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 June 30, 2020 and December 31, 2019 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 June 30, 2020, the Company had $-0- in cash and cash equivalents. The Company had net loss of $116,716 for the six months
ended June 30, 2020, has negative working capital of $1,164,189 and accumulated deficit of $3,422,519 on June 30, 2020.
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 June 30, 2020 and December 31,
2019, 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 June 30, 2020 and December 31, 2019, the Company had $630,453 and $513,737 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 June 30, 2020 and December 31, 2019.
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.