118,059
|
)
|
|
Operating loss
|
|
|
(442,064
|
)
|
|
|
(237,305
|
)
|
|
Financing income (expenses), net
|
|
|
(30,916
|
)
|
|
|
9,232
|
|
|
Net loss
|
|
|
(472,980
|
)
|
|
|
(228,073
|
)
|
Revenues. Revenues
for the six months ended June 30, 2021 and 2020 were $81,450 and $28,108, 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 $147,354
for the six months ended June 30, 2020 as compared to $253,860 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 salaries and related
expenses and other non-personnel related expenses such as legal expenses. General and administrative expenses increased from $118,059
for the six months ended June 30, 2020 as compared to $269,654 in 2021. The increase is primarily attributable to the increase in salaries
and related expenses, professional services other non-personnel related expenses.
Financing Expenses,
Net. Financing income, net for the six months ended June 30, 2020 amounted to $9,232. Financing expenses, net for the six months
ended June 30, 2021 amounted to $30,916 . The increase is mainly due to currency exchange differences between the Dollar and the New
Israeli Shekel.
Net Loss.
Net loss for the six months ended June 30, 2021 was $472,980 and is primarily attributable to research and development 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 June 30, 2021 and 2020,
we had current assets of $124,056 and $325,647 respectively, and total assets of $401,287 and $356,511 respectively. The decrease in
total assets is due to a decrease in related parties balance offset by increase in right of use asset arising from operating lease. We
had current liabilities of $557,613 as compared to $433,270 as of June 30, 2021 and 2020, respectively and total liabilities of $2,856,829
as compared to $1,691,048 as of June 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
June 30, 2021, we had a cash balance of $45,255 compared to the cash balance of $359,949 as of December 31, 2020. We have no cash equivalents.
At
June 30, 2021, we had a working capital deficiency of $433,557 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 $2,455,542 and a working capital deficiency of $433,557 at June 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.
