|
000-54936
|
||
|
Commission file number
|
||
|
Zenosense, Inc.
|
||
|
(Exact name of small business issuer as specified in its charter)
|
||
|
Nevada
|
26-3257291
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
|
|
Avda Cortes Valencianas 58, Planta 5, 46015 Valencia, Spain
|
||
|
(Address of principal executive offices)
|
||
|
001 (34) 960454202
|
||
|
(Issuer’s telephone number)
|
||
|
Not Applicable
|
||
|
(Former name, former address and former fiscal year, if changed since last report)
|
||
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
|
||||
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act
|
||||
|
Large accelerated filer
|
[ ]
|
Accelerated filer
|
[ ]
|
|
|
Non-accelerated filer
|
[ ]
|
Smaller reporting company
|
[ X ]
|
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
|
||||
|
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 16,677,431 common shares issued and outstanding as of August 4, 2016
|
||||
|
Page
|
||
|
PART I – FINANCIAL INFORMATION
|
||
|
Item 1.
|
Financial Statements
|
3
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
4
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
10
|
|
Item 4.
|
Controls and Procedures
|
10
|
|
PART II – OTHER INFORMATION
|
||
|
Item 1.
|
Legal Proceedings
|
11
|
|
Item 1A.
|
Risk Factors
|
11
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
11
|
|
Item 3.
|
Defaults Upon Senior Securities
|
11
|
|
Item 4.
|
Mine Safety Disclosures
|
11
|
|
Item 5.
|
Other Information
|
11
|
|
Item 6.
|
Exhibits
|
12
|
|
SIGNATURES
|
13
|
|
Page
|
|
|
Balance Sheets (Unaudited)
|
F-1
|
|
Statements of Operations (Unaudited)
|
F-2
|
|
Statements of Cash Flows (Unaudited)
|
F-3
|
|
Notes to Financial Statements (Unaudited)
|
F-4 to F-7
|
|
June 30, 2016
|
December 31, 2015
|
|||||||
|
Assets
|
||||||||
|
Current Assets
|
||||||||
|
Cash and cash equivalent
|
$ | 7,170 | $ | 989 | ||||
|
Investment in joint venture
|
130,000 | - | ||||||
|
Prepaid expense
|
- | 4,167 | ||||||
|
Total assets
|
$ | 137,170 | $ | 5,156 | ||||
|
Liabilities and Stockholders’ Deficit
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued expense
|
$ | 23,160 | $ | 33,850 | ||||
|
Accounts payable and accrued expense – related party
|
70,572 | 49,951 | ||||||
|
Loan payable
|
- | 110,000 | ||||||
|
Convertible notes, net of discount
|
156,831 | - | ||||||
|
Stock payable
|
67,500 | 67,500 | ||||||
|
Total current liabilities
|
318,063 | 261,301 | ||||||
|
Stockholders’ Deficit:
|
||||||||
|
Common stock 500,000,000 shares authorized, $0.001 par value issued and outstanding 16,677,431 and 7,087,919 shares, respectively
|
16,677 | 7,088 | ||||||
|
Additional paid in capital
|
1,188,208 | 1,047,797 | ||||||
|
Accumulated Deficit
|
(1,385,778 | ) | (1,311,030 | ) | ||||
|
Total stockholders’ deficit
|
(180,893 | ) | (256,145 | ) | ||||
|
Total Liabilities and Stockholders’ deficit
|
$ | 137,170 | $ | 5,156 | ||||
|
Three Months ended June 30, 2016
|
Three Months ended June 30, 2015
|
Six Months ended June 30, 2016
|
Six Months ended June 30, 2015
|
|||||||||||||
|
Revenues
|
$ | - | $ | - | $ | - | $ | - | ||||||||
|
Expense
|
||||||||||||||||
|
General and administrative expense
|
43,861 | 30,227 | 70,467 | 70,241 | ||||||||||||
|
Total expenses
|
43,861 | 30,227 | 70,467 | 70,241 | ||||||||||||
|
Loss from operations
|
(43,861 | ) | (30,227 | ) | (70,467 | ) | (70,241 | ) | ||||||||
|
Other income/(expense)
|
||||||||||||||||
|
Interest expense
|
(2,872 | ) | (566 | ) | (4,281 | ) | (1,000 | ) | ||||||||
|
Total other expense
|
(2,872 | ) | (566 | ) | (4,281 | ) | (1,000 | ) | ||||||||
|
Net loss
|
$ | (46,733 | ) | $ | (30,793 | ) | $ | ( 74,748 | ) | $ | (71,241 | ) | ||||
|
Net loss per common share:
|
||||||||||||||||
|
Basic and diluted
|
$ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.04 | ) | ||||
|
Weighted average common shares outstanding:
|
||||||||||||||||
|
Basic and diluted
|
9,406,253 | 7,087,828 | 8,253,495 | 7,087,828 | ||||||||||||
|
June 30, 2016
|
June 30, 2015
|
|||||||
|
Operating Activities
|
||||||||
|
Net loss
|
$ | (74,748 | ) | $ | (71,241 | ) | ||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Amortization of debt discount
|
1,087 | - | ||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Prepaid expense
|
4,167 | (9,167 | ) | |||||
|
Accounts payable and accrued expense
|
(4,946 | ) | 23,956 | |||||
|
Accounts payable and accrued expense – related party
|
20,621 | 22,658 | ||||||
|
Cash used in operating activities
|
(53,819 | ) | (33,794 | ) | ||||
|
Investing activities
|
||||||||
|
Investment in joint venture
|
(130,000 | ) | - | |||||
|
Cash used in investing activities
|
(130,000 | ) | - | |||||
|
Financing activities
|
||||||||
|
Proceeds from third party loan
|
- | 30,000 | ||||||
|
Proceeds from sales of common stock
|
150,000 | - | ||||||
|
Proceeds from convertible note payable
|
40,000 | - | ||||||
|
Cash provided by financing activities
|
190,000 | 30,000 | ||||||
|
Net increase (decrease) in cash
|
6,181 | (3,794 | ) | |||||
|
Cash, beginning of period
|
989 | 4,423 | ||||||
|
Cash, end of period
|
$ | 7,170 | $ | 629 | ||||
|
Supplemental disclosure of cash flow information
|
||||||||
|
Cash paid for income taxes
|
$ | - | $ | - | ||||
|
Cash paid for interest
|
$ | - | $ | - | ||||
|
Noncash investing and financing activities:
|
||||||||
|
Beneficial conversion feature
|
$ | 155,744 | $ | - | ||||
|
●
|
Is capable of detecting biomarkers at a nanoparticle level, providing fully quantitative measurement of results i.e. giving a numerical value for each biomarker detected and not just an indication on whether a specified biomarker is actually present,
|
|
|
●
|
Is capable of multiplexing i.e. performing multiple types of test from the same sample,
|
|
|
●
|
Provides full connectivity and networking for collection, storage and transfer of data and results,
|
|
|
●
|
Displays test results in minutes (less than 8 minutes for a panel of up to 3 tests),
|
|
|
●
|
Requires a finger prick sample size for a single test,
|
|
|
●
|
Utilizes a handheld reader and single disposable cartridge designed to be operated by a minimally trained person, requiring modest manual operation, other than for sample collection,
|
|
|
●
|
Contains all necessary reagents and where all steps are automated into an integrated encompassing pre-treatment, analyte specific reaction, signal production, signal reaction and final result: from sample to result in one step,
|
|
|
●
|
Can be adapted to perform different immunoassays for testing in areas such as infectious diseases, drugs of abuse or oncology, especially where rapid diagnosis is critical, and
|
|
|
●
|
Has a simple system design, requiring minimal direct input costs and inline manufacturing processes to keep unit costs as low as possible.
|
|
●
|
Unparalleled expertise in the field of quantitative micro-magnetic and luminescence measurement techniques and applying that specialism to measure density and behaviour of particulate markers within body fluids.
|
|
|
●
|
Thirty years of experience in magnetic measurement and magnetic sensor (Hall Effect and Bio-Sensors) design and specifically in magnetic nano-particle applications within the medical and bio-engineering POC field.
|
|
|
●
|
High level experience of dealing with the measurement of changes within body fluids and tissues in micro and nano environments.
|
|
|
●
|
Extensive experience in the design and development of small, low cost POC measurement devices that read changes occurring on input strips, both from an engineering, physics (optics and magnetic), reader software and end user perspective.
|
|
|
●
|
Clear understanding of quality standards, timescales, processes and testing rigours required in the POC healthcare area.
|
|
|
●
|
Established relationships with commercial partners capable of creating licence revenue for enhancements of existing market products and to develop multiple new revenue streams from new applications.
|
|
|
●
|
A broad skills base across its management team covering scientific, technical and financial expertise. Team members have experience of closing deals related to products in this sector.
|
|
Three Months Ended
|
||||||||
|
June 30
|
||||||||
|
2016
|
2015
|
|||||||
|
General and administrative expenses
|
$
|
43,859
|
$
|
30,227
|
||||
|
Cash Flows
|
Three Months Ended
June 30, 2016
|
Three MonthsEnded
June 30,2015 |
||||||
|
Net Cash Used in Operating Activities
|
$
|
(53,380)
|
$
|
(14,709)
|
||||
|
Net Cash Used in Investing Activities
|
$
|
(130,000)
|
$
|
-
|
||||
|
Net Cash Provided by Financing Activities
|
$
|
190,000
|
$
|
10,000
|
||||
|
Cash increase (decrease) during the period
|
$
|
6,620
|
$
|
(4,709)
|
||||
|
Six Months Ended
|
||||||||
|
June 30
|
||||||||
|
2016
|
2015
|
|||||||
|
Research and development expenses
|
$
|
-
|
$
|
|||||
|
General and administrative expenses
|
$
|
70,467
|
$
|
70,241
|
||||
|
|
|
|||||||
|
Cash Flows
|
Six Months Ended
June 30, 2016 |
Six Months Ended
June 30, 2015 |
||||||
|
Net Cash Used in Operating Activities
|
$
|
(53,819)
|
$
|
(33,794)
|
||||
|
Net Cash Used in Investing Activities
|
$
|
(130,000)
|
$
|
-
|
||||
|
Net Cash Provided by Financing Activities
|
$
|
190,000
|
$
|
30,000
|
||||
|
Cash increase (decrease) during the period
|
$
|
6,181
|
$
|
(3,794)
|
||||
|
10.1*
|
Form of Share Exchange Agreement, dated May 17, 2016, between the Company and certain Note Holder.
|
|
|
10.2*
|
Form Convertible Promissory Note, dated May 17, 2016, issued by the Company
|
|
|
10.3*
|
Form of Securities Purchase Agreement, dated June 6, 2016, between the Company and an accredited investor.
|
|
| 10.4 | Subscription and Shareholders' Agreement (incorporated by reference to Exhibit 10.2 of the Form 10-Q of Bio-AMD, Inc., filed with the Securities and Exchanage Commission on August 15, 2016.) | |
|
31.1*
|
Certification of Principal Executive Officer who is also the Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1*
|
Certification of Chief Executive Officer who is also the Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS*
|
XBRL Instance Document
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
ZENOSENSE, INC.
|
||
|
Date: August 22, 2016
|
By:
|
/s/Carlos Jose Gil
|
|
Name:
|
Carlos Jose Gil
|
|
|
Title:
|
Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)
|
|
1.
|
Exchange of Notes.
|
|
2.
|
Holder’s Representations and Warranties. The Holder represents and warrants to the Company that:
|
|
3.
|
Representations and Warranties of the Company.
|
|
4.
|
COVENANTS.
|
|
5.
|
Transfer Agent Instruction.
|
|
6.
|
Conditions to the Company’s Obligation to Sell.
|
|
a.
|
The Holder shall have executed this Agreement and delivered the same to the Company.
|
|
b.
|
The Holder shall have delivered the Original Debt in accordance with Section 1(b) above, which shall include the delivery of the Original Debt being cancelled.
|
|
c.
|
The representations and warranties of the Holder shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Holder shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Holder at or prior to the Closing Date.
|
|
d.
|
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
|
|
7.
|
Conditions to The Holder’s Obligation to Exchange.
|
|
a.
|
The Company shall have executed this Agreement and delivered the same to the Holder.
|
|
b.
|
The Company shall have delivered to the Holder the duly executed New Note (in such denominations as the Holder shall request) in accordance with Section 1(b) above.
|
|
c.
|
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Holder, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.
|
|
d.
|
The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Holder shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Holder including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the transactions contemplated hereby.
|
|
e.
|
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
|
|
f.
|
The Holder shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.
|
|
8.
|
Governing Law; Miscellaneous.
|
|
a.
|
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
|
|
b.
|
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
|
|
c.
|
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.
|
|
d.
|
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.
|
|
e.
|
Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Holder makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest of the Holder.
|
|
f.
|
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
|
|
g.
|
Successors and Assigns.This Agreement and the New Note are freely assignable by the Holder in whole or in part at any time upon notice to the Company. The Company shall treat the Holder as the owner with respect to the New Note for all purposes until assigned or otherwise sold and transferred to a third party or parties, at which time the Company shall treat such new holder(s) as the Holder under this Agreement and as the owner with respect to the New Note (or such part of the New Note as may have been assigned to such third party or parties) for all purposes. The Company shall cooperate with the Holder and any new holder(s) in all aspects of any such assignment or transfer, including without limitation timely honoring each and every one of the Company's obligations under this Agreement and the New Note, whether financial or otherwise. Any assignment of all or a portion of the New Note by the Holder will also result in the full and automatic assignment of all of the Holder's rights and privileges under this Agreement, without further action by any party, with respect to such portion of the New Note that was assigned. Subject to Section 2(f), the Holder may assign its rights hereunder to any person that purchases Securities in a private transaction from the Holder or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.
|
|
h.
|
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
|
|
i.
|
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Holder. The Company agrees to indemnify and hold harmless the Holder and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.
|
|
j.
|
Publicity. The Company, and the Holder shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTC Markets or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Holder, to make any press release or SEC, OTC Markets (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Holder shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).
|
|
k.
|
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
|
|
l.
|
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
|
|
m.
|
Remedies.The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.
|
|
1.1
|
Conversion Right. The Holder shall have the right from time to time, from the Issue Date and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.
|
|
1.2
|
Conversion Price. The conversion price (the “Conversion Price”) is set at $0.001(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).
|
|
1.3
|
Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares (the “Reserved Amount”), free from pre-emptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Exchange Agreement. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.
|
|
1.4
|
Method of Conversion.
|
|
1.5
|
Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Exchange Agreement). Except as otherwise provided in the Exchange Agreement (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:
|
|
1.7
|
Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note issued pursuant to the Exchange Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Exchange Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.
|
|
1.8
|
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower’s failure to convert this Note.
|
|
|
1.9 Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the issue date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Optional Prepayment Amount”) equal to 110%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.
|
|
2.1
|
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.
|
|
2.2
|
Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.
|
|
2.3
|
Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note. (d) borrowings to directly finance development under the License Agreement.
|
|
2.4
|
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.
|
|
2.5
|
Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000 unless being made as an advance of payment under the License Agreement.
|
|
3.1
|
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.
|
|
3.2
|
Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.
|
|
3.3
|
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Exchange Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.
|
|
3.4
|
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Exchange Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Exchange Agreement.
|
|
3.5
|
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.
|
|
3.6
|
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
|
|
3.7
|
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.
|
|
3.8
|
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of OCT Markets or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, the American Stock Exchange or such other means to allow the Company’s common stock to be traded electronically.
|
|
3.9
|
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.
|
|
3.10
|
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.
|
|
3.11
|
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.
|
|
3.12
|
Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).
|
|
3.13
|
Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Exchange Agreement.
|
|
3.14
|
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.
|
|
3.15
|
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Exchange Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.
|
|
3.16
|
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.
|
|
4.1
|
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.
|
|
4.2
|
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
|
|
4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Exchange Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.
|
|
4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.
|
|
4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.
|
|
4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
|
|
4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.
|
|
4.8 Exchange Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Exchange Agreement.
|
|
4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.
|
|
4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.
|
|
Dated as of: May 31, 2016
|
|||
|
By:
|
|||
|
Name:
Title:
|
|||
|
(a) if to the Company, to:
|
Zenosense, Inc.
Avda Cortes Valencianas 58, Planta 5,
46015 Valencia, Spain
Attention:
|
|
with a copy to:
|
Golenbock Eiseman Assor Bell &Peskoe LLP
437 Madison Avenue
New York, New York10022
Attention: Andrew D. Hudders, Esq.
The above notice to counsel is only for informational purposes, and shall not constitute legal notice under this Agreement or for any other purpose.
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 of Zenosense, Inc. (the “registrant”);
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
|
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report, our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
|
d)
|
Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5.
|
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
Date: August 22 , 2016
|
By:
|
/s/Carlos Jose Gil | |
|
Name:
|
Carlos Jose Gil,
|
||
|
Title:
|
Chief Executive Officer and Principal Financial Officer
|
|
1.
|
The Report on Form 10-Q of the Company for the quarter ended June 30, 2016, which this certification accompanies (the "Periodic Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date: August 22, 2016
|
By:
|
/s/Carlos Jose Gil | |
|
Name:
|
Carlos Jose Gil
|
||
|
Title:
|
Chief Executive Officer and Principal Financial Officer
|
Document and Entity Information - shares |
6 Months Ended | |
|---|---|---|
Jun. 30, 2016 |
Aug. 04, 2016 |
|
| Document And Entity Information | ||
| Entity Registrant Name | Zenosense, Inc. | |
| Entity Central Index Key | 0001458581 | |
| Document Type | 10-Q | |
| Document Period End Date | Jun. 30, 2016 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-31 | |
| Is Entity a Well-known Seasoned Issuer? | No | |
| Is Entity a Voluntary Filer? | No | |
| Is Entity's Reporting Status Current? | Yes | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Common Stock, Shares Outstanding | 16,677,431 | |
| Document Fiscal Period Focus | Q2 | |
| Document Fiscal Year Focus | 2016 |
Balance Sheets - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
|---|---|---|
| Current assets | ||
| Cash | $ 7,170 | $ 989 |
| Investment in joint venture | 130,000 | |
| Prepaid expenses | 4,167 | |
| Total current assets | 137,170 | 5,156 |
| Current liabilities: | ||
| Accounts payable and accrued expenses | 23,160 | 33,850 |
| Accounts payable and accrued expenses, related party | 70,572 | 49,951 |
| Loan payable | 110,000 | |
| Convertible notes, net of discount | 156,831 | |
| Stock payable | 67,500 | 67,500 |
| Total current liabilities | 318,063 | 261,301 |
| Stockholders Equity (Deficit): | ||
| Common stock 500,000,000 shares authorized, $0.001 par value, issued and outstanding 16,677,431 and 7,087,919 shares, respectively | 16,677 | 49,615 |
| Additional paid in capital | 1,188,208 | 1,005,270 |
| Accumulated deficit | (1,385,778) | (1,311,030) |
| Total stockholders deficit | (180,893) | (256,145) |
| Total liabilities and stockholders deficit | $ 137,170 | $ 5,156 |
Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2016 |
Dec. 31, 2015 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 500,000,000 | 500,000,000 |
| Common stock, shares issued | 16,677,431 | 7,087,919 |
Statements of Operations - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
| Income Statement [Abstract] | ||||
| Revenues | ||||
| Expenses | ||||
| General and administrative | 43,861 | 30,227 | 70,467 | 70,241 |
| Total expenses | 43,861 | 30,227 | 70,467 | 70,241 |
| Loss from operations | (43,861) | (30,227) | (70,467) | (70,241) |
| Other expense | ||||
| Interest expense | (2,872) | (566) | (4,281) | (1,000) |
| Total other expense | (2,872) | (566) | (4,281) | (1,000) |
| Net loss | $ (46,733) | $ (30,793) | $ (74,748) | $ (71,241) |
| Net loss per common share: | ||||
| Basic and diluted | $ (0.00) | $ (0.02) | $ (0.01) | $ (0.04) |
| Weighted average common shares outstanding: | ||||
| Basic and diluted | 9,406,253 | 7,087,828 | 8,253,495 | 7,087,828 |
Note 1 - Nature of Operations |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Accounting Policies [Abstract] | |
| Note 1 - Nature of Operations |
1. Nature of operations
Zenosense, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on August 11, 2008, for the purpose of acquiring and developing mineral properties. In May 2013, the Company terminated its mineral development business.
On November 22, 2013, the Company filed a certificate of amendment with the State of Nevada and (1) changed its name from “Braeden Valley Mines, Inc.” to “Zenosense, Inc.” and (2) effected an increase in the Company’s authorized shares from 50,000,000 to 500,000,000, with par value of $0.001 per share.
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 the sensory technology for a methicillin resistant Staphylococcus aureus / Staphylococcus aureus (“MRSA/SA”) detection 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 2014 and July 2014 to extend it to cancer sensory products and to modify and extend the development schedule and change the research funding budget to accommodate a lung cancer product as well as the 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.
The MIDS technology will incorporate what we believe to be a novel microfluidic strip design, magnetic nanoparticle manipulation and a unique double detection technique using bespoke ‘Hall Effect’ sensors and a bespoke optical sensor which, when combined, will increase significantly the sensitivity and accuracy of the result.
The MIDS technology platform has the potential to be adapted to a vast array of POC immunoassay tests, taking them to a whole new level of accuracy, cost, ease of use and speed of testing: A multi-capability POC device with laboratory gold standard accuracy for testing for conditions such as Chlamydia, prostate, colorectal and other cancers, stroke tests, sports anti-doping tests, Drugs of Abuse, insulin tests, H. Pylori, Inflammatory & Autoimmune disease, Influenza, Legionella, Osteoporosis, Endocrine tests, Respiratory Virus, pneumonia, Blood infections, Streptococcus, Meningitis, Rheumatism, Hepatitis, HIV, Viral tests, and many more. |
Note 2 - Basis of Presentation |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Accounting Policies [Abstract] | |
| Note 2 - Basis of Presentation |
2. Basis of presentation
The accompanying unaudited interim consolidated financial statements of Zenosense, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on May 20, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ended December 31, 2015, as reported on Form 10-K, have been omitted. |
Note 3 - Going Concern |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Note 3- Going Concern |
3. Going Concern
The financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for 12 months. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At June 30, 2016, the Company had not yet achieved profitable operations, had accumulated losses of $1,385,778 since its inception and expects to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
The Company expects to continue to incur substantial losses as it executes its business plan and does not expect to attain profitability in the near future. Since its inception, the Company has funded operations through short-term borrowings, advances, and equity investments in order to meet its strategic objectives. The Company's future operations are dependent upon external funding and its ability to execute its business plan, realize sales and control expenses. Management believes that sufficient funding will be available from additional borrowings and private placements to meet its business objectives including anticipated cash needs for working capital, for the next fiscal year. However, there can be no assurance that the Company will be able to obtain sufficient funds to continue the development of its business operation, or if obtained, upon terms favorable to the Company. |
Note 4 - Summary of Significant Accounting Policies |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Accounting Policies [Abstract] | |
| Note 4 - Summary of Significant Accounting Policies |
4. Summary of Significant Accounting Policies
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 could differ from those estimates.
Reclassifications
Certain reclassifications have been made to the prior year financial statements to conform with the current year presentation.
Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments with an original maturity of ninety days or less. The Company has not experienced any losses on its deposits of cash and cash equivalents.
Research and development
Research and development costs are expensed as incurred.
Income taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between their financial statement carrying amounts 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.
Loss per common share
Basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period.
Subsequent events
The Company evaluated all events or transactions that occurred after June 30, 2016, up through the date these financial statements were issued and no subsequent events occurred that required disclosure in the accompanying financial statements.
Recently Adopted Accounting Standards
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements. |
Note 5 - Loans payable |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Debt Disclosure [Abstract] | |
| Note 5 - Loan payable |
5. Loans Payable
On November 2, 2015, four promissory notes previously owed to several third parties (the “Prior Notes”) were assigned to a new party (the “Investor”) in one note for a total of $110,000 in principal plus accrued interest of $3,647. The new note bears interest of 5% and is due on demand. At May 16, 2016, the Company had accrued interest of $5,744 in connection with the promissory note.
On March 29, 2016, the Investor gave notice that it demanded repayment of all principal amounts and accrued interest outstanding, due within 90 days of the demand notice.
On May 16, 2016 the Investor exchanged the Prior Notes and accrued interest in the amount of $115,744 for new convertible notes. |
Note 6 - Convertible Debt |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Notes to Financial Statements | |
| Note 6 - Convertible Debt |
6. Convertible Debt
On April 20, 2016 the Investor agreed to a further loan of $40,000 and the Company issued a convertible note in a principal amount of $40,000 (the “April 2016 Note”). The April 2016 Note bears a 5% interest per annum and is due on April 19, 2018. The April 2016 Note may be prepaid at any time within 90 days of the Issue Date. Starting from September 20, 2016, the April 2016 Note can be convertible into shares of common stock (the “Conversion”) of the Company, at the discretion of the holder, at a price of $0.007 per share subject to a blocker provision that limits the amount issued at any time to 4.99% of the outstanding shares of Common Stock. The Company has initially reserved 5,714,286 shares of Common Stock issuable upon the Conversion.
On May 17, 2016, the Investor agreed to exchange the Prior Notes (see note 5) for two new convertible notes (the “May 2016 Notes”) under two separate Securities Exchange Agreements which closed on May 17, 2016. One note for the principal amount of $53,197 and the other for the principal amount of $62,547 for a combined aggregate principal amount of $115,744. The May 2016 Notes bear a 5% interest per annum and are due on May 16, 2018. The May 2016 Notes may be prepaid at any time within 90 days of issuance. The May 2016 Notes can be convertible into shares of common stock of the Company at the discretion of the holder, at a price of $0.007 per share subject to a blocker provision that limits the amount issued at any time to 4.99% percent of the outstanding shares of Common Stock. The Company has initially reserved 16,534,857 shares of Common Stock issuable upon the Conversion.
At June 30, 2016, the Company had accrued interest of $1,087 in connection with the new notes.
The convertible notes contained a beneficial conversion feature with a combined intrinsic value of $155,744 for the three notes. The intrinsic value is based upon the difference between the market price of Zenosense’s common stock on the date of issuance and the conversion price of $0.001. The discount is being amortized through interest expense using the straight line method over the term of the notes. For the three and six months ended June 30, 2016, the Company recorded amortization of $1,087 on debt discount. |
Note 7 - Common Stock |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Equity [Abstract] | |
| Note 7 - Common Stock |
7. Common Stock
On June 6, 2016, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor (the “ Investor ”). The transaction closed on June 8, 2016 (the “Closing”).
Under the terms of the SPA; the Investor purchased 9,589,512 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock ”), for a purchase price of $150,000 and a commitment by the Investor to provide unsecured convertible loans (the “ Commitment Loans ”) in an aggregate amount of $640,000. The Commitment Loans will be made in four individual amounts (individually the “Conversion Amount ” and collectively the “ Conversion Amounts ”). On or before September 20, 2016, the Investor will lend the Company a Conversion Amount of $180,000. On or before November 20, 2016, the Investor will lend the Company a Conversion Amount of $170,000. On or before January 20, 2016, the Investor will lend the Company a Conversion Amount of $170,000. On or before March 20, 2017, the Investor will lend the Company a Conversion Amount of $120,000. The Commitment Loans shall bear an interest rate of 10% per annum based on a 360 day year and are due 4 years from each respective issuance date (the “Maturity Date”). The Company may, at any time prior to the Maturity Date, prepay any unconverted amount of each respective Commitment Loan in full or in part. The Investor may, at any time prior to the Maturity Date of each respective Commitment Loan, convert any or all of the Conversion Amounts into Common Stock at the lower of either (a) $0.07 per share (subject to adjustment), or (b) a 15% discount to the 10 day VWAP provided that any such conversion is not at a price of less than $0.035 per share (subject to adjustment). In either scenario the total number of shares of Common Stock issued on conversion may not cause the total beneficial ownership by the Investor and its affiliates to exceed 4.99% of the outstanding shares of Common Stock. On the Maturity Date of each respective Commitment Loan any outstanding amount shall automatically and mandatorily convert into Common Stock at a price of $0.07 per share (subject to adjustment). |
Note 8 - Commitments |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Note 8 - Commitments |
8. Commitments
In December 4, 2013, the Company entered into the License Agreement with Sgenia Industrial S.L. and its subsidiaries, Sgenia Soluciones S.L and ZENON Biosystem S.L (collectively, “Sgenia”) for the development of the Sgenia Products, to be based on the Sgenia sensory technology. Pursuant to the License Agreement, the Company will have 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 Company entered into three amendments (the “Amendments”) to the License Agreement to modify and extend the Sgenia Products to include a lung cancer product and change the product development schedule and the research funding budget to accommodate the additional lung cancer product as well as the continuation of the development of the MRSA product.
Additionally, the development stage objectives and milestones were modified to reflect the current state of development of each of the Sgenia Products.
Under the License Agreement, the Company is funding the development of the Sgenia Products pursuant to a research and development plan proposed by Sgenia and accepted by the Company. The funding will be provided on an advance basis, per month, based on agreed development stages. In return, the Company will have the exclusive right to manufacture, formulate, package, market and sell the Sgenia Products world-wide, for 40 years, subject to a limitation on the inclusion of Spain in the territory. All intellectual property developed by Sgenia at any time during the term related to manufacturing, formulating and/or packaging process shall be shared ownership and licensed to the Company on a royalty-free basis. Sgenia will also supply to the Company, at a negotiated price based on quantity, all of the requirements for the integrated circuits on microchips that are necessary for the operation of the Sgenia Products. Sgenia and the Company will also work together to research and develop the Sgenia Products and establish written plans and reviewing committees for the management of the overall development project and commercialization of the Sgenia Products.
The Company’s funding of the MRSA product development was limited to an initial approved budget of $1,256,438, of which $526,846 was advanced by the Company. As a result of the Amendment of July 2014, at the date of this report, the revised and approved budget is approximately $1,142,143, of which $769,787 has been advanced (including the amount advanced under the prior budget) as of June 30, 2016. The Company is currently committed to advancing approximately EUR656,000 (approximately $727,000), for research and development under the revised and approved budget, and subject to Sgenia meeting certain milestones. Some of the milestones have not been met as of June 30, 2016. The aggregate of the advances paid by the Company are recorded as research and development expenses. The budget may be changed by mutual agreement from time to time.
In addition to providing the development funding, the Company will also pay royalties for completed sales of the Sgenia Products, payable 60 days after each fiscal quarter of the Company (the “Royalties”). The Royalties will be 20% of net sales, which is calculated based on gross sales of the device and the installation and training for the Sgenia Products, less various expenses, including manufacturing, components acquired from Sgenia, commissions, refunds and discounts and sales taxes. If the Sgenia Products are sold by Sgenia in Spain for original use in Spain, then the Royalties on those sales will be reduced. The Company also has the right to sublicense to other parties throughout the world, except in Spain if and when, if at all, Sgenia seeks to act as the distributor in that territory.
The Company has the option to fund the development of future proposed products based on the Sgenia intellectual property, and if funded the Company will obtain the right to manufacture, market and sell the resulting devices.
On June 20, 2016 the Company entered into a joint venture arrangement by way of the MML SSA with the Partner utilizing a joint venture vehicle, MML, a UK Limited company under which the Company will own a 40% interest. MML is developing the Partner’s MIDS universal immunoassay detection technology with an initial focus on a novel POC Cardiac Device with the aim of developing a hand held device to support high sensitivity tests of various cardiac biomarkers to definitively identify or discount AMI, with accuracy equal or better than gold standard laboratory tests, within minutes.
The Company’s funding of MML is limited to an initial aggregate payment of £450,500 (approximately $580,000) for Phase 1 of which £92,857.14 ($130,000) has already been paid. In addition, The Company may be required to provide the Contingency to be available after March 31, 2017 in an aggregate amount of up to £45,000 (approximately $58,000) to be paid by the Company within 20 days of receiving a written notice from MML. |
Note 9 - Related party |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Related Party Transactions [Abstract] | |
| Note 9 - Related party transactions |
9. Related Party Transactions
On December 5, 2013, the Company entered into a one-year service agreement with Mr. Carlos Jose Gil, through his consulting firm, Ksego Engineering S.L., under which the Company obtains his services as the Chief Executive Officer of the Company. The agreement is now on a month-to-month basis. Mr. Gil receives a base salary and additional compensation equal to 10% of the net sales generated from the License Agreement. During the six months ended June 30, 2016, the Company recorded $30,553 of general and administrative expenses related to amounts paid/owed to Ksego Engineering S.L. for services rendered by Mr. Gil. As of June 30, 2016, the Company owes Mr. Gil $70,572. No additional compensation based on net sales has been earned to date. |
Note 10 - Subsequent Events |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Subsequent Events [Abstract] | |
| Note 10 - Subsequent Events |
10. Subsequent Events
After the close of the stock market on August 3, 2016, the Company effected a 1-for-7 reverse split of its common stock. The reverse stock split was approved by the Company’s board of directors. As a result, all common stock share amounts included in this filing have been retroactively adjusted by a factor of seven, and all common stock per share amounts have been increased by a factor of seven, with the exception of our common stock par value.
On August12, 2016, the Company amended Mr. Carlos Jose Gil’s service agreement to include additional compensation equal to 10% of the revenue received by Zenosense, Inc. from MML as a result of any future commercialization of the MIDS project. |
Note 4 - Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Accounting Policies [Abstract] | |
| Use of Estimates |
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 could differ from those estimates. |
| Reclassifications |
Reclassifications
Certain reclassifications have been made to the prior year financial statements to conform with the current year presentation. |
| Cash and cash equivalents | Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments with an original maturity of ninety days or less. The Company has not experienced any losses on its deposits of cash and cash equivalents. |
| Research and development |
Research and development
Research and development costs are expensed as incurred. |
| Income taxes |
Income taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between their financial statement carrying amounts 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. |
| Loss per common share |
Loss per common share
Basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. |
| Subsequent events |
Subsequent events
The Company evaluated all events or transactions that occurred after June 30, 2016, up through the date these financial statements were issued and no subsequent events occurred that required disclosure in the accompanying financial statements. |
| Recently Adopted Accounting Standards |
Recently Adopted Accounting Standards
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements. |
Note 1 - Nature of Operations (Details Narrative) - $ / shares |
Jun. 20, 2016 |
Jun. 06, 2016 |
Nov. 22, 2013 |
|---|---|---|---|
| Accounting Policies [Abstract] | |||
| Authorized shares, pre-increase | 50,000,000 | ||
| Authorized shares post-increase | 500,000,000 | ||
| Par value per share | $ 0.001 | $ 0.001 | |
| Percent interest in joint venture, MDS Medical Ltd. | 40.00% |
Note 3 - Going Concern (Details Narrative) |
Jun. 30, 2016
USD ($)
|
|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Accumulated Losses | $ 1,385,778 |
Note 5 - Loans payable (Details Narrative) |
May 16, 2016
USD ($)
|
Mar. 29, 2016 |
Nov. 02, 2015
USD ($)
|
|---|---|---|---|
| Notes Assigned | |||
| Notes assigned, value | $ 110,000 | ||
| Accrued interest at assignment date | $ 3,647 | ||
| Accrued Interest | $ 5,744 | ||
| Interest rate | 5.00% | ||
| Days from notice of demand for payment of note | 90 | ||
| Value, note exchanged for new convertible note | $ 115,744 |
Note 7 - Common Stock (Details Narrative) - USD ($) |
6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Mar. 20, 2017 |
Jan. 20, 2017 |
Nov. 20, 2016 |
Sep. 20, 2016 |
Jun. 06, 2016 |
Nov. 22, 2013 |
|
| Terms of SPA | |||||||
| Shares purchased | 9,589,512 | ||||||
| Common stock, par value | $ 0.001 | $ 0.001 | |||||
| Purchase Price | $ 150,000 | ||||||
| Total additional commitment from Investor | $ 640,000 | ||||||
| Number of investment tranches | 4 | ||||||
| Amount for subsequent investment and amount | $ 120,000 | $ 170,000 | $ 170,000 | $ 180,000 | $ 180,000 | ||
| Interest rate | 10.00% | ||||||
| Term of loans, years | 4 | ||||||
| Terms of conversion | The Company may, at any time prior to the Maturity Date, prepay any unconverted amount of each respective Commitment Loan in full or in part. The Investor may, at any time prior to the Maturity Date of each respective Commitment Loan, convert any or all of the Conversion Amounts into Common Stock at the lower of either (a) $0.07 per share (subject to adjustment), or (b) a 15% discount to the 10 day VWAP provided that any such conversion is not at a price of less than $0.035 per share (subject to adjustment). In either scenario the total number of shares of Common Stock issued on conversion may not cause the total beneficial ownership by the Investor and its affiliates to exceed 4.99% of the outstanding shares of Common Stock. | ||||||
| Limit to the amount of common stock issued at any time under the SPA as a percent of outstanding shares of Common Stock. | 499.00% | ||||||
| Price per share, conversion of each loan into stock on maturity date | $ 0.07 |
Note 9 - Related party (Details Narrative) |
6 Months Ended | |
|---|---|---|
|
Jun. 30, 2016
USD ($)
|
Dec. 05, 2013 |
|
| Ksego Engineering S.L. | ||
| Term of service agreement, years | 1 | |
| Additional compensation, percent of net sales from license agreement | 10.00% | |
| Amounts paid or owed for services rendered, Mr. Gil, in period | $ 30,553 | |
| Amount due to Mr. Gil | $ 70,572 |
Note 10 - Subsequent Events (Details Narrative) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2016 |
Aug. 12, 2016 |
|
| Subsequent Events [Abstract] | ||
| Terms of reverse split | After the close of the stock market on August 3, 2016, the Company effected a 1-for-7 reverse split of its common stock. The reverse stock split was approved by the Company’s board of directors. | |
| Compensation added to Mr. Gil's service agreement, percent revenue generated from MML | 10.00% |