World Health Energy Holdings, Inc 10-Q for FY2024 Q2
World Health Energy Holdings, Inc. (WHEN)
About this 10-Q
World Health Energy Holdings, Inc filed this 10-Q on August 19, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).
Headline figures
Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $19.05K
- down 81.4% from $102.65K a year earlier
- Net loss
- $1.1M
- compared with a net loss of $1.53M a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
MARK ONE
for
the Quarterly Period ended
for the transition period from ________ to ________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | Zip Code |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 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.
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files).
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 accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | 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
As of August 19, 2024, there were issued and outstanding shares of the registrant’s common stock, par value $ per share, were outstanding.
WORLD HEALTH ENERGY HOLDINGS, INC.
Form 10-Q
June 30, 2024
| 2 |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2024
(UNAUDITED)
| 3 |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2024
IN U.S. DOLLARS
(UNAUDITED)
TABLE OF CONTENTS
| 4 |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(U.S. dollars except share and per share data)
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | ||||||||
| Accounts receivable, net
of allowance for credit losses of $ | ||||||||
| Inventory | ||||||||
| Other current assets | ||||||||
| Total Current assets | ||||||||
| Non-current assets | ||||||||
| Right-of-use asset | ||||||||
| Long term prepaid expenses | ||||||||
| Property and equipment, net | ||||||||
| Funds in respect of employee rights upon termination | ||||||||
| Intangible assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Short term credit from related party | ||||||||
| Accounts payable | ||||||||
| Short term operating lease liability | ||||||||
| Other current liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Non-current Liabilities | ||||||||
| Liability for employee rights upon retirement | ||||||||
| Long term loan from parent company | ||||||||
| Long term operating lease liability | ||||||||
| Deferred tax liability | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Deficit (Note 3) | ||||||||
| Series A preferred stock $ par value, shares authorized, shares issued and outstanding as of June 30, 2024, and December 31, 2023 | ||||||||
| Preferred stock, value | ||||||||
| Common stock $ par value, shares authorized as of June 30, 2024 and December 31, 2023. shares issued and outstanding as of June 30, 2024 and December 31, 2023. | ||||||||
| Additional paid-in capital | ( | ) | ( | ) | ||||
| Treasury stock at cost – shares of common stock | ( | ) | ( | ) | ||||
| Proceeds on account of shares | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Company’s stockholders’ equity | ||||||||
| Non-controlling interests | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | ||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 5 |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars except share and per share data)
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Six months ended | Three months ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues | ||||||||||||||||
| Cost of sales | ( | ) | ( | ) | ||||||||||||
| Gross profit | ( | ) | ||||||||||||||
| Research and development expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Finance income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Loss before equity in net loss of equity investments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: Equity in net gain (loss) of equity investments | ( | ) | ||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to non-controlling interests | ||||||||||||||||
| Net loss attributable to the Company’s stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Basic and diluted net loss per share | ) | ) | ) | ) | ||||||||||||
| Weighted average number of shares outstanding used in computing basic and diluted net loss per share | ||||||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive loss - Foreign currency translation adjustments | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net - loss attributable to non-controlling interests | ||||||||||||||||
| Other comprehensive loss attributable to non-controlling interests | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss attributable to the Company’s stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 6 |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(U.S. dollars, except share and per share data)
| Number of Shares | Amount | Number of Shares | Amount | Additional paid-in capital | Proceeds on account of shares | Treasury shares | Accumulated Other Comprehensive Income | Accumulated deficit | Total Company’s stockholders’ equity (deficit) | Non-Controlling Interest | Total stockholders’ equity (deficit) | |||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Additional paid-in capital | Proceeds on account of shares | Treasury shares | Accumulated Other Comprehensive Income | Accumulated deficit | Total Company’s stockholders’ equity (deficit) | Non-Controlling Interest | Total stockholders’ equity (deficit) | |||||||||||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2024: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based payment to employees and services providers | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds on account of shares | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| BALANCE AS OF MARCH 31, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| CHANGES DURING THE PERIOD OF THREE MONTHS ENDED JUNE 30, 2024: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based payment to employees and services providers | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds on account of shares | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| BALANCE AS OF JUNE 30, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| 7 |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(U.S. dollars, except share and per share data)
| Series A Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Additional paid-in capital | Proceeds on account of shares | Treasury shares | Accumulated Other Comprehensive Income | Accumulated deficit | Total Company’s stockholders’ equity (deficit) | Non-Controlling Interest | Total stockholders’ equity (deficit) | |||||||||||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2022 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2023: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares | - | |||||||||||||||||||||||||||||||||||||||||||||||
| Share-based payment to employees and services providers | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| BALANCE AS OF MARCH 31, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| CHANGES DURING THE PERIOD OF THREE MONTHS ENDED JUNE 30, 2023: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares | - | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares for investment in an investee | - | |||||||||||||||||||||||||||||||||||||||||||||||
| Share-based payment to employees and services providers | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| BALANCE AS OF JUNE 30, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| 8 |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars except)
| 2023 | 2023 | |||||||
| Six months ended | ||||||||
| June 30, | ||||||||
| 2023 | 2023 | |||||||
| (Unaudited) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss for the period | ( | ) | ( | ) | ||||
| Adjustments required to reconcile net loss for the period to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Change in liability for employee rights upon retirement | ||||||||
| Equity in losses of non-consolidated entity | ||||||||
| Share-based compensation expense | ||||||||
| Change in operating lease | ( | ) | ||||||
| Change in accounts receivable | ( | ) | ||||||
| Change in inventory and in other assets | ( | ) | ||||||
| Change in accounts payable | ( | ) | ||||||
| Change in other accounts liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Loans granted to related parties | ( | ) | ( | ) | ||||
| Increase in funds in respect of employee rights upon retirement | ( | ) | ||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Loan received | ||||||||
| Proceeds on account of shares | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ||||||||
| INCREASE IN CASH AND CASH EQUIVALENTS | ||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Non cash transactions: | ||||||||
| Initial recognition of operating lease liability | ||||||||
| Shares issued for the purchase of subsidiary | ||||||||
| Issuance of share in exchange for debt | ||||||||
The accompanying notes are an integral part of the condensed consolidated financial statement
| 9 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – GENERAL
| A. | Operations |
World Health Energy Holdings, Inc. (the “Company” or “WHEN”) was formed on May 21, 1986 under the laws of the State of Delaware. The Company has invested in a variety of internally developed 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. (“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, the Company’s principal shareholder, and RNA. UCG is primarily engaged in the marketing and distribution of cybersecurity-related products.
On April 27, 2020, the Company completed a reverse triangular merger pursuant to which SG 77 Inc., a Delaware corporation (“SG”) and at such time a wholly-owned subsidiary of UCG, became a direct and wholly owned subsidiary of the Company and RNA became an indirect wholly owned subsidiary of the Company through SG (the “SG Merger”).
The SG Merger was accounted for as a reverse asset acquisition. Under this method of accounting, SG was deemed to be the accounting acquirer for financial reporting purposes.
On March 22, 2022, the Company entered into an investment agreement pursuant to which the Company purchased % of the outstanding common shares of CrossMobile Sp. z o.o (“CrossMobile”) on a fully diluted basis, in consideration of the issuance by the Company to CrossMobile of restricted shares of the Company’s common stock (the “Initial Investment”). On October 25, 2022, the Company exercised an option to purchase an additional 25% shares of CrossMobile such that following the acquisition, the Company increased its holding from 26% to 51% of CrossMobile’s outstanding common stock on a fully diluted basis. In consideration for the exercise of the Additional Share Purchase Option, the Company issued 10,000,000 restricted common stock on November 28, 2022 to Crossmobile.
CrossMobile is a licensed mobile virtual network operator in Poland, providing the necessary licenses and key infrastructure in the EU. With its involvement in CrossMobile, the Company expects to provide advanced cybersecurity solutions and other next-generation value-added services to CrossMobile’s future product offerings.
The Company, collectively with SG, RNA and CrossMobile are hereunder referred to as the “Group”.
| C. | Board and Shareholder Authority for Reverse Stock Split |
On
May 17, 2023,
| 10 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – GENERAL (continued)
| A. | Financial position |
The Group is subject to certain inherent risks and uncertainties associated with the development of its business. To date, substantially all the Company’s efforts and investments have been devoted to the growth of its business, organically and inorganically. These investments have historically been funded by raising outside capital, and as a result of these efforts, the Company has generally incurred significant losses and used net cash outflows from operations since inception.
During
the six months ended June 30, 2024, the Company incurred a net loss of $
The Group’s management expects that the Group will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flows and cash balances as of June 30, 2024, management currently is of the opinion that its existing cash will be sufficient to fund operations until the end of the second quarter of 2025. As a result, there is substantial doubt regarding the Company’s ability to continue as a going concern.
Management endeavors to secure sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships. Additional funds may not be available when the Company needs them, on favorable terms, or at all. If the Company is unsuccessful in securing sufficient financing, it may need to cease operations.
The financial statements do not include adjustments for measurement or presentation of assets and liabilities, which may be required should the Company fail to operate as a going concern.
| B. | Risk factors |
The Group faces 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.
| C. | On October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Following the attack by Hamas on Israel’s southern border, Hezbollah in Lebanon also launched missile, rocket, drone and shooting attacks against Israeli military sites, troops and Israeli towns in northern Israel. In response to these attacks, the Israeli army has carried out a number of targeted strikes on sites belonging to Hezbollah in Lebanon and Syria. Recently, Iran has directly joined the hostilities against Israel by firing hundreds of drones, ballistic missiles and guided missiles to Israel causing further uncertainty in the region. While currently limited damage was registered in Israel from the Iranian attack, the situation is developing and could lead to additional wars and hostilities in the Middle East. It is possible that the hostilities with Hezbollah will escalate, and that other terrorist organizations, including Palestinian military organizations in the West Bank, as well as other hostile countries, will join the hostilities. Such hostilities may include terror and missile attacks. |
Certain of our consultants in Israel may be called up for reserve duty, in addition to employees of our service providers located in Israel, have been called, for service and such persons may be absent for an extended period of time. In the event that hostilities disrupt our ongoing operations, our ability to deliver or provide services in a timely manner to meet our contractual obligations towards customers and vendors could be materially and adversely affected.
| 11 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – GENERAL (continue)
The intensity and duration of Israel’s current war against Hamas is difficult to predict, as are such war’s economic implications on the Company’s business and operations and on Israel’s economy in general. These events may be intertwined with wider macroeconomic indications of a deterioration of Israel’s economic standing, which may have a material adverse effect on the Company and its ability to effectively conduct its operations.
Since this is an event that is not under the control of the Company, and matters such as the fighting continuing or stopping may affect the Company’s assessments, as at the reporting date the Company is unable to assess the extent of the effect of the war on its business activities and on the business activities of its subsidiaries, and on their medium and long term results. The Company is continuing to regularly follow developments on the matter and is examining the effects on its operations and the value of its assets.
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 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, 2024. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2024. 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, for the year ended December 31, 2023.
Principles of Consolidation
The consolidated financial statements are prepared in accordance with 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 condensed interim consolidated financial statements in conformity with GAAP 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.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to provide enhanced segment disclosures. The standard will require disclosures about significant segment expenses and other segment items and identifying the Chief Operating Decision Maker and how they use the reported segment profitability measures to assess segment performance and allocate resources. These enhanced disclosures are required for all entities on an interim and annual basis, even if they have only a single reportable segment. The standard is effective for years beginning after December 15, 2023 and interim periods within annual periods beginning after December 15, 2024, and early adoption is permitted. The Company does not believe that adoption of this ASU will have a material impact on the Company’s consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024, early adoption is permitted. The Company does not believe that adoption of this ASU will have a material impact on the Company’s consolidated financial statements.
NOTE 3 – COMMON STOCK
| During
the six months ended June 30, 2024, the Company received subscription proceeds of $ |
| 12 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
| 1. | The following table presents the Company’s stock option activity during the three and six months ended June 30, 2024: |
| Number of Options | Weighted Average Exercise Price | |||||||
| Outstanding at December 31,2023 | ||||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited or expired | ||||||||
| Outstanding at March 31,2024 | ||||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited or expired | ||||||||
| Outstanding at June 30,2024 | ||||||||
| Number of options exercisable at June 30, 2024 | ||||||||
The aggregate intrinsic value of the awards outstanding as of June 30, 2024 is $. These amounts represent the total intrinsic value, based on the Company’s stock price of $ as of June 30, 2024, less the weighted exercise price. This represents the potential amount received by the option holders had all option holders exercised their options as of that date.
SCHEDULE OF STOCK OPTIONS OUTSTANDING RANGE OF EXERCISE PRICE
| Exercise price | Stock options outstanding | Weighted average remaining contractual life – years | Stock options vested | |||||||||
| As of June 30, 2024 | ||||||||||||
The stock options outstanding as of June 30, 2023, have been separated into exercise prices, as follows:
| Exercise price | Stock options outstanding | Weighted average remaining contractual life – years | Stock options vested | |||||||||
| As of June 30, 2023 | ||||||||||||
Compensation expense recorded by the Company in respect of its stock-based compensation awards for the six and three months ended June 30, 2024 were $ and $, respectively and for the six and three months ended June 30, 2023 were $ and $, respectively. The compensation expenses are included in the Statements of Operations.
As of June 30, 2024, the total share-based compensation costs not yet recognized related to unvested stock options was $ million, which is expected to be recognized over the weighted-average remaining requisite service period of years
| 13 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 – RELATED PARTIES
| A. | Transactions and balances with related parties |
SCHEDULE OF RELATED PARTY EXPENSES
Six months ended June 30 | Three months ended June 30 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| General and administrative expenses: | ||||||||||||||||
| Salaries and fees to officers | ||||||||||||||||
| (*) of which share based compensation | ||||||||||||||||
| Research and development expenses: | ||||||||||||||||
| Salaries and fees to officers | ||||||||||||||||
| (*) of which share based compensation | ||||||||||||||||
| B. | Balances with related parties and officers: |
As of June 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| Other current assets | ||||||||
| Other accounts liabilities | ||||||||
| Liability for employee rights upon retirement | ||||||||
| Long term loan from related party (*) | ||||||||
| (*) |
NOTE 6 – SUBSEQUENT EVENTS
(i)
On July 2, 2024, the Company, entered into and executed an agreement (the “IHQ Agreement”) with Intent HQ Limited
(“IHQ”), a company incorporated under the laws of England and Wales pursuant to which IHQ invested and granted the
Company a worldwide, royalty-free, perpetual, nonexclusive, sublicensable, irrevocable license to IHQ’s Edge SDK, in both
source-code and object-code formats and associated documentation (collectively, the “Perpetual License”). In
consideration of the Perpetual License the Company undertook to issue
shares (the “Consideration Shares”) of Company’s common stock, par value $
per share (the “Common Stock”). The Consideration Shares represents approximately
The strategic alliance represented by this agreement aims to leverage WHEN’s cybersecurity products in combination with IHQ’s modules to introduce to the market novel products in the cybersecurity field applicable to both the business and individual level.
The IHQ Agreement provides that the Consideration Shares are subject to a Lock Up Agreement for a period of 12 months from the date of their issuance, but the lock up would be automatically canceled on the date of the Uplisting (as defined below). In addition, the lock up may be cancelled unilaterally by IHQ, in its sole discretion, in which case the Perpetual License will be considered fully paid. Under the terms of the IHQ Agreement, the Company undertook to complete an uplisting (the “Uplisting”) of its shares of Common Stock on NYSE, NASDAQ or the Chicago Board Options Exchange prior to June 28, 2025 (the “Uplisting Target Date”).
Under
the terms of the IHQ Agreement, the Company may at any time prior to the Uplisting Target Date, at its sole discretion without any
obligation whatsoever, pay IHQ in cash $
In the event that the Company or a subsidiary will raise funds on or prior to December 28, 2025 (the “Target Fundraise Period”) in connection with, from or relating to the Uplisting (whether or not the Uplisting ultimately occurs) for a specified amount (the “Target Fundraise”), the Company is obligated to pay IHQ a marketing advisory fee at a specified the rate for each dollar cumulatively raised during the Target Fundraise Period over and above the Target Fundraise.
(ii)
On August 14, 2024, the Company, entered into and executed an agreement (the “Terra Zone Agreement”) with Terra Zone
Ltd. (“Terrz Zone”), a company incorporated under the laws of Israel pursuant to which the Company purchased
ordinary shares of Terra Zone, representing
Terra Zone is engaged in the cybsersecurity field. On August 14, 2024, the Company and Terra Zone entered into the Technology Cooperation Agreement pursuant to which the parties will cooperate as reasonably required so that their security solutions interoperate, By integrating Terra Zone’s unique technology with WHEN’s intelligence cyber and security business solution, the parties intend to bring to market an endpoint security solution intended to enable organizations to precisely identify and isolate any entity—whether working remotely or within the corporate network—ensuring that only authorized users can access critical resources while remaining completely isolated from the broader network.
Under the terms of the technology cooperation agreement,
the parties undertook to develop and commercialize the Bundled Solution. The parties also agreed that of the net sales received from the parties from the Bundled Solution in an aggregate
amount of up to eight million ($
(iii)
The Company and Mr. Baumeohl, a Company director, entered into an agreement as of August 14, 2024 pursuant to which all investments by
Mr. Baumeohl during 2024 under the investment agreement between Mr. Barumeohl and Company which was entered into in November 2022, which
aggregated to $
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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, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2024. 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. 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.
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 (“WHEN” or the “Company” or “us” ) is primarily engaged in the global telecom and cybersecurity technology field. On April 27, 2020, WHEN completed a reverse triangular merger pursuant to which SG 77 Inc., a Delaware corporation (“SG”) and at such time a wholly-owned subsidiary of UCG, the Company’s principal shareholder, became a direct and wholly owned subsidiary of the Company and RNA Ltd. became an indirect wholly owned subsidiary of the Company through SG. Each of Gaya Rozensweig and George Baumeohl, directors of the Company, are also the sole shareholders and directors of UCG.
RNA is primarily a research and development company that has been performing software design services in the field of cybersecurity. SG is primarily engaged in the marketing and distribution of cybersecurity related products. In anticipation of the transaction contemplated under the Merger Agreement, SG was formed and all of the cybersecurity rights and interests held by UCG, including the share ownership of RNA, were assigned to SG.
Following the closing, each of SG 77 and RNA became wholly-owned subsidiaries of the Company.
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Acquisition of CrossMobile
On March 22, 2022 the Company, CrossMobile Sp z o.o., a company formed under the laws of Poland (“CrossMobile”) and the shareholders of CrossMobile (of which our CEO, Giora Rosenzweig, holds 40.67% and George Baumeohl, a director, holds 3.33%, of the issued preferred share capital of CrossMobile), entered into an Investment Agreement (the “Agreement”) pursuant to which the Company purchased in July 2022 an initial 26% equity stake of the outstanding common share capital of CrossMobile on a fully diluted basis, in consideration of the issuance by the Company to CrossMobile of 10,000,000,000 restricted shares of Company . In addition, for 18 months following the date of the Agreement, the Company has the option to purchase additional shares of CrossMobile, (the “Additional Share Purchase Option”), such that following such additional purchase, the Company shall hold approximately 51% of CrossMobile’s outstanding share capital on a fully diluted basis. On October 25, 2022, the Company exercised the Additional Share Purchase Option to acquire such additional shares of CrossMobile and the Company now holds approximately 51% of CrossMobile’s outstanding share capital on a fully diluted basis and proportionally voting rights. In consideration for the exercise of the Additional Share Purchase Option, the Company issued to CrossMobile an additional 10,000,000 shares of the Company’s common stock.
CrossMobile provides public mobile telephone services in Europe, (without its own radio infrastructure) We believe that the acquisition of CrossMobile provides an opportunity in our evolution and provides us with a strong foothold in the European mobile telecom market. CrossMobile is planning to roll-out a comprehensive suite of value-added services for B2B and B2C customers in the telecom industry.
With our involvement in CrossMobile, we expect to provide advanced cybersecurity solutions and other next-generation value-added services to CrossMobile’s future product offerings.
The global telecom services market size was valued at USD $172.32 billion in 2023 and is expected to expand at a compound annual growth rate (CAGR) of 6.2% from 2023 to 2030 1. The global cyber security market size is projected to grow from billion in 2023 to $424.97 billion in 2030, at a CAGR of 4.51%2 during the forecast years. By combining the telecom focus with our existing cyber security product offering, our plan is to bring to market a new standard of service in value added telecom and security solutions for B2B and B2C customers alike.
Through the date of this report, CrossMobile signed up approximately 3,500 paying subscribers, including B2B and B2C subscribers. CrossMobile intends during the next 12 months to build a strong telecom brand empowered by ’state of the art’ technology, competitive pricing and a product mix including proprietary AI and WHEN’s cybersecurity solutions.
Acquisition of Instaview
On Feb. 26, 2023 we completed the acquisition of an initial 26% of Instaview Ltd. (“Instaview”), an emerging technology company in the field of AI-based image processing systems, thermal cameras, home and enterprise security, livestock tracking and control appliances plus much more.
Instaview is engaged in the field of image processing systems and thermal cameras. Over the past 18 years, Instview has provided innovative security and managing solutions in hundreds of projects in Israel and overseas.
During the fourth quarter of 2023, the Company amortized its investment in InstaView and recorded an impairment charge of $151,015.
1 Grand View Research, from https://www.grandviewresearch.com/industry-analysis/global-telecom-services-market
2 https://www.fortunebusinessinsights.com/industry-reports/cyber-security-market-101165
Transaction with Intent HQ
On July 2, 2024, the Company, entered into an agreement (the “HQ Agreement”) with Intent HQ Limited (“IHQ”), a company incorporated under the laws of England and Wales pursuant to which IHQ Invested and granted the Company a worldwide, royalty-free, perpetual, nonexclusive, sublicensable, irrevocable license to IHQ’s Edge SDK, in both source-code and object-code formats and associated documentation (collectively, the “Perpetual License”). In consideration of the Perpetual License the Company issued 25,038,272,832 shares (the “Consideration Shares”) of Company’s common stock, par value $0.00001 per share (the “Common Stock”). IHQ also undertook to provide professional consulting services to enable the Company to implement, develop and commercialize its own and joined products based on the product materials or any portions or derivative works thereof, all subject to the terms and conditions set forth therein.
| 16 |
The strategic alliance represented by this agreement aims to leverage WHEN’s cybersecurity products in combination with IHQ’s modules to introduce to the market novel products in the cybersecurity field applicable to both the business and individual level.
The Agreement provides that the Consideration Shares are subject to a Lock Up Agreement for a period of 12 months from the date of their issuance, but the lock up would be automatically canceled on the date of the Uplisting (as defined below). In addition, the lock up may be cancelled unilaterally by IHQ, in its sole discretion, in which case the Perpetual License will be considered fully paid. Under the terms of the Agreement, the Company undertook to complete an uplisting (the “Uplisting”) of its shares of Common Stock on NYSE, NASDAQ or the Chicago Board Options Exchange prior to June 28, 2025 (the “Uplisting Target Date”).
Under the terms of the Agreement, the Company may at any time prior to the Uplisting Target Date, at its sole discretion without any obligation whatsoever, pay IHQ in cash $5 million dollar as a license fee for the Perpetual License, upon which the entirety of the Consideration Shares shall be returned to the Company. If the Uplisting occurs on or before the Uplisting Target Date, then upon Uplisting the Perpetual License shall be deemed to have been fully paid for by the issuance of the Consideration Shares, and all of IHQ’s rights of termination of the Agreement and rights related to cancellation of Lock Up shall terminate and no longer be in force and effect. However, if the Uplisting does not occur before the Uplisting Target Date and, or the Company has not paid $5 million license fee for the Perpetual License, then IHQ has the right, within 30 days of the Uplisting Target Date, to terminate the Agreement and return to WHEN all of the Consideration Shares.
In the event that the Company or a subsidiary will raise funds on or prior to December 28, 2025 (the “Target Fundraise Period”) in connection with, from or relating to the Uplisting (whether or not the Uplisting ultimately occurs) for a specified amount (the “Target Fundraise”), the Company is obligated to pay IHQ a marketing advisory fee at a specified the rate for each dollar cumulatively raised during the Target Fundraise Period over and above the Target Fundraise.
Transaction with Terra Zone Ltd.
On August 14, 2024, the Company, entered into and executed an agreement (the “Agreement”) with Terra Zone Ltd. (“Terrz Zone”), a company incorporated under the laws of Israel pursuant to which the Company purchased 448,029 ordinary shares of Terra Zone, representing 4% of the issued and outstanding shares of Terra Zome on a fully diluted basis immediately following the issuance, in consideration for the Company’s agreement to issue ot Terrz Zone 5,000,000,000 shares of the Company’s common stock. In addition, the parties agreed to a mutual option, exercisable by either of the parties through the second anniversary of closing, to acquire additional shares of the other. Under the mutual option, the Company is entitled to purchase an additional 446,697 ordinary shares of Terra Zone in consideration of the issuance by the Company of 5,208,338,520 shares common stock of the Company and Terra Zone is entitled to exercise the mutual option for the same number of the Company’s common stock.
Terra Zone is engaged in the cybsersecurity field. On August 14, 2024, the Company and Terra Zone entered into the Technology Cooperation Agreement pursuant to which the parties will cooperate as reasonably required so that their security solutions interoperate. By integrating Terra Zone’s unique technology with WHEN’s WHEN’s advanced intelligence cyber and security business solution, the parties intend to bring to market an endpoint security solution intended to enable organizations to precisely identify and isolate any entity—whether working remotely or within the corporate network—ensuring that only authorized users can access critical resources while remaining completely isolated from the broader network.
The collaboration between WHEN and TerraZone highlights their commitment to advancing security measures in the micro-segmentation industry. As cyber threats evolve, the demand for adaptive security solutions that can operate seamlessly across various network environments is imperative. Together, WHEN and TerraZone are are aiming to deliver a comprehensive security solutions that address the complexities of the current corporate infrastructures.
Under the terms of the technology agreement, the parties undertook to develop and commercialize the bundled product. The parties also agreed that of the net sales received from the parties from the Bundled Solution in an aggregate amount of up to eight million ($8,000,000), except for certain specified fees, 75% of such amount shall be for the account of WHEN and the balance for Terra Zone. Any amounts of net sales in excess of eight million ($8,000,000) shall be distributed to the parties in equal measure
Combined WHEN Product Offerings
Our product offerings are comprised of three complementary segments, namely
| 1. | Cyber Care, which is the long standing and core business segment of WHEN | |
| 2. | AI based image processing systems such as audio-video systems and security cameras solutions being an off-line extension of the on-line Cyber Care services entered through the acquisition of 26% shares in Instaview | |
| 3. | Mobile telecom GSM which is a new business segment, linking the off and on line business segments entered through the recent acquisition of CrossMobile |
All three are targeting commercial enterprises (B2B) and individual users (B2C).
Cyber Care
B2B Offerings—Our B2B Cybersecurity system software development and implementation program focuses on developing a threat management software that provides innovative solutions for the constantly evolving cyber challenges of businesses, non-governmental organizations (NGO’s) and governmental entities.
In 2021 we 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 operating system (OS)-based Internet of things (IOT) devices. IoT devices are the nonstandard computing devices that connect wirelessly to a network and have the ability to transmit data.
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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 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 then 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.
OTOGRAPH is continuously learning and calibrating the normal patterns and their thresholds to minimize the number of false alarms and constantly adapt to the changing needs of organizations in real time. Our 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.
B2C
SG’s Parental System offers a comprehensive solution which is designed to enable parents wishing to observe their children’s online behavior to learn if they are accessing inappropriate websites and content and/or to protect them from a range of threats including cyberbullying, pedophiles and other predators and identity theft.
The Parental System line is positioned as the “ultimate parental cyber solution”. This system incorporates a range of features enabling parents to view and manage their children’s Android phones and devices. The key elements of our proprietary solutions include the following: analysis of all incoming and outgoing written data; analysis of all incoming and outgoing audio communication; real time location tracking; environmental surroundings analysis; and cyber activity analysis.
The Parental System has similar features to those of the B2B yet tailored to fit the needs of parents and guardians to protect their children. Such variations focus on online behavioral patterns whether vocally, via short message service (“SMS”) or social media platforms. If there is a change in behavior patterns, the product is designed to immediately send the parent or adult guardian an alert. For example, as stated in several international reports, one of the identifiable indicators before suicide is social withdrawal, something which today appears as a significant decrease in text message exchanges. The system categorizes this decrease as a red flag. Moreover, there are certain words and phrases which increase in use prior to suicide which the system will detect these it will put them in the red flag category.*
* https://www.mayoclinic.org/healthy-lifestyle/tween-and-teen-health/in-depth/teen-suicide/art-20044308
While analyzing voice calls based on; tone of speech, lengths of the conversation and the frequency of calls, Parental System Analytics is capable of identifying changes in behavioral patterns and flagging these changes. For example, studies showed that with deteriorating mental health, the frequency of calls decreases and the sentences along with the length of the conversations get shorter. Any such discrepancy in behavior patterns will send a real time alert to the parent or legal guardian, potentially avoiding a tragedy.
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Strategy Cyber Care: We believe that the technology underlying our product offering is our primary competitive advantage. The strength of our solution is driven by several proprietary technologies and methodologies that we have developed, coupled with how we have combined them into our highly versatile platform incl. the mobile telecom platform discussed below. These advantages enable our end users to
| ● | Prevent trade secret and data leakage; | |
| ● | Protect against hackers; | |
| ● | Minimize loss of productivity; | |
| ● | Detect embezzlements and thefts; | |
| ● | Defend employees from harassments; | |
| ● | Prevent talent and client poaching; | |
| ● | Avoid human errors; | |
| ● | Develop a new level of decision-making ability based on accurate and real-time data; and | |
| ● | Assist parents and legal guardians in monitoring their minor children’s’ cyber online activities. |
The Company’s go-to-market strategy focuses principally on generating revenue from software, services and licensing. The Company intends to drive revenue growth and to achieve margins that are consistent with those of other enterprise software companies.
We currently 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.
The implementation of our strategies is subject to our raising significant cash resources, of which no assurance can be provided that we will be successful in raising the needed capital on commercially reasonable terms. As of the date of this prospectus, we have no commitments for any capital raise.
Mobile telecom GSM
Following the first step, our next planned strategy is to add the advanced B2B and B2B Cyber Care bundled with the audio-video systems and security cameras solution and offer them as an integrated part of our GSM solutions. This will give our B2B the possibility to use the AI and BBA as a tool to increase not only security but as well efficiency in sales organizations where soft skills, emotions and personal relations are crucial.
In respect to the B2C market our strategy is to give families a tool to protect their assets and entire households in particular kids or pets and evenelderly members being fragile newcomers in the world of e-commerce, on-line banking and on-line dating.
The third step expected to be initiated in fourth quarter of 2024 is to copy and paste the same scenario of combining Cyber Care and Mobile Telecom to other selected markets in North Africa, the USA and Europe.
Bundled Security Offering
Under the agreement with Terra Zone, WHEN and Tera Zone intend to bring to market an endpoint security solution intended to enable organizations to precisely identify and isolate any entity—whether working remotely or within the corporate network—ensuring that only authorized users can access critical resources while remaining completely isolated from the broader network.
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Comparison of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023
| Three months ended June, 2024 | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | 19,047 | 102,646 | |||||
| Cost of revenues | (22,866 | ) | - | |||||
| Gross profit | (3,819 | ) | 102,646 | |||||
| Operating Expenses | ||||||||
| Research and development expenses | (378,199 | ) | (502,187 | ) | ||||
| Selling and marketing expenses | (66,626 | ) | (3,527 | ) | ||||
| General and administrative expenses | (686,016 | ) | (1,148,382 | ) | ||||
| Operating loss | (1,134,660 | ) | (1,551,450 | ) | ||||
| Financing income (expenses), net | (7,694 | ) | 10,614 | |||||
| Loss before equity in net loss of equity investments | (1,142,354 | ) | (1,540,836 | ) | ||||
| Less: Equity in net loss of equity investments | - | 250 | ||||||
| Net loss | (1,142,354 | ) | (1,540,586 | ) | ||||
| Net loss attributable to non-controlling interests | 43,094 | 12,930 | ||||||
| Net loss attributable to the Company’s stockholders | (1,099,260 | ) | (1,527,656 | ) | ||||
Revenues
Our total revenue consists of sales of our products and services.
Cost of revenues
Our cost of revenues includes cost of products sold.
Operating Expenses
Our current operating expenses consist of three components - research and development expenses, selling and marketing expenses and general and administrative expenses.
Research and Development Expenses, net
We expect to continue incurring substantial expenses for the next several years as we continue to develop our product lines. We are unable, with any certainty, to estimate either the costs or the timelines in which those expenses will be incurred. The design and development activities will consume a large proportion of our current, as well as projected, resources.
Our research and development costs include costs are comprised of:
● internal recurring costs, such as personnel-related costs (salaries, employee benefits, equity compensation and other costs), materials and supplies, facilities and maintenance costs attributable to research and development functions; and
● fees paid to external parties who provide us with contract services, such as preclinical testing, manufacturing and related testing and clinical trial activities.
The following table discloses the breakdown of research and development expenses:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Salaries and related expenses | $ | 72,374 | 111,339 | |||||
| Share-based compensation expenses | 201,955 | 349,867 | ||||||
| Subcontractors and other development costs | 42,729 | 5,887 | ||||||
| Depreciation and amortization | 4,733 | 4,305 | ||||||
| Rent and office maintenance | 16,532 | 24,465 | ||||||
| Other expenses | 39,876 | 6,324 | ||||||
| Total | $ | 378,199 | 502,187 | |||||
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Selling and Marketing Expenses
Selling and marketing expenses consist primarily of salaries and related expenses, professional services and other expenses.
The following table discloses the breakdown of selling and marketing expenses:
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Salaries and related expenses | 49,913 | 3,527 | ||||||
| Other expenses | 16,713 | - | ||||||
| Total | $ | 66,626 | 3,527 | |||||
We expect that our selling and marketing expenses will increase as we continue to increase our selling and marketing efforts in 2024 following the acquisition of Cross Mobile and our marketing efforts to build new Telecom operators with standard packages of Voice, SMS and Data in Poland and International Roaming .
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses, professional services, rent and office maintenance and other non-personnel related expenses.
The following table discloses the breakdown of general and administrative expenses:
Three Months Ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| Salaries and related expenses | $ | 59,186 | $ | 55,477 | ||||
| Share-based compensation expenses | 667,337 | 975,319 | ||||||
| Professional services | (63,765 | ) | 86,067 | |||||
| Rent and office maintenance | 22,202 | 16,346 | ||||||
| Other expenses | 1,056 | 15,173 | ||||||
| Total | $ | 686,016 | $ | 1,148,382 | ||||
Revenues
Revenues for the three months ended June 30, 2024 and 2023 were $19,047 and $102,646, respectively. The decrease in our revenues resulted primarily from one-time services provided under a development agreement in an amount of $90,000 recognized during the three months ended June 30, 2023.
Research and Development Expenses. Research and development expenses consist of salaries and related expenses, share-based compensation expenses, consulting fees, service providers’ costs and overhead expenses. Research and development expenses decreased from $502,187 during the three months ended June 30, 2023 to $378,199 during the three months ended June 30, 2024. The decrease resulted primarily from decrease in non-cash share-based compensation expenses as well as salaries and related expenses, partially offset by increase in consulting fees and service providers’ costs associated with our development activities, rent and maintenance costs and salaries and related expenses.
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Selling and Marketing Expenses. Selling and marketing expenses consist primarily of salaries and related expenses. Selling and marketing expenses for the three months ended June 30, 2024 amounted to $66,626 as compared to $3,527 for the three months ended June 30, 2023. The increase in our Selling and marketing expenses resulted primarily from increase in salaries and related expenses and in other selling and marketing expenses.
General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses, share-based compensation expenses and other non-personnel related expenses such as legal expenses. General and administrative expenses decreased from $1,148,382 for the three months ended June 30, 2023 to $686,016 in the three months ended June 30, 2024. The decrease is primarily attributed to the decrease in non-cash share-based compensation expenses and professional services expenses.
Financing Income (expenses), Net. Financing income, net decreased from $10,614 of financing income for the three months ended June 30, 2023 to financing expenses, net of $7,694 for the three months ended June 30, 2024. The increase in financing expenses, net is mainly a result of currency exchange differences between the Dollar and the New Israeli Shekel.
Net Loss. As a result of the foregoing, our net loss for the three months ended June 30, 2024 was $1,142,354 compared to $1,540,586 for the three months ended June 30, 2023.
Comparison of the six Months Ended June 30, 2024 to the six Months Ended June 30, 2023
Summary of Results of Operations
| Six months ended | ||||||||
| June 30 | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | 51,923 | 134,986 | |||||
| Cost of revenues | (34,548 | ) | - | |||||
| Gross profit | 17,375 | 134,986 | ||||||
| Operating Expenses | ||||||||
| Research and development expenses | (824,583 | ) | (1,005,123 | ) | ||||
| Selling and marketing expenses | (93,825 | ) | (30,197 | ) | ||||
| General and administrative expenses | (1,641,147 | ) | (3,132,840 | ) | ||||
| Operating loss | (2,542,180 | ) | (4,033,174 | ) | ||||
| Financing income, net | (7,585 | ) | 15,503 | |||||
| Loss before equity in net loss of equity investments | (2,549,765 | ) | (4,017,671 | ) | ||||
| Less: Equity in net loss of equity investments | - | (227 | ) | |||||
| Net loss | (2,549,765 | ) | (4,017,898 | ) | ||||
| Net loss attributable to non-controlling interests | 67,328 | 25,942 | ||||||
| Net loss attributable to the Company’s stockholders | (2,482,437 | ) | (3,991,956 | ) | ||||
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Revenues
Our total revenue consists of sales of our products and services.
Operating Expenses
Our current operating expenses consist of three components - research and development expenses, selling and marketing expenses and general and administrative expenses.
Research and Development Expenses, net
We expect to continue incurring substantial expenses for the next several years as we continue to develop our product lines. We are unable, with any certainty, to estimate either the costs or the timelines in which those expenses will be incurred. The design and development activities will consume a large proportion of our current, as well as projected, resources.
Our research and development costs include costs are comprised of:
● internal recurring costs, such as personnel-related costs (salaries, employee benefits, equity compensation and other costs), materials and supplies, facilities and maintenance costs attributable to research and development functions; and
● fees paid to external parties who provide us with contract services, such as preclinical testing, manufacturing and related testing and clinical trial activities.
The following table discloses the breakdown of research and development expenses:
| Six Months Ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| Salaries and related expenses | $ | 147,857 | 173,683 | |||||
| Share-based compensation expenses | 470,946 | 750,391 | ||||||
| Subcontractors and other development costs | 80,376 | 14,719 | ||||||
| Depreciation and amortization | 9,815 | 8,573 | ||||||
| Rent and office maintenance | 58,562 | 47,089 | ||||||
| Other expenses | 57,027 | 10,667 | ||||||
| Total | $ | 824,583 | 1,005,123 | |||||
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of salaries and related expenses, professional services and other expenses.
The following table discloses the breakdown of selling and marketing expenses:
| Six Months Ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| Professional services | $ | 77,112 | $ | 30,197 | ||||
| Other expenses | 16,713 | - | ||||||
| Total | $ | 93,825 | $ | 30,197 | ||||
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We expect that our selling and marketing expenses will increase as we continue to increase our selling and marketing efforts in 2024 following the acquisition of Cross Mobile and our efforts to be in the air with standard packages of Voice, SMS and Data in Poland and International Roaming and initiate cooperation with existing or build new Telecom operators.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses, professional services, rent and office maintenance and other non-personnel related expenses.
The following table discloses the breakdown of general and administrative expenses:
Six Months Ended June 30 | ||||||||
| 2024 | 2023 | |||||||
| Salaries and related expenses | $ | 117,571 | 149,916 | |||||
| Share-based compensation expenses | 1,371,096 | 2,821,682 | ||||||
| Professional services | 97,846 | 106,409 | ||||||
| Rent and office maintenance | 50,468 | 47,200 | ||||||
| Other expenses | 4,166 | 7,633 | ||||||
| Total | $ | 1,641,147 | 3,132,840 | |||||
Revenues
Revenues for the six months ended June 30, 2024 and 2023 were $51,923 and $134,986, respectively. The decrease in our revenues resulted primarily from one-time services provided under a development agreement in an amount of $90,000 recognized during the six months ended June 30, 2023.
Research and Development Expenses. Research and development expenses consist of salaries and related expenses, share-based compensation expenses, consulting fees, service providers’ costs and overhead expenses. Research and development expenses decreased from $1,005,123 during the six months ended June 30, 2023 to $824,583 during the six months ended June 30, 2024. The decrease resulted primarily from decrease in non-cash share-based compensation expenses and salaries and related expenses partially offset by increase in professional services.
Selling and Marketing Expenses. Selling and marketing expenses consist primarily of professional fees. Selling and marketing expenses for the six months ended June 30, 2024 amounted to $93,825 as compared to $30,197 for the six months ended June 30, 2023. The increase is primarily attributable to increase in salaries and related expenses.
General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses, share-based compensation expenses and other non-personnel related expenses such as legal expenses. General and administrative expenses decreased from $3,132,840 for the six months ended June 30, 2023 to $1,641,147 in the six months ended June 30, 2024. The decrease is primarily attributed to the decrease in non-cash share-based compensation expenses.
Financing Income (expenses), Net. Financing income, net decreased from $15,503 of financing income for the six months ended June 30, 2023 to financing expenses, net of $7,585 for the six months ended June 30, 2024. The increase in financing expenses, net is mainly a result of currency exchange differences between the Dollar and the New Israeli Shekel.
Net Loss. As a result of the foregoing, our net loss for the six months ended June 30, 2024 was $2,549,765 compared to $4,017,898 for the six months ended June 30, 2023.
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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, 2024 and 2023, we had current assets of $383,566 and $448,604, respectively, and total assets of $10,360,869 and $10,535,250 respectively. We had current liabilities of $790,393 and 664,641 as of June 30, 2024 and 2023, respectively and total liabilities of $3,966,534 as compared to $3,815,403 as of June 30, 2024 and 2023, respectively.
At June 30, 2024, we had a cash balance of $125,807 compared to the cash balance of $267,151 as of June 30, 2023. We have no cash equivalents.
At June 30, 2024, we had a negative working capital of $406,827 as compared with a working capital deficiency of $216,037 at June 30, 2023.
Financial Support
In November 2022, we entered into an investment agreement with George Baumeohl, our director, pursuant to which Mr. Baumeohl has agreed to support our operation by way of an equity investment of up to $3 million through August 2025, as needed. The agreement provides for sales of our common stock to Mr. Baumeohl at per share purchase prices ranging between $0.0003 and $0.0005. As of the date of this report, we received an aggregate of $2,144,767 from Mr. Baumeohl. The Company and Mr. Baumeohl entered into an agreement as of August 14, 2024 pursuant to which all investments by Mr. Baumeohl during 2024 under the November 2022 investment agreement, which as of the date of this report aggregated to $919,767, will be priced at a per share purchase price of $0.0001, retroactive to such date.
Management believes that funds on hand, as well as the subscription proceeds that we are to receive on a periodic basis under the committed subscription agreements with our director, will enable us to fund our operations and capital expenditure requirements through the next twelve months. We are substantially dependent on the periodic investment by our director and any disruption of this arrangement will likely materially adversely affect our business.
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.
Critical Accounting Policies
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and consolidated statements of operations. Actual results may differ significantly from those estimates.
While our significant accounting policies are described in more detail in the notes to our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
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.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Interim Chief Executive Officer, 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 June 30, 2024. Based on that evaluation, our management, including our Chief Executive Officer, concluded that our disclosure controls and procedures were not effective as of June 30, 2024.
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, 2023, our management concluded that our internal control over financial reporting was not effective at December 31, 2023. 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. |
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 noted above, there have been no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 26 |
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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 seeks declaratory judgment to unwind the FSC transaction and cancel the shares of WHEN common stock issued in the FSC transaction that are still outstanding.
On or about, January 19, 2022, EL filed a lawsuit in the Delaware Court of Chancery seeking to remove the restrictive legend from all the shares of Common Stock held by EL (the “2022 Lawsuit”), which are approximately 23,000,000,000 shares. The Company is vigorously defending the 2022 Lawsuit, which is currently in the discovery. Trial is scheduled for May 5, 2025.
On June 24, 2022 the Company filed an amended complaint in Palm Beach County, Florida (CASE NO. 50-2020- CA-011735), alleging violation of Fla. Stat. 517.301, seeking declaratory relief with regard to the status of the shares held and transferred by EL, and seeking a temporary injunction with regard to the transfer of any subject shares.
The Florida Court dismissed the amended complaint based on the statute of limitations.
The Company intends to continue to vigorously pursue this action and avail itself of all options lawfully available to it.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not aware of any such legal proceedings or claims against us.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition, or future results.
ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
On November 1, 2022, we entered into an investment agreement with George Baumeohl, Company’s director, pursuant to which Mr. Baumeohl has agreed to support Company’s operation by way of an equity investment of up to $3 million, as needed.
| a. | On May 1, 2024 the Company received subscription proceeds of $150,000 under the investment agreement with Mr. Baumeohl in respect of which he is entitled to 1,500,000,000 shares of Common Stock which have not been issued as of the date of this report | |
| b. | On June 20, 2024 the Company received subscription proceeds of $150,000 under the investment agreement with Mr. Baumeohl in respect of which he is entitled to 1,500,000,000 shares of Common Stock which have not been issued as of the date of this report. | |
| c. | On August 13, 2024 the Company received subscription proceeds of $150,000 under the investment agreement with Mr. Baumeohl in respect of which he is entitled to 1,500,000,000 shares of Common Stock which have not been issued as of the date of this report. |
We relied upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”) by virtue of Section 4(a)(2) thereof and/or Regulation S promulgated by the SEC under the Act with respect to the issuance of such securities.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION:
(i)
During the fiscal quarter ended June 30, 2024, none of our directors or executive officers
(ii) On August 14, 2024, the Company, entered into and executed an agreement (the “Agreement”) with Terra Zone Ltd. (“Terrz Zone”), a company incorporated under the laws of Israel pursuant to which the Company purchased 448,029 ordinary shares of Terra Zone, representing 4% of the issued and outstanding shares of Terra Zome on a fully diluted basis immediately following the issuance, in consideration for the Company’s agreement to issue ot Terrz Zone 5,000,000,000 shares of the Company’s common stock. In addition, the parties agreed to a mutual option, exercisable by either of the parties through the second anniversary of closing, to acquire additional shares of the other. Under the mutual option, the Company is entitled to purchase an additional 446,697 ordinary shares of Terra Zone in consideration of the issuance by the Company of 5,208,338,520 shares common stock of the Company and Terra Zone is entitled to exercise the mutual option for the same number of the Company’s common stock.
Terra Zone is engaged in the cybsersecurity field. By integratingTerra Zone’s unique technology with WHEN’s advance mobile application, the parties intend to bring to market a endpoint security identity isolation sector, particularly in providing a robust Zero Trust Network Access (ZTNA) solution, tailored for the micro-segmentation industry. The combined offering is intended to enable organizations to precisely identify and isolate any entity—whether working remotely or within the corporate network—ensuring that only authorized users can access critical resources while remaining completely isolated from the broader network. Under the terms of the Terra Zone Agreement, the parties undertook to develop and commercialize the bundled product.
(iii) The Company and Mr. Baumeohl, a Company director, entered into an agreement as of August 14, 2024 pursuant to which all investments by Mr. Baumeohl during 2024 under the investment agreement between Mr. Barumeohl and Company which was enterd into in November 2022, which as of the date of this report aggregated to $919,767, will be priced at a per share purchase price of $0.0001, retroactive to January 1, 2024.
ITEM 6. EXHIBITS
Exhibit Index:
* Portions of this exhibit (indicated by bracketed asterisks) are omitted in accordance with the rules of the Securities and Exchange Commission because they are both not material and the Company customarily and actually treats such information as private or confidential.
+ Management Agreement
** Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| WORLD HEALTH ENERGY HOLDINGS, INC. | ||
| (Registrant) | ||
| By: | /s/ Giora Rozensweig | |
| Giora Rozensweig | ||
| Interim Chief Executive Officer | ||
(Principal Executive Officer and Principal Financial and Accounting Officer) |
||
| Date: | August 19, 2024 | |
| 29 |
Exhibit 10.3
ORDINARY SHARE PURCHASE AGREEMENT
THIS ORDINARY SHARE PURCHASE AGREEMENT (this “Agreement”) is made as of August 14, 2024, by and among Terra Zone Ltd., an Israeli company (the “Company”), and World Health Energy Holdings, Inc., a Delaware corporation listed on the OTC Markets under the ticker symbol WHEN (the “Investor”).
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company to raise capital by means of issuance to the Investor of the Company’s Ordinary Shares, nominal value NIS0.001 per share (the “Ordinary Shares”), as more fully set forth in this Agreement; and
WHEREAS, the Investor desires to purchase and the Company desires to issue and sell to the Investor the Ordinary Shares pursuant to the terms and conditions more fully set forth in this Agreement.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF ORDINARY SHARES.
1.1 Sale and Issuance of Shares. Subject to the satisfaction of the closing conditions set forth in Sections 4 and 5 hereof, at the Closing (as defined below), the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, for an aggregate purchase price of US$2,000,000, payable by the issuance of the Investor’s Common Stock refereed to below (the “Purchase Price”), an aggregate of 448,029 Ordinary Shares (the “Purchased Shares”) at a price per share equal to $4.4640, reflecting a post-money valuation of the Company, on a Fully-Diluted Basis (as defined below) immediately prior to Closing of US$50,000,000 and four (4%) percent of the Company’s outstanding voting share capital on a Fully-Diluted Basis immediately following the Closing.
The capitalization table of the Company, reflecting the issued and outstanding share capital of the Company on a Fully-Diluted Basis, immediately prior to Closing and immediately following the Closing, assuming the investment of the Purchase Price, is attached hereto as Exhibit A.
In this Agreement, “Fully-Diluted Basis” shall mean all issued and outstanding shares of the Company, including but not limited to (i) all Ordinary Shares; (ii) all securities convertible or exercisable into shares (being deemed so converted); (iii) all convertible investments, financings or loans (being deemed so converted); (iv) all options, warrants and other rights to acquire shares or other securities exercisable for shares (being deemed allocated and so exercised); (v) any adjustments of the number of issued shares triggered by or in connection with the transaction contemplated by this Agreement (if any), including anti-dilution adjustment; and (vi) a reservation for all shares, options or other equity awards, promised, reserved for and/or allocated to directors, officers, employees, consultants and service providers of the Company or its subsidiaries (being deemed issued, converted granted and/or exercised), but excluding the Company Option Shares (as defined below).
1.2 Closing. The consummation of the transactions contemplated hereby, including the purchase and sale of the Purchased Shares (the “Closing”) shall take place remotely via the exchange of documents and signatures, on the date hereof or at such other time and place as the Company and the Investor mutually agree upon (such designated time and place, the “Closing Date”). The Closing shall be subject to the conditions of Section 4 and 5 below, which conditions shall be deemed to take place simultaneously and no transaction described in such sections shall be deemed to have been completed or any document delivered until all such transactions have been completed and all such required documents delivered.
1.3 Ordinary Shares Reservation. On or prior to the Closing, the Company shall have authorized the sale and issuance to the Investor of the Purchased Shares, the grant of the Mutual Option (as defined below) and the reservation and issuance of Ordinary Shares to be issued upon exercise of the Mutual Option.
1.4 Closing Deliverables.
(a) At the Closing, the Company shall deliver to the Investor:
(i) True and correct copies of written resolutions, or minutes of a meeting, of the Board, approving and adopting in all respects the execution, delivery and performance by the Company of this Agreement and the transactions contemplated hereby, including, among others, (i) authorizing the issuance and sale of the Purchased Shares against payment of the purchase price therefor and the grant of the Mutual Option and the issuance of Ordinary Shares upon the exercise of the Mutual Option; (ii) reserving a sufficient number of Ordinary Shares to be issued upon exercise of the Mutual Option and (iii) the approval of the execution, delivery and performance by the Company of all agreements contemplated herein to which the Company is party and any agreements, instruments or documents ancillary thereto; all in the form attached hereto as Schedule 1.4(a)(i);
(ii) True and correct copies of written resolutions, or minutes of meeting, of the Company’s shareholders approving the increase of the authorized share capital of the Company, in the form attached hereto as Schedule 1.4(a)(ii);
(iii) Duly executed share certificates representing the respective Purchased Shares issued to the Investor at the Closing in the name of the Investor, in the form attached hereto as Schedule 1.4(a)(iii);
(iv) A copy of the register of shareholders of the Company, certified by an executive officer of the Company and prepared in accordance with Section 130 of the Companies Law, 5759–1999, as amended (the “Companies Law”), in which the Purchased Shares issued at the Closing are registered in the name of the Investor, in the form attached hereto as Schedule 1.4(a)(iv); and
(v) The Reseller Agreement and the Technology Cooperation Agreement (the “Commercial Agreements”) between the Company and Investor, in the forms attached hereto as Exhibit B and Exhibit C, respectively, duly executed by the Company.
(b) At the Closing, the Investor shall deliver to the Company:
(i) Any identification documents required for the purpose of making the filings required under Section 6.1 which have been requested by the Company or its counsel prior to Closing;
(ii) Evidence that the necessary corporate approvals on behalf of Investor to approve the transactions contemplated hereby, including the issuance of the Consideration Shares and the grant of the Mutual Option, have been duly obtained; and
(c) Within 10 days of the Closing,
(iii) the Investor shall deliver to the Company book entry statements reflecting the Consideration Shares
(iv) The Investor and the Company shall each have duly executed and delivered to the other the Reseller Agreement and the Technology Cooperation Agreement (the “Commercial Agreements”), substantially in the forms attached hereto as Exhibit B and Exhibit C, respectively, with such revisions as the parties shall agree to.
1.5 Purchase Price. At the Closing the Investor shall pay to the Company the Purchase Price by way of issuance of five billion (5,000,000,000) shares of common stock of Investor, par value $0.00001 (“Investor’s Common Stock”), which issuance shall hereinafter be referred to as the “Consideration Shares”.
1.6 Mutual Option.
(a) Effective as of the Closing (a) as further consideration for the Purchased Shares, the Company hereby grants the Investor an option, exercisable in the Investor’s sole discretion, to purchase up to additional 466,697 Ordinary Shares (the “Company Option Shares”), representing 4% of the then outstanding shares of the Company’s voting share capital immediately following the Closing and assuming the issuance of the Company Option Shares in consideration per Ordinary Share equal to the same number of shares of Investor’s Common Stock issued per Ordinary Share at Closing (the “Exchange Ratio”), and (b) as further consideration for the Consideration Shares, the Investor hereby grants to the Company an option to purchase up to 5,208,338,520 shares of Investor’s Common Stock (the “Investor Option Shares”) equal to the Consideration Shares issued at Closing, in consideration per share of Investor’s Common Stock calculated based on the Exchange Ratio (the “Mutual Option”). The option may be exercised on one occasion only.
(b) The Mutual Option shall be exercisable by either the Company or the Investor, as the case may be, by giving a written exercise notice to the other, until 5:00 pm Israel Time on the second anniversary of the Closing, provided that Mutual Option with respect to each party hereto shall terminate upon the earlier of the consummation of (a) a Deemed Liquidation of the other party or (b) with respect to Investor’s options to purchase the Company Options Shares, the consummation of an initial public offering of the Company in any jurisdiction (the “Company IPO”). A “Deemed Liquidation” of the Company or the Investor, as applicable shall mean each of the following events: (A) the merger or consolidation of such party with or into any other corporate entity; (B) a sale or other disposition, in a single transaction or series of related transactions, of all or of substantially all of the shares of such party, or (C) a sale, transfer, exclusive and substantially worldwide license, or other disposition of all or substantially all of the assets of such party and its subsidiaries taken as a whole, other than any such licenses granted in such party’s ordinary course of business; except, in case of sub-articles (A) and (B), any such transaction or series of related transactions in which the shareholders of such party as of immediately prior to such transaction continue to hold (solely by virtue of the respective shares and in the same holding proportions each of them held in such party as of immediately prior to such transaction) immediately following such transaction, at least a majority, by voting power, of the share capital of (1) the surviving, acquiring or resulting company or (2) if the surviving, acquiring or resulting company is a wholly owned subsidiary of another company immediately following such transaction, the parent company of such surviving, acquiring or resulting company.
For purposes of exercising the Mutual Option, the Company shall give written notice to the Investor of the Company’s intention to undertake an IPO and periodic progress thereon.
(c) Adjustments.
The number and kind of securities purchasable upon the exercise of the Mutual Option and the Exchange Ratio shall be subject to adjustment from time to time as follows:
(i) Stock Splits, Dividends and Combinations. If the shares subject to the Mutual Option shall be subdivided into a greater number of shares or a dividend or other distribution payable in additional shares shall be paid in respect of such, the Exchange Ratio in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares subject to the Mutual Option shall be combined into a smaller number of shares, the Exchange Ratio in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination be proportionately increased. When any adjustment is required to be made in the Exchange Ratio, the number of respective shares purchasable upon the exercise of the Mutual Option shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of the Mutual Option immediately prior to such adjustment, multiplied by the Exchange Ratio in effect immediately prior to such adjustment, by (ii) the Exchange Ratio in effect immediately after such adjustment.
(ii) Reclassification, Etc. In case of any reclassification or change of the outstanding securities of the Company or the Investor, as applicable, or of any reorganization of the Company or the Investor (or any other corporation the shares or securities of which are at the time receivable upon the exercise of the Mutual Option) or any similar corporate reorganization on or after the date hereof, then and in each such case the Company or Investor, as applicable, upon the exercise hereof at any time after the consummation of such reclassification, change, reorganization, merger or conveyance, shall be entitled to receive, in lieu of the shares or other securities and property receivable upon the exercise hereof prior to such consummation, the shares or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised the Mutual Option immediately prior thereto, all subject to further adjustment as provided in this Section (c); and in each such case, the terms of this Section (c) shall be applicable to the shares or other securities properly receivable upon the exercise of the Mutual Option after such consummation.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Investor that, the following representations are true, correct and complete as of the date hereof and as of the Closing (as if made on the Closing Date); except, in each case, as to such representations and warranties that address matters as of a particular date, which are true, correct and complete only as of such date.
2.1 Organization. The Company is a company duly organized and validly existing under the laws of the State of Israel, is not a “breaching company” (within the meaning of Section 362.A of the Israeli Companies Law) and has all requisite corporate power and authority to carry on its business as currently conducted.
2.2 Authorization. All corporate action on the part of the Company, its directors and shareholders, necessary for the authorization, execution and delivery of this Agreement, the Commercial Agreements and the other agreements, instruments or documents entered into in connection with this Agreement and to which the Company is a party (collectively, the “Transaction Documents”) and for the performance of all obligations of the Company under the Transaction Documents in accordance with their terms has been taken or will be taken prior to the Closing. The Transaction Documents, when executed and delivered by the Company, and assuming the due authorization, execution and delivery by the other parties hereto and thereto, constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
2.3 Valid Issuance of Shares. The Purchased Shares and the Company Option Shares issued upon the exercise of the Mutual Option being or that may be issued to the Investor hereunder (collectively, the “Company Purchased Securities”), when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, shall be duly and validly issued, fully paid, and non-assessable, issued in compliance with all applicable state securities laws, and free and clear of liens, pledges, charges, encumbrances or other restrictions on transfer of any kind (including, without limitation, preemptive rights), other than restrictions on transfer under this Agreement, the Company’s Articles of Association and under applicable securities laws and other than liens or encumbrances created by or imposed on the Investor. The offer, sale and issuance of the Company Purchased Securities constitute transactions exempted from the registration requirements of the Securities Act of 1933 (the “Securities Act”) and the Israeli Securities Law, 1968, as amended. The Company Option Shares have been duly reserved for issuance.
2.4 No Conflict; Consents. The execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated by the Transaction Documents do not and will not (a) result in any conflict with, or a breach or violation, with or without the passage of time and giving of notice, of any of the terms, conditions or provisions of, or give rise to rights to others (including rights of termination, cancellation or acceleration) under: (i) the Company’s Articles of Association, as in effect prior to the Closing; (ii) any judgment, injunction, order, writ, decree or ruling of any court or governmental authority, domestic or foreign, to which the Company is subject; (iii) any material contract or agreement, lease, license or commitment to which the Company is a party or by which it is bound; or (iv) any applicable law; (b) result in the creation of any lien, charge or encumbrance upon any asset of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company; or (c) require the consent, approval or authorization of, registration, qualification or filing with, or notice to any person or any federal, state, local or foreign governmental authority or regulatory authority or agency, on the part of the Company, which has not heretofore been obtained or made or will be obtained or made prior to Closing.
2.5 Purchase Entirely for Own Account. The Investor Purchased Securities will be acquired for investment for the Company’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Company has no present intention of selling, granting any participation in, or otherwise distributing the same. The Company does not presently have any contract, undertaking, agreement or arrangement to sell, transfer or grant participation rights to any person with respect to any of the Investor Purchased Securities. The Company has not been formed for the specific purpose of acquiring the Investor Purchased Securities.
2.6 Disclosure of Information. The Company acknowledges that it has had an opportunity to review the filings made by the Investor with the Securities and Exchange Commission (the “SEC”), including without limitation “Risk Factors” in the Investor’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on April 15, 2024. The Company has had an opportunity to discuss the Company’s business, operations, properties, prospects, technology, plans, management, financial affairs and the terms and conditions of the offering of the Investor Purchased Securities with the Investor’s management and has had an opportunity to review the Investor’s facilities. The foregoing, however, does not limit, modify or qualify the representations and warranties of the Investor in Section 3 of this Agreement or the right of the Company to rely thereon. The Company acknowledges that any projections provided (if any) by the Investor are uncertain in nature, and that some or all of the assumptions underlying such projections may not materialize or will vary significantly from actual results.
2.7 Investment Experience. The Company acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating and understanding the merits and risks of the investment in the Investor Purchased Securities.
2.8 Restricted Securities. The Investor Purchased Securities have not been and will not be registered under the Securities Act or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. The Company is aware that, except as set forth in this Agreement, the Investor is under no obligation to effect any such registration or to file for or comply with any exemption from registration. The sale and issuance of the Investor Purchased Securities have not been registered under the Securities Act by reason of a specific exemption from registration which depends upon, among other things, the accuracy of the Company’s representations as expressed herein.
2.9 General Solicitation. The Company is not purchasing the Investor Purchased Securities as a result of any advertisement, article, notice or other communication regarding the Investor Purchased Securities published in any newspaper, magazine or similar media or broadcast or presented at any seminar or other general advertisement.
2.10 Brokers and Finders. The Company has not taken any action that would give rise to any claim by any person for brokerage commissions, finders’ fee or the like relating to this Agreement or the transactions contemplated hereby. No person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.
2.11 Legends. The Investor Purchased Securities, and (if applicable) any securities issued in respect of or exchange for the foregoing may be notated with the following or a similar legend as well as other legends as may be required by applicable securities laws:
2.12 “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER OF SUCH SHARES MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
The Investor hereby represents and warrants to the Company that the following representations are true, correct and complete as of the date hereof and as of the Closing (as if made on the Closing Date); except, in each case, as to such representations and warranties that address matters as of a particular date, which are given only as of such date:
3.1 Authorization; Organization. The Investor is duly organized, validly existing and, if applicable, in good standing under the laws of the jurisdiction in which it has been incorporated and has full power and authority to enter into the Transaction Documents. The Transaction Documents, when executed and delivered by the Investor, and assuming the due authorization, execution and delivery by the other parties hereto and thereto, constitute valid and binding obligations of the Investor, enforceable against the Investor in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
3.2 No Conflict; Consents. The execution, delivery and performance by the Investor of the Transaction Documents and the consummation of the transactions contemplated by such Transaction Documents do not and will not (a) result in any conflict with, or a breach or violation, with or without the passage of time and giving of notice, of any of the terms, conditions or provisions of, or give rise to rights to others (including rights of termination, cancellation or acceleration) under: (i) the governing documents of the Investor; (ii) any judgment, injunction, order, writ, decree or ruling of any court or governmental authority, domestic or foreign, to which the Investor is subject; (iii) any material contract or agreement, lease, license or commitment to which the Investor is a party or by which it is bound; (iv) any applicable law; or (b) require the consent, approval or authorization of, registration, qualification or filing with, or notice to any person or any federal, state, local or foreign governmental authority or regulatory authority or agency, on the part of the Investor, which has not heretofore been obtained or made or will be obtained or made prior to Closing.
3.3 Valid Issuance of Shares. The Consideration Shares and the Investor Option Shares issued upon the exercise of the Mutual Option being or that may be issued to the Company hereunder (collectively, the “Investor Purchased Securities”), when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, shall be duly and validly issued, fully paid, and non-assessable, issued in compliance with all applicable state securities laws, and free and clear of liens, pledges, charges, encumbrances or other restrictions on transfer of any kind (including, without limitation, preemptive rights), other than restrictions on transfer under this Agreement, the Investor’s Certificate of Incorporation and under applicable securities laws and other than liens or encumbrances created by or imposed on the Company. The offer, sale and issuance of the Investor Purchased Securities constitute transactions exempted from the registration requirements of the Securities Act and the Israeli Securities Law, 1968, as amended. The shares of Investor’s Common Stock issuable upon exercise of the Mutual Option have been duly reserved for issuance.
3.4 Purchase Entirely for Own Account. The Company Purchased Securities will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor does not presently have any contract, undertaking, agreement or arrangement to sell, transfer or grant participation rights to any person with respect to any of the Company Purchased Securities. The Investor has not been formed for the specific purpose of acquiring the Company Purchased Securities.
3.5 Disclosure of Information. The Investor has had an opportunity to discuss the Company’s business, operations, properties, prospects, technology, plans, management, financial affairs and the terms and conditions of the offering of the Company Purchased Securities with the Company’s management and has had an opportunity to review the Company’s facilities. The foregoing, however, does not limit, modify or qualify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Investor to rely thereon. The Investor acknowledges that any projections provided (if any) by the Company are uncertain in nature, and that some or all of the assumptions underlying such projections may not materialize or will vary significantly from actual results.
3.6 Investment Experience. The Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating and understanding the merits and risks of the investment in the Company Purchased Securities. The issuance of the Company Purchased Securities to the Investor is a transaction exempt from securities registration afforded by Section 4(a)(2) of the Securities Act.
3.7 Restricted Securities. The Company Purchased Securities have not been and will not be registered under the Securities Act or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. Investor is aware that the Company is under no obligation to effect any such registration or to file for or comply with any exemption from registration. The sale and issuance of the Company Purchased Securities have not been registered under the Securities Act by reason of a specific exemption from registration which depends upon, among other things, the accuracy of the Investor’s representations as expressed herein.
3.8 Brokers and Finders. The Investor has not taken any action that would give rise to any claim by any person for brokerage commissions, finders’ fee or the like relating to this Agreement or the transactions contemplated hereby. No person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Investor.
3.9 Legends. The Company Purchased Securities, and (if applicable) any securities issued in respect of or exchange for the foregoing may be notated with the following or a similar legend as well as other legends as may be required by applicable securities laws: “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER OF SUCH SHARES MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”
4. CONDITIONS OF INVESTOR’S OBLIGATIONS AT CLOSING.
The obligations of the Investor to purchase the Purchased Shares at the Closing are subject to the fulfillment on or before the Closing of each of the following conditions, unless otherwise waived in writing by the Investor:
4.1 Representations and Warranties. The representations and warranties of the Company shall have been true in all respects on and as if made as of the Closing.
4.2 Performance. The Company shall have performed and complied, in all material respects, with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.
4.3 Delivery of Documents. All of the documents to be delivered by the Company pursuant to Section 1.4, shall have been in a form as attached to this Agreement, or, if not attached, in a form and substance satisfactory to the Investor and shall have been delivered to the Investor.
5. CONDITIONS OF THE COMPANY’S OBLIGATIONS AT CLOSING.
The obligations of the Company to the Investor at the Closing under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, unless otherwise waived in writing by the Company:
5.1 Representations and Warranties. The representations and warranties contained in Section 3 shall have been true in all respects on and as if made as of the Closing.
5.2 Performance. The Investor shall have performed and complied, in all material respects, with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.
5.3 Delivery of Documents. All of the documents to be delivered by the Investor pursuant to Section 1.4, shall have been in a form as attached to this Agreement, or, if not attached, in a form and substance satisfactory to the Company and shall have been delivered to the Company.
6. AFFIRMATIVE COVENANTS BY THE PARTIES.
6.1 Filing with the Israeli Registrar of Companies. As soon as possible following the Closing, and in any event no later than 14 days following the Closing, the Company shall file all required notices with the Israeli Registrar of Companies as are required for all matters arising from this Agreement and the transactions contemplated hereby (including, of the issuance of the Purchased Shares at the Closing and increase of the authorized share capital.
6.2 Removal of Transfer Restrictions. Following the Closing, until such time as the Company is entitled to have the restrictive legend on the Investor Purchased Securities removed under Rule 144 under the Securities Act (“Rule 144”) and is able to sell all of the Investor Purchased Securities received under this Agreement without any limitations under Rule 144, Investor agrees that it shall use its commercially practicable best efforts to file the reports required to be filed by it in accordance with Rule 144(c)(1) (or, if Investor is not required to file such reports, it will, upon the request of any Company, use its commercially practicable best efforts to make publicly available the information specified by Rule 144(c)(2) as may be required for resale by the Company of the Investor Purchased Securities in reliance on Rule 144, if applicable). Investor agrees to use its commercially practicable best efforts, subject to Rule 144, to (i) cause the Investor’s transfer agent (the “Investor Transfer Agent”) to remove the legend set forth in Section 2.11 above from the Investor Purchased Securities and any other restrictive annotation or stop transfer restrictions, if applicable, and (ii) if applicable, cause its legal counsel to deliver any necessary legal opinions to the Investor Transfer Agent in connection with the preceding clause (i).
7. MISCELLANEOUS.
7.1 Further Assurances. Each of the parties hereto shall perform such further acts and execute such further documents as may reasonably be necessary to carry out and give full effect to the provisions of this Agreement and the intentions of the parties as reflected thereby.
7.2 Entire Agreement. This Agreement (including the exhibits and schedules hereto) and the other Transaction Documents constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and supersede all prior agreements and understandings, both written and oral, among any of the parties hereto, with respect to the subject matter hereof (with no concession being made as to the existence of any such prior agreements or understandings).
7.3 Amendment; Waiver. Except as explicitly set forth herein, any term of this Agreement may be amended only with the written consent of the Company and the Investor. The observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a particular instance) only by the prior written consent of the party against which enforcement of such waiver shall be sought.
7.4 Assignment; Successors and Assigns. None of the rights, privileges or obligations set forth in, arising under, or created by this Agreement may be assigned or transferred by any party to this Agreement, without the prior written consent of the other party.
7.5 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Israel, disregarding its conflict of laws rules. Any dispute arising under or in relation to this Agreement shall be resolved exclusively in the competent court located in Tel Aviv-Jaffa, Israel and each of the parties hereby irrevocably submits to the exclusive jurisdiction of such court. Each of the parties hereto (i) consents to submit itself to the exclusive jurisdiction of the abovementioned courts in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (ii) agrees that it shall not attempt to deny or defeat such jurisdiction by motion or other request for leave from the abovementioned court, (iii) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the abovementioned court, and (iv) irrevocably consents to service of process in the manner provided by Section 7.6 or as otherwise provided by applicable law.
7.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt, or (i) when delivered, if sent by personal delivery to the party to be notified, (ii) when sent, if sent by electronic mail (with electronic conformation of delivery) on a business day and during normal business hours of the recipient, and otherwise on the first business day in the place of recipient, (iii) five (5) business days after having been sent, if sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) business day after deposit with an internationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written confirmation of receipt. All communications shall be sent to the respective parties at their address or contact details as set forth below, or to such address or contact details as subsequently modified by written notice given in accordance with this Section 7.6, or, in the case of the Investor, as used for purposes of sending shareholders’ notices by the Company.
| If to the Company: | 8 Abba Eban blvd, Herzliya Israel Attention: Amir Mizhar E-mail: amir.mizhar@terrazone.io |
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| with a mandatory copy to (which shall not constitute a notice): | ||
Meitar, Law Offices 16 Abba Hillel Rd., Ramat Gan, Israel Attention: Noam Tzur, Adv. Telephone: 03-6103100 E-mail: noamt@meitar.com
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| If to the Investor: | as set forth on the signature page hereto |
7.7 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.
7.8 Interpretation. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless the context requires otherwise, the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety, and not to any particular provision hereof, and all references herein to Sections shall be construed to refer to Sections to this Agreement. Reference to “governmental authorities” (or similar terms) shall include any: (a) nation, principality, state, commonwealth, territory, county, municipality, district or other jurisdiction of any nature, (b) federal, state, local, municipal, foreign or other government, (c) governmental, quasi-governmental or regulatory body of any nature, including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, organization, unit, or body or any governmental official, or (d) court, public or private arbitrator or other public tribunal. Reference to a “person” shall mean any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, estate, unincorporated organization, governmental authority or other entity, including, any party to this Agreement. Any reference to a “day” or a number of days (without explicit reference to “business days”) shall be interpreted as a reference to a calendar day or number of calendar days, and if any action is to be taken or given on or by a particular calendar day, and such calendar day is not a business day, then such action may be deferred until the first business day thereafter (where “business day” shall mean any day on which banking institutions in Tel-Aviv-Jaffa, Israel are generally open to the public for conducting business and are not required by law to close). For the purposes of this Agreement, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person, or such person and its affiliates (including persons the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts indicated herein.
7.9 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be enforceable in accordance with its terms and interpreted so as to give effect, to the fullest extent consistent with and permitted by applicable law, to the meaning and intention of the excluded provision.
7.10 Counterparts. This Agreement and any Transaction Document may be executed in one or more counterparts, all of which together shall constitute one and the same instrument, binding and enforceable against the parties so executing the same; it being understood that all parties need not sign the same counterpart. Counterparts may also be delivered by email transmission (in pdf format or the like, or signed with docusign, e-sign or any similar form of signature by electronic means) and any counterpart so delivered shall be sufficient to bind the parties to this Agreement or any other Transaction Document, as an original.
- Signature Pages Follow -
IN WITNESS WHEREOF, the parties have executed this ORDINARY SHARE PURCHASE AGREEMENT to be executed as of the date first written above.
| COMPANY: | ||
| TERRA ZONE LTD. | ||
By: |
/s/ Amir Mizhar | |
| Name: | ||
| Title: | CEO | |
IN WITNESS WHEREOF, the parties have executed this ORDIANRY SHARE PURCHASE AGREEMENT as of the date first written above.
| INVESTOR: | ||
| WORLD HEALTH ENERGY HOLDINGS, INC. | ||
| By: | /s/ Giora Rozensweig | |
| Name: | Giora Rozensweig | |
| Title: | CEO | |
| Address: | 1825 NW Corporate Blvd Suite 110, Boca Raton, Florida 33431 | |
Exhibit 10.4
TECHNOLOGY COOPERATION AGREEMENT
This TECHNOLOGY COOPERATION AGREEMENT (“Agreement”) is entered into as of August 14 2024 (“Effective Date”) by and between World Health Energy Holdings, Inc., a Delaware corporation with offices at 1825 NW Corporate Blvd Suite 110, Boca Raton, Florida 33431 (“When”) and TerraZone Ltd., an Israeli company with offices at 8 Aba Even Blvd. Herzliya 4672526, Israel (“TerraZone”) (each, a “Party” and collectively, the “Parties”).
R E C I T A L S
WHEREAS, each Party develops, markets and sells subscriptions to its own Platform (as defined below); and WHEREAS, the Parties wish to create interoperable versions of their Platforms that would be marketed as two independent, yet interoperable, parts of one Bundled Solution (as defined below).
NOW, THEREFORE, intending to be legally bound, the Parties agree as follows:
| 1. | DEFINITIONS |
| 1.1. | “Affiliate” with respect to a party, means a corporation, partnership or other entity controlling, controlled by or under common control with such party, but only so long as such control continues to exist. For purposes of this definition, “control” means ownership, directly or indirectly, of more than fifty percent (50%) of the voting rights in such entity (or, in the case of a noncorporate entity, equivalent rights). |
| 1.2. | “As Revised” means including, without limitation, any improvements and derivative works thereof. |
| 1.3. | “Bundled Solution” means the security solution comprising the TerraZone Solution and the When Solution. |
| 1.4. | “Solution” means, in reference to a Party, that Party’s Solution. |
| 1.5. | “Product” means, in reference to a Party, that Party’s Platform and/or Solution. |
| 1.6. | “TerraZone Platform” means TerraZone computer security platform and documentation (As Revised). |
| 1.7. | “TerraZone Solution” means a version of the TerraZone Platform, available as a downloadable computer app, adapted to interoperate with the When Solution (As Revised). |
| 1.8. | “When Platform” means When mobile security platform and documentation (As Revised). |
| 1.9. | “When Solution” means a version of the When Platform, available as a downloadable mobile app, adapted to interoperate with the TerraZone Solution (As Revised). |
| 2. | SCOPE OF THE AGREEMENT |
| 2.1. | Interoperability plan. The Parties wish to achieve interoperability between their Platforms. To this end, TerraZone shall create the TerraZone Solution, and When Shall create the When Solution. The Parties will cooperate as reasonably required so that their Solutions interoperate, as described in the interoperability plan and associated timeline (“Interoperability Plan”) in Exhibit A. The Interoperability Plan shall conclude successfully once each Party sends the other a notice attesting to its determination of successful interoperability and to its intent to move forward (“Notice of Success”). |
| 2.2. | Commercialization. Once each Party sends a Notice of Success to the other, the Parties shall commercialize the Bundled Solution under the terms specified in Exhibit B. |
| 2.3. | Interoperability of new releases. If either Party releases a new version of its Solution, it shall be responsible for testing it and verifying its interoperability with the Solution of the other Party prior to release. In such cases, the other Party shall provide as much technical assistance, and allocate as many resources, as are reasonably needed for that purpose. |
| 1 |
| 2.4. | Subcontractors. Either Party may engage subcontractors to perform its obligations under this Agreement provided that each Party remains fully responsible and liable for the performance of its subcontractors. Each Party shall bind its subcontractors to terms and conditions necessary to ensure such subcontractor’s compliance with the duties and obligations in this Agreement including, but not limited to, with respect to intellectual property rights and confidentiality. |
| 2.5. | Support, Hosting and Maintenance: each Party, at its own cost and expense, shall be responsible, with respect to its Solution, to: |
| 2.5.1. | host it, |
| 2.5.2. | provide customer support for it, provided, that if one Party’s customer service determines that the source of a problem is the other Party’s Solution, it shall inform the end-user to contact the other Party’s customer support. Notwithstanding the foregoing, the Parties shall work together to resolve any interoperability issue identified by joint customers; and |
| 2.5.3. | revise, update and upgrade it, including the fixing of bugs and security weaknesses. |
| 2.6. | Marketing and publicity: unless otherwise agreed by the Parties in writing, each Party shall be free to market and advertise the Bundled Solution as it sees fit (subject to the terms of this Agreement, including the commercialization terms in Exhibit B, and to using the Registry) at its own cost and expense, provided that (i) such Party shall refrain from making any representations, warranties, or guarantees to customers (and other third parties) regarding the other Party’s Solution that are inconsistent with or in addition to those stated in this Agreement or any marketing plan agreed by the Parties, and (ii) obtain prior written approval from the other Party for all publicity concerning the other Party and/or activities related to this Agreement, including but not limited to public announcements, press releases, marketing statements and materials, postings, or other advertising or public relations activities. |
| 3. | GRANT |
| 3.1. | License by When. Subject to the terms of this Agreement, When hereby grants TerraZone and its Affiliates a non-exclusive, non-transferable, non-sub-licensable, irrevocable (solely during the Term), limited, royalty-bearing license, during the Term of this Agreement, to (i) use the When Platform and the When Solution internally for the purpose of making the TerraZone Solution interoperable with the When Solution, and (ii) to copy, sell, offer to sell, market and distribute the When Solution as part of marketing and commercializing the Bundled Solution to clients. |
| 3.2. | License by TerraZone. Subject to the terms of this Agreement, TerraZone hereby grants When and its Affiliates a non-exclusive, non-transferable, non-sub-licensable, irrevocable (solely during the Term), limited, royalty-bearing license, during the Term of this Agreement, to (i) use the TerraZone Platform and the TerraZone Solution internally for the purpose of making the When Solution interoperable with the TerraZone Solution, and (ii) to copy, sell, offer to sell, market and distribute the TerraZone Solution as part of marketing and commercializing the Bundled Solution to clients. |
| 3.3. | Non-licensed uses prohibited. Neither Party shall use the other Party’s Product in any way other than strictly authorized under the terms of the limited license in this Section 3. Without limiting the generality of the foregoing, neither Party will, nor allow others to, without the other Party’s prior written consent: (a) use the other Party’s Product in any manner not authorized by that Product’s documentation or applicable laws, (b) license or otherwise distribute the other Party’s Product to third parties, (c) modify or otherwise create derivative works of the other Party’s Product; (d) reverse engineer, disassemble, decompile or otherwise attempt to reveal or extract internal or underlying elements from the other Party’s Product; or (e) remove, modify, or conceal any trademark or other indication of source off the other Party’s Product. |
| 2 |
| 3.4. | All rights reserved. Any rights not expressly granted herein are deemed reserved and neither Party shall make any other use of the other Party’s Product other than as expressly permitted in this Agreement. |
| 4. | INTELLECTUAL PROPERTY RIGHTS |
| 4.1. | Background IP. Each Party owns solely and exclusively all right, title and interest relating to any and all of that Party’s IP (as defined below), including, but not limited to, to that Party’s Platform, created prior to the Effective Date, and any other IP conceived, developed and/or registered by such Party, during the Term (as the term is defined below) or thereafter, independent of this Agreement. |
| 4.2. | Foreground IP. Each Party shall own wholly, solely and exclusively, all right, title and interest in any revision, adaptation, improvement, and any other derivative work of its Platform, including, without limitation, that Party’s Solution (“Foreground IP”). |
| 4.3. | No Joint IP. For the sake of clarity, this Agreement does not create any joint IP, and the Parties are not co-authors. The Bundled Solution consists of the Parties’ two independent Solutions, each owned wholly, solely and exclusively by the respective Party. Each Party waives any and all rights and claims to the other Party’s Solution, and affirms, declares, warrants and represents that it has no right, title and interest in and to the other Party’s Solution. Neither Party shall be allowed to market the Bundled Solution after the expiration or termination of this Agreement. |
| 4.4. | Feedback. As part of the Parties’ performance under this Agreement, or in relation thereto, each Party may provide to the other Party feedback, such as in the form of comments, suggestions, thoughts, observations, lines of code for interoperability, and/or questions regarding the other Party’s Foreground IP (“Feedback”). Each Party hereby grants to the other party a non-exclusive, irrevocable, royalty-free, perpetual, worldwide license to make any use that the Feedback-receiving Party wishes to make of the Feedback for any purpose whatsoever, and waives any and all moral rights that it may have in respect thereto. It is further understood that use of Feedback, if any, may be made by the Feedback-receiving Party at its sole discretion, without any duty to compensate, reward or acknowledge the Feedback-providing Party in any way. |
| 4.5. | No Transfer. Except for the limited licenses explicitly noted in Sections 3.1, 3.2 and 4.3 (Feedback), this Agreement does not transfer any IP from one Party to the other. |
| 4.6. | “Intellectual Property Rights” or “IP” means all rights of the following types, which may exist or be created under the laws of any jurisdiction in the world: (a) rights related to expressive works of authorship, including, e.g., any copyrights, moral rights, and mask works; (b) rights related to valuable information that is not generally and publicly known, including, e.g., any trade secrets, know-how, data of any kind whatsoever, techniques, methods, ideas, concepts, procedures, formulas, designs, processes, and database rights; (c) rights related to inventions, including, e.g., any patents, discoveries, processes, machines, manufactures and compositions of matter; (d) rights related to designation of origin and/or source, including, e.g., rights in reputation and/or goodwill, trademarks, service marks, trade dress, and trade names, (e) any other proprietary rights in intellectual property of every kind and nature, including economic and beneficial rights and interests and rights to control and/or commercial exploitation of a person’s name, image and likeness; and (f) all registrations, renewals, extensions, continuations, divisions, or reissues of, and applications for, any of the above rights; provided, that the aforementioned shall include (i) any improvement to, and/or derivatives of, any of the above, (ii) such rights, regardless of whether they are protectible under extant intellectual property laws, registered, registrable, or not, and (iii) such rights, regardless of whether their source is proprietary, contractual or other. |
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| 5. | TRADEMARKS |
| 5.1. | Limited license. Subject to the terms of this Agreement, each Party grants the other Party a limited, revocable, non-exclusive, non-transferable, non-sublicensable and royalty-free license for the Term of this Agreement to use that Party’s trademarks, service marks, trade dress, trade names and/or logos (“Trademarks”) solely to display them in the course of providing the Bundled Solution, and/or to advertise the interoperability between the Parties’ Solutions, provided any use of such Trademarks shall be (i) subject to the limitations set forth in Section 2.6 (Marketing and Publicity), and (ii) in accordance with the guidelines of the Party owning the relevant Trademarks. |
| 5.2. | All rights reserved. Each Party maintains exclusive title to its Trademarks and retains all rights not explicitly licensed in this Agreement. Neither Party will: (i) challenge or take any action which interferes with the other Party’s rights in its Trademarks; (ii) directly or indirectly use any Trademarks or any mark or name confusingly similar to any Trademarks of the other Party, as part of its business names or in any manner except as explicitly authorized by the other Party; (iii) register or attempt to register any trademark, any part of trademark, or any mark or name confusingly similar to any the other Party’s Trademarks. Each Party shall have the right to object to and thereby prohibit the use of its Trademarks on any products and services, or in any materials, at any time in its sole discretion. Each Party shall follow the other Party’s policies regarding the use of that other Party’s Trademarks. Either Party may terminate its Trademarks license if, in its reasonable discretion, the other Party’s use of one or more of its Trademarks is likely to cause trademark infringement, trademark dilution or false advertising. |
| 6. | CONFIDENTIALITY |
| 6.1. | Confidential Information. Each Party and its Affiliates may have access to non-public information of the other Party or its Affiliates, in any form or media, including without limitation, trade secrets and other information related to the products, software, technology, intellectual property, testing results, data, know-how, or business of the other Party, and any other information that a reasonable person should have reason to believe is proprietary, confidential, privileged, or competitively sensitive (the “Confidential Information”). The receiving Party’s obligations under this Section, with respect to any Confidential Information of the disclosing Party, shall not apply to and/or shall terminate if such information: (a) was already lawfully known to the receiving Party at the time of disclosure by the disclosing Party; (b) was disclosed to the receiving Party by a third party who had the right to make such disclosure without any confidentiality restrictions; (c) is, or through no fault of the receiving Party has become, generally available to the public; or (d) was independently developed by the receiving Party without access to, or use of, the disclosing party’s Confidential Information. |
| 6.2. | Standard of care regarding Confidential Information. The receiving Party will use the same standard of care to protect the disclosing Party’s Confidential Information as it uses to protect its own Confidential Information, but no less than reasonable care. Neither Party shall use or disclose the Confidential Information of the other Party except for as reasonably necessary for performance of its obligations under this Agreement. The receiving Party shall only permit access to the disclosing Party’s Confidential Information to its and/or its Affiliates’ respective employees, consultants, and subcontractors having a need to know such information, and who are bound by at least equivalent obligations of confidentiality and non-disclosure as those under this Agreement (such recipients being “Authorized Recipients”). The receiving Party is responsible for the compliance of its Authorized Recipients with the confidentiality and non-disclosure obligations of this Agreement. The receiving Party will be allowed to disclose Confidential Information to the extent that such disclosure is required by law or by the order or a court of similar judicial or administrative body, provided that, to the extent permitted by applicable law, it notifies the disclosing Party of such required disclosure to enable disclosing Party to seek a protective order or otherwise prevent or restrict such disclosure. Notwithstanding the foregoing, each Party can disclose the terms and existence of this Agreement to third parties in connection with a due diligence subject to such third parties being bound by at least equivalent obligations of confidentiality and non-disclosure as those under this Agreement. |
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| 6.3. | Duties to return and purge. Unless otherwise agreed by the Parties, upon (a) the disclosing Party’s request (but only if such Confidential Information is not required to exercise a right or perform an obligation under this Agreement); or, (b) in any event, termination or expiration of this Agreement, each Party will return or destroy (and certify such destruction upon request of the disclosing party) the Confidential Information of the other Party, and all copies thereof, in its possession or control, except such Confidential Information as is necessary to continue exercising any rights that survive termination or expiration of this Agreement or as otherwise required to comply with applicable laws. The obligation to return or destroy all copies of Confidential Information does not extend to automatically generated copies which may still exists on servers and back-ups for a reasonable period in line with industry standards provided that the receiving Party shall make no further use of those copies and that the confidentiality obligations herein shall continue to apply until the Confidential Information is fully destroyed. |
| 6.4. | All rights reserved, no transfer. All Confidential Information and any derivatives thereof are and shall remain the exclusive property of the disclosing Party and no rights, interests or license, are granted or implied hereby to have been granted to the receiving Party. Each Party acknowledges and agrees that its products and services contain proprietary information and trade secrets of the owner of the products and services. Each Party will not use any Confidential Information that it gains through use or study of the other’s products and services to facilitate its or any third party’s development of any software programs or other products that would compete with the other’s products and services. Notwithstanding the foregoing, each Party hereby acknowledges and agrees that the other party may currently or in the future be developing information internally, or receiving information from other parties, that is similar to the Confidential Information of the disclosing Party. Accordingly, nothing in this Agreement will be construed as a representation or agreement that either Party will not develop or have developed products, services, concepts, systems or techniques that are similar to or compete with the products, concepts, systems or techniques contemplated by or embodied in the Confidential Information, provided that the receiving Party does not violate any of its obligations under this Agreement in connection with such development. |
| 6.5. | Right to injunctive relief. Each Party acknowledges that a breach by the other Party of any confidentiality or proprietary rights provision of this Agreement may cause the non-breaching party irreparable damage, for which the award of damages would not be adequate compensation. Consequently, the non-breaching party may seek an action to enjoin the breaching party from any and all acts in violation of those provisions, which remedy shall be cumulative and not exclusive, and a Party may seek the entry of an injunction enjoining any breach or threatened breach of those provisions, in addition to any other relief to which the non-breaching party may be entitled at law or in equity. |
| 7. | INDEMNIFICATION |
| 7.1. | Indemnity. Each Party (“Indemnifying Party”) will indemnify, defend and hold harmless the other Party, its Affiliates, directors and employees (collectively “Indemnified Party”) from any and all third party claims, demands, liabilities, losses, damages, and all related costs and expenses (including reasonable costs and attorney’s fees) (collectively, “Claims”) arising from, in connection with, or based on, the Indemnifying Party’s (i) performance under this Agreement or in connection therewith, (ii) breach of this Agreement, (iii) breach of any representations, warranties, promises and covenants under this Agreement, and/or based on Claims that the Indemnified Party’s use of the Indemnifying Party’s Solution as authorized by this Agreement (for example, as part of the Bundled Solution) violates, misappropriates or infringes upon the IP of a third party (“IP Claims”). |
| 7.2. | Indemnification conditions. The Indemnified Party shall (i) give the Indemnifying Party written notification of the Claims for which it intends to seek indemnification promptly after becoming aware of them; (ii) allow the Indemnifying Party sole control of the Claims, provided that the Indemnifying Party shall make no admission of fact, fault or liability, and will not settle the Claims without the Indemnified Party’s prior written consent, which shall not be unreasonably withheld or delayed; and (iii) shall give the Indemnifying Party all reasonable assistance in connection with the associated negotiations, settlement and/or litigation. |
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| 7.3. | Limitation of indemnity for IP Claims. Notwithstanding the foregoing, the (would-be) Indemnifying Party will have no obligation under this section or otherwise with respect to any IP Claims to the extent based upon: (i) any use of the other Party’s Solution not in accordance with this Agreement or the relevant documentation; (ii) any use of the other Party’s Solution in combination with other products, hardware, equipment, software, or data not authorized in writing by such (would-be) Indemnifying Party to be used with the Bundled Solution; or (iii) any modification of the other Party’s Solution by any person other than the other Party or its authorized agents or subcontractors. |
| 8. | LIMITATION OF LIABILITY |
| 8.1. | NON-DIRECT DAMAGES. NEITHER PARTY AND/OR ITS AFFILIATES SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES (OR ANY DAMAGES SIMILAR TO THOSE), of any kind or nature (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS of ANY OF THE FOLLOWING: use, BUSINESS, PROFITS OR DATA) RELATING TO THIS aGREEMENT, whether such liability is asserted on the basis of contract, tort (including negligence or strict liability) or otherwise, even if that Party has been advised of the possibility of such loss or damages. |
| 8.2. | DAMAGES CAP. EACH PARTY’S TOTAL AGGREGATE LIABILITY FOR ALL ACTUAL AND DIRECT DAMAGES HEREUNDER SHALL NOT EXCEED THE AMOUNTS ACTUALLY RECEIVED BY THAT PARTY FROM THE OTHER PARTY UNDER THIS AGREEMENT DURING THE TWELVE- (12-) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO LIABILITY. |
| 8.3. | EXCEPTIONS TO LIMITATION OF LIABILITY. THE LIMITATIONS OF LIABILITY IN SECTIONS 8.1 AND 8.2 SHALL NOT APPLY WITH RESPECT TO ANY DAMAGES ARISING OUT OF A PARTY’S: (1) GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUDULENT ACT, (2) INDEMNIFICATION OBLIGATIONS IN THIS AGREEMENT, (3) INFRINGEMENT, MISAPPROPRIATION OR OTHERWISE VIOLATION OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS, AND/OR (4) BREACH OF ITS CONFIDENTIALITY OBLIGATIONS HEREIN. |
| 9. | WARRANTIES |
| 9.1. | Mutual Warranties. Each Party warrants to the other Party that: (a) it has the full corporate power and authority to enter into, deliver and perform its obligations under this Agreement; (b) this Agreement, when executed by it, will constitute a valid and legally binding obligation of such Party, enforceable against it in accordance with its terms, subject to applicable laws relating to bankruptcy, moratorium and the availability of equitable remedies and legal and public policy restrictions on the enforcement of provisions providing for indemnification; (c) the execution, delivery and performance by such Party of this Agreement will not constitute a breach of, or otherwise conflict with, any of its respective corporate documents or any other agreement, instrument or commitment to which it is subject or by which it is bound; (d) it shall comply with all applicable laws, rules and regulations applicable to performance of the contemplated activities pursuant to this Agreement in any applicable country or jurisdiction. |
| 9.2. | DISCLAIMER OF WARRANTIES. As beteen the Parties, EACH PARTY PROVIDES ITS PRODUCT “AS IS”. EACH PARTY SPECIFICALLY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED AND/OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY ARISING FROM COURSE OF DEALING OR PERFORMANCE. |
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| 10. | TERM AND TERMINATION |
| 10.1. | Term. This Agreement shall become effective as of the Effective Date and will remain in force for a minimum term of 3 (three) years (“Initial Term”). Following the expiration of the Initial Term, this Agreement shall be automatically renewed for additional successive terms of 24 (twenty-four) months (each a “Renewal Term”, and the Initial Term, together with all Renewal Terms, the “Term”), unless either Party gives written notice of termination to the other Party at least 12 (twelve) months prior to the end of the Initial Term or of any Renewal Term. |
| 10.2. | Termination for Cause. Either Party may immediately terminate this Agreement upon notice to the other Party if the other Party: (i) materially breaches this Agreement and, to the extent such breach is curable, fails to cure such breach within 30 (thirty) days after receiving notice of thereof from that Party, or (ii) commences bankruptcy or dissolution proceedings, has a receiver appointed for a substantial part of its assets, or ceases to operate in the ordinary course of business. Any accrued rights and obligations will survive termination under this Section 10.2. |
| 10.3. | Effect of termination. Upon expiration or termination of this Agreement (a) all rights and obligations granted to each Party by the other hereunder shall immediately cease; (b) neither Party shall have the right to represent itself as a partner of the other Party; (c) each Party shall remove all references of the other Party from its website and marketing materials, and shall cease all use of the other Party’s Trademarks; and (d) within 30 (thirty) days, each Party shall return to the other Party, or if impracticable destroy, all materials (tangible, electronic or otherwise) in its possession or control that belong to the other Party and shall certify compliance with this Section 10.3 upon request. |
| 10.4. | Survival. Sections intended, by their nature, to survive termination or expiration of this Agreement, shall so survive, including, without limitation, Sections 4 (Intellectual Property Rights), 6 (Confidentiality), 7 (Indemnification), 8 (Limitation of Liability), 10 (Term and Termination), 11 (Miscellaneous) and Section 6 in Exhibit B (Audits). |
| 11. | MISCELLANEOUS |
| 11.1. | Relationship of Parties. The Parties expressly agree that they are independent contractors under this Agreement and no other relationship is intended, including without limitation a partnership, franchise, joint venture, agency, employer/employee, fiduciary, master/servant relationship, or other special relationship or status. Neither Party shall have any right or authority to assume, create, or incur any liability or any obligation on behalf of the other Party. Neither Party shall take any action that expresses or implies a relationship other than that of independent contractor. |
| 11.2. | No Third Party Beneficiaries. Unless otherwise expressly provided, no provisions of this Agreement are intended or shall be construed to confer upon or give to any person or entity other than the Parties any rights, remedies or other benefits under or by reason of this Agreement. |
| 11.3. | Notices. All notices which are required to be given pursuant to this Agreement shall be in writing and shall be sent by overnight courier to the address listed at the preamble of this Agreement, with receipt acknowledged, or by email with an electronic proof of receipt. Notices shall be deemed to have been delivered at the time delivered. |
| 11.4. | Force Majeure. Nonperformance by either Party will be excused to the extent that, and as long as, performance is rendered impossible by strike, fire, flood, riots, terrorism, governmental acts or orders or restrictions, or any other reason where failure to perform is beyond the reasonable control of the non-performing Party and not caused by the negligence of the nonperforming Party. |
| 11.5. | Expenses. Each Party shall bear its own costs and expenses incurred in performing its obligations under this Agreement, unless otherwise agreed by the Parties in writing |
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| 11.6. | Assignment. Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party, which consent may not be unreasonably withheld or delayed. Notwithstanding the foregoing, this Agreement may be assigned by either Party in connection with a merger, consolidation, sale of all of the equity interests of such Party, or a sale of all or substantially all of the assets of the Party to which this Agreement relates. Without derogating from and subject to the abovementioned, this Agreement will bind and benefit each Party and its respective successors and assigns. |
| 11.7. | Export. Each Party shall be responsible for complying with all applicable laws in connection with its use of the Bundled Solution including, but not limited to, U.S. Export Administration Regulations, any other export laws, restrictions, and regulations to ensure that the Bundled Solution and any technical data related thereto is not exported or re-exported, directly or indirectly, in violation of or used for any purposes prohibited by such laws and regulations. |
| 11.8. | Compliance with privacy and data protection laws. Each Party will independently comply with all applicable data privacy, data protection and data security laws, rules and regulations. The Parties acknowledge that, for the purposes of the GDPR and equivalent data protection laws, they each act as independent data controllers concerning their respective customers’ personal data, and there is no controller-processor relationship between TerraZone and When with regards to either Party’s customers’ personal data. If required to enter into additional agreements to comply with applicable laws, including to put in place adequate data transfer mechanisms such as Standard Contractual Clauses, the Parties agree to execute such additional agreements as needed. |
| 11.9. | Waiver, Severability and Modification. The failure of either Party to enforce any rights granted hereunder or to take action against the other Party in the event of any breach hereunder shall not be deemed a waiver by that Party as to subsequent enforcement of rights or subsequent actions in the event of future breaches. If any provision of this Agreement is held to be unenforceable, such provision shall be reformed only to the extent necessary to make it enforceable and will have no effect on the remainder of this Agreement. Any waiver, amendment or other modification of any provision of this Agreement will be effective only if in writing and signed by the Parties. |
| 11.10. | Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. All disputes arising out of or in connection with the present contract shall be finally and exclusively settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator appointed in accordance with the said Rules. The place of arbitration shall be New York, NY. The language of the arbitration shall be English. Notwithstanding the foregoing, each Party may also seek interim relief in any court of competent jurisdiction. The application of a party to a judicial authority for such interim relief shall not be deemed to be an infringement or a waiver of the arbitration agreement and shall not affect the relevant powers reserved to the arbitral tribunal. |
| 11.11. | Entire Agreement. This Agreement, including all exhibits or terms that are incorporated herein by reference, constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter. |
| 11.12. | Counterparts. This Agreement may be executed in electronic counterparts, each of which shall be an original and together which shall constitute one and the same instrument. |
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement and all exhibits attached hereto to be executed by their duly authorized corporate officers as of the dates below:
| TerraZone Ltd | World Health Energy Holdings, Inc.] | |||
| Signature: | /s/ Amir Mizhar | Signature: | /s/ Giora Rozensweig | |
| Name: | Amir Mizhar | Name: | Giora Rozensweig | |
| Title: | CEO | Title: | CEO | |
| Date: | August 14, 2024 | Date: | August 14, 2024 | |
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Exhibit A
Interoperability Plan
The Parties shall make best reasonable commercial efforts to follow the following plan to achieve interoperability between their Solutions, while communicating and cooperating fully throughout:
| Task | Party Responsible | Expected Completion Date | ||
| Creation of interoperability technical protocol | Joint | Effective Date plus 30 | ||
| Development of When Solution | When | Effective Date plus 60 | ||
| Development of TerraZone Solution | TerraZone | Effective Date plus 60 | ||
| Testing interoperability with the TerraZone Solution | When | Effective Date plus 90 | ||
| Testing interoperability with the When Solution | TerraZone | Effective Date plus 90 | ||
| Giving the other Party a Notice of Success | TerraZone, When | Effective Date plus 90 |
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Exhibit B
Terms of Commercial Exploitation of Bundled Solution
The Parties shall exploit the Bundled Solution commercially as follows:
| 1. | Announcement: the Parties shall announce the Bundled Solution as one product requiring the installation of two components, the TerraZone Solution, to be installed on desktop and laptop computers, and the When Solution, to be installed on mobile devices. |
| 2. | Branding: the Parties shall mark their Solutions in a way that would convey a sense of interrelatedness. For example, the Parties may label their Solutions “TruePass Computer” and “TruePass Mobile”, and/or by using a similar logo, or using any other mutually agreed upon branding scheme. |
| 3. | Consumer exclusivity: to prevent consumer confusion and to implement an Acquisition Fee (as described below), the Parties shall keep a registry of potential clients at [www.registry.com] (“Registry”). Each Party shall approach prospective clients only after checking that their name does not appear in the Registry, and if so, will register such clients to itself. From the moment of registration, only the registered Party shall approach that potential client concerning the Bundled Solution. |
| 4. | Revenue sharing. The Parties will share revenue from Bundled Solution sales as follows: |
| a. | Client acquisition fee. |
| i. | Amount. A Party who sells the Bundled Solution to a new client (“Acquiring Party”) shall retain, as compensation for the sale effort, an acquisition fee in the amount of fifteen percent (15%) (“Acquisition Fee”) of the price actually paid by the client for its first purchase of the Bundled Solution, excluding any Transaction Tax (“Net Sale”). For the sake of clarity, subsequent sales to a past client shall not entitle the Acquiring Party to an Acquisition Fee. |
| ii. | “Transaction Tax” means any tax, duty, or impost, regardless of its name, that is applied, under applicable law (whether federal, state, local or other law, or agency rule) to a transaction, including, but not limited to, any sales, use, excise or value-added tax. |
| b. | Distributions. After an Acquisition Fee is retained by the Acquiring Party, the remaining 85% (eighty five percent) of the Net Sale (“Remainder”), or, if no Acquisition Fee is due, the entire Net Sale (either one, a “Distribution”), shall be split between the Parties as follows: |
| i. | Respecting the first $8M (eight million USD) of all Distributions received by the Parties in the aggregate over time: 75% (seventy five percent) shall go to When, and 25% (twenty-five percent) to TerraZone. |
| 1. | Numerical example. For the sake of clarity, assume that the first use of the Registry shall be by TerraZone, who shall register company X to itself. Assume further that TerraZone shall immediately thereafter make a Net Sale of $1M (one million USD) to company X. If so, of that amount, TerraZone shall retain $150,000 (one hundred and fifty thousand USD) as its Acquisition Fee plus an additional amount of $212,500 (two hundred twelve thousand and five hundred USD) for its share in the Remainder, calculated as 25% (twenty five percent) of the $850,000 (eight hundred and fifty thousand USD) Remainder, and deliver to When $637,500 (six hundred thirty seven thousand and five hundred USD), calculated as 75% (seventy five percent) of the $850,000 (eight hundred and fifty thousand USD) Remainder. Of this sale, the $850,000 (eight hundred and fifty thousand USD) Remainder shall count towards satisfying the aforementioned $8M (eight million USD) threshold. |
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| ii. | Respecting revenue above the first $8M (eight million USD) of all Distributions received by the Parties in the aggregate over time: the Parties shall split such revenue equally, on a 50% (fifty percent) / 50% (fifty percent) basis. |
| 1. | Numerical Example. For the sake of clarity, assume that by December 31, 2025, the aggregate amount of Distributions received by the Parties was greater than $8M (eight million USD). Assume that on January 1st, 2026, When makes a Net Sale of $1M (one million USD) to company Y, one of its past clients, so no Acquisition Fee is due. If so, When shall retain $500,000 (five hundred thousand USD), calculated as 50% (fifty percent) of the $1M (one million USD) Distribution, and deliver to TerraZone the same amount, calculated the same way. |
| c. | Payment terms. By the tenth (10th) day following the end of each calendar month, the Acquiring Party shall pay the amounts on account of Bundled Solution revenue received during that prior calendar month to the other Party against receipt of invoice therefrom. The Acquiring Party shall pay any Transaction Tax, which shall be added to the invoice. |
| d. | Acceleration of payments to When. The Parties’ intention and goal (“Goal”) in Subsection 4.b in this Exhibit B is to have TerraZone pay When, as an initial matter, an amount of $2M (two million USD) out of it would-be 50% (fifty percent) share in Distributions prior to moving to the eventual 50% (fifty percent) / 50% (fifty percent) revenue split arrangement. However, TerraZone shall have the option to accelerate the payment of said $2M (two million USD) amount to When, such as by occasionally (i) making a direct payment, or (ii) choosing a revenue split more favorable to When than the one described in Subsection 4.b.i in this Exhibit B. Should TerraZone choose to accelerate payment, the Parties shall transition to the eventual 50% (fifty percent) / 50% (fifty percent) revenue split once the Goal has been met. |
| 5. | Quarterly reports. Within thirty (30) days following the end of each fiscal quarter during the Term of this Agreement, each Party shall deliver to the other Party a written report (“Report”) setting forth an itemized list of all Net Sales received by it, as an Acquiring Party, during that quarter, and for each specifying the date, name of client, amount received, Acquisition Fee retained (if any), and the amounts due to each Party out of the Distribution, in the format in Schedule 1. |
| 6. | Audits. |
| a. | Record keeping. Each Party (the “Reporting Party”) shall keep during the Term, in the regular course of business, full and complete records relating to the performance under this Agreement (including, but not limited to, the Reports and the revenue sharing arrangement in Section 4 in this Exhibit B), documenting, among other things, all sales of the Bundled Solution, including quantities, prices, payments, taxes and other charges; clients’ names, contacts and Bundled Solution locations; and the dates of sales, payment, and delivery. |
| b. | Right to audit. During the Term plus an additional period of twelve (12) months thereafter, each Party (the “Auditing Party”) shall have a right, no more frequently than once every 12 (twelve) months, to audit the records of the Reporting Party relating to a desired period (“Audit Period”) going back no more than sixty (60) months. Said records shall be available for examination, during normal business hours and following reasonable notice, by accountants representing the Auditing Party, who shall be entitled to make copies and extracts and to receive any explanations that may reasonably be requested. The Auditing Party shall provide the Reporting Party with a written report of the findings (“Audit Report”), including any discrepancies, non-compliance and areas for improvement. |
| c. | Cost. The Auditing Party shall pay its accountants’ fees, except that the Reporting Party shall be responsible for such fees in the event the Audit Report discloses a discrepancy in the Auditing Party’s favor of more than five percent (5%) of the payment due to the Auditing Party for the Audit Period. |
| d. | Corrective action. The Parties shall work collaboratively to address and rectify any issues and deficiencies identified in the Audit Report. The Parties shall correct any overpayment or underpayment identified therein, provided that any underpayment to the Auditing Party shall be corrected with a five percent (5%) annual interest (respecting any component in the Audit Report). |
| e. | Confidentiality. All correspondence, records, documents and information exchanged between the Parties relating to all audits shall be considered Confidential Information under this Agreement and handled by the Parties accordingly. |
| 7. | Uniform client agreement. The Parties shall sell the Bundled Solution to clients using the agreement in Schedule 2. |
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Exhibit 10.5
August 14, 2024
Re: Amendment to the Investment Agreement dated as of November 1, 2022 (the “Investment Agreement”) between World Health Energy Holdings, Inc. (the “Company”) and George Baumeohl, a Company director (“GM”).
Reference is made to the above referenced Investment Agreement pursuant to which GM has committed to invest up to $3,000,000 , as needed by the Company, through the purchase of shares of the Company’s common stock. All capitalized terms used herein shall, unless otherwise defined, have the meanings ascribed to such terms in the Investment Agreement.
As of the date of this letter an amount of 2,144,767 out of the $3,000,000 has been invested in the Company by GM in the Company under the Investment Agreement. Accordingly, that leaves an univested balance of the commitment in the amount of $855,233 under the Investment Agreement( the “Uninvested Balance”)
The Company and GM agree that notwithstanding anything to the contrary in the Investment Agreement, going forward the Uninvested Balance under the Investment Agreement shall be invested in the Company’s common stock at the per share rate of $0.0001. Additionally, all amounts invested under the Investment Agreement since January 1, 2024 (i.e., $769,767) shall also be adjusted such that these amounts shall be invested at per share rate of $0.0001. Accordingly, the Company shall issue shares of the Company’s common stock as needed in respect of funds heretofore invested under the Investment Agreement as of January 1, 2024 to give effect to the amendment hereunder.
This letter amendment shall be deemed to amend the terms of the Investment Agreement and, except as hereby amended, all other terms and conditions in the Investment Agreement shall remain in full force and effect.
| World Health Energy Holding, Inc. | ||
| By: | /s/ Giora Rozensweig | |
| Name: | Giora Rozensweig | |
| Title: | CEO | |
| /s/ George Baumeohl | ||
| George Baumeohl | ||
EXHIBIT 31.1
RULE 13a-14(a) CERTIFICATION
I, Giora Rozensweig, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, of World Health Energy Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financing reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 19, 2024 | |
| /s/ Giora Rozensweig | |
| Giora Rozensweig, Chief Executive Officer | |
| (Principal Executive Officer and Principal Financial | |
| and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 (AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report on Form 10-Q of World Health Energy Holdings, Inc. (the “Company”) for the for the fiscal quarter ended June 30, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Giora Rozensweig, Interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Giora Rozensweig | |
| Giora Rozensweig | |
| Chief Executive Officer (Principal Executive Officer and | |
| Principal Financial and Accounting Officer) | |
| August 19, 2024 |