WHEN 8-K/A
World Health Energy Holdings, Inc. (WHEN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Amendment No. 2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
April 27, 2020
Date of Report (Date of earliest event reported)
World Health Energy Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
| 000-30256 | 59-2762023 | |
(Commission File Number) |
(IRS Employer Identification No.) |
1825 NW Corporate Blvd. Suite 110, Boca Raton, FL 33431
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (561) 870-0440
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. [ ]
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 |
EXPLANATORY NOTE
World Health Energy Holding, Inc. (the “Company”) previously filed a Current Report on Form 8-K with the Securities and Exchange Commission on April 30, 2020 to announce completion of the previously disclosed 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 Company indicated in the initial Form 8-K that it would file the financial statements of UCG (“UCG”) and pro forma financial information required under Item 9.01 under cover of Form 8-K/A. The Company filed the financial information under cover of Form 8-K/A dated July 30, 2020 (the “Form 8-K/A”).
At the request of the staff of the Securities and Exchange Commission, the Form 8-K/A is being further amended to include the financial information for UCG, Inc. as of March 31, 2020.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The following financial statements of UCG are being filed as exhibits to this Amendment No. 1:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.
| Date: August 25, 2020 | ||
| World Health Energy Holdings, Inc. | ||
| By: | /s/ Giora Rozensweig | |
| Interim Chief Executive Officer | ||
Exhibit 99-1
UCG, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2020
IN U.S. DOLLARS
TABLE OF CONTENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars except share and per share data)
| March 31, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (Unaudited) | ||||||||
| A s s e t s | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 82,956 | 359,461 | ||||||
| Accounts receivable, net | 8,186 | 6,448 | ||||||
| Other current assets | 355,666 | 213,011 | ||||||
| T o t a l Current assets | 446,808 | 578,920 | ||||||
| Right Of Use asset arising from operating lease | 17,930 | 24,034 | ||||||
| Property and Equipment, Net | 20,643 | 17,225 | ||||||
| 620620 | ||||||||
| T o t a l assets | 485,381 | 620,179 | ||||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | 39,352 | 31,369 | ||||||
| Other accounts liabilities | 98,115 | 73,452 | ||||||
| T o t a l current liabilities | 137,467 | 104,821 | ||||||
| Liability for employee rights upon retirement | 44,623 | 41,846 | ||||||
| T o t a l liabilities | 182,090 | 146,667 | ||||||
| Stockholders’ Deficit | ||||||||
| Common stocks of US$ 0.0001 par value each (“Common Stocks”): 1,000,000 shares authorized as of March 31, 2020 and December 31, 2019; issued and outstanding 372,500 shares as of March 31, 2020 and December 31, 2019. | 37 | 37 | ||||||
| Additional paid-in capital | 1,095,610 | 1,095,610 | ||||||
| Foreign currency translation adjustments | (1,998 | ) | (715 | ) | ||||
| Accumulated deficit | (790,358 | ) | (621,420 | ) | ||||
| T o t a l stockholders’ deficit | 303,291 | 473,512 | ||||||
| T o t a l liabilities and stockholders’ deficit | 485,381 | 620,179 | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 2 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars except share and per share data)
| Three months ended | ||||||||
| March 31 | ||||||||
| 2020 | 2019 | |||||||
| (Unaudited) | ||||||||
| Revenues | 3,516 | 26,571 | ||||||
| Research and development expenses | (99,948 | ) | (44,623 | ) | ||||
| General and administrative expenses | (57,406 | ) | (23,617 | ) | ||||
| Operating loss | (153,838 | ) | (41,669 | ) | ||||
| Financing expenses, net | (15,100 | ) | (18,482 | ) | ||||
| Net loss | (168,938 | ) | (60,151 | ) | ||||
| Other comprehensive loss - Foreign currency gain (loss) | (1,283 | ) | 3,533 | |||||
| Comprehensive loss | (170,221 | ) | (56,618 | ) | ||||
| Loss per share (basic and diluted) | (0.45 | ) | (0.21 | ) | ||||
| Basic and diluted weighted average number of shares of common stock outstanding | 372,500 | 280,000 | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(U.S. dollars, except share and per share data)
| Number of Shares | Amount | Additional paid-in capital | Foreign currency translation adjustments | Accumulated deficit | Total Company’s stockholders’ equity | |||||||||||||||||||
| BALANCE AT JANUARY 1, 2019 | 280,000 | 28 | 271,069 | (5,723 | ) | (207,494 | ) | 57,880 | ||||||||||||||||
| CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2019: | ||||||||||||||||||||||||
| Shares issued in payment of liability | 5,733 | 1 | 43,374 | - | - | 43,375 | ||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | 3,533 | - | 3,533 | ||||||||||||||||||
| Comprehensive loss for three month ended March 31, 2019 | - | - | - | - | (60,151 | ) | (60,151 | ) | ||||||||||||||||
| BALANCE AT MARCH 31, 2019 (Unaudited) | 285,733 | 29 | 314,443 | (2,190 | ) | (267,645 | ) | 44,637 | ||||||||||||||||
| Number of Shares | Amount | Additional paid-in capital | Foreign currency translation adjustments | Accumulated deficit | Total Company’s stockholders’ equity | |||||||||||||||||||
| BALANCE AT JANUARY 1, 2020 | 372,500 | 37 | 1,095,610 | (715 | ) | (621,420 | ) | 473,512 | ||||||||||||||||
| CHANGES DURING THE PERIOD OF THREE MONTHS ENDED MARCH 31, 2020: | ||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | (1,283 | ) | - | (1,283 | ) | ||||||||||||||||
| Comprehensive loss for three month ended March 31, 2020 | - | - | - | - | (168,938 | ) | (168,938 | ) | ||||||||||||||||
| BALANCE AT MARCH 31, 2020 (Unaudited) | 372,500 | 37 | 1,095,610 | (1,998 | ) | (790,358 | ) | 303,291 | ||||||||||||||||
| 4 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars except)
| Three months ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| (Unaudited) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss for the period | (168,938 | ) | (60,151 | ) | ||||
| Adjustments required to reconcile net loss for the period to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 9,627 | 9,447 | ||||||
| Increase in liability for employee rights upon retirement | 4,057 | 4,075 | ||||||
| Decrease (increase) in accounts receivable | (1,935 | ) | 3,776 | |||||
| Decrease (increase) in other current assets | (13,826 | ) | 11,056 | |||||
| Increase (decrease) in accounts payable | 8,943 | (1,178 | ) | |||||
| Increase in other accounts liabilities | 33,696 | 11,310 | ||||||
| Net cash used in operating activities | (128,376 | ) | (21,665 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Loans granted to related parties | (145,292 | ) | (35,494 | ) | ||||
| Purchase of Property and Equipment | (6,886 | ) | (1,507 | ) | ||||
| Net cash used in investing activities | (152,178 | ) | (37,001 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payments of lease liability | (6,942 | ) | (6,814 | ) | ||||
| Proceeds from issued in payment of liability | - | 43,375 | ||||||
| Net cash provided by (used in) financing activities | (6,942 | ) | 36,561 | |||||
| EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 10,991 | (739 | ) | |||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (276,505 | ) | (22,844 | ) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 359,461 | 23,149 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 82,956 | 305 | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statement
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
| NOTE 1 – | GENERAL |
| A. | Operations |
UCG, INC. (the “Company”) 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 the Company in the field of cybersecurity under the terms of development agreement between the Company and RNA. The Company is primarily engaged in the marketing and distribution of cybersecurity related products.
In anticipation of the transaction contemplated under the Merger Agreement referred to below, SG 77 Inc. a Delaware Corporation and a wholly-owned subsidiary of the Company (“SG”), was incorporated on April 16, 2020 and all of the cybersecurity rights and interests held by the Company, including the share ownership of RNA, were assigned to SG.
On April 27, 2020, the Company completed a reverse triangular merger pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) among World Health Energy Holdings, Inc., (“WHEN”), R2GA, Inc., a Delaware corporation and a wholly owned subsidiary of WHEN (“Sub”), the Company, SG, and RNA. Under the terms of the Merger Agreement, R2GA merged with SG, with SG remaining as the surviving corporation and a wholly-owned subsidiary of the WHEN (the “Merger”). The Merger was effective as of April 27, 2020 whereby SG became a direct and wholly owned subsidiary of WHEN and RNA indirect wholly owned subsidiary of the Company. Each of Gaya Rozensweig and George Baumeohl, directors of the Company, are also the sole shareholders and directors of the Company.
As consideration for the Merger, WHEN issued to UCG 3,870,000 Series B Convertible Preferred Stock, par value $0.0007 per share, of WHEN (the “Series B Preferred Shares”). Each share of the Series B Preferred Shares will automatically convert into 100,000 shares of WHEN’s common stock, par value $0.0007 (the “Common Stock”), for an aggregate amount of 387,000,000,000 shares of WHEN’s Common Stock, upon the filing with the Secretary of State of Delaware of an amendment to WHEN’s certificate of incorporation increasing the number of authorized shares of Common Stock that the Company is authorized to issue from time to time.
| B. | Going concern uncertainty |
Since inception, the Company has devoted substantially all its efforts to research and development. The Company is still in its development stage and the extent of the Company’s future operating losses and the timing of becoming profitable, if ever, are uncertain. As of March 31, 2020, the Company had $82,956 in cash and cash equivalents, net losses of $168,938 and accumulated deficit of $790,358.
The Company 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 Company on acceptable terms, if at all, and the Company cannot give assurance that it will be successful in securing such additional capital.
These conditions raise substantial doubt about the Company’s ability to continue to operate as a “going concern.” The Company’s ability to continue operating as a going concern is dependent on several factors, among them is the ability to raise sufficient additional funding.
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UCG, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| NOTE 1 – | GENERAL (continue) |
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (SARS-CoV-2) to be a global pandemic (COVID-19), which continues to spread throughout the United States and around the world. The COVID-19 pandemic is having significant effects on global markets, supply chains, businesses, and communities. Specific to the Company, COVID-19 may impact various parts of its 2020 operations and financial results including but not limited to reduction is sales, difficulties in obtaining additional financing, or potential shortages of personnel. The Company believes it is taking appropriate actions to mitigate the negative impact. However, the full impact of COVID-19 is unknown and cannot be reasonably estimated as these events occurred subsequent to year end and are still developing.
| C. | Risk factors |
The Company and RNA (collectively, 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.
| 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 for three-months ended March 31, 2020. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2020. 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 filed under cover of Form 8-K/A on July 30 2020.
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UCG, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
| NOTE 2 - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continue) |
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.
Recent Accounting Pronouncements
In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 will originally become effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation.
| 8 |
UCG, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
| NOTE 3 – | RELATED PARTIES |
| A. | Transactions and balances with related parties |
Three months ended March 31 | ||||||||
| 2020 | 2019 | |||||||
| General and administrative expenses: | ||||||||
| Salaries and fees to officers | 15,034 | 11,553 | ||||||
| Research and development expenses: | ||||||||
| Salaries and fees to officers | 8,495 | 6,201 | ||||||
| B. | Balances with related parties and officers: |
| As of March 31, | ||||||||
| 2020 | 2019 | |||||||
| Other accounts receivable | 306,740 | 80,815 | ||||||
| NOTE 4 – | SUBSEQUENT EVENTS |
MERGER AGREEMENT
See Note 1 above for additional detailed regarding the merger agreement signed on April 27, 2020.
| 9 |