NOTES
TO UNAUDITED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Zenosense, Inc.
(the “Company”) was incorporated under the laws of the State of Nevada on August 11, 2008.
Effective December
4, 2013, the Company entered into a development and exclusive license agreement (“License Agreement”) whereby the
Company will provide a third party with capital for the development of sensory technology for a methicillin resistant Staphylococcus
aureus / Staphylococcus aureus (“MRSA/SA”) detection device and a cancer detective device and other improvements and
variations to the products (the “Sgenia Products”) to be used in the hospital and health care environments, in exchange
for a worldwide, exclusive license to manufacture, market and sell the resulting products, subject to certain limitations and
a royalty arrangement on a revenue sharing basis. The License Agreement was modified in April 2015 and July 2015 to extend to
additional cancer sensory products and to modify and extend the development schedule and change the research funding budget to
accommodate the lung cancer product as well as MRSA/SA product.
On June 20,
2016, the Company entered into a joint venture arrangement by way of a Subscription and Shareholders’ Agreement (“MML
SSA”) with a third party medical detection device developer (“Partner”) utilizing a joint venture vehicle, MIDS
Medical Ltd (“MML”), a UK Limited company of which the Company owns a 40% interest awarded on July 1, 2016, in exchange
for its participation and funding to support MML during a Phase 1 and prospectively during a Phase 2 development of the Partner’s
MIDS universal immunoassay detection technology platform (“MIDS”). MML will have the right, under license, to use
the MIDS Intellectual Property (“MIDS IP”) during the development and the MIDS IP will be transferred to MML in the
event MML concludes a commercial deal for MIDS with a third party.
Following an
extensive revision to the MIDS core Hall effect sensor electronics during the first half of 2018, MML reported, in June, 2018,
that testing had confirmed and had materially improved upon the testing results announced in late 2017, with a near doubling of
sensitivity of detection. MML informed the Company that two brands of commercially available paramagnetic assay beads were
tested: GE Sera-Mag™ (3μm) and Thermo Fisher Scientific M-270 Dynabeads® (2.8 μm), both of which are thought suitable
for a HS troponin assay and have similar paramagnetic characteristics. MML also stated that the MIDS level of detail of both these
brands was seen on a reliable, repeatable basis at around 50,000 beads, with good signal linearity (required for accurate assay
quantitation) at higher numbers. This number of beads detected at the level of detail is, according to MML, well within the
range advised by MML’s assay consultants as suitable for a HS troponin assay.
On August 31,
2018, the Company and MML entered into an agreement with an investor for the funding of MML of up to US$1,200,000 in exchange
for up to 10.31% equity ownership in MML. The Company’s ownership of MML may be diluted based on the amount of the
investor funds.
The Company
has been dormant since November, 2018.
The Company’s
year-end is December 31st.
On December
9, 2021, the Eighth Judicial District Court in Clark County, Nevada Case No: A-21-843440-B appointed Custodian Ventures, managed
by David Lazar as the Company’s custodian.
David Lazar,
31, has been CEO and Chairman of the Company since December 9, 2021. David Lazar is a private investor. Mr. Lazar has been a partner
at Zenith Partners International since 2013, where he specializes in research and development, sales, and marketing. From 2014
through 2015, David was the Chief Executive Officer of Dico, Inc., which was then sold to Peekay Boutiques. Since February of
2018, Mr. Lazar has been the managing member of Custodian Ventures LLC, where he specializes in assisting distressed public companies.
Since March 2018, David has acted as the managing member of Activist Investing LLC, which specializes in active investing in distressed
public companies. David has a diverse knowledge of financial, legal, and operations management; public company management, accounting,
audit preparation, due diligence reviews, and SEC regulations.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The accompanying
financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”)
“FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements
in conformity with generally accepted accounting principles (“GAAP”) in the United States.
Principles
of Consolidation
The consolidated
financial statements include the financial statements of all the subsidiaries. All inter-company transactions and balances have
been eliminated upon consolidation.
Management’s
Representation of Interim Financial Statements
The accompanying
unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and
regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing
quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed
or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information
presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion
of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of
a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These condensed consolidated
financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto.
Use of
estimates
The preparation
of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the calculation of stock-based compensation, and disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Management
makes these estimates using the best information available at the time the estimates are made; however actual results could differ
from those estimates. Significant items subject to such estimates and assumptions include valuation of inventory, and recoverability
of carrying amount and the estimated useful lives of long-lived assets.
Cash and
cash equivalents
Cash and cash
equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted
as to withdrawal or use, and which have remaining maturities of three months or less when initially purchased. As of September
30, 2019 and December 31, 2018, the Company had no cash on hand.
Income
taxes
The Company
accounts for income taxes under FASB ASC 740, ”Accounting for Income Taxes”. Under FASB ASC 740, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. FASB ASC 740-10-05, ”Accounting for Uncertainty in Income
Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and
measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position
must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized
is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.
The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances
have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under
audit.
Net Loss
per Share
Net loss per
common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by
Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”)
calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during
the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number
of common shares and dilutive common share equivalents outstanding.
Recent
Accounting Pronouncements
There are no
recent accounting pronouncements that impact the Company’s operations.
NOTE 3 – GOING
CONCERN
As of September
30, 2019, the Company had $-0- in cash and cash equivalents. The Company had net loss of $302,186 for the nine months ended
September 30, 2019, has negative working capital of $989,115 and accumulated deficit of $3,247,445 on September 30,
2019. The Company’s principal sources of liquidity have been cash provided by operating activities, as well as financial
support from related parties. The Company’s operating results for future periods are subject to numerous uncertainties and
it is uncertain if the Company will be able to maintain profitability and continue growth for the foreseeable future. If management
is not able to increase revenue and/or manage operating expenses in line with revenue forecasts, the Company may not be able to
maintain profitability. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company
will focus on improving operation efficiency and cost reduction, developing core cash-generating business, and enhancing marketing
function. Actions include developing more customers, as well as creating synergy using the Company’s resources.
The Company
believes that available cash and cash equivalents, the cash provided by operating activities, together with actions as developing
more customers and create synergy of the Company’s resources, should enable the Company to meet presently anticipated cash
needs for at least the next 12 months after the date that the financial statements are issued and the Company has prepared the
consolidated financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints
on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but
not necessarily be limited to, obtaining financial support from related parties, and controlling overhead expenses. Management
cannot provide any assurance that the Company’s efforts will be successful. The consolidated financial statements do not
include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the outcome of these uncertainties.
NOTE 4 – EQUITY
Common
stock
The Company
has authorized 500,000,000 shares of $0.001 par value, common stock. As of September 30, 2019 and December 31,
2018, there were 31,932,843 shares of Common Stock issued and outstanding.
NOTE 5 – RELATED
PARTY NOTES PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES
As of September
30, 2019 and December 31, 2018, the Company had $455,379 and $280,305 in accounts payable, accrued expenses and accrued interest;
respectively. Additionally, as of the same dates the Company had $108,496 due to former related parties, and $425,240 in
convertible notes, outstanding.
NOTE 6 – COMMITMENTS
AND CONTINGENCIES
The Company
did not have any contractual commitments as of September 30, 2019 and December 31, 2018.
NOTE
7 – SUBSEQUENT EVENTS
On December
9, 2021, the Eighth Judicial District Court in Clark County, Nevada Case No: A-21-843440-B appointed Custodian Ventures, managed
by David Lazar as the Company’s custodian.