NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED SEPTEMBER 30, 2022
NOTE 1 – ORGANIZATION AND BUSINESS
ZEUUS, INC. (formerly Kriptech International Corp.)
(the “Company”) is a corporation established under the corporation laws in the State of Nevada on March 20, 2016. The Company
has adopted September 30 fiscal year end.
On June
11, 2020, Meshal Al Mutawa, acquired control of 8,000,000 restricted shares of the Company’s issued and outstanding common stock,
representing approximately 75.97% of the Company’s total issued and outstanding common stock, from Anatolii Antontcev and Aleksandr
Zausayev in exchange for $270,000 under the terms of a Stock Purchase Agreement by and among Messrs. Al Mutawa, Zausayev and Antontcev.
On June 11, 2020, (i)
Mr. Anatolii Antontcev resigned from all positions with the Company, including
as President, Chief Executive Officer, Treasurer, Chief Financial Officer and as a Director, (ii) Aleksandr Zausayev resigned as the Secretary.
On June 11, 2020, Mr.
Meshal Al Mutawa was appointed to the Company’s Board of Directors and as the Company’s President, Chief Executive Officer,
Treasurer, Chief Financial Officer, and Secretary.
On
August 31, 2020, Bassam A.I. Al-Mutawa, acquired control of eight million (8,000,000) restricted shares of the Company’s issued
and outstanding common stock, representing approximately 75.97% of the Company’s total issued and outstanding common stock, from
Meshal Al Mutawa through an Assignment by and between Mr. Meshal Al Mutawa, and Mr. Bassam A.I. Al-Mutawa.
On
August 31, 2020, Mr. Bassam A.I. Al-Mutawa was appointed to the Company’s Board of Directors and as the Company’s President,
Chief Executive Officer, Treasurer, Chief Financial Officer, and Secretary.
On March 9, 2021, the
Financial Industry Regulatory Authority (“FINRA”) approved the Company’s name change to Zeuus, Inc. and its trading
symbol to ZUUS. The market effective date of the name and trading symbol change was March 10, 2021.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results may differ from those estimates.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts,
the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently
have not experienced any losses in our accounts. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation
insurable amount (“FDIC”).
Cash equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years ended September
30, 2022 or 2021.
Principles of Consolidation
The accompanying consolidated financial statements
for the years ended September 30, 2022 and 2021, include the accounts of the Company and its wholly owned subsidiaries. Zeuus Energy,
incorporated on July 27, 2021 in Montenegro is currently the only operating subsidiary.
Translation Adjustment
For the years ended September 30, 2022 and 2021,
the accounts of the Company’s subsidiary Zeuus Energy, Inc, are maintained in Euros. According to the Codification, all assets
and liabilities were translated at the current exchange rate at respective balance sheets dates, members’ capital are translated
at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation
adjustments are reported under other comprehensive income in accordance with the Comprehensive Income Topic of the Codification (ASC 220),
as a component of members’ capital. Transaction gains and losses are reflected in the income statement.
Comprehensive Income
The Company uses SFAS 130 “Reporting Comprehensive
Income” (ASC Topic 220). Comprehensive income is comprised of net income and all changes to the statements of members’
capital, except those due to investments by members, changes in paid-in capital and distributions to members. Comprehensive income for
the years ended September 30, 2022 and 2021 is included in net loss and foreign currency translation adjustments.
Property and Equipment
Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the
estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over the lesser of the
remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance are expensed as incurred.
Basic and Diluted Earnings Per Share
Net income (loss) per common share is computed
pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed
by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net
income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and
potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially
outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. As of September 30,
2022 and 2021, the Company’s diluted loss per share is the same as the basic loss per share, as the inclusion of any potential shares
would have had an anti-dilutive effect due to the Company generating a loss.
Stock-based Compensation
We account for equity-based transactions with
employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation”
(Topic 718), which establishes that equity-based payments to employees and non-employees are recorded at the grant date the fair value
of the equity instruments the entity is obligated to issue when the employees and non-employees have rendered the requisite service and
satisfied any other conditions necessary to earn the right to benefit from the instruments. Topic 718 also states that observable market
prices of identical or similar equity or liability instruments in active markets are the best evidence of fair value and, if available,
should be used as the basis for the measurement for equity and liability instruments awarded in these share-based payment transactions.
However, if observable market prices of identical or similar equity or liability instruments are not available, the fair value shall be
estimated by using a valuation technique or model that complies with the measurement objective, as described in FASB ASC Topic 718.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of
the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States
of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair
value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to
valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The
three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1: Quoted market prices available in active markets for identical
assets or liabilities as of the reporting date.
Level 2: Pricing inputs other than quoted prices in active markets
included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3: Pricing inputs that are generally unobservable inputs and
not corroborated by market data.
The carrying amount of the Company’s financial
assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity
of those instruments. The Company’s notes payable represent the fair value of such instruments as the notes bear interest rates
that are consistent with current market rates.
Recently issued accounting pronouncements
The Company has implemented all new applicable
accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements
unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued
that might have a material impact on its financial position or results of operations.
NOTE 3 – GOING CONCERN
The Company’s consolidated financial statements
as of September 30, 2022, were prepared using generally accepted accounting principles in the United States of America applicable to a
going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company
has an accumulated deficit at September 30, 2022 of $1,283,556, had a net loss of $833,922 and $715,816 of cash used in operations for
the year ended September 30, 2022. The Company has not yet established a source of revenue. These factors raise substantial doubt about
its ability to continue as a going concern.
In order to continue as a going concern, the Company
will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining
capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity
and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its
plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – NOTE RECEIVABLE
On January 8, 2021, a
promissory note for $150,000 was entered into between WNT Solutions LLC, a Dubai Corporation and the Company. The Note accrues
interest at the rate of 5% per annum and matures July 31, 2021. On March 29, 2021, the Company received a payment of $75,000 of
principal and $771 of interest. In April 2021, the remaining balance of $75,000 and all interest due was repaid.
NOTE 5 – INTANGIBLE ASSET
On June 1, 2021, the
Company completed the closing of the transactions under the terms of the Asset Purchase Agreement with Andrei Seleznev, Nikolay Alekseev,
and Ilia Alekseev (collectively, “Sellers”), dated May 12, 2021, to purchase the assets comprising the Wind Turbine Technology.
In exchange for these assets, the Company paid $100,000 in cash, and issued 14,289 shares of its common stock to the Sellers. The shares
were valued at $800,000 based on the average of the closing price per share of the Company’s common stock for the 30 trading days
prior to the effective date of the agreement. In addition, the Company entered into employment agreements with each Seller to further
develop the wind turbine technology and acquired assets. Before this transaction, the Company had no material relationship with any of
the Sellers.
NOTE 6 – PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation
is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows between three and
five years.
Long lived assets, including property and equipment,
to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less
than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed
of are reported at the lower of carrying amount or fair value less cost to sell.
Maintenance and repair expenses, as incurred,
are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable
to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.
Property and equipment stated at cost, less accumulated
depreciation consisted of the following:
| | |
September 30,
2022 | | |
September 30,
2021 | |
| Property and equipment | |
$ | 100,293 | | |
$ | 45,196 | |
| Less: accumulated depreciation | |
| (17,102 | ) | |
| (1,668 | ) |
| Property and equipment, net | |
$ | 83,191 | | |
$ | 43,528 | |
Depreciation expense
Depreciation expense
for the years ended September 30, 2022 and 2021 was $17,102 and $1,668, respectively.
NOTE 7 - COMMON STOCK TRANSACTIONS
Pursuant to the terms of the Asset Purchase Agreement
(Note 5), the Company issued 14,289 shares of common stock. The shares were valued at $800,000 based on the average of the closing price
per share of the Company’s common stock for the 30 trading days prior to the effective date of the Agreement.
On July 18, 2022, the Company amended its Articles
of Incorporation effectuating a one for ten forward split of the common stock. At the same time the authorized common stock was increased
from 75,000,000 to 200,000,000. All shares throughout these financial statements have been retroactively adjusted to reflect the forward
split.
During the year ended September 30, 2022, the
Company sold 49,470 shares of common stock for total cash proceeds of $125,626.
NOTE 8 – RELATED PARTY TRANSACTIONS
In support of the Company’s efforts and
cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains
adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support
by officers, directors, or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered
temporary in nature and have not been formalized by a promissory note.
Since March 20, 2016, (inception) through September
30, 2022, Meshal Al Mutawa, the Company’s former president, treasurer and director, and son of Bassam Al-Mutawa, has loaned the
Company funds to pay for incorporation costs and operating expenses. The following is summary of the loans as of September 30, 2022.
| Date | |
Maturity | |
Rate | | |
Default
Rate | | |
Balance 9/30/2021 | | |
Additions | | |
Balance 6/30/2022 | |
| 8/30/2021 | |
10/31/2022 | |
| 8 | % | |
| 16 | % | |
$ | 100,000 | | |
$ | — | | |
$ | 100,000 | |
| 2020 | |
n/a | |
| n/a | | |
| n/a | | |
$ | 13,823 | | |
$ | — | | |
$ | 13,823 | |
| 10/12/2021 | |
10/12/2022 | |
| 8 | % | |
| 16 | % | |
$ | — | | |
$ | 100,000 | | |
$ | 100,000 | |
| 10/25/2021 | |
10/25/2022 | |
| 8 | % | |
| 16 | % | |
$ | — | | |
$ | 150,000 | | |
$ | 150,000 | |
| 3/24/2022 | |
3/24/2023 | |
| 8 | % | |
| 16 | % | |
$ | — | | |
$ | 45,000 | | |
$ | 45,000 | |
| 4/11/2022 | |
4/11/2023 | |
| 8 | % | |
| 16 | % | |
$ | — | | |
$ | 80,000 | | |
$ | 80,000 | |
| 6/6/2022 | |
6/6/2023 | |
| 8 | % | |
| 16 | % | |
$ | — | | |
$ | 50,000 | | |
$ | 50,000 | |
| 7/18/2022 | |
7/18/2023 | |
| 8 | % | |
| 16 | % | |
$ | — | | |
$ | 100,000 | | |
$ | 100,000 | |
| 9/20/2022 | |
9/20/2023 | |
| 8 | % | |
| 16 | % | |
$ | — | | |
$ | 60,000 | | |
$ | 60,000 | |
| Balance | |
| |
| | | |
| | | |
$ | 113,823 | | |
$ | 585,000 | | |
$ | 698,823 | |
Total accrued interest on the above notes as of
September 30, 2022, is $36,002.
On January 7, 2021, Bassam Al-Mutawa,
CEO, loaned the Company $240,000. On January 8, 2021, the Company issued Mr. Al-Mutawa, a Promissory Note in the principal amount
of $150,000 (the “Note”) in consideration of cash in the amount of $150,000. The Note accrues interest at the rate of
5% per annum and matures January 8, 2022. As of September 30, 2022, there is $13,104 of interest accrued on this note. In addition
to the Note, Mr. Al-Mutawa, has advanced additional funds to the Company. As of September 30, 2022, the Company owes total principal of
$460,761.
During the year ended September 30, 2022, the
Company granted 23,100 shares of common stock to its directors for services. The shares were valued at $1.50 per share for total non-cash
expense of $34,650.
NOTE 9 – INCOME TAX
Deferred taxes are provided on a liability method
whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has evaluated Staff Accounting
Bulletin No. 118 regarding the impact of the decreased tax rates of the Tax Cuts & Jobs Act. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of 21% is being used
due to the new tax law recently enacted.
Net deferred tax assets consist of the following
components as of September 30:
| Deferred tax asset attributable to: | |
2022 | | |
2021 | |
| Net operating loss carryover | |
$ | 175,124 | | |
$ | 75,240 | |
| Less: valuation allowance | |
| (175,124 | ) | |
| (75,240 | ) |
| Net deferred tax asset | |
$ | — | | |
$ | — | |
At September 30, 2022, the Company had net operating
loss carry forwards of approximately $270,000 that may be offset against future taxable income. No tax benefit has been reported
in the September 30, 2022 or 2021 financial statements since the potential tax benefit is offset by a valuation allowance of the same
amount.
On December 22, 2017, the U.S. government enacted
comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act establishes new
tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate income tax rate to 21% effective January
1, 2018.
Due to the change in ownership provisions of the
Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes are subject to annual limitations. Should
a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
ASC Topic 740 provides guidance on the accounting
for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 requires a company to determine whether
it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If
the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial
statements.
The Company includes interest and penalties arising
from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of September 30, 2022, the
Company had no accrued interest or penalties related to uncertain tax positions. The Company is subject to examination by the various
taxing authorities beginning with the tax year ended December 31, 2017 (or the tax year ended December 31, 2003 if the Company were to
utilize its NOLs)
NOTE 10 - SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant
to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were issued and has determined
that no material subsequent events exist.