EVENTS DURING THE PERIOD

9 Months Ended

Sep. 30, 2024

NOTE 3 –EVENTS DURING THE PERIOD

(i)

On July 2, 2024, the Company, entered into and executed an agreement (the “IHQ Agreement”) with Intent HQ Limited (“IHQ”), a company incorporated under the laws of England and Wales pursuant to which IHQ invested and granted the Company a worldwide, royalty-free, perpetual, nonexclusive, sublicensable, irrevocable license to IHQ’s Edge SDK, in both source-code and object-code formats and associated documentation (collectively, the “Perpetual License”). In consideration of the Perpetual License the Company issued 25,038,272,832 shares (the “Consideration Shares”) of Company’s common stock (the “Common Stock”). The Consideration Shares represents approximately 4.8% of the issued and outstanding share capital of the Company following such issuance. Under the terms of the IHQ Agreement, IHQ also undertook to provide professional consulting services to enable the Company to implement, develop and commercialize its own and joined products based on the product materials or any portions or derivative works thereof, all subject to the terms and conditions set forth therein.

The strategic alliance represented by this agreement aims to leverage WHEN’s cybersecurity products in combination with IHQ’s modules to introduce to the market novel products in the cybersecurity field applicable to both the business and individual level.

The IHQ Agreement provides that the Consideration Shares are subject to a Lock Up Agreement for a period of 12 months from the date of their issuance, but the lock up would be automatically canceled on the date of the Uplisting (as defined below). In addition, the lock up may be cancelled unilaterally by IHQ, in its sole discretion, in which case the Perpetual License will be considered fully paid. Under the terms of the IHQ Agreement, the Company undertook to complete an uplisting (the “Uplisting”) of its shares of Common Stock on NYSE, NASDAQ or the Chicago Board Options Exchange prior to June 28, 2025 (the “Uplisting Target Date”).

WORLD HEALTH ENERGY HOLDINGS, INC.

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Under the terms of the IHQ Agreement, the Company may at any time prior to the Uplisting Target Date, at its sole discretion without any obligation whatsoever, pay IHQ in cash $5 million dollar as a license fee for the Perpetual License, upon which the entirety of the Consideration Shares shall be returned to the Company. If the Uplisting occurs on or before the Uplisting Target Date, then upon Uplisting the Perpetual License shall be deemed to have been fully paid for by the issuance of the Consideration Shares, and all of IHQ’s rights of termination of the Agreement and rights related to cancellation of Lock Up shall terminate and no longer be in force and effect. However, if the Uplisting does not occur before the Uplisting Target Date and, or the Company has not paid $5 million license fee for the Perpetual License, then IHQ has the right, within 30 days of the Uplisting Target Date, to terminate the Agreement and return to WHEN all of the Consideration Shares.

In the event that the Company or a subsidiary will raise funds on or prior to December 28, 2025 (the “Target Fundraise Period”) in connection with, from or relating to the Uplisting (whether or not the Uplisting ultimately occurs) for a specified amount (the “Target Fundraise”), the Company is obligated to pay IHQ a marketing advisory fee at a specified the rate for each dollar cumulatively raised during the Target Fundraise Period over and above the Target Fundraise.

The Company estimated the value of the Perpetual License purchased at $5,000,000 based on the fair value of Company’s shares at the agreement date. In addition, the Company determined that in certain circumstances, beyond its control, the Consideration Shares may be obligated to be redeemed and therefore, classified the Consideration Shares as temporary equity pursuant to the guidance in ASC 815-40-25.

(ii)

On August 14, 2024, the Company, entered into and executed an agreement (the “Terra Zone Agreement”) with Terra Zone Ltd. (“Terrz Zone”), a company incorporated under the laws of Israel pursuant to which the Company purchased 448,029 ordinary shares of Terra Zone, representing 4% of the issued and outstanding shares of Terra Zome on a fully diluted basis immediately following the issuance, in consideration for the Company’s agreement to issue to Terra Zone 5,000,000,000 shares of the Company’s common stock. In addition, the parties agreed to a Mutual Option, exercisable by either of the parties through the second anniversary of the closing of the Terra Zone Agreement, to acquire additional shares of the other. Under the Mutual Option, the Company is entitled to purchase an additional 446,697 ordinary shares of Terra Zone in consideration of the issuance by the Company of 5,208,338,520 shares common stock of the Company and Terra Zone is entitled to exercise the Mutual Option for the same number of the Company’s common stock.

Terra Zone is engaged in the cybsersecurity field. On August 14, 2024, the Company and Terra Zone entered into the Technology Cooperation Agreement pursuant to which the parties will cooperate as reasonably required so that their security solutions interoperate, by integrating Terra Zone’s unique technology with WHEN’s intelligence cyber and security business solution, the parties intend to bring to market an endpoint security solution intended to enable organizations to precisely identify and isolate any entity—whether working remotely or within the corporate network—ensuring that only authorized users can access critical resources while remaining completely isolated from the broader network.

Under the terms of the technology cooperation agreement, the parties undertook to develop and commercialize the Bundled Solution. The parties also agreed that of the net sales received from the parties from the Bundled Solution in an aggregate amount of up to eight million ($8,000,000), except for certain specified fees, 75% of such amount shall be for the account of WHEN and the balance for Terra Zone. Any amounts of net sales in excess of eight million ($8,000,000) shall be distributed to the parties in equal measure.

As of September 30, 2024, Terra Zone issued its share to the Company while the Company issued its shares to Terra Zone at October 25, 2024.

The Company estimated the value of the Terrz Zone’s shares based on the fair value of Company’s shares as the agreement date, at $500,000.

The fair value of the Mutual Option was estimated using the Black-Scholes option pricing model. The assumptions used to perform the calculations as of September 30, 2024 and the agreement date, are detailed below:

	September 30, 2024			August 14, 2024
Expected volatility (%)		169.4	%		174.0	%
Risk-free interest rate (%)		3.66	%		3.93	%
Expected dividend yield		0.0	%		0.0	%
Contractual term (years)		1.87			2.00
Conversion price		0.0001			0.0001
Underlying share price (U.S. dollars)		0.0001			0.0001
Fair value (U.S. dollars in thousands)		396,515			411,378

WORLD HEALTH ENERGY HOLDINGS, INC. 10-Q