World Health Energy Holdings, Inc 10-Q for FY2022 Q2
World Health Energy Holdings, Inc. (WHEN)
About this 10-Q
World Health Energy Holdings, Inc filed this 10-Q on August 22, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).
Headline figures
Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $11.21K
- down 77.0% from $48.8K a year earlier
- Net loss
- $2.74M
- compared with a net loss of $206.89K 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)
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| incorporation or organization) | Identification No.) |
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(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
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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 ☐
As of August 22, 2022, shares of the registrant’s common stock, par value $0.00001 per share, were outstanding.
WORLD HEALTH ENERGY HOLDINGS, INC.
Form 10-Q
June 30, 2022
| i |
WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022
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WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars except share and per share data)
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| A s s e t s | (Unaudited) | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | ||||||||
| Accounts receivable, net | ||||||||
| Payments on account of investment | ||||||||
| Other current assets | ||||||||
| T o t a l Current assets | ||||||||
| Right Of Use asset arising from operating lease | ||||||||
| Long term prepaid expenses | ||||||||
| Property and Equipment, Net | ||||||||
| Funds in respect of employee rights upon termination | ||||||||
| T o t a l assets | ||||||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | ||||||||
| Right Of Use liabilities arising from operating lease | ||||||||
| Other account liabilities | ||||||||
| T o t a l current liabilities | ||||||||
| Liability for employee rights upon retirement | ||||||||
| Long term loan from parent company | ||||||||
| Right Of Use liabilities arising from operating lease | ||||||||
| T o t a l liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock, par $, shares authorized, shares issued and outstanding as of June 30, 2022 and December 31, 2021. | ||||||||
| Series B Convertible Preferred stock, par $, shares authorized, shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively. | ||||||||
| Preferred stock, value | ||||||||
| Common stock, par $, shares authorized at June 30, 2022 and December 31, 2021. and shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively. | ||||||||
| Additional paid-in capital | ( | ) | ( | ) | ||||
| Proceeds on account of shares | ||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| T o t a l stockholders’ deficit | ( | ) | ( | ) | ||||
| T o t a l liabilities and stockholders’ deficit | ||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars except share and per share data)
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Six months ended | Three months ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues | ||||||||||||||||
| Research and development expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Share based compensation expenses | ( | ) | ( | ) | ||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Financing income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss per share (basic and diluted) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(U.S. dollars, except share and per share data)
| Preferred Stock, $0.0007, Par Value | Preferred Stock B, $0.0007, Par Value | Common Stock, $0.0007, Par Value | Additional paid-in capital | Proceeds on account of shares | Foreign currency translation adjustments | Accumulated deficit | Total Company’s stockholders’ deficit | |||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | |||||||||||||||||||||||||||||||||||||||
| BALANCE AT JANUARY 1, 2022 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of shares | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Share based payment to service providers | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Proceeds on account of shares | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Comprehensive loss for three month ended March 31, 2022 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| BALANCE AT MARCH 31, 2022 (Unaudited) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of shares | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Share based payment to employees and service providers | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive loss for three month ended June 30, 2022 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| BALANCE AT JUNE 30, 2022 (Unaudited) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Preferred Stock, $0.0007, Par Value | Preferred Stock B, $0.0007, Par Value | Common Stock, $0.0007, Par Value | Additional paid-in capital | Foreign currency translation adjustments | Accumulated deficit | Total Company’s stockholders’ deficit | |||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | ||||||||||||||||||||||||||||||||||||
| BALANCE AT JANUARY 1, 2021 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Comprehensive loss for three month ended March 31, 2021 | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| BALANCE AT MARCH 31, 2021 (Unaudited) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Comprehensive loss for three month ended June 30, 2021 | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Comprehensive loss | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| BALANCE AT JUNE 30, 2021 (Unaudited) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statement
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WORLD HEALTH ENERGY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars except)
| 2022 | 2021 | |||||||
| Six months ended | ||||||||
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| (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 and amortization | ||||||||
| Increase (decrease) in liability for employee rights upon retirement | ( | ) | ||||||
| Share based compensation | ||||||||
| Interest on lease liability | ( | ) | ( | ) | ||||
| Increase in accounts receivable | ( | ) | ( | ) | ||||
| Increase in other current assets | ( | ) | ||||||
| Increase (decrease) in accounts payable | ( | ) | ||||||
| Increase (decrease) in other accounts liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Loans received from (granted to) related parties | ( | ) | ||||||
| Proceeds from related parties | ( | ) | ||||||
| Loan to investee company | ( | ) | ||||||
| Increase in asset for employee rights upon retirement | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash provided by (used in) investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from stock issued for cash | ||||||||
| Payments on account of shares | ||||||||
| Loan received from parent company | ||||||||
| Net cash provided by financing activities | ||||||||
| INCREASE (DECREASE) 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 right-of-use assets | ||||||||
| Initial recognition of operating lease liability | ( | ) | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statement
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WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 1 – GENERAL
A. Operations
World Health Energy Holdings, Inc., (the “Company” or “WHEN”), was formed on May 21, 1986, under the laws of the State of Delaware. The Company has invested in and abandoned a variety of software programs that it strove to commercialize.
UCG, INC. (the “UCG”) was incorporated on September 13, 2017, under the laws of the State of Florida. The Company wholly-owns the issued and outstanding shares of RNA Ltd. (Hereinafter: “RNA”).
RNA is primarily a research and development company that has been performing software design work for UCG in the field of cybersecurity under the terms of development agreement between UCG and RNA. UCG is primarily engaged in the marketing and distribution of cybersecurity related products.
In anticipation of the transaction contemplated under the Merger Agreement, SG 77 Inc. a Delaware Corporation and a wholly-owned subsidiary of UCG (“SG”), was incorporated on April 16, 2020 and all of the cybersecurity rights and interests held by UCG, including the share ownership of RNA, were assigned to SG.
CrossMobile investment agreement
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 Mr. Giora Rozensweig, holds
CrossMobile filed an application with the Polish Companies Registrar on June 22, 2022 to increase CrossMobile’s share capital in order to effectuate the issuance to WHEN of the CrossMobile ordinary shares representing % of the CrossMobile equity interest to WHEN and to register the issuance to CrossMobile of the WHEN shares in consideration thereof. The Companies Registrar approved the requested actions on July 22, 2022 and published on August 1, 2022. The approval and registration by the Polish Companies Registrar is required under local law for CrossMobile to issue to WHEN the CrossMobile ordinary shares representing % of CrossMobile. In anticipation of the approval of the increase in the share capital of CrossMobile, WHEN issued to CrossMobile on July 13, 2022 the WHEN shares. Upon the registration of the Company shareholdings in CrossMobile the closing of the Initial Investment will be deemed to have occurred.
CrossMobile is a licensed mobile virtual network operator (“MVNO”) 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.
In addition, through January 22, 2024, the Company has the option to purchase additional shares of CrossMobile, such that following such additional purchase, the Company shall hold approximately of CrossMobile’s outstanding share capital on a fully diluted basis. In the event the Company shall choose to exercise the option, the Company shall issue such number of restricted shares of common stock of the Company calculated based on pre-money valuation of CrossMobile as determined by an independent appraiser agreed between the Company and CrossMobile.
| 7 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 1 – GENERAL (continue)
B. Going concern uncertainty
Since
inception, the Group has devoted substantially all its efforts to research and development. The Group is still in its development stage
and the extent of the Group’s future operating losses and the timing of becoming profitable, if ever, are uncertain. As of June
30, 2022, the Group had $
The Group will need to secure additional capital in the future in order to meet its anticipated liquidity needs primarily through the sale of additional Common Stock or other equity securities and/or debt financing. Funds from these sources may not be available to the Group on acceptable terms, if at all, and the Group cannot give assurance that it will be successful in securing such additional capital (see Note 3 in respect to subscription agreements signed during 2022).
These conditions raise substantial doubt about the Company’s ability to continue to operate as a “going concern.” The Company’s ability to continue operating as a going concern is dependent on several factors, among them is the ability to raise sufficient additional funding.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
C. Risk factors
The Group face a number of risks, including uncertainties regarding finalization of the development process, demand and market acceptance of the Group’s products, the effects of technological changes, competition and the development of products by competitors. Additionally, other risk factors also exist, such as the ability to manage growth and the effect of planned expansion of operations on the Group’s future results. In addition, the Group expects to continue incurring significant operating costs and losses in connection with the development of its products and increased marketing efforts. As mentioned above, the Group has not yet generated significant revenues from its operations to fund its activities, and therefore the continuance of its activities as a going concern depends on the receipt of additional funding from its current stockholders and investors or from third parties.
D. COVID-19
The COVID-19 pandemic continues to create business and economic uncertainty and volatility in the global markets. Many countries around the world are experiencing further outbreaks of the pandemic, following which governments are once again imposing various restrictions. At the same time, there is a recovery trend in the volume of economic activity around the world that leads on one hand, to significant demand for certain products and services and on the other hand, disruptions to worldwide supply chain routes and some raw materials. The Group continues to take measures to ensure the health and safety of its employees, suppliers, other business partners and the communities in which it operates in order to ensure, among others, the operation level, the proper functioning of its facilities and to minimize the pandemic’s potential impact on its business. Manufacturing continues at the Group’s sites without interruptions. However, there is still a difficulty in assessing the future impacts of the pandemic on the Group’s operations, inter alia, in light of the uncertainty of its duration, the extent of its intensity and effects on global supply chains and global markets, and additional countermeasures that may be taken by governments and central banks.
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WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Unaudited Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the six-months ended June 30, 2022. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2022. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.
Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on published on the OTCIQ Alternative Reporting System, for the year ended December 31, 2022.
Principles of Consolidation
The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its wholly-owned and majority-owned subsidiaries. All inter-company balances and transactions have been eliminated.
Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to the going concern assumptions and share based compensation.
| 9 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continue)
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The amendments in ASU 2020-06 are effective for the Company for fiscal years beginning after December 15, 2021. Early adoption is permitted. The guidance must be adopted as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new guidance, but does not expect it to have a material impact on its financial statements.
NOTE 3 – COMMON STOCK
During
the six months ended June 30, 2022, the Company and certain investors entered into subscription agreements for a private placement of
units of the Company securities in an aggregated amount of $, where each unit (a “Unit” and collectively the “Units”)
is comprised of (i) one (1) share of the Company’s Common Stock and (ii) one common stock purchase warrant to purchase an additional
share of the Company’s Common Stock through the second anniversary thereof at a per share exercise price of $
In
May 2022, the Company and certain investors entered into subscription agreements for a private placement of units of the Company securities
(the May 2022 Private Placements”) in an aggregated amount of $
On
May 19, 2022 the Company issued share of the Company’s Common Stock to a service provider in exchange for certain tax
services. The Company estimated the value of the shares issued at $
| 10 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
On June 21, 2021, the board of directors of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”) pursuant to which the Company may issue awards, from time to time, consisting of non-qualified stock options, restricted stock grants and restricted stock units. In addition, stock option awards that qualify under Section 102 of the Israeli Tax Ordinance (New Version) 1961 (the “ITO”), and/or under Section 3(i) of the ITO, may be granted.
Mr. Tromer, the CEO of CrossMobile, was appointed to the Company’s advisory board in February 2022. In connection with his service on the advisory board, on February 14, 2022, he was awarded options under the Company’s 2021 Equity Incentive Plan to purchase shares of the Company’s common stock, at a per share exercise price of $ per share, which the exercise price for all grants to date to member of the Company’s advisory board. Mr. Tromer’s options vest as follows: (i.e., ) option shares vest on the first anniversary of the appointment to the advisory board and the balance in increments of shares on each subsequent three (3) month anniversary.
The fair value of the options was determined
using the Black-Scholes pricing model, assuming a risk free rate of %, a volatility factor of %, dividend yields of % and an expected
life of years and was estimated at $
On January 1, 2022, the Company granted options to purchase shares of the Company’s Common Stock to a member of its advisory board, under the Company’s 2021 Plan. Options to purchase shares of Common Stock shall vest on the first anniversary of the agreement and the remaining options shall vest quarterly, over additional years
The fair value of the options was determined using the Black-Scholes pricing model, assuming a risk free rate of , a volatility factor between , dividend yields of and an expected life of years and was estimated at $.
On May 15, 2022, the Company granted options under the 2021 Plan (2021) to directors, employees and service providers to purchase an aggregate of shares of Common Stock exercisable at a per share exercise price of $. Of the options granted, were issued to CEO.
The
fair value of the options was determined using the Black-Scholes pricing model, assuming a risk free rate of , a volatility factor
of , dividend yields of and an expected life of years and was estimated at $
| 11 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
SCHEDULE OF STOCK OPTION ACTIVITY
| Number of Options | Weighted Average Exercise Price | |||||||
| Outstanding at December 31,2021 | ||||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited or expired | ||||||||
| Outstanding at March 31,2022 | ||||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited or expired | ||||||||
| Outstanding at June 30,2022 | ||||||||
| Number of options exercisable at June 30, 2022 | ||||||||
The aggregate intrinsic value of the awards outstanding as of June 30, 2022 is . These amounts represent the total intrinsic value, based on the Company’s stock price of $ as of June 30, 2022, 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, 2022 | |||||||||||||
The stock options outstanding as of December 31, 2021, have been separated into exercise prices, as follows:
| Exercise price | Stock options outstanding | Weighted average remaining contractual life – years | Stock options vested | ||||||||||
| As of December 31, 2021 | |||||||||||||
Compensation expense recorded by the Company in respect of its stock-based compensation awards for the period of six months ended June 30, 2022 was $ and are included in General and Administrative expenses in the Statements of Operations.
| 12 |
WORLD HEALTH ENERGY HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 5 – RELATED PARTIES
A. Transactions and balances with related parties
SCHEDULE OF RELATED PARTY EXPENSES
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Six months ended June 30 | Three months ended June 30 | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| General and administrative expenses: | ||||||||||||||||
| Salaries and fees to officers | ||||||||||||||||
| (*) of which share based compensation | ||||||||||||||||
| Share based compensation | ||||||||||||||||
| Research and development expenses: | ||||||||||||||||
| Salaries and fees to officers | ||||||||||||||||
| (*) of which share based compensation | ||||||||||||||||
| Share based compensation | ||||||||||||||||
B. Balances with related parties and officers:
| As of June 30, | As of December 31, | |||||||
| 2022 | 2021 | |||||||
| Other current assets | ||||||||
| Other accounts liabilities | ||||||||
| Liability for employee rights upon retirement | ||||||||
| Long term loan from related party | ||||||||
NOTE 6 – SUBSEQUENT EVENTS
On July 13, 2022 the Company issued
restricted shares of Company common stock to CrossMobile, pending the receipt of the approval of the Polish company registrar to increase
the share capital of the CrossMobile and register the CrossMobile ordinary shares issuable to the Company (representing the initial
On August 10, 2022, the Company entered into follow on agreement with a consultant providing investor relations services since November 2021 pursuant to which the Company undertook to issue to the Consultant an additional million shares of restricted stock.
| 13 |
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, 2021 as filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2022. Certain statements made in this discussion are “forward-looking statements” within the meaning of the private securities litigation reform act of 1995,. These statements are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by the Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations and the effects that the COVID-19 outbreak, or similar pandemics, could have on our business. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
The full extent to which the COVID-19 pandemic may directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods. Actual results may differ from these estimates.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.
General Overview
World Health Energy Holdings, Inc. (“we” “us” “our” the “Company” or “WHEN”) WHEN is a diversified energy, health, and cybersecurity technology company. On April 27, 2020, WHEN completed a reverse triangular merger pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) among the Company, R2GA, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Sub”), UCG, Inc., a Florida corporation (“Seller”), SG 77 Inc., a Delaware corporation and wholly-owned subsidiary of Seller (“SG”), and RNA Ltd., an Israeli company and a wholly owned subsidiary of SG (“RNA”). Under the terms of the Merger Agreement, R2GA merged with and into SG, with SG remaining as the surviving corporation and a wholly-owned subsidiary of the Company (the “Merger”). The Merger became effective as of April 29, 2020. Each of Gaya Rozensweig and George Baumeohl, directors of the Company, are also the sole shareholders and directors of UCG.
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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.
Recent Developments
(i) As previously disclosed, WHEN completed the acquisition of a 26% equity interest in CrossMobile Sp. z o.o, a company formed under the laws of Poland (“CrossMobile”). On March 22, 2022 the Company, CrossMobile and the shareholders of CrossMobile entered into an Investment Agreement (the “Agreement”) pursuant to which the Company is to purchase 26% 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 common stock (the “Initial Investment”). Prior to the closing, Mr. Giora Rozensweig, the Company CEO, held 40.67% and Mr. George Baumeohl, a director, held 3.33%, of the issued preferred share capital of CrossMobile). The preferred share capital of CrossMobile provides certain privileges, including the right to participate in CrossMobile shareholder meetings at a rate of two votes for each preferred share and preference as to distribution of dividends at a rate equal to twice the dividends distributed to the holders of the common shares in CrossMobile.
CrossMobile filed an application with the Polish Companies Registrar on June 22, 2022 to increase its share capital in order to effectuate the issuance to WHEN of the CrossMobile ordinary shares representing 26% of the CrossMobile equity interest to WHEN and to register the issuance to CrossMobile of the 10,000,000,000 WHEN shares in consideration thereof. The Companies Registrar approved the requested actions on July 22, 2022 and published on August 1, 2022. The approval and registration by the Polish Companies Registrar is required under local law for CrossMobil to issue to WHEN the CrossMobile ordinary shares representing 26% of CrossMobile. In anticipation of the approval of the increase in the share capital of CrossMobile, WHEN issued to CrossMobile on July 13, 2022 the 10,000,000,000 WHEN shares.
Through January 22, 2024, the Company has the option to purchase additional shares of CrossMobile, such that following such additional purchase, the Company would hold approximately 51% of CrossMobile’s outstanding share capital on a fully diluted basis. In the event the Company elects to exercise the option, the Company shall issue such number of restricted shares of common stock of the Company calculated based on pre-money valuation of CrossMobile as determined by an independent appraiser agreed between the Company and CrossMobile.
Following the closing of the Initial Investment, Ms. Gaya Rozensweig, a Company director, was appointed to the CrossMobile board of directors.
Following the Initial Investment, the combined holdings of Giora Rozensweig and WHEN, afford them effective control of the majority of the outstanding voting capital of CrossMobile
Business Overview
We believe that the acquisition of CrossMobile provides an opportunity in our evolution and provides us with a strong foothold in the European market. CrossMobile is part of a limited group of licensed mobile virtual network operators (MVNO) in the European Union.
The global telecom market was valued at $1.6 trillion in 2020 and is expected to grow at 5.4% Compound Annual Growth Rate (CAGR) through 20281. The global cybersecurity market was valued at $140 billion in 2021 and is expected to reach $376 billion by 20292. 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.
1 Global Telecom Services Market Size Report, 2021-2028. (2022). Retrieved 21 August 2022, from https://www.grandviewresearch.com/industry-analysis/global-telecom-services-market
2 Insights, F. (2022). With 13.4% CAGR, Global Cyber Security Market Size to Surpass USD 376.32 Billion in 2029. Retrieved 21 August 2022, from https://www.globenewswire.com/news-release/2022/06/14/2461786/0/en/With-13-4-CAGR-Global-Cyber-Security-Market-Size-to-Surpass-USD-376-32-Billion-in-2029.html
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By combining the current solutions of these two divisions, WHEN expects to commercialize a new standard of service in value added telecom and security solutions for B2B and B2C customers alike.
Our strategic plan for the next 12 months includes the following
| a. | Integrating IT infrastructure with MNO Telecom operator in Poland on standard packages of Voice, SMS and Data service. (name of Telekom operator will be released in separate announcement) | |
| b. | Finalizing tests of platform for sales and customer care. This platform will be based on in-house artificial intelligence systems to keep operating costs substantially below market | |
| c. | Start test of integration with and sales of Data packages |
CrossMobile anticipates that it will be able to go live in December 2022 with the following:
| a. | Be in the air with standard packages of Voice, SMS and Data in Poland and International Roaming. | |
| b. | Generate first invoice for sales of standard packages of Voice, SMS and Data in Poland and International Roaming | |
| c. | Initiate cooperation with existing or build new MVNO Telecom operators similar to CrossMobile to fully optimize ROI on the investment made in people and IT Systems. Focus areas will be USA, UK, Asia Pacific and selected countries in Europe with high potential. |
Key Financial Terms and Metrics
The following discussion summarizes the key factors our management believes are necessary for an understanding of our consolidated financial statements.
Revenues
We currently generate revenues primarily from software license fees.
Research and Development Expenses
The process of researching and developing our product candidates is lengthy, unpredictable, and subject to many risks. We expect to continue incurring substantial expenses through 2023 as we continue to develop our product offerings and adapt them to our new MVNO business. We are unable, with any certainty, to estimate either the costs or the timelines in which those expenses will be incurred..
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.
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General and Administrative Expenses
General and administrative expenses consist primarily of salaries, employee benefits, equity compensation, and other personnel-related costs associated with executive, administrative and other support staff. Other significant general and administrative expenses include the costs associated with professional fees for accounting, auditing, insurance costs, consulting and legal services, along with facility and maintenance costs attributable to general and administrative functions.
Financial Expenses
Financial expenses consist primarily impact of exchange rate derived from re-measurement of monetary balance sheet items denominated in non-dollar currencies. Other financial expenses include bank’s fees and interest on long term loans.
Comparison of the Three Months Ended June 30, 2022 to the Three Months Ended June 30, 2021
The following table presents our results of operations for the three months ended June 30, 2022 and 2021
| Three Months Ended | ||||||||
| June 30 | ||||||||
| 2022 | 2021 | |||||||
| Revenues | 11,212 | 48,801 | ||||||
| Operating Expenses | ||||||||
| Research and development expenses | (119,518 | ) | (81,089 | ) | ||||
| General and administrative expenses | (147,704 | ) | (145,169 | ) | ||||
| Share based compensation expenses | (2,518,832 | ) | - | |||||
| Operating loss | (2,774,842 | ) | (177,457 | ) | ||||
| Financing income (expenses), net | 33,338 | (29,432 | ) | |||||
| Net loss | (2,741,504 | ) | (206,889 | ) | ||||
Revenues. Revenues for the three months ended June 30, 2022 and 2021 were $11,212 and $48,801, respectively. Revenues were comprised primarily of software license fees. The decrease in revenues is primarily related to efforts we undertook in the 2022 period to refocus our resources on the CrossMobile transaction.
Research and Development. Research and development expenses consist of share based compensation, salaries and related expenses, consulting fees, service providers’ costs, related materials and overhead expenses. Research and development expenses increase from $81,089 in the three months ended June 30, 2021 to $119,518 during the corresponding period in 2022. The increase resulted primarily from share based compensation expenses.
General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses and other non-personnel related. General and administrative expenses increased from $145,169 for the three months ended June 30, 2021 to $147,704 during the corresponding period in 2022.
Financing Expenses, Net. Financing expenses, net for the three months ended June 30, 2021 amounted to $29,432. Financing income, net for the three months ended June 30, 2022 amounted to $33,338. The increase is mainly due to currency exchange differences between the Dollar and the New Israeli Shekel.
Net Loss. Net loss for the three months ended June 30, 2022 was $2,741,504 and is primarily attributable to non-cash share based compensation expense of $2,310,512, research and development and general and administrative expenses.
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Comparison of the Six Months Ended June 30, 2022 to the Six Months Ended June 30, 2021
The following table presents our results of operations for the three months ended June 30 2022 and 2021
| Six Months Ended | ||||||||
| June 30 | ||||||||
| 2021 | 2020 | |||||||
| Revenues | 43,754 | 81,450 | ||||||
| Operating Expenses | ||||||||
| Research and development expenses | (243,024 | ) | (253,860 | ) | ||||
| General and administrative expenses | (270,341 | ) | (269,654 | ) | ||||
Share based compensation expenses | (3,945,323 | ) | - | |||||
| Operating loss | (4,414,934 | ) | (442,064 | ) | ||||
| Financing income (expenses), net | 36,634 | (30,916 | ) | |||||
| Net loss | (4,378,300 | ) | (472,980 | ) | ||||
Revenues. Revenues for the six months ended June 30, 2022 and 2021 were $43,754 and $81,450, respectively. Revenues were comprised primarily of software license fees. The decrease in revenues is primarily related to efforts we undertook in the 2022 period to refocus our resources on the CrossMobile transaction
Research and Development. Research and development expenses consist of share based compensation, salaries and related expenses, consulting fees, service providers’ costs, related materials and overhead expenses. Research and development expenses increased from $253,860 for the six months ended June 30, 2021 as compared to $243,024 during the corresponding period in 2022. The increase resulted primarily from increase in share based compensation expenses.
General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses and other non-personnel related expenses such as legal expenses. General and administrative expenses increased from $269,654 for the six months ended June 30, 2021 as compared to $270,341 in 2022 during the corresponding period in 2022.
Financing Expenses, Net. Financing expenses, net for the six months ended June 30, 2021 amounted to $30,916. Financing income, net for the six months ended June 30, 2022 amounted to $ 36,634. The increase is mainly due to currency exchange differences between the Dollar and the New Israeli Shekel.
Net Loss. Net loss for the six months ended June 30, 2022 was $4,378,300 and is primarily attributable to non-cash share based compensation expense of $3,737,003, research and development and general and administrative expenses.
Financial Condition, Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. At June 30 and 2022 and 2021, we had current assets of $1,496,376 and $124,056 respectively, and total assets of $1,752,336 and $401,287 respectively. The increase in total assets is primarily due to an increase in our cash balance, payments on account of investment and prepaid share based payment to service providers balance. We had current liabilities of $723,498 as compared to $557,613 as of June 30, 2022 and 2021, respectively and total liabilities of $3,020,526 as compared to $2,856, 829 as of June 30, 2022 and 2021, respectively. The increase is mainly attributed to the increase in the balance of employees and related institutions, accrued expenses, and increase in loans received from a related party offset by decrease in right of use liabilities arising from operating lease.
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At June 30, 2022, we had a cash balance of $407,979 compared to the cash balance of $46,022 as of December 31, 2021. We have no cash equivalents.
At June 30, 2022, we had a working capital of $772,878 as compared with a working capital of $547,972 at December 31, 2021.
In January 2022, the Company received $34,000 from an investor who entered into a subscription agreement with the Company in October 2021 for an investment of $200,000 to be remitted to the Company in periodic three month instalments, representing the second agreed upon instalment amount. In accordance with the terms of his subscription agreement, we issued to the investor a total 340,000,000 shares of our common stock and he is entitled to warrants for an additional 680,000,000 shares of our common stock. In May 2022, we received $40,000 from the same investor, representing the third agreed upon instalment amount to be remitted to the Company. In accordance with the terms of his subscription agreement, we issued to the designees of such investor a total 400,000,000 shares of our common stock and he is entitled to warrants for an additional 800,000,000 shares of our common stock.
During March 2022, the Company and certain investors entered into subscription agreements for a private placement of units of the Company securities in an aggregated amount of $500,000, where each unit (a “Unit” and collectively the “Units”) is comprised of (i) one (1) share of the Company’s Common Stock and (ii) one common stock purchase warrant to purchase an additional share of the Company’s Common Stock through the second anniversary thereof at a per share exercise price of $0.0002. The price per unit is $0.0001. In consideration thereof the holders are entitled to 5,000,000,000 shares of Common Stock and warrants for an additional 5,000,000,000 shares of Common Stock, of which to date 2,500,000,000 shares of Common Stock and warrants for an additional 2,500,000,000 shares of Common Stock have been issued.
During May 2022, the Company entered into subscription agreements with two investors for a private placement of units of the Company securities in an aggregated amount of $250,000, where each unit (a “Unit” and collectively the “Units”) is comprised of (i) one (1) share of the Company’s Common Stock and (ii) two common stock purchase warrants to purchase an additional share of the Company’s Common Stock through the second anniversary thereof at a per share exercise price of $0.0003. The price per unit was $0.0003. In consideration thereof the holders are entitled to 833,333,334 shares of Common Stock and warrants for an additional 1,666,666,668 shares of Common Stock, of which to date the shares of Common Stock and warrants have been issued.
We expect that our existing cash and cash equivalents as well as expected periodic remittances from subscription proceeds will enable us to fund our operations and capital expenditure requirements through March 2023. Our requirements for additional capital during this period will depend on many factors, including the amounts necessary to bring the CrossMobile operations live by December 2022.
We 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.
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Going Concern
The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. We have a stockholders’ deficit of $1,268,160 and a working capital of $772,878 at June 30, 2022 as well as negative operating cash flows. These conditions raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
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, 2022. Based on that evaluation, our management, including our Interim Chief Executive Officer, concluded that our disclosure controls and procedures were not effective as of June 30, 2022.
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, 2021, our management concluded that our internal control over financial reporting was not effective at December 31, 2021. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The limitation of the Company’s internal control over financial reporting was due to the applied risk-based approach which is indicative of many small companies with limited number of staff in corporate functions. The identified weakness were:
| ● | Material Weakness – We did not maintain effective controls over certain aspects of the financial reporting process because we (i) lacked a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and (ii) we lacked controls over the disclosure of our business operations. |
| ● | lack of segregation of duties Significant Deficiencies – Inadequate segregation of duties. |
Our management believes the weaknesses identified above have not had any material effect on our financial results.
We expect to be materially dependent upon third parties to provide us with accounting consulting services for the foreseeable future which we believe will mitigate the impact of the material weaknesses discussed above. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP and establish an audit committee and implement internal controls and procedures, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures will not result in errors in our financial statements which could lead to a restatement of those financial statements.
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Changes in Internal Controls over Financial Reporting.
Except for the material weakness and associated remediation plan, , there have been no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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 sought declaratory judgment to unwind the FSC transaction and cancel the shares of WHEN common stock issued in the FSC transaction that are still outstanding.
A hearing was set for January 6, 2021 whereupon mediation was ordered. Mediation meetings were held but no resolution was reached. The Florida lawsuit is currently pending.
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 retained the services of Delaware counsel and has moved to dismiss or stay the 2022 Lawsuit in favor of the previously filed Florida lawsuit, which involves the same parties and same issues. The Company’s motion is currently pending in the Delaware Court of Chancery.
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 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 legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings or claims that we believe, either individually or in the aggregate, will have a material adverse effect on our business, financial condition, or results of operations.
ITEM 1A. RISK FACTORS
An investment in the Company’s Common Stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 14, 2022, in addition to other information contained in our reports and in this quarterly report in evaluating the Company and its business before purchasing shares of our Common Stock. There have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2021.
ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
(i) In January 2022, the Company received approximately $34,000 from an investor who entered into a subscription agreement with the Company in October 2021for an investment of $200,000, representing the second agreed upon periodic instalment. In accordance with the terms of his subscription agreement, we issued to the such investor in February 2022 a total 340,000,000 shares of our common stock and the investor is entitled to warrants for an additional 680,000,000.
(ii) During May 2022, the Company and two investors entered into subscription agreements for a private placement of units of the Company securities in an aggregated amount of $250,000, where each unit (a “Unit” and collectively the “Units”) is comprised of (i) one (1) share of the Company’s Common Stock and (ii) two common stock purchase warrants to purchase an additional share of the Company’s Common Stock through the second anniversary thereof at a per share exercise price of $0.0003. The price per unit was $0.0003. In consideration thereof the holders are entitled to 833,333,334 shares of Common Stock and warrants for an additional 1,666,666,668 shares of Common Stock, of which to date the shares of Common Stock and warrants have been issued.
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(iii) In May 2022, the Company received $40,000 from the investor referred to in (i) above who entered into a subscription agreement with the Company in October 2021for an investment of $200,000, representing the third agreed upon instalment amount to be remitted to the Company. In accordance with the terms of his subscription agreement, we issued to the designees of such investor a total 400,000,000 shares of our common stock and he is entitled to warrants for an additional 800,000,000.
(iv) In May 2022, the Company awarded to employees and service providers, including the CEO, options under the Company’s 2021 Equity Incentive Plan to purchase 34,900,000,000 shares of the Company’s common stock, at a per share exercise price of $0.0001 per share, which the exercise price vest as follows: 25% (i.e., 1,500,000,000) option shares vest on the first anniversary of the grant date and the balance in increments of 400,000,000 shares on each subsequent three (3) month anniversary. Of the Options granted, the CEO received options for 5,000,000 shares.
(v) In May 2022, in consideration of legal services provided, the Company issued to a consultant 30 million shares of the Company’s common stock.
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.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION:
None
ITEM 6. EXHIBITS
Exhibit Index:
| 10.1 | ||
| 31.1* | Certification of Interim Chief Executive Officer (Principal Executive Officer and Principal Financial and Accounting Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 | |
| 32.1* | Certification of Interim Chief Executive Officer (Principal Executive Officer and Principal Financial and Accounting Officer), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* 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 22, 2022 | |
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Exhibit 10.1
INVESTMENTAGREEMENT
THIS INVESTMENT AGREEMENT (this “Agreement”) is made as of the 22nd day of March 2022, by and among WORLD HEALTH ENERGY HOLDINGS, INC., a Delaware corporation (“WHEN”), CROSSMOBILE S.P.Zoo, a company organized under the laws of Poland (the “Company”) and the Company shareholders listed on the signature page hereof (collectively, the “Company Shareholder”). For purposes of this Agreement, WHEN, the Company, and the Company Shareholders are sometimes collectively referred to as the “Parties” and individually as a “Party.”
WHEREAS, the parties have executed an Letter of Intent (LOI) regarding the provision by WHEN of cybersecurity and related services and products to the Company;
WHEREAS, in connection therewith WHEN desires to invest in the Company and the Company and the Company Shareholders are agreeable to such investment, all as herein provided;
WHEREAS, the Parities agree that the foregoing Recitals are true and correct and are hereby incorporated into this Agreement by this reference; and,
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises, covenants, representations, warranties, and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound, the Parties agree as follows:
ARTICLE I
INVESTMENT
Section 1.1 Initial Investment. Upon the terms and subject to the conditions of this Agreement, WHEN shall invest, in exchange of, and the Company shall issue to WHEN, ordinary shares (the “Initial Company Shares”) of the Company, representing on the date of issuance 26% of the issued and outstanding shares of the Company on a fully diluted basis, in consideration for which WHEN shall issue to the Company 10,000,000,000 (Ten Billion) shares (the “WHEN Shares”) of WHEN common stock par value $0.00001 per share , subject to adjustment in respect of any capital reorganization that may be implemented such as a reverse stock split (the “WHEN Common Stock”). The amount of the Initial Company Shares is based on an agreed upon pre-money valuation of the Company,
Section 1.2 Option. WHEN shall have the option, exercisable for a period of 18 months from the date hereof, but not the obligation to purchase additional shares of Company such that following such issuance WHEN shall hold, together with the Initial Company Shares, in the aggregate 51%, on a fully diluted basis, of the issued and outstanding shares of the Company (the “Company Option Shares”; and together with the Initial Company Shares, the “Company Shares”), in consideration for which WHEN shall issue additional WHEN Common Stock consistent with the pre-money valuation of the Company as determined by an independent valuation produced by a valuator which shall be mutually acceptable to WHEN and the Company (“Company Valuation”) and which shall be based on, among other things, certified financial statements of the Company and other criteria mutually agreed upon by the Parties (hereinafter, each such issuance being the “WHEN Option Shares”; and together with the WHEN Shares, the “WHEN Consideration Shares”).
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Upon issuance, the WHEN Consideration Shares will be validly issued, fully paid and nonassessable and not subject to any pre-emptive or similar rights, and the Company shall have acquired the sole legal and beneficial ownership of the WHEN Consideration Shares free and clear of all encumbrances placed by WHEN.
Section 1.3 Restriction on WHEN Consideration Shares. The Company acknowledges that the WHEN Consideration Shares issued pursuant to the terms and conditions set forth in this Agreement will be “restricted securities” under the Securities Act of 1933, as amended (the “Securities Act”) and as a result may not be sold, transferred or otherwise disposed, except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act and in each case only in accordance with all applicable securities laws. All certificates representing the WHEN Consideration Shares issued upon Closing (as defined below) will be endorsed with the following legend pursuant to the Securities Act in order to reflect the fact that the WHEN Consideration Shares will be issued to the Company pursuant to an exemption from the registration requirements of the Securities Act:
“THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF WHEN
WHEN represents and warrants to the Company as follows:
Section 2.1 Organization and Good Standing. WHEN is duly incorporated, organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease its properties and to carry on its business as now being conducted and as presently proposed to be conducted. WHEN is duly qualified or licensed to do business and is in good standing in each of the jurisdictions in which it owns property, leases property, does business, or is otherwise active in a way which makes such qualification or licensing necessary, and where the failure to be so qualified or licensed would have a material adverse effect on its businesses, operations, or financial condition or be material to WHEN’s ability to consummate the transactions contemplated hereby or to perform its obligations under this Agreement.
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Section 2.2 Authority; Execution and Delivery. WHEN has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement, and to consummate the transactions contemplated hereby. The execution and delivery by WHEN of this Agreement has been, and the consummation of the transactions contemplated hereby, has been duly and validly authorized by all requisite corporate action on the part of WHEN. This Agreement has been duly and validly executed and delivered by WHEN. This Agreement constitutes a valid and binding obligation of WHEN enforceable against it in accordance with its terms, in each case, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding at law or equity). “Laws” shall mean all federal, state, local, regional, municipal or foreign laws, statutes, rules, regulations, ordinances, codes, decrees, judgments, orders or other legal requirements.
Section 2.3 No Conflict; Consents
(a) The execution, delivery and performance of this Agreement by WHEN, and the consummation by WHEN of the transactions contemplated hereby, will not conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach, impairment or violation of, or constitute a default under (i) any provision of the Articles of Association of WHEN or other governing documents as currently in effect; (ii) any of the terms, conditions or provisions of any contract to which WHEN is a party or by which any of properties or assets are bound; or (iii) under any Law applicable to the Company or a Company Shareholder or any of its respective properties or assets.
(b) The lawful execution, delivery and performance of this Agreement by WHEN, and the consummation by WHEN of the transactions contemplated hereby, will not require any consent, waiver, approval, authorization or other permit of, or filing or registration with or notification to, any individual, corporation, limited liability company, partnership, joint venture, trust, association, unincorporated organization, other entity or Governmental Authority (“Person”) or any Governmental Authority. “Governmental Authority” shall mean any federal, state or local or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body or any quasi-governmental or private body exercising any regulatory or taxing authority thereunder.
Section 2.4 Valid Issuance. When issued, the WHEN Consideration Shares to be issued to the Company in accordance with this Agreement will be duly authorized, validly issued, fully paid and non-assessable, free and clear from all Encumbrances (except for applicable securities laws), and will not be subject to any preemptive rights or similar rights and will be duly registered in the name of the Company. “Encumbrance” shall mean any security interest, pledge, mortgage, lien, charge, encumbrance, license, easement, right-of-way, cloud on title, adverse claim, preferential arrangement or restriction of any kind, including, but not limited to, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership. The WHEN Consideration Shares will entitle the Company to the same rights and obligations as all other shares of WHEN Common Stock.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND COMPANY SHAREHOLDERS
The Company and each Company Shareholder, jointly and severally, represent and warrant to WHEN as follows:
Section 3.1 Organization. The Company is a corporation duly formed under the law of Poland, and has all requisite corporate power and authority to own its properties and assets, to conduct its business as now conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its activities makes such qualification and being in good standing necessary.
Section 3.2 Authority; Execution and Delivery. The Company and each Company Shareholder has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement, and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and each Company Shareholder has been, and the consummation of the transactions contemplated hereby, has been duly and validly authorized by all requisite action on the part of the Company and each Company Shareholder. This Agreement has been duly and validly executed and delivered by the Company and each Company Shareholder. This Agreement constitutes a valid and binding obligation of the Company and each Company Shareholder enforceable against it in accordance with its terms.
Section 3.3 No Conflict; Consents
(a) The execution, delivery and performance of this Agreement by the Company and each Company Shareholder, and the consummation by the Company and each Company Shareholder of the transactions contemplated hereby, will not conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach, impairment or violation of, or constitute a default under (i) any provision of the Articles of Association of the Company or other governing documents as currently in effect; (ii) any of the terms, conditions or provisions of any Contract to which the Company or Company Shareholder is a party or by which any of its respective properties or assets are bound; or (iii) under any Law applicable to the Company or a Company Shareholder or any of its respective properties or assets. “Contract” shall mean all contracts, agreements, commitments, notes, bonds, deeds of trust, indentures, leases, mortgages, arrangements, documents, instruments, guaranties, plans, policies and arrangements, whether written or oral, of any nature or description that the Company or a Company Shareholder is party to or obligated by.
(b) The lawful execution, delivery and performance of this Agreement by the Company and each Company Shareholder, and the consummation by the Company and the Company Shareholders of the transactions contemplated hereby, will not require any consent, waiver, approval, authorization or other permit of, or filing or registration with or notification to, any Person.
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Section 3.4 Litigation. There is no action, suit, hearing, inquiry, review, proceeding or investigation by or before any court or Governmental Authority (an “Action”) pending or currently threatened against the Company, a Company Shareholder or any director or officer of the Company in such capacity, that may affect the validity of this Agreement or the right of the Company or a Company Shareholder to enter into this Agreement or to consummate the transactions contemplated hereby or thereby. There is no Action pending or currently threatened against the Company, a Company Shareholder or any director or officer of the Company in such capacity, before any Governmental Authority or any arbitration board or tribunal, nor is there any judgment, decree, injunction or order of any court, Governmental Authority, commission, agency, instrumentality or arbitrator against or relating to the Company or a Company Shareholder. Neither the Company nor any Company Shareholder is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any Government Authority.
Section 3.5 Capitalization of the Company. The registered share capital of the Company is ______ divided into ______ Ordinary Shares of which __________ are issued and outstanding (assuming the exercise of all issued and outstanding convertible securities). The Company Shareholders are the sole shareholders of the Company. All of the issued and outstanding shares of Ordinary Shares of the Company the Company are duly authorized, validly issued, fully paid and non-assessable, will have been issued in compliance with all applicable securities and corporate Laws of Poland and will have been issued free of Encumbrances, including without limitation, pre-emptive rights of any Person. There are no outstanding (i) options, subscriptions, warrants, or other rights to purchase or otherwise acquire from the Company any share capital of the Company, (ii) debt securities or instruments convertible into or exchangeable for shares of the Company or (iii) commitments of any kind for the issuance of additional shares of the Company or options, warrants or other securities of the Company.
Section 3.6 Shareholders. The Company has provided WHEN a true and complete list of the holders of all issued and outstanding shares of the Company.
Section 3.7 Tax Matters.
(a) The Company has timely filed all Tax Returns in connection with any Taxes which are required to be filed on or prior to the Closing, taking into account any extensions of the filing deadlines which have been validly granted to the Company or its subsidiaries, and all such returns are true and correct in all material respect;
“Tax Returns” shall mean any federal, state, local or foreign return, report, information return or other document (including any related or supporting information) filed or required to be filed with any Governmental Authority in connection with the determination, assessment or collection of any Taxes or the administration of any laws, regulations or administrative requirements relating to any Taxes.
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(b) The Company has paid all Taxes that have become or are due with respect to any period ended on or prior to the date hereof, and has established an adequate reserve therefore on its balance sheets for those Taxes not yet due and payable;
(c) The Company is not presently under and has not received notice of, any contemplated investigation or audit by Governmental Authority of body or any foreign or state taxing authority concerning any fiscal year or period ended prior to the date hereof; and
(d) All Taxes required to be withheld on or prior to the date hereof from employees for income Taxes, social security Taxes, unemployment Taxes and other similar withholding Taxes have been properly withheld and, if required on or prior to the date hereof, have been deposited with the appropriate Governmental Authority.
“Taxes” shall mean all taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, together with any interest and any penalties, fines, additions to tax or additional amounts imposed by any Governmental Authority and shall include any transferee liability in respect of Taxes.
Section 3.8 Subsidiaries. The Company does not and has never maintained any stock, partnership, joint venture or any other security or ownership interest in any other Person.
Section 3.9 Personal Property. The Company possesses, and has good and marketable title of all property necessary for the continued operation of the business of the Company as presently conducted and as represented to WHEN. All equipment, furniture, fixtures and other tangible personal property and assets owned by the Company is owned by the Company free and clear of all Encumbrances.
Section 3.10 Intellectual Property. The Company owns or holds an interest (including by way of a license) in all intellectual property necessary for the operation of the business of the Company as it is currently conducted (collectively, the “Intellectual Property Assets”), including:
(a) all functional business names, trading names, registered and unregistered trademarks, service marks, and applications (collectively, the “Marks”);
(b) all patents, patent applications, and inventions, methods, processes and discoveries that may be patentable (collectively, the “Patents”);
(c) all copyrights in both published works and unpublished works (collectively, the “Copyrights”);
(d) the[ MVNO License], a copy of which is attached hereto as Exhibit A;
(d) all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans, drawings, and blueprints owned, used, or licensed by the Company as licensee (collectively, the “Trade Secrets”).
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Section 3.11 Company Intellectual Property. A full list of all the Intellectual Property Assets is included on Schedule 3.11 of this Agreement.
Section 3.12 Contracts. Schedule 3.12 attached hereto lists each Contract to which the Company is a party. Each Contract is in full force and effect, and there exists no breach or violation of or default by the Company or any of its subsidiaries under any Contract, or any event that with notice or the lapse of time, or both, will create a breach or violation thereof or default under any Contract by the Company. The continuation, validity, and effectiveness each Contract will in no way be affected by the consummation of the transactions contemplated in this Agreement. There exists no actual or threatened termination, cancellation, or limitation of, or any amendment, modification, or change to any Contract.
Section 3.13 Consultants. All consultants, agents and representatives of the Company have been paid all compensation, salaries, wages, income and any other sum due and owing to them by the Company, as of the Closing. The Company is not aware of any labor conflict or dispute with any employee, consultant or any third Person, and no employee, consultant or any third Party is in violation of any term of their Contract, nondisclosure agreement, non-competition agreement or any other Contract relating to the relationship of such Person with the Company.
Section 3.14 Real Property. The Company does not own any real property. Each of the leases, subleases, claims or other real property interests (collectively, the “Leases”) to which the Company is a party or is bound is legal, valid, binding, enforceable and in full force and effect in all respects. All rental and other payments required to be paid by the Company pursuant to any such Leases have been duly paid and no event has occurred which, upon the passing of time, the giving of notice, or both, would constitute a breach or default by any party under any of the Leases. The Leases will continue to be legal, valid, binding, enforceable and in full force and effect on the terms thereof following the Closing Date. The Company has not assigned, transferred, conveyed, mortgaged, deeded in trust, or Encumbered any interest in the Leases or the leasehold property pursuant thereto.
Section 3.15 Certain Transactions. The Company is not a guarantor or indemnitor of any indebtedness of any third-party.
Section 3.16 Foreign Corrupt Practices Act. The Company has not engaged in any activity, practice or conduct which would constitute an offence under the Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1, et seq and rules, regulations, thereunder and no action, investigation, inquiry, charge, claim, demand or notice has been filed or commenced against it alleging any failure to comply.
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Section 3.17 Economic Risk. The Company has knowledge and experience in evaluating and investing in securities in companies similar to WHEN so that it is capable of evaluating the merits and risks of the transaction and has the capacity to protect its own interests.
Section 3.18 Company Information. The Company has had an opportunity to discuss WHEN’s business, management and financial affairs with directors, officers and management of WHEN.
Section 3.19 Securities Laws Representations.
(a) The Company is acquiring the WHEN Consideration Shares for its own account with the present intention of holding such Shares for purposes of investment and the Company is not acquiring the WHEN Consideration Shares with a view to or for distribution thereof, within the meaning of the Securities Act. The Company is acquiring the WHEN Consideration Shares for its own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part, and no other Person has a direct or indirect beneficial interest in the restricted WHEN Consideration Shares the Company is acquiring herein. Further, the Company does not have any Contract with any Person to sell, transfer or grant participations to such person or to any third person, with respect to the WHEN Consideration Shares the Company is acquiring.
(b) At no time was the Company presented with or solicited by any newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.
(c) The Company acknowledges and understands that the WHEN Consideration Shares have not been registered under the Securities Act or qualified under the securities or “blue sky” laws of any state in reliance upon exemptions from registration or qualification thereunder and the WHEN Consideration Shares may not be sold, offered, transferred, assigned, pledged, hypothecated or otherwise disposed of or encumbered, except in compliance with the Securities Act and such rules and regulations.
Section 3.20 Accuracy. All representations, warranties and certifications contained in this Agreement, including any schedules delivered herewith, and all the other documents delivered directly and indirectly in connection with this Agreement and the transactions contemplated herein by the Company are true, correct and complete, do not contain any statement which is false or misleading with respect to a material fact and do not omit to state a material fact necessary in order to make the statements herein and therein not false or misleading.
ARTICLE IV
CONDITIONS TO CLOSING; DELIVERIES
Section 4.1 Closing. The consummation of the agreement pursuant to this Agreement (the “Closing”) shall take place remotely via the exchange of documents and signatures or at such time and place as WHEN and the Company shall designate (the “Closing Date”), subject to the fulfillment of the conditions to Closing as set forth hereunder.
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Section 4.2 Closing Conditions of WHEN.
Section 4.2.1 Closing Deliverables. The obligation of WHEN to effect the investment shall be subject to the delivery to WHEN at or prior to the Closing of the following documents, unless waived by WHEN:
(a) delivery to WHEN of copies of all resolutions and/or consents and actions adopted by or on behalf of the board of directors of the Company (the “Board”) evidencing approval of this Agreement and the transactions contemplated hereunder, including the appointment of Giora Rozensweig as one of the two directors to the Board of the Company;
(b) delivery to WHEN of excerpts of the Company’s share register, filled in as required by this Agreement and certificates representing the Company Shares;
(c ) the increase by the Company of its authorized share capital; and
(d) such other instruments and certificates as may be requested by WHEN.
Section 4.2.2 Conditions to Closing. The obligation of WHEN to effect the transaction shall be subject to the fulfillment at or prior to the Closing of the following conditions, unless waived by WHEN:
(a) each representation, warranty and covenant of the Company and the Company Shareholders is true and correct at the Closing as if made on and as of the Closing and at or prior to the Closing, and the Company and the Company Shareholders shall have delivered to WHEN a certificate to that effect signed by an officer of the Company and the Company Shareholders, respectively;
(b) each of the Company and the Company Shareholders shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing, and the Company and the Company Shareholders shall have delivered to WHEN a certificate to that effect signed by an officer of the Company and the Company Shareholders, respectively;
(c) from the date of this Agreement through the Closing, there shall not have occurred any change, circumstance or event concerning the Company that has had or could be reasonably likely to have a material adverse effect on the Company;
(d) no Law or any temporary restraining order, preliminary or permanent injunction or other judgment issued by, any Governmental Authority shall be in effect having the effect of making the transactions contemplated by this Agreement illegal or otherwise prohibiting consummation thereof or imposing, individually or in the aggregate, a burdensome condition (collectively, “Legal Restraints”) and (ii) no Governmental Authority shall have instituted any action or proceeding (which remains pending at what would otherwise be the Closing Date) seeking to temporarily or permanently enjoin, restrain or otherwise prohibit consummation of the transactions contemplated hereby or impose a Legal Restraint.
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Section 4.3. Closing Conditions of the Company and the Company Shareholders.
Section 4.3.1 Closing Deliverables. The respective obligations of the Company and the Company Shareholders to effect the transaction shall be subject to the delivery at or prior to the Closing of the following documents, unless waived by the Company:
(a) delivery to the Company of copies of all resolutions and/or consents and actions adopted by or on behalf of the board of directors of WHEN evidencing approval of this Agreement and the transactions contemplated hereunder; and
(b) The Company shall have received from WHEN stock certificates or, in lieu thereof, book entry form confirmation, evidencing their respective ownership of the WHEN Consideration Shares then due.
Section 4.3.2 Conditions to Closing. The obligation of Company and the Company Shareholders to effect the transactions shall be subject to the fulfillment at or prior to the Closing of the following conditions, unless waived by Company and the Company Shareholders:
(a) each representation, warranty and covenant of WHEN is true and correct at the Closing as if made on and as of the Closing and at or prior to the Closing and WHEN shall have delivered to Company a certificate to that effect signed by an officer of WHEN;
(b) WHEN shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing, and WHEN shall have delivered to the Company and the Company Shareholders a certificate to that effect signed by an officer of WHEN;
(c) from the date of this Agreement through the Closing, there shall not have occurred any change, circumstance or event concerning WHEN that has had or could be reasonably likely to have a material adverse effect on WHEN; and
(d) No Law or any Legal Restraint shall be in effect and no Governmental Authority shall have instituted any action or proceeding (which remains pending at what would otherwise be the Closing Date) seeking to temporarily or permanently enjoin, restrain or otherwise prohibit consummation of the transactions contemplated hereby or impose a Legal Restraint.
ARTICLE V
TERMINATION
Section 5.1 Termination. This Agreement may be terminated at any time prior to the Closing contemplated hereby by:
(a) mutual agreement of WHEN and the Company;
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(b) WHEN, if there has been a material breach by the Company or the Company Shareholders of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of the Company or the Company Shareholders that is not cured, to the reasonable satisfaction of WHEN, within 30 days after notice of such breach is given by WHEN (except that no cure period will be provided for a breach by the Company or the Company Shareholders that by its nature cannot be cured); provided that WHEN shall not be entitled to terminate the Agreement under this Section 5.1(b), if it is in breach of any material representation, warranty, covenant or agreement at such time and such breach by WHEN is not the direct result of the breach by the Company or the Company Shareholders, as the case may be, of any of material representation, warranty, covenant or agreement applicable to them;
(c) the Company, if there has been a material breach by WHEN of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of WHEN that is not cured, to the reasonable satisfaction of the Company, within 30 days after notice of such breach is given by the Company (except that no cure period will be provided for a breach by the Company that by its nature cannot be cured); provided that Company shall not be entitled to terminate the Agreement under this Section 5.1(c), if it is in breach of any material representation, warranty, covenant or agreement at such time and such breach by the Company is not the direct result of the breach by WHEN of any of material representation, warranty, covenant or agreement applicable to WHEN;
(d) WHEN, if the acquisition by WHEN of the Initial Company Shares contemplated by this Agreement has not been consummated prior to September 30, 2022 (other than as a result of any failure on the part of terminating party to comply with or perform any covenant or obligation of such party set forth in this Agreement or in any other agreement or instrument delivered to the non-terminating party in connection with the transactions contemplated by this Agreement);
(e) WHEN or the Company if (i) a court of competent jurisdiction or other Governmental Authority shall have issued a final and non-appealable order, decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or (ii) there shall be any Law enacted, promulgated, issued or deemed applicable to the transactions contemplated by this Agreement by any Governmental Authority that would make consummation of such transactions illegal.
Section 5.2 Effect of Termination. In the event of the termination of this Agreement as provided in this Section, this Agreement will be of no further force or effect, provided, however, that no termination of this Agreement will relieve any party of liability for any breaches of this Agreement that are based on a wrongful refusal or failure to perform any obligations.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Survival of Representations and Warranties. All representations, warranties, covenants and agreements of the Parties contained herein or in any other certificate or document delivered pursuant hereto shall survive the Closing for eighteen months from the Closing Date.
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Section 6.2 Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided that no Party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other Parties.
Section 6.3 Fees and Expenses. Except as otherwise expressly provided in this Agreement, all legal and other fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such expenses, costs or fees, including without limitation the fees and expenses of any investment banks, attorneys, accountants, or other experts or advisors retained by such Party.
Section 6.4 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally, 7 days after being sent by registered or certified mail (postage prepaid, return receipt requested) or on the next business day after being transmitted by e-mail at the addresses set forth on the signature pages of this Agreement. No change in any of such addresses shall be effective insofar as notices under this Section 6.4 are concerned unless notice of such change shall have been given to such other party hereto as provided in this Section 6.4.
Section 6.5 Entire Agreement. This Agreement, together with the exhibits hereto, represents the entire agreement and understanding of the parties with reference to the transactions set forth herein and no representations or warranties have been made in connection with this Agreement other than those expressly set forth herein or in the exhibits, certificates and other documents delivered in accordance herewith. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into this Agreement.
Section 6.6 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.
Section 6.7 Titles and Headings. The Article and Section headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.
Section 6.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Fax and PDF copies shall be considered originals for all purposes.
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Section 6.9 Convenience of Forum; Consent to Jurisdiction. The parties to this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the appropriate court sitting in New York Count, New York, in respect of any matter arising under this Agreement.
Section 6.10 Governing Law. This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of New York without giving effect to the choice of law provisions thereof.
Section 6.11 Amendments and Waivers. Except as otherwise provided herein, no amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any such prior or subsequent occurrence.
[Remainder of Page Intentionally Omitted; Signature Page to Follow]
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In Witness, the undersigned have executed and delivered this Agreement as of the date first above written.
| WORLD HEALTH ENERGY HOLDINGS, INC. | CROSSMOBILE S.P.Zoo | |||
| By: | /s/ Gaya Rozensweig | By: | /s/ Henryk Tomasz Tromer | |
| Title: | Director | Title: | CEO | |
| /s/ Gaya Rozensweig | /s/ Henryk Tomasz Tromer | |||
| Company Shareholder | Company Shareholder | |||
| /s/ Giora Rozensweig | ||||
| Giora Rozensweig | ||||
| /s/ Marcos Enrique Lande | ||||
| Marcos Enrique Lande | ||||
| /s/ Luc Louis Schellen | ||||
| Luc Louis Schellen | ||||
| /s/ George Baumoehl | ||||
| George Baumoehl | ||||
| /s/ Natalia Tromer | ||||
| Natalia Tromer | ||||
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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, 2022, 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 22, 2022
| /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, 2022, 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 22, 2022 |