Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 11, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Zenosense, Inc. | |
Entity Central Index Key | 1,458,581 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 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 | 16,677,451 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 23,875 | $ 989 |
Investment in equity method joint venture | 158,290 | |
Prepaid expenses | 4,167 | |
Total current assets | 182,165 | 5,156 |
Current liabilities: | ||
Accounts payable and accrued expenses | 24,394 | 33,850 |
Accounts payable and accrued expenses, related party | 85,671 | 49,951 |
Loan payable | 110,000 | |
Convertible notes, net of discount | 246,280 | |
Stock payable | 67,500 | 67,500 |
Total current liabilities | 423,845 | 261,301 |
Stockholders Equity (Deficit): | ||
Common stock 500,000,000 shares authorized, $0.001 par value, issued and outstanding 16,677,451 and 7,087,919 shares, respectively | 16,677 | 49,615 |
Additional paid in capital | 1,188,208 | 1,005,270 |
Accumulated deficit | (1,446,565) | (1,311,030) |
Total stockholders deficit | (241,680) | (256,145) |
Total liabilities and stockholders deficit | $ 182,165 | $ 5,156 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 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 | 16,677,451 | 7,087,919 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Expenses | ||||
Research and development expense | 32,215 | 32,215 | ||
General and administrative expense | 27,627 | 30,003 | 98,094 | 100,243 |
Total expenses | 27,627 | 62,218 | 98,094 | 132,458 |
Loss from operations | (27,627) | (62,218) | (98,094) | (132,458) |
Other income/(expense) | ||||
Interest expense | (31,450) | (1,317) | (35,731) | (2,317) |
Loss in equity method investment | (1,710) | (1,710) | ||
Total other expense | (33,160) | (1,317) | (37,441) | (2,317) |
Net loss | $ (60,787) | $ (63,535) | $ (135,535) | $ (134,775) |
Net loss per common share: | ||||
Basic and diluted | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) |
Weighted average common shares outstanding: | ||||
Basic and diluted | 16,677,451 | 7,087,828 | 11,182,619 | 7,087,828 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Activities | ||
Net loss | $ (135,535) | $ (134,775) |
Adjustment to reconcile to net loss to net cash used in operating activities: | ||
Amortization of debt discount | 30,536 | |
Loss in equity method investment | 1,710 | |
Changes in balances of assets and liabilities: | ||
Prepaid expense | 4,167 | (6,667) |
Accounts payable and accrued expenses | (3,712) | 19,377 |
Accounts payable and accrued expenses, related party | 35,720 | 29,595 |
Cash used in operating activities | (67,114) | (92,470) |
Investing activities | ||
Investment in joint venture | (160,000) | |
Cash used in investing activities | (160,000) | |
Financing activities | ||
Proceeds from loan from third party | 90,000 | |
Proceeds from sales of common stock | 150,000 | |
Proceeds from convertible note payable | 100,000 | |
Cash provided by financing activities | 250,000 | 90,000 |
Net increase (decrease) in cash | 22,886 | (2,470) |
Cash, beginning of period | 989 | 4,423 |
Cash, end of period | 23,875 | 1,953 |
Supplemental disclosure of cash flow information | ||
Cash paid for income taxes | ||
Cash paid for interest | ||
Noncash investing and financing activities: | ||
Conversion from loans payable and accrued interest to convertible notes | $ 155,744 |
Note 1 - Nature of Operations
Note 1 - Nature of Operations | 9 Months Ended |
Sep. 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 to change its name from “Braeden Valley Mines, Inc.” to “Zenosense, Inc.” and to increase the Company’s authorized shares of common stock from 50,000,000 to 500,000,000, par value $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 based on that technology (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 Sgenia 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. As of July 1, 2016, the Company owns a 40% interest in MML in exchange for providing funding to MML during a Phase 1 and prospectively during a Phase 2 development of a universal immunoassay detection technology platform (“MIDS”) with an initial focus on the development of a novel Point of Care (“POC”) cardiac device (“MIDS Cardiac™”). MML will have the right, under license from the Partner, 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 adaptable to a large array of other POC immunoassay tests, taking them to a whole new level of accuracy, lower cost, ease of use, and speed of testing. We believe that such a multi-capability POC device, with laboratory gold standard accuracy, could be used to test for conditions such as Chlamydia, prostate, colorectal and other cancers, stroke, sports anti-doping, drugs of abuse, insulin levels, H. Pylori, inflammatory & autoimmune disease, influenza, Legionella, osteoporosis, endocrine levels, respiratory viruses, pneumonia, blood infections, streptococcus, meningitis, rheumatism, hepatitis, HIV, Viral infection, among others. |
Note 2 - Basis of Presentation
Note 2 - Basis of Presentation | 9 Months Ended |
Sep. 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 Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on May 23, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the 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
Note 3 - Going Concern | 9 Months Ended |
Sep. 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 September 30, 2016, the Company had not yet achieved profitable operations, had accumulated losses of $1,446,565 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 pursue its investment in MML and does not expect to attain profitability in the near future. Since its inception, the Company has funded its operations through short-term borrowings, advances, and equity investments. 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 be able to meet its business objectives, including its 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 pursuing its currently planned business operations, or if obtained, whether the funding will be on terms acceptable and/or favorable to the Company. |
Note 4 - Summary of Significant
Note 4 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 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. Investments in unconsolidated Affiliates We apply the equity method of accounting where we can exert significant influence over, but do not control or direct, the policies, decisions or activities of the entity. We use the cost method of accounting where we are unable to exert significant influence over the entity. Entities are required to periodically review their equity and cost method investments to determine whether current events or circumstances indicate that the carrying value of the investments may be impaired. We evaluate our cost method investment for impairment when there are indicators of impairment. If indicators suggest impairment we will perform an impairment test to assess whether an adjustment is necessary. The impairment test considers whether the fair value of our cost method investment has declined and if any such decline is other than temporary. If a decline in fair value is determined to be other than temporary, the investment’s carrying value is written down to fair value. 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 September 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 - Equity Method Investme
Note 5 - Equity Method Investment | 9 Months Ended |
Sep. 30, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Note 5 - Equity Method Investment | 5. Equity Method Investment On June 20, 2016, the Company entered into a joint venture arrangement with the Partner, using the joint venture vehicle, MML, a UK limited company. The Company owns a 40% interest in MML. MML is developing the Partner’s MIDS universal immunoassay detection technology with an initial focus on developing a novel POC cardiac device that would be a hand held device able 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 accounts for its investment in MML using equity method of accounting The Company evaluated its relationship with MML to determine if it was a variable interest entity (“VIE”) as defined in ASC 810-10 and whether the Company was the primary beneficiary of MML, in which case consolidation with the Company would be required. The Company determined that MML qualifies as a VIE but the Company is not considered as the primary beneficiary. The Company’s investment in MML qualifies for the equity method of accounting since the Company has the ability to exert significant influence over MML through common ownership and management Through September 30, 2016, the Company has invested $160,000 in MML. For the nine months ended September 30, 2016, the Company recognized $1,710 loss in its equity method investment in MML. |
Note 6 - Loans payable
Note 6 - Loans payable | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Note 6 - Loans payable | 6. Loans Payable On November 2, 2015, four promissory notes (the “Prior Notes”) previously owed to a third party were assigned to a new party (the “ On March 29, 2016, the Note Holder gave notice that it demanded repayment of all principal amounts and accrued interest outstanding on the Prior Notes, due within 90 days of the demand notice. No further action was taken in respect of the demand; however, on May 17, 2016, the Note Holder agreed to exchange the Prior Notes and accrued interest then totaling $115,744 for two new convertible notes. |
Note 7 - Convertible Debt
Note 7 - Convertible Debt | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Note 7 - Convertible Debt | 7. Convertible Debt On April 20, 2016, the Note Holder agreed to a loan of $40,000, and the Company issued a convertible note in a principal amount of $40,000 (the “ “ ” On May 17, 2016, the Note Holder agreed to exchange the Prior Notes (see note 6) for two new convertible notes (the “May 2016 Notes”) under two separate Securities Exchange Agreements. One note is 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 interest at 5% per annum, are due on May 16, 2018 and may not be prepaid by the Company. The May 2016 Notes can be converted 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 of common stock that may be 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 feature. At September 30, 2016, the Company had accrued interest of $3,230 in connection with the April 2016 and the May 2016 Notes. The April 2016 and May 2016 Notes have a beneficial conversion feature with a combined intrinsic value of $155,744 for the three notes as of September 30, 2016. 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 $0.007 The discount is being amortized through an interest expense using the straight line method over the term of the notes. For the three and nine months ended September 30, 2016, the Company recorded amortization of $30,495 on the debt discount. On September 29, 2016, the Company issued an unsecured convertible note (the “October 2016 Note”) in the principal amount of $60,000, to the Note Holder in exchange of a loan of $60,000. Under the October 2016 Note, the Company also granted an option to the Note Holder to provide four additional unsecured convertible loans to the Company (the “Option Loans”), in the following amounts: (a) on or before October 31, 2016, an amount of $140,000; (b) on or before November 30, 2016, an amount of $170,000 (c) on or before January 31, 2017, an amount of $180,000; and (d) on or before March 31, 2017, an amount of $100,000. The terms and conditions of certain commitment loans (see Note 8 below), the Option Loans and the October 2016 Note (collectively the “New Loans”) are the same (conversion and floor prices having been adjusted in line with the terms of the commitment loans at the time of the reverse stock split completed on August 4, 2016), and bear an interest rate of 10% per annum, based on a 360 day year, and are due four years from the issuance date (the “Maturity Date”). The Company may, at any time prior to the Maturity Date, prepay any unconverted amount of the New Loans in full or in part. The Note Holder may, at any time prior to the Maturity Date convert any or all of the New Loans into shares of common stock of the Company (the “Common Stock”) at either (a) $0.07 per share (subject to adjustment), or (b) a 15% discount to the 10-day Volume Weighted Average Price per share, 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 held by the Investor and its affiliates, or the Note Holder and its affiliates to exceed 4.99% of the outstanding shares of Common Stock. On the Maturity Date of each of the New Loans any outstanding amount shall automatically and mandatorily convert into Common Stock at a price of $0.07 per share (subject to adjustment). The New Loans also contain standard anti-dilution provisions. The Company evaluated the October 2016 Note to have a beneficial conversion features with an intrinsic value of $53,486. 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 $0.07. The discount is being amortized through an interest expense using the straight line method over the term of the notes. For the three months ended September 30, 2016, the Company recorded amortization of $41 on the debt discount. |
Note 8 - Common Stock
Note 8 - Common Stock | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Note 8 - Common Stock | 8. 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. 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, for a purchase price of $150,000 and a commitment by the Investor to provide a series of unsecured convertible loans (the “Commitment Loans”) in an aggregate loan amount of $640,000, payable in four individual amounts, the first payment due by September 20, 2016, the Note Holder retaining the right of first refusal on the Commitment Loans. The first Commitment Loan was not entered into due to the capital requirements of the Company being less than anticipated, primarily due to lower than expected MML development costs during the quarter, which allowed for an amendment to the MML funding obligations of the Company. Consequently, the Company issued the October 2016 Note in the amount of $60,000 rather than draw upon the Commitment Loans. On September 29, 2016, the Investor, the Company and the Note Holder entered into an amendment to the SPA pursuant to which the Investor, the Note Holder and the Company agreed that should the Note Holder elect to provide the Option Loans, the Investor will not be required to, or will it be permitted to, provide the Commitment Loans. In the event the Note Holder does not provide the Option Loans, the Investor will be required to provide the Commitment Loans in an amended aggregate amount of $580,000, on dates and in amounts to be agreed between the Investor and the Company. After the close of the stock market on August 3, 2016, the Company implemented a 1-for-7 reverse split of its common stock. All share and per share data in these financial statements and footnotes have been retrospectively adjusted to account for this reverse stock split. |
Note 9 - Commitments
Note 9 - Commitments | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 8 - Commitments | 9. Commitments Sgenia License Agreement On December 4, 2013, the Company entered into a 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 obtain a worldwide exclusive license to manufacture, market and sell the resulting Sgenia 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/SA product. Additionally, the objectives of the development stages and the 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/SA 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, 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 September 30, 2016. The Company is currently committed to advancing approximately EUR656,000 (approximately $718,000), 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 September 30, 2016, reflecting a slowing of the research and development of the Sgenia Products. The Company cannot determine at this time whether or not the Sgenia Products will be fully developed, which will also limit the funding obligations of the Company under the License Agreement. 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. MML Funding Arrangement The Company’s funding of MML was limited to an initial committed aggregate payment of £450,500 (approximately $650,000 at exchange rates prevailing at the time of the MML SSA) for Phase 1 of which $160,000 has been paid. In addition, the Company may be required to provide an additional £45,000 (approximately $55,000 at current exchange rates) to be available after March 31, 2017, payable within 20 days after the Company received written notice from MML. On September 29, 2016, the MML SSA commitment was amended to provide for the total amount of $650,000, payable under an amended timetable; all the other provisions of the MML SSA remained in force. Under the amendment, the Company has made payments to MML of $130,000 on August 2, 2016 and $30,000 on October 1, 2016. Subsequent payments are expected to be made as follows; (a) on or before October 31, 2016, a payment $110,000, (b) on or before November 30, 2016, a payment of $152,500; (c) on or before January 31, 2017 a payment of $152,500; and (d) on or before March 31, 2017 a payment of $75,000. |
Note 10 - Related party
Note 10 - Related party | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Note 10 - Related party transactions | 10. 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, if any, to be equal to 10% of the net sales generated from the License Agreement. On August 12, 2016, the Company amended Mr. Carlos Jose Gil’s service agreement to include additional compensation, if any, to be equal to 10% of the revenue received by Zenosense, Inc. from MML as a result of any future commercialization of the MIDS project. During the nine months ended September 30, 2016, the Company recorded $45,539 of general and administrative expenses related to amounts paid/owed to Ksego Engineering S.L. for services rendered by Mr. Gil. As of September 30, 2016, the Company owes Mr. Gil $85,671. No additional compensation based on net sales has been earned to date. |
Note 11 - Subsequent Events
Note 11 - Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Note 11 - Subsequent Events | 11. Subsequent Events On October 18, 2016, the Note Holder entered into a Debt Purchase and Assignment Agreement (the “Assignment Agreement”) with an accredited investor as defined in Rule 501(a) of the 1933 Securities Act (the “Junior Holder”), whereby the Junior Holder purchased $42,000 of the principle amount of one of the May 2016 Notes. Under the terms of the Assignment Agreement; (a) the portion of the May 2016 Note held by the Junior Holder (such portion being referred to as the “Junior Note”) will be subordinate to the portion of the May 2016 Note held by the Note Holder (such portion being referred to as the “Senior Note”) and all other debt of the Note Holder issued by the Company at all times that the Company has any obligations under the Senior Note or any other debt securities issued to the Note Holder, and all actions requiring permission from the Note Holder as set out in the May 2016 Note and the Exchange Agreement will remain in place and the Junior Note will be amended to reflect these rights; and (b) the Junior Note will be amended whereby the Junior Holder will not be permitted to convert any of the Junior Note into shares of common stock of the Company unless the trading price of the Company’s securities is equal to or greater than $0.15 per share based on the average volume weighted price of the preceding five trading days. On October 27, 2016, the Company issued an unsecured note (the “November 2016 Note”) in the principal amount of $140,000, to the Note Holder in exchange of a loan of $140,000. The November 2016 Note is the first out of the four Option Loans and the Note Holder retains the option to provide the balance of the Option Loans. The terms of the November 2016 Note are listed in note 7 above. On November 1, 2016, after notice from the Note Holder, the Company reissued one of the May 2016 Notes (the “$62,547 May 2016 Note”) in the amounts of $42,000 and $ 21,968 (which includes the full amount of the interest due through November 1, 2016 on the $62,547 May 2016 Note) under two separate new notes. The terms of the $42,000 note were modified to make it subordinate to the note in principal amount of $21.968, but otherwise the two notes are basically the same and generally carry forward the terms of the May 2016 Notes. |
Note 4 - Summary of Significa17
Note 4 - Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 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. |
Investments in unconsolidated affiliates | Investments in unconsolidated Affiliates We apply the equity method of accounting where we can exert significant influence over, but do not control or direct, the policies, decisions or activities of the entity. We use the cost method of accounting where we are unable to exert significant influence over the entity. Entities are required to periodically review their equity and cost method investments to determine whether current events or circumstances indicate that the carrying value of the investments may be impaired. We evaluate our cost method investment for impairment when there are indicators of impairment. If indicators suggest impairment we will perform an impairment test to assess whether an adjustment is necessary. The impairment test considers whether the fair value of our cost method investment has declined and if any such decline is other than temporary. If a decline in fair value is determined to be other than temporary, the investment’s carrying value is written down to fair value. |
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 September 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 (
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, MIDS Medical Ltd. | 40.00% |
Note 3 - Going Concern (Details
Note 3 - Going Concern (Details Narrative) | Sep. 30, 2016USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated Losses | $ 1,446,565 |
Note 5 - Equity Method Invest20
Note 5 - Equity Method Investment (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Jun. 20, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Percent interest in joint venture, MIDS Medical Ltd. | 40.00% | |
Investment in MML | $ 160,000 | |
Loss on investment in MML | $ 1,710 |
Note 6 - Loans payable (Details
Note 6 - Loans payable (Details Narrative) | May 17, 2016USD ($) | Mar. 29, 2016 | Nov. 02, 2015USD ($) |
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 two new convertible notes | $ 115,744 |
Note 7 - Convertible Debt (Deta
Note 7 - Convertible Debt (Details Narrative) - USD ($) | 9 Months Ended | |||||||
Sep. 30, 2016 | Mar. 31, 2017 | Jan. 31, 2017 | Nov. 30, 2016 | Oct. 31, 2016 | Sep. 29, 2016 | May 17, 2016 | Apr. 20, 2016 | |
Securities Purchase Agreement | ||||||||
Principal value | $ 40,000 | |||||||
Interest rate | 5.00% | |||||||
Conversion price per share | $ 0.007 | |||||||
Limit to the amount of common stock issued at any time under the SPA as a percent of outstanding shares of Common Stock. | 4.99% | |||||||
Shares initially reserved with respect to conversion feature | 5,714,286 | |||||||
Exchange of Prior Notes to New Notes | ||||||||
2016 May Note 1 | $ 53,197 | |||||||
2016 May Note 2 | 62,547 | |||||||
Aggregate principal of Note 1 and Note 2 | $ 115,744 | |||||||
Interest rate per annum | 5.00% | |||||||
Conversion price per share | $ 0.007 | |||||||
Limit to the amount of common stock issued at any time under the SPA as a percent of outstanding shares of Common Stock. | 4.99% | |||||||
Shares initially reserved with respect to conversion feature | 16,534,857 | |||||||
Accrued interest, new notes | $ 3,230 | |||||||
Beneficial conversion feature, intrinsic value | $ 155,744 | |||||||
Amortization of debt discount | $ 30,495 | |||||||
October 2016 Note | ||||||||
Principal Amount | $ 60,000 | |||||||
Option loan value | $ 100,000 | $ 180,000 | $ 170,000 | $ 140,000 | ||||
Interest rate per annum | 10.00% | |||||||
Terms of Note | The Company may, at any time prior to the Maturity Date, prepay any unconverted amount of the New Loans in full or in part. The Note Holder may, at any time prior to the Maturity Date convert any or all of the New Loans into shares of common stock of the Company (the Common Stock) at either (a) $0.07 per share (subject to adjustment), or (b) a 15% discount to the 10-day Volume Weighted Average Price per share, 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 held by the Investor and its affiliates, or the Note Holder and its affiliates to exceed 4.99% of the outstanding shares of Common Stock. On the Maturity Date of each of the New Loans any outstanding amount shall automatically and mandatorily convert into Common Stock at a price of $0.07 per share (subject to adjustment). The New Loans also contain standard anti-dilution provisions. | |||||||
Limit to the amount of common stock issued at any time under the SPA as a percent of outstanding shares of Common Stock. | 4.99% | |||||||
Conversion Price per Share | $ 0.07 | |||||||
Beneficial Conversion Feature, intrinsic value | $ 53,486 | |||||||
Amortization of debt discount | $ 41 |
Note 8 - Common Stock (Details
Note 8 - Common Stock (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 29, 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 | |||
Principal Amount, note | $ 60,000 | |||
Amended principal value, commitment loans | $ 580,000 | |||
Terms of reverse split | 1-for-7 |
Note 9 - Commitments (Details N
Note 9 - Commitments (Details Narrative) | Mar. 31, 2017USD ($) | Jan. 31, 2017USD ($) | Nov. 30, 2016USD ($) | Oct. 31, 2016USD ($) | Oct. 01, 2016USD ($) | Sep. 30, 2016USD ($) | Aug. 02, 2016USD ($) | Jun. 20, 2016USD ($) | Jun. 20, 2016GBP (£) | Dec. 04, 2013USD ($) |
Sgenia Industrial S.L License Agreement | ||||||||||
Term of license, years | 40 | |||||||||
Aggregate initial product development budget | $ 1,256,438 | |||||||||
Product development, expensed as research and development under initial budget | $ 526,846 | |||||||||
Aggregate revised product development budget | $ 1,142,143 | |||||||||
Product development, expensed as research and development under revised budget | 769,787 | |||||||||
Amount committed to advance, EUR | 656,000 | |||||||||
Amount committed to advance, USD | $ 718,000 | |||||||||
Number of days after each fiscal quarter for payment of Royalties | 60 | |||||||||
Royalty percentage payable on net sales | 0.20 | |||||||||
MML | ||||||||||
Percent interest in joint venture, MDS Medical Ltd. | 40.00% | 40.00% | ||||||||
Company funding commitment to MML - GBP | £ | £ 450,500 | |||||||||
Company funding to MML - equivalent USD | $ 650,000 | |||||||||
Amount paid, USD | $ 160,000 | |||||||||
Contingency required on 20 days written notice after March 31 2017, GBP | $ 45,000 | |||||||||
Contingency required on 20 days written notice, after March 31, 2017, USD, approximate | 55,000 | |||||||||
Payments under amended timetable | $ 75,000 | $ 152,500 | $ 152,500 | $ 30,000 | $ 110,000 | $ 130,000 |
Note 10 - Related party (Detail
Note 10 - Related party (Details Narrative) | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Aug. 12, 2016 | 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 | $ 45,539 | ||
Amount due to Mr. Gil | $ 85,671 | ||
Compensation added to Mr. Gil's service agreement, percent revenue received by Zenosense, Inc. from MML as a result of any future commercialization of the MIDS project. | 10.00% |
Note 11 - Subsequent Events (De
Note 11 - Subsequent Events (Details Narrative) | Nov. 01, 2016USD ($) | Oct. 27, 2016USD ($) | Oct. 18, 2016USD ($)$ / shares |
Subsequent Events [Abstract] | |||
Principle amount purchased under Assignment Agreement | $ 42,000 | ||
Junior Holder will not be permitted to convert any of the Junior Note into shares of common stock of the Company unless the trading price of the Company's securities is equal to or greater than | $ / shares | $ 0.15 | ||
Number of trading days used to determine average volume weighted price per share | 5 | ||
Unsecured Note, Principal, issued for First Option Loan | $ 140,000 | ||
Note 1- reissued May 2016 note | $ 42,000 | ||
Note 2- reissued May 2016 note | $ 21,968 |