WORLD HEALTH ENERGY HOLDINGS, INC. - Quarter Report: 2022 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

MARK ONE

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the Quarterly Period ended September 30, 2022; or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from ________ to ________

WORLD HEALTH ENERGY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

(561) 870-0440

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 14, 2022, 503,002,741,330 shares of the registrant’s common stock, par value $0.00001 per share, were outstanding.

WORLD HEALTH ENERGY HOLDINGS, INC.

Form 10-Q

September 30, 2022

WORLD HEALTH ENERGY HOLDINGS, INC.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2022

(UNAUDITED)

WORLD HEALTH ENERGY HOLDINGS, INC.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2022

(U.S. dollars except share and per share data)

(UNAUDITED)

TABLE OF CONTENTS

WORLD HEALTH ENERGY HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars except share and per share data)

The accompanying notes are an integral part of the condensed consolidated financial statements.

WORLD HEALTH ENERGY HOLDINGS, INC .

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(U.S. dollars except share and per share data)

The accompanying notes are an integral part of the condensed consolidated financial statements.

WORLD HEALTH ENERGY HOLDINGS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(U.S. dollars, except share and per share data)

The accompanying notes are an integral part of the condensed consolidated financial statements.

WORLD HEALTH ENERGY HOLDINGS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(U.S. dollars, except share and per share data)

The accompanying notes are an integral part of the condensed consolidated financial statements.

WORLD HEALTH ENERGY HOLDINGS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars except)

The accompanying notes are an integral part of the condensed consolidated financial statement

WORLD HEALTH ENERGY HOLDINGS, INC .

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 – GENERAL

World Health Energy Holdings, Inc., (the “Company” or “WHEN”), was formed on May 21, 1986, under the laws of the State of Delaware. The Company has invested in and abandoned a variety of software programs that it strove to commercialize.

UCG, INC. (the “UCG”) was incorporated on September 13, 2017, under the laws of the State of Florida. The Company wholly-owns the issued and outstanding shares of RNA Ltd. (Hereinafter: “RNA”).

RNA is primarily a research and development company that has been performing software design work for UCG in the field of cybersecurity under the terms of development agreement between UCG and RNA. UCG is primarily engaged in the marketing and distribution of cybersecurity related products.

In anticipation of the transaction contemplated under the Merger Agreement, SG 77 Inc. a Delaware Corporation and a wholly-owned subsidiary of UCG (“SG”), was incorporated on April 16, 2020 and all of the cybersecurity rights and interests held by UCG, including the share ownership of RNA, were assigned to SG.

The Company, collectively with RNA are hereunder referred to as the “Group”.

CrossMobile investment agreement

On March 22, 2022 the Company, CrossMobile CrossMobile Sp. z o.o, a company formed under the laws of Poland (“CrossMobile”) and the shareholders of CrossMobile (of which Mr. Giora Rosenzweig, held 40.67% and Mr. George Baumeohl held 3.33%, of the issued preferred share capital 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”). 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 CrossMobile’s 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 CorssMobile, WHEN issued to Crossmobile on July 13, 2022 the 10,000,000,000 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 51% 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. See note 5(1).

WORLD HEALTH ENERGY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 – GENERAL (continue)

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 September 30, 2022, the Group had $111,436 of cash and cash equivalents, accumulated deficit of $15,251,472, negative working capital of $168,337 and net losses of $9,158,022 during the nine months ended September 30, 2022.

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.

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on its operations and determined that there were no material adverse impacts on the Company’s results of operations and financial position as of September 30, 2022. These estimates may change, as new events occur and additional information is obtained.

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 interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q

and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Operating results for the three months and nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected for the year ending 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 financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.

WORLD HEALTH ENERGY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 3 – COMMON STOCK

Between August and October 2021, the Company and certain investors entered into subscription agreements for a private placement of units of the Company securities (the 2021 Private Placements”) 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. Subscription agreements for an aggregate of $900,000 provide that the investors are to remit the subscription proceeds at the time of investment and in three month intervals thereafter, in each case in amounts equal to 20% of their committed amounts. During the nine months ended September 30, 2022, the Company received a total of $151,250 on account of these subscription and in consideration thereof issued 1,140,000,000 shares of Common Stock and warrants for an additional 1,140,000,000 shares of Common Stock and the balance is presented as proceeds on account of shares.

During the nine months ended September 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 $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. As part of the subscription agreements, CrossMobile undertook to issue the investors up to 5% of the issued and outstanding share capital of CrossMobile. During the nine months ended September 30, 2022, the Company received a total of $500,000 on account of these subscription and in consideration thereof issued 2,500,000,000 shares of Common Stock and warrants for an additional 2,500,000,000 shares of Common Stock and the balance is presented as proceeds on account of shares.

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 $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) one common stock purchase warrant to purchase an additional share of the Company’s Common Stock for a one year period at a per share exercise price of $0.0006. The price per unit is $0.0003. In consideration thereof, the Company issued 833,333,334 shares of Common Stock and warrants for an additional 833,333,334 shares of Common Stock.

On May 19, 2022 the Company issued 30,000,000 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 $9,000 based on the share price of the Company as of the issuance date.

On August 10, 2022, the Company entered into an agreement with a consultant with a term of 12 months under which it undertook to issue to the Consultant 300,000,000 restricted stock for investor relations services.

WORLD HEALTH ENERGY HOLDINGS, INC .

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 4 - STOCK OPTIONS

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 6,000,000,000 shares of the Company’s common stock, at a per share exercise price of $0.0001 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: 25% (i.e., 1,500,000,000) option shares vest on the first anniversary of the appointment to the advisory board and the balance in increments of 400,000,000 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 1.85%, a volatility factor of 397%, dividend yields of 0% and an expected life of 6.25 years and was estimated at $2,400,000.

On January 1, 2022, the Company granted options to purchase 400,000,000 shares of the Company’s Common Stock to a member of its advisory board, under the Company’s 2021 Plan. Options to purchase 100,000,000 shares of Common Stock shall vest on the first anniversary of the agreement and the remaining options shall vest quarterly, over additional 3 years

The fair value of the options was determined using the Black-Scholes pricing model, assuming a risk free rate of 1.12%, a volatility factor between 391%, dividend yields of 0% and an expected life of 6.25 years and was estimated at $200,000.

On May 15, 2022, the Company granted options under the 2021 Plan (2021) to directors, employees and service providers to purchase an aggregate of 34,900,000,000 shares of Common Stock exercisable at a per share exercise price of $0.0001. Of the options granted, 5,000,000,000 were issued to CEO. The options vest on an annual basis with 25% of the option grant vesting on each anniversary of the option grant. Following vesting the options are exercisable through the sixth month anniversary following the last instalment vesting date.

The fair value of the options was determined using the Black-Scholes pricing model, assuming a risk free rate of 2.84%, a volatility factor of 305.1%, dividend yields of 0% and an expected life of 6.25 years and was estimated at $13,959,141.

On September 18, 2022, the Company granted options under the 2021 Plan (2021) to its Chief strategic affairs to purchase an aggregate of 10,000,000,000 shares of Common Stock exercisable at a per share exercise price of $0.0001. Of the options granted, 5,000,000,000 were immediately vested and the remaining shall vest on 4 annual equal instalments commencing May 15, 2023.

The fair value of the options was determined using the Black-Scholes pricing model, assuming a risk free rate of 3.62%, a volatility factor of 306.5%, dividend yields of 0% and an expected life of 5.54 years and was estimated at $3,999,451.

WORLD HEALTH ENERGY HOLDINGS, INC .

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 4 - STOCK OPTIONS (continue)

The following table presents the Company’s stock option activity during the nine months ended September 30, 2022:

 SCHEDULE OF STOCK OPTION ACTIVITY

The aggregate intrinsic value of the awards outstanding as of September 30, 2022 is 11,620,000. These amounts represent the total intrinsic value, based on the Company’s stock price of $0.0003 as of September 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.

The stock options outstanding as of September 30, 2022, have been separated into exercise prices, as follows:

 SCHEDULE OF STOCK OPTIONS OUTSTANDING RANGE OF EXERCISE PRICE

The stock options outstanding as of December 31, 2021, have been separated into exercise prices, as follows:

Compensation expense recorded by the Company in respect of its stock-based compensation awards for the period of nine months ended September 30, 2022 was $8,622,640 and are included in General and Administrative expenses in the Statements of Operations.

As of September 30, 2022, there was $15,212,104 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the employee share option plan.

WORLD HEALTH ENERGY HOLDINGS, INC .

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 5 – SUBSEQUENT EVENTS

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.

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. Following the closing of the Initial Investment, Ms. Gaya Rozensweig, a Company director, was appointed to the CrossMobile board of directors and the combined holdings of Giora Rozensweig and WHEN, afford them effective control of the majority of the outstanding voting capital of CrossMobile

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. On October 25, 2022, the Company exercised the option to acquire such additional shares of CrossMobile and the Company now holds approximately 51% of CrossMobile’s outstanding share capital on a fully diluted basis. In consideration for the exercise of the option, the Company shall issue to CrossMobile 10,000,000 shares of the Company’s common stock.

Business Overview of the CrossMobile Transaction

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

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

CrossMobile anticipates that it will be able to go live in December 2022 with the following:

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.

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 September 30, 2022 to the Three Months Ended September 30, 2021

The following table presents our results of operations for the three months ended September 30, 2022 and 2021

Revenues. Revenues for the three months ended September 30, 2022 and 2021 were $23,726 and $33,717, 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 salaries and related expenses, consulting fees, service providers’ costs, related materials and overhead expenses. Research and development expenses decrease from $120,701 in the three months ended September 30, 2021 to $111,570 during the corresponding period in 2022. The decrease resulted from decrease in salaries and related expenses offset by increase in consulting fees.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses and other non-personnel related. General and administrative expenses decreased from $466,847 for the three months ended September 30, 2021 to $106,828 during the corresponding period in 2022. The decrease resulted primarily from decrease in professional services expenses.

Financing Expenses, Net. Financing expenses, net for the three months ended September 30, 2021 amounted to $19,519. Financing income, net for the three months ended September 30, 2022 amounted to $8,881. The decrease is mainly due to currency exchange differences between the Dollar and the New Israeli Shekel.

Net Loss. Net loss for the three months ended September 30, 2022 was $4,715,455 and is primarily attributable to non-cash share based compensation expense of $4,529,664, research and development and general and administrative expenses.

Comparison of the Nine Months Ended September 30, 2022 to the Nine Months Ended September 30, 2021

The following table presents our results of operations for the three months ended June 30 2022 and 2021

Revenues. Revenues for the nine months ended September 30, 2022 and 2021 were $67,480 and $115,167, 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 salaries and related expenses, consulting fees, service providers’ costs, related materials and overhead expenses. Research and development expenses decreased from $374,561 for the nine months ended September 30, 2021 as compared to $354,593 during the corresponding period in 2022. The decrease resulted primarily from decrease in salaries and related 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 decreased from $736,501 for the nine months ended September 30, 2021 as compared to $377,168 in 2022 during the corresponding period in 2022. The decrease resulted primarily from decrease in professional services expenses.

Financing Expenses, Net. Financing expenses, net for the nine months ended September 30, 2021 amounted to $50,435. Financing income, net for the nine months ended September 30, 2022 amounted to $45,515. The increase is mainly due to currency exchange differences between the Dollar and the New Israeli Shekel.

Net Loss. Net loss for the nine months ended September 30, 2022 was $9,093,755 and is primarily attributable to non-cash share based compensation expense of $8,474,989, 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 September 30 and 2022 and 2021, we had current assets of $371,280 and $355,188 respectively, and total assets of $5,472,583 and $622,735 respectively. The increase in total assets is primarily due to an increase in our investments and cash balance. We had current liabilities of $539,617 as compared to $1,297,427 as of September 30, 2022 and 2021, respectively and total liabilities of $2,830,399 as compared to $3,649,405 as of September 30, 2022 and 2021, respectively. The decrease is mainly attributed to the decrease in the balance of other accounts liabilities and right of use liabilities arising from operating lease offset by increase in accounts payable.

At September 30, 2022, we had a cash balance of $111,436 compared to the cash balance of $46,022 as of December 31, 2021. We have no cash equivalents.

At September 30, 2022, we had a negative working capital of $168,337 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.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. We have a stockholders’ equity of $2,642,184 and a negative working capital of $168,337 at September 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 September 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:

Our management believes the weaknesses identified above have not had any material effect on our financial results.

We expect to be materially dependent upon third parties to provide us with accounting consulting services for the foreseeable future which we believe will mitigate the impact of the material weaknesses discussed above. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP and establish an audit committee and implement internal controls and procedures, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures will not result in errors in our financial statements which could lead to a restatement of those financial statements.

Changes in Internal Controls over Financial Reporting.

Except for the material weakness and associated remediation plan, , there have been no changes in our internal control over financial reporting during the fiscal quarter ended September 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 to dismiss was denied. The Company answered the complaint, denying all allegations, and filed a counterclaim against EL and other third party defendants in September 2022. EL filed a motion to dismiss the counterclaim, which is currently pending.

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 suit was dismissed without prejudice. The Company is currently not pursuing the lawsuit in Florida as the Company’s counterclaim in Delaware referred to above seeks substantially the same redress.

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

No Offerings in July- September?

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:

* Filed herewith

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.