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, 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 June 30, 2019, the Company had $-0- in
cash and cash equivalents. The Company had net loss of $243,828 for the six months ended June 30, 2019, has negative working
capital of $930,757 and accumulated deficit of $3,189,087 on June 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 June 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 June 30, 2019 and December 31, 2018,
the Company had $397,021 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 June 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.