UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.20549
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)FORM 10-Q
MARK ONE [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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Forfor the quarterly periodQuarterly Period ended September 30, 2017March 31, 2021; or
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Forfor the transition period from____________ to___________from ________ to ________
Commission file number000-29462
WORLD HEALTH ENERGY HOLDINGS, INC.
(NameExact name of small business issuerregistrant as specified in its charter)
Delaware |
| |
| (I.R.S. Employer | |
incorporation or organization) |
Identification No.) |
1825 NW Corporate Blvd. Suite 110, Boca Raton, FL | 33431 | |
(Address of principal executive offices) | Zip Code |
3000 IslandBlvrd #402 Aventura(561) 870-0440
FL
(Address of principal executive offices)
33160(Zip Code)
IssuersRegistrant’s telephone number,:(212) 884-8395 including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, Par Value $0.0007 Per Share
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
N/A | N/A | N/A |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the issuerregistrant (1) has filed all reports required to be filed by sectionSection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ [X] No ☐[ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if disclosure of delinquent filersany, every Interactive Data File required to be submitted and posted pursuant to ItemRule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part IIIS-T (§232.405 of this Form 10-Q or any amendmentchapter) during the preceding 12 months (or for such shorter period that the registrant was required to this Form 10-Q. ☑submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| Accelerated filer |
| |
Non-accelerated filer | ||||
Smaller reporting company |
| |||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐[ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐[ ] No ☑[X]
As of November 10, 2017, the Registrant hadMay 11, 2021, 89,789,407,996 outstanding shares of itsthe registrant’s common stock, par value $0.0007 par value.per share, were outstanding.
Transitional Small Business Disclosure Format (check one): Yes ☐ No ☑
DOCUMENTS INCORPORATED BY REFERENCEWORLD HEALTH ENERGY HOLDINGS, INC.
NoneForm 10-Q
INDEXMarch 31, 2021
i |
PARTI. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTSWORLD HEALTH ENERGY HOLDINGS, INC.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2021
WORLD HEALTH ENERGY HOLDINGS, INC .
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2021
IN U.S. DOLLARS
TABLE OF CONTENTS
WORLD HEALTH ENERGY HOLDINGS, INC.INC .
CONDENSED CONSOLIDATED BALANCE SHEETSSHEETS
(U.S. dollars except share and per share data)
March 31, | December 31, | |||||||
2021 | 2020 | |||||||
Assets | (Unaudited) | |||||||
Current Assets | ||||||||
Cash and cash equivalents | 141,868 | 359,949 | ||||||
Accounts receivable, net | 13,360 | 5,086 | ||||||
Other current assets | 47,205 | 42,178 | ||||||
Total Current assets | 202,433 | 407,213 | ||||||
Right Of Use asset arising from operating lease | 230,761 | - | ||||||
Long term prepaid expenses | 23,995 | 24,883 | ||||||
Property and Equipment, Net | 26,270 | 26,054 | ||||||
Total assets | 483,459 | 458,150 | ||||||
Liabilities and Shareholders’ Deficit | ||||||||
Current Liabilities | ||||||||
Accounts payable | 20,860 | 26,284 | ||||||
Right Of Use liabilities arising from operating lease | 39,610 | - | ||||||
Other accounts liabilities | 531,580 | 496,874 | ||||||
Total current liabilities | 592,050 | 523,158 | ||||||
Liability for employee rights upon retirement | 133,364 | 104,850 | ||||||
Long term loan from parent company | 1,812,704 | 1,812,704 | ||||||
Right Of Use liabilities arising from operating lease | 193,994 | |||||||
Total liabilities | 2,732,112 | 2,440,712 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, par $0.0007, 10,000,000 shares authorized, 5,000,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020. | 3,500 | 3,500 | ||||||
Series B Convertible Preferred stock, par $0.0007, 3,870,000 shares authorized, 3,870,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020. | 2,709 | 2,709 | ||||||
Common stock, par $0.0007, 110,000,000,000 shares authorized, 89,789,407,996 shares issued and outstanding at March 31, 2021 and December 31, 2020. | 62,852,585 | 62,852,585 | ||||||
Additional paid-in capital | (63,339,224 | ) | (63,339,224 | ) | ||||
Foreign currency translation adjustments | (5,495 | ) | (5,495 | ) | ||||
Accumulated deficit | (1,762,728 | ) | (1,496,637 | ) | ||||
Total stockholders’ deficit | (2,248,653 | ) | (1,982,562 | ) | ||||
Total liabilities and stockholders’ deficit | 483,459 | 458,150 |
The accompanying notes are an integral part of the condensed consolidated financial statements.
September 30, | December 31, | |||||||
2017 (Unaudited) | 2016 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | - | $ | - | ||||
Deposits | 3,000 | 3,000 | ||||||
TOTAL CURRENT ASSETS | 3,000 | 3,000 | ||||||
PROPERTY AND EQUIPMENT | ||||||||
Furniture, fixtures and equipment | 4,353 | 4,353 | ||||||
Software | - | - | ||||||
Less: Accumulated depreciation | (4,353 | ) | (4,353 | ) | ||||
- | - | |||||||
TOTAL ASSETS | $ | 3,000 | $ | 3,000 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 78,698 | $ | 89,039 | ||||
Due to affiliates | 780,229 | 725,067 | ||||||
Related party convertible note payable | 21,474 | 21,474 | ||||||
880,401 | 835,580 | |||||||
TOTAL LIABILITIES | 880,401 | 835,580 | ||||||
Commitments and Contingencies (see Note 8) | ||||||||
STOCKHOLDERS’ DEFICIT | ||||||||
Preferred stock, $0.0007 par value, authorized 10,000,000 shares; 2,500,000 issued and outstanding | 1,750 | 1,750 | ||||||
Common stock, $0.0007 par value, authorized 110,000,000,000 shares; 89,789,407,996 issued and outstanding at September 30, 2017 and December 31, 2016 | 62,852,585 | 62,852,585 | ||||||
Discount on common stock | (49,000,000 | ) | (49,000,000 | ) | ||||
Additional paid in capital | 11,433,491 | 11,433,491 | ||||||
Accumulated deficit | (26,165,227 | ) | (26,120,406 | ) | ||||
(877,401 | ) | (832,580 | ) | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 3,000 | $ | 3,000 |
See Accompanying Notes to
WORLD HEALTH ENERGY HOLDINGS, INC .
Condensed Consolidated Financial StatementsCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars except share and per share data)
Three months ended | ||||||||
March 31 | ||||||||
2021 | 2020 | |||||||
(Unaudited) | ||||||||
Revenues | 32,649 | 3,516 | ||||||
Research and development expenses | (172,771 | ) | (99,948 | ) | ||||
General and administrative expenses | (124,485 | ) | (57,406 | ) | ||||
Operating loss | (264,607 | ) | (153,838 | ) | ||||
Financing expenses, net | (1,484 | ) | (9,208 | ) | ||||
Net loss | (266,091 | ) | (163,046 | ) | ||||
Comprehensive loss | (266,091 | ) | (163,046 | ) | ||||
Loss per share (basic and diluted) | (0.00 | ) | (0.00 | ) |
The accompanying notes are an integral part of the condensed consolidated financial statements.
4 |
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, 2020 | - | - | 3,870,000 | 2,709 | - | - | (2,681 | ) | (5,495 | ) | (623,844 | ) | (629,311 | ) | ||||||||||||||||||||||||||
CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2020: | ||||||||||||||||||||||||||||||||||||||||
Comprehensive loss for three month ended March 31, 2020 | - | - | - | - | - | - | - | - | (163.046 | ) | (163,046 | ) | ||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2020 (Unaudited) | - | - | 3,870,000 | 2,709 | - | - | (2,681 | ) | (5,495 | ) | (786,890 | ) | (792,357 | ) |
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 | ) | ||||||||||||||||||||||||||
CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2021: | ||||||||||||||||||||||||||||||||||||||||
Comprehensive loss for three month 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 | 62,852,585 | (63,339,224 | ) | (5,495 | ) | (1,762,728 | ) | (2,248,653 | ) |
The accompanying notes are an integral part of the condensed consolidated financial statement
WORLD HEALTH ENERGY HOLDINGS, INC.INC .
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCASH FLOWS
(U.S. dollars except)
For the 3 Months Ended (Unaudited) | For the 9 Months Ended (Unaudited) | |||||||||||||||
Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2017 | Sep 30, 2016 | |||||||||||||
REVENUE | $ | - | $ | - | $ | - | $ | - | ||||||||
OPERATING EXPENSES | ||||||||||||||||
General and administrative | 11,152 | 2,058 | 17,361 | 90,162 | ||||||||||||
Professional Fees | 10,863 | 6,470 | 27,460 | 34,592 | ||||||||||||
Total expenses | 22,015 | 8,528 | 44,821 | 124,754 | ||||||||||||
NET LOSS BEFORE TAXES | (22,015 | ) | (8,528 | ) | (44,821 | ) | (124,754 | ) | ||||||||
INCOME TAXES | - | - | - | - | ||||||||||||
NET LOSS | $ | (22,015 | ) | $ | (8,528 | ) | $ | (44,821 | ) | $ | (124,754 | ) | ||||
LOSS PER WEIGHTED AVERAGE COMMON SHARES | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||
NUMBER OF WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 89,789,407,996 | 89,789,407,996 | 89,789,407,996 | 89,789,407,996 |
Three months ended | ||||||||
March 31, | ||||||||
2021 | 2020 | |||||||
(Unaudited) | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss for the period | (266,091 | ) | (163,046 | ) | ||||
Adjustments required to reconcile net loss for the period to net cash used in operating activities: | ||||||||
Depreciation and amortization | 13,597 | 10,362 | ||||||
Increase in liability for employee rights upon retirement | 28,514 | 2,777 | ||||||
Decrease in accounts receivable | (8,274 | ) | (1,738 | ) | ||||
Decrease (increase) in other current assets | (4,139 | ) | (12,719 | ) | ||||
Increase (decrease) in accounts payable | (5,422 | ) | 7,983 | |||||
Increase in other accounts liabilities | 37,178 | 31,606 | ||||||
Net cash used in operating activities | (204,637 | ) | (124,775 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Loans granted to related parties | - | (228,898 | ) | |||||
Proceeds from related parties | 3,521 | - | ||||||
Purchase of property and equipment | (1,668 | ) | (7,675 | ) | ||||
Net cash used in investing activities | 1,853 | (236,573 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Payments of lease liability | (15,297 | ) | (6,942 | ) | ||||
Loan received from parent company | - | 91,785 | ||||||
Net cash provided by (used in) financing activities | (15,297 | ) | 84,843 | |||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (218,081 | ) | (276,505 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 359,949 | 359,461 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 141,868 | 82,956 | ||||||
Supplemental disclosure of cash flow information: | ||||||||
Non cash transactions: | ||||||||
Initial recognition of operating lease right-of-use assets | 242,906 | - | ||||||
Initial recognition of operating lease liability | (242,906 | ) | - |
See Accompanying Notes to Condensed Consolidated Financial Statements.The accompanying notes are an integral part of the condensed consolidated financial statement
WORLD HEALTH ENERGY HOLDINGS, INC.INC .
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFINANCIAL STATEMENTS (unaudited)
For the Nine Months Ended | ||||||||
Sep 30, | Sep 30, | |||||||
2017 | 2016 | |||||||
(Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (44,821 | ) | $ | (124,754 | ) | ||
Reconciliation of Net Loss to Net Cash Used in Operating Activities | ||||||||
Changes in: | ||||||||
Deposits | - | (3,000 | ) | |||||
Accounts payable and accrued liabilities | (10,933 | ) | 18,665 | |||||
Net cash used in operating activities | (55,754 | ) | (109,089 | ) | ||||
Cash flows from investing activities: | ||||||||
Deposit on purchase of AMID | - | (20,000 | ) | |||||
Net cash from investing activities | - | (20,000 | ) | |||||
Cash flows from financing activities: | ||||||||
Advances from affiliates | 55,754 | 125,627 | ||||||
Net cash from financing activities | 55,754 | 125,627 | ||||||
Change in cash | - | (3,462 | ) | |||||
Cash, beginning of period | - | 4,054 | ||||||
Cash, end of period | $ | - | $ | 592 |
NOTE 1 – GENERAL
A. | Operations |
See Accompanying NotesWorld 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 Condensed Consolidated Financial Statements.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.
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”.
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.INC .
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(1) NatureNOTE 1 – GENERAL (continue)
As a result, the historical financial statements of Businessthe 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. | 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 March 31, 2021, the Group had $141,868 of cash and cash equivalents, net losses of $266,091, accumulated deficit of $1,762,728, and a negative working capital of $389,617.
The Condensed Consolidated Financial Statements includeGroup will need to secure additional capital in the accountsfuture in order to meet its anticipated liquidity needs primarily through the sale of World Health Energy Holdings, Inc. (“WHEH”)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 its wholly owned subsidiaries, World Health Energy, Inc. (“WHE”) and FSC Solutions, Inc. (FSC), an online software solutions trading company.the Group cannot give assurance that it will be successful in securing such additional capital.
WHE’s corporate offices are located in Aventura, Florida. WHEHThese 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 a holding company which owns algae tech and software companies/businessesdependent on several factors, among them is the company does not have revenues yet but is planning on launching at least one product in the 3rd quarter. The Company is looking and needsability to raise capital forsufficient additional funding.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
D. | 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 concerns until it produces revenues.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
WHE is planning to spinoff its businesses into subsidiary public companies.Unaudited Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and withinclude the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of managementaccounts of the Company the accompanying unaudited condensed consolidated financial statements contain all the adjustments (which are of a normal recurring nature) necessary for a fair presentation. Operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the financial statements and the footnotes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission.
(2) Basis of Presentation and Consolidation
The Condensed Consolidated Financial Statements have beenits subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) onand with the accrual basisinstructions to Form 10-Q. In the opinion of accounting. All significant intercompany accounts and transactions have been eliminated in consolidation. The interimmanagement, the financial statements reflectpresented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal and recurring adjustments,adjustments) which are, in the opinion of management, necessary in order to makefor a fair statement of the financial statementscondition, results of operations and cash flows for the three-months ended March 31, 2021. However, these results are not misleading.
(3) Significant Accounting Policies
a) Usenecessarily indicative of Estimates
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.
GAAPPrinciples 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 atas of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.statements. Actual results could differ materially 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)
b) Loss per share
The Company has adopted FinancialRecent Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Pronouncements260-10-50, Earnings Per Share, which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Basic and diluted losses per share were the same at the reporting dates as there were no common stock equivalents outstanding at September 30, 2017 or 2016.
c) Cash and Cash Equivalents
The Company considers all highly-liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at September 30, 2017 or December 31, 2016.
d) Property & Equipment and Depreciation
Property and equipment is stated at cost and was depreciated using the straight line method over the estimated useful lives of the respective assets of three years. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that extend the useful life of the assets are capitalized. When office equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in operations. At September 30, 2017 and December 31, 2016 property and equipment, valued at $4,353, was fully depreciated.
e) Revenue Recognition
The Company plans to recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin Topic 13, Revenue Recognition and FASB ASC 605-15-25, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured.
f) Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Additionally, the recognition of future tax benefits, such as net operating loss carryforwards, is required to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.
In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Company’s assets and liabilities result in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some or all of the deferred tax asset will not be realized. In assessing the realizability of the deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies.
The Company’s income tax returns are subject to examination by tax authorities. Generally, the statute of limitations related to the Company’s federal and state income tax return isthree years from the date of filing. The state impact of any federal changes for prior years remains subject to examination for a period up to five years after formal notification to the states.
Management has evaluated tax positions in accordance with FASB ASC 740, Income Taxes, and has not identified any significant tax positions, other than those disclosed.
g) Recently Issued Accounting Pronouncements
The Company reviewed all recent accounting pronouncements issued byAugust 2020, the Financial Accounting Standards Board (including its Emerging Issues Task Force),(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 AICPAaccounting for convertible debt and convertible preferred stock by removing the SECrequirements 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 they didHedging: 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 or are not believed by managementexpect it to have a material impact on the Company’s present or futureits financial statements.
(4) Going Concern
The accompanying Condensed Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern, as reflected by the net losses of $26,165,227 accumulated through September 30, 2017. The Condensed Consolidated Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is presently seeking to raise permanent equity capital in the capital markets to eliminate negative working capital and provide working capital. Failure to raise equity capital or secure some other form of long-term debt arrangement will cause the Company to further increase its negative working capital deficit and could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations.
(5) Income Taxes
The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes for the ninemonths ended September 30, 2017 and 2016 are as follows:NOTE 3 – RELATED PARTIES
| A. | Transactions and balances with related parties |
Three months ended March 31 | ||||||||
2021 | 2020 | |||||||
General and administrative expenses: | ||||||||
Salaries and fees to officers | 39,413 | 15,107 | ||||||
Research and development expenses: | ||||||||
Salaries and fees to officers | 22,653 | 8,536 |
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 March 31, | As of December 31, | |||||||
2021 | 2020 | |||||||
Other accounts liabilities | 183,135 | 191,994 | ||||||
Long term loan from related party | 1,812,704 | 1,812,704 | ||||||
Liability for employee rights upon retirement | 102,516 | 95,451 |
NOTE 4 – 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.
11 | |||||
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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
At September 30, 2017 and December 31, 2016, the Company’s only significant deferred income tax asset was a cumulative net tax operating loss of approximately $23 million that is available to offset future taxable income, if any, in future periods, subject to expiration and other limitations imposed by the Internal Revenue Service. Management has considered the Company's operating losses incurred to date and believes that a full valuation allowance against the deferred tax assets is required at September 30, 2017 and December 31. 2016. The net operating losses began to expire in 2006 and generally are available for 20 years from the date incurred.
(6) Related Parties
At September 30, 2017 and December 31, 2016, the Company had $120,000 and $59,157, respectively, included in Due to affiliates in the accompanying condensed consolidated balance sheets that is due to a stockholder for amounts paid to certain vendors for services rendered. The amounts are non-interest bearing and due upon demand.
At September 30, 2017 and December 31, 2016, the Company had $364,481 and $280,336, respectively, included in Due to affiliates in the accompanying condensed consolidated balance sheets that is due to a stockholder and consultant of the Company for services rendered as a business advisor and for amounts paid to certain vendors for services rendered.The amounts are non-interest bearing and due upon demand.
At September 30, 2017 and December 31, 2016, the Company had $64,000 included in Due to affiliates in the accompanying condensed consolidated balance sheets that is due to a stockholder and consultant of the Company for services rendered as the previous Chief Executive Officer of the Company. The amounts are non-interest bearing and due upon demand.
At September 30, 2017 and December 31, 2016, the Company had $0 and $117,598, respectively, included in Due to affiliates in the accompanying condensed consolidated balance sheets that is due to a stockholder for amounts paid to certain vendors for services rendered. The amount is non-interest bearing and due upon demand.
At September 30, 2017 and December 31, 2016, the Company had $76,263 and $48,491, respectively, included in Due to affiliates in the accompanying condensed consolidated balance sheets that is due to a stockholder and consultant of the Company for amounts paid to certain vendors for services rendered. The amounts are non-interest bearing and due upon demand.
At September 30, 2017 and December 31, 2016, the Company had $155,485 included in Due to affiliates in the accompanying condensed consolidated balance sheets that is due to creditors of FSC, a business acquired by the Company during 2015. The amounts are non-interest bearing and due upon demand.
(7) Convertible Note Payable
During 2015, the Company issued 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 is now a related party. The note is due to be converted in the final Quarter of 2017.
(8) Commitments & Contingencies
During the normal course of business, the Company may be exposed to litigation. In the event the Company were to become aware of potential litigation, it would evaluate the merits of the case in accordance with ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. At September 30, 2017, the Company is not aware of any contingent liabilities that should be reflected in the accompanying Condensed Consolidated Financial Statements.
ITEM 2. MANAGEMENT'S
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Forward-Looking Statements
The following discussion and analysis should be read in conjunction with our Financial Statementsthe financial statements and Notes thereto appearingrelated 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 SEC filings.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.
OverviewThe 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 and analysis 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 Condensed Consolidated Financial Statementsareas 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 Companyworkplace 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 accompanying notes appearing subsequently underscale and sophistication of their attacks, increasingly focused on the caption "Condensed Consolidated Financial Statements."endpoint, continue to develop.
This reportThe 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 Form 10-Q contains forward-looking statementspremises 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 subjectconnected to risksthe company’s network infrastructure – whether physically, wirelessly or remotely. The data is processed and uncertainties that could cause actual resultsanalyzed to differ materiallylearn 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 discussed in the forward-looking statementsexpected patterns. The anomalies are detected automatically and from historical results of operations. Among the risksinstantly, categorized by their type and uncertaintiesgenerate push alerts which could cause such a difference are those relatingsent to our dependence upon certain key personnel, our ability to manage our growth, our success in implementing the business strategy, our success in arranging financing where required,leader’s dashboard and enabling him to respond to the risk of economic and market factors affecting us or our customers. Many of such risk factors are beyond the control of the Company and its management.threat.
Management has not been satisfiedB2C Cybersecurity —The B2C Cybersecurity division targets families concerned with the results of its operationsexternal cyber threats and exposures in the fieldaddition 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 current endeavors. Dueproducts and services to limited capital resources, it has not been abledistributors and resellers, which will sell to properly promote or advertiseend-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 products. Moreover, even with increased brand awareness, competition inshareholders 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 field remains intense. As a resultclosing date for the Company is pursuing other business opportunities and hasacquisition. Pursuant to the terms of the Agreement, we acquired all of the issued and outstandingcapital 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. AssumingHealth 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 can raise sufficient finances,has been successful in demonstrating the effectiveness of the GB3000 system on a small-scale the Company will focus its attentionhas not yet been able to raise the necessary capital to implement their technologies on the operations on World Health. In the interim, it will continue with its current operations.a commercial scale.
Corporate Structure (Diagram)
The corporate structure of the WHEN Group is reflected below in this diagram
Comparison of Operating Results for the Three and NineMonths Ended September 30, 2017March 31, 2021 to the Three and NineMonths Ended September 30, 2016March 31, 2020
RevenuesThe following table presents our results of operations for the three months ended March 31, 2021 and 2020
Three Months Ended | ||||||||
March 31 | ||||||||
2021 | 2020 | |||||||
Revenues | 32,649 | 3,516 | ||||||
Operating Expenses | ||||||||
Research and development expenses | (172,771 | ) | (99,948 | ) | ||||
General and administrative expenses | (124,485 | ) | (57,406 | ) | ||||
Operating loss | (264,607 | ) | (153,838 | ) | ||||
Financing expenses, net | (1,484 | ) | (9,208 | ) | ||||
Net loss | (266,091 | ) | (163,046 | ) |
Revenues. Revenues for the three months ended March 31, 2021 and nine month periods ended September 30, 20172020 were $32,649 and 2016$3,516, respectively. Revenues were $0.comprised primarily of software license fees.
Operating Expenses
OperatingResearch 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 $99,948 for the three and nine month periods endedSeptember 30, 2017 were $22,015 and $44,821comparedmonths ended March 31, 2020 to $8,528 and $124,754for$172,771 for the three months ended March 31, 2021. The increase resulted primarily from increase in salaries and nine month periods endedSeptember 30, 2016.The reason for the decrease is due to there being a decrease in therelated expenses associated with our development activities of the Company during the period, in particular relating to the consulting and other professional fees involved in the development of software in the corresponding period in the previous year..
We recorded 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 $57,406 for the three months ended March 31, 2020 to $124,485 for the three months ended March 31, 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 expenses, net decreased from $9,208 for the three months ended March 31, 2020 to $1,484 for the three months ended March 31, 2020. The decrease is mainly a net operatingresult of currency exchange differences between the Dollar and the New Israeli Shekel.
Net Loss. Net loss for the threeMarch 31, 2021 was $266,091 and nine month periods ended September 30, 2017 of $22,015is primarily attributable to research and $44,821compared to $8,528development and $124,754 for the threegeneral and nine month periods ended September 30, 2016.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 March 31, 2021, we had current assets of $202,433 compared to total current assets of $407,213 as of December 31, 2020. At March 31, 2021, we had total assets of $483,459 compared to total assets of $458,150 as of December 31, 2020. The increase in total assets is due to a decrease in related parties balance offset by increase in right of use asset arising from operating lease. At March 31, 2021,we had current liabilities of $592,050 as compared to $523,158 as of December 31, 2020. At March 31, 2021, we had total liabilities of $2,732,112 as compared to $2,440,712 as of December 31, 2020. The increase is mainly attributed to the increase in the balance of employees and related institutions, accrued expenses and right of use liabilities arising from operating lease.
At September 30, 2017, andMarch 31, 2021, we had a cash balance of $141,868 compared to the cash balance of $359,949 as of December 31, 2016, we had current and total assets of $3,000.2020. We had current and total liabilities of $880,401 as compared to $835,580, at September 30, 2017, and December 31, 2016, respectively. The increase is primarily due to shareholder advances used to fund operations.
have no cash equivalents.
At September 30, 2017,March 31, 2021, we had a working capital deficiency of $877,401as$389,617 as compared with a working capital deficiency of $832,580$115,945 at December 31, 2016.2020.
We need capitalexpect that our existing cash and cash equivalents as well as expected revenues will enable us to sustainfund our operations and no assurance can be givencapital expenditure requirements through the fiscal 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 able to obtain thisdiluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital on acceptable terms, if at all. In such an event, this may have a materially adverse effect on our business, operating results and financial condition. If the need arises,through debt financing, we may attemptbe subject to obtain funding through the use of various types of short term funding, loanscovenants limiting or workingrestricting our ability to take specific actions, such as incurring additional debt, making capital financing arrangements from banksexpenditures or financial institutions.declaring dividends.
Going Concern
Going Concern
The accompanying Condensed Consolidated Financial Statementsconsolidated financial statements have been prepared assuming that we will continue as a going concern. We have stockholdersa stockholders’ deficit of $26,165,227,$2,248,653 and a working capital deficiency of $877,401at September 30, 2017, and net loss from operations of $44,821 for the nine month period ended September 30, 2017.$389,617 at March 31, 2021 as well as negative operating cash flows. These conditions raise substantial doubt about our ability to continue as a going concern. The Condensed Consolidated Financial Statementsconsolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Critical Accounting Policies
Use of EstimatesThe Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In preparing the Condensed Consolidated Financial Statements, management is required to make estimatesand assumptions that affect the reported amounts on the condensed consolidated balance sheets and condensed consolidated statements of operations for the year then ended. Actual results may differ significantly from those estimates.
Net loss per shareThe Company has adopted FASBASC260-10-50, Earnings Per Share, which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Basic and diluted losses per share were the same at the reporting dates as there were no common stock equivalents outstanding at September 30, 2017 or December 31, 2016.
Fair value of financial instrumentsThe carrying values of the Company’s liabilities approximate their fair values due to the short maturity of these instruments.
Off-Balance Sheet ArrangementsWe have not entered into anyno off-balance sheet arrangements during 2017 and do not anticipate entering into any off-balance sheet arrangements duringthat have or are reasonably likely to have a current or future effect on the next 12 months.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.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Not applicable.
ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not subject to any specific market risk other than that encountered by any other public company related to being publicly traded.
ITEM 4T - CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to the filing date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's President, Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Company's President, Chief Executive Officer and Chief Financial Officer concluded that the Company'sWe maintain disclosure controls and procedures are effective. There have been no significant changes(as defined in Rule 13a-15(e) under the Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.
Disclosure controls and procedures are controls and other proceduresExchange Act) that are designed to ensure that information required to be disclosed by us in Company reports filed or submittedthat we file under the Exchange Act is recorded, processed, summarized and reported within the time periodsas specified in the Securities and Exchange Commission'sSEC’s rules and forms. Disclosure controlsforms and procedures include, without limitation, controls and procedures designed to ensure that such information required to be disclosed by us in Company reports filedthat we file under the Exchange Act is accumulated and communicated to our management, including the Company'sour Interim Chief Executive Officer, and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of our Interim Chief Executive Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2021. Based on that evaluation, our management, including our Interim Chief Executive Officer, concluded that our disclosure controls and procedures were not effective as of March 31, 2021.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2020, our management concluded that our internal control over financial reporting was not effective at December 31, 2020. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The limitation of the Company’s internal control over financial reporting was due to the applied risk-based approach which is indicative of many small companies with limited number of staff in corporate functions. The identified weakness were:
● | Material Weakness – We did not maintain effective controls over certain aspects of the financial reporting process because we (i) lacked a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and (ii) we lacked controls over the disclosure of our business operations. |
● | lack of segregation of duties Significant Deficiencies – Inadequate segregation of duties. |
Our management believes the weaknesses identified above have not had any material effect on our financial results.
We expect to be materially dependent upon third parties to provide us with accounting consulting services for the foreseeable future which we believe will mitigate the impact of the material weaknesses discussed above. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP and establish an audit committee and implement internal controls and procedures, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures will not result in errors in our financial statements which could lead to a restatement of those financial statements.
Changes in Internal Controls over Financial Reporting.
Except for the material weakness and associated remediation plan, , there have been no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - II—OTHER INFORMATION
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1 LEGAL PROCEEDINGSOn 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.
NoneA hearing was set for January 6, 2021 whereupon mediation was ordered. The Company has been in discussion with EL to resolve this issue.
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSFrom time to time we may become involved in various legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings or claims that we believe, either individually or in the aggregate, will have a material adverse effect on our business, financial condition, or results of operations.
ITEM 1A. | RISK FACTORS |
None
An investment in the Company’s Common Stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on April 15, 2021, in addition to other information contained in our reports and in this quarterly report in evaluating the Company and its business before purchasing shares of our Common Stock. There have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 2. | UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS |
None.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 3 DEFAULTS UPON SENIOR SECURITIESNone.
ITEM 4. | MINE SAFETY DISCLOSURES |
None
None.
ITEM 5. | OTHER INFORMATION: |
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS
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32.1* | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
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* Filed herewith.herewith
(b) The following sets forth the Company's reports on Form 8-K that have been filed during the quarter for which this report is filed:
None
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has dulyregistrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
WORLD HEALTH ENERGY HOLDINGS, INC. |
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(Registrant) | |||
By: | /s/ Giora Rozensweig | ||
Giora Rozensweig | |||
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(Principal Executive Officer and Principal Financial and Accounting Officer) |
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Date: | May 17, 2021 |
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