ZENOSENSE, INC. - Annual Report: 2016 (Form 10-K)

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Nevada		26-3257291
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Avda Cortes Valencianas 58, Planta 5, Valencia, Spain		N/A
(Address of principal executive offices)		(Zip Code)

	011-34-960-454-202
(Registrant’s telephone number, including area code)

 

Title of each class			Name of each exchange on which registered
None			None

Large Accelerated Filer                                               [   ]	Accelerated Filer                                                        [    ]
Non-Accelerated Filer                                                 [   ]	Smaller Reporting Company                                     [ X ]

 

·

Dr. Nasser Djennati is a UMIST graduate with extensive experience in instrumentation design, analogue and digital electronics, IT, sensor design and specifically in magnetic nanoparticle applications within the medical POC device area. He has 20 years expertise in Hall Effect technology and magnetic field measurement and experience in the regulatory approvals process for Class II- a medical device products.

 

 

 

 

 

·	The number of heart attack survivors has doubled in the last 40 years as research and healthcare continues to improve.

 

·	A 2012 NHS report showed the mortality rate in England during 2002-10 fell by 50% in men and 53% in women3.

 

·	Take a resting 12-lead ECG and a blood sample for troponin I or T measurement on arrival in hospital

 

·	Carry out a physical examination

 

·	Take a detailed clinical history unless ST-Elevation Myocardial Infarction is confirmed from the resting 12-lead ECG

 

 

·	A troponin test measures the levels troponin T or troponin I proteins in the blood12. These proteins are released when the heart muscle has been damaged, such as occurs with a heart attack13.

 

·	The more damage there is to the heart, the greater the amount of troponin there will be in the blood.

 

·	Troponins are preferred over traditional markers, such as CK-MB or myoglobin, due to their greater specificity and sensitivity14.

 

 

 

·	Improve the accuracy of immunoassay biomarker detection to provide quantitative measurements of samples, effectively combining the accuracy of high sensitivity cardiac biomarker assays performed on central laboratory analyzers (“CL”) with the speed and convenience of a POC, hand held device;

 

·	Rapid analytical time; 3 minutes for a single assay test, much faster than existing, less sensitive POC tests19 and very much faster than CL analyzer tests;

 

·	Accuracy and sensitivity will permit the use, for the first time, of rapid HS cTnI tests able to rule / in rule out MI, at the POC;

 

·	Ability to use just a 5 ul (a small drop) of finger-stick blood for a single assay test on an easy to use microfluidic test strip, no other POC cTnI device can do this as they require venous draw20;

 

·	Ability to multiplex up to three assays on a single test strip using a <15ul finger stick blood sample in under 8 minutes; and

 

·	Very simple operation by relatively untrained operative - can be used very easily at first contact with patient delivering fully automated results with no requirement for expert interpretation by a highly skilled operative.

 

·	In the UK, around 700,000 patients attend hospital emergency departments each year with chest pains22.

 

·	A typical district general hospital will see around 6,500 patients present with chest pain of suspected cardiac origin each year24.

 

·	NHS Glasgow had reported a lower number of 3,000 patients every year who come to the hospital as an emergency with chest pain25.

 

·	Approximately 2 to 4% of patients with an ACS are mistakenly discharged28.

 

·	Around 14,000 and 50,000 patients a year are wrongly sent home by doctors having suffered a mild heart attack that has been missed by current testing methods29.

 

·	Subsequently, medical litigation arising from missed diagnosis is increasing at the rate of 20%30.

 

 

 

 

 

 

 

·	High rates of false positives – a non-calcified nodule of any size will be found in 50% of those screened and 98% of those will be false positives

 

 

·	Over diagnosis – cancers identified and treated which, if left alone, would not have impacted long-term morbidity or mortality

 

 

·	Radiation Risks – concern over the risks of radiation exposure associated with serial CT imaging and its role in the development of future lung or other cancer

 

 

·	Cost-effectiveness – the NLST found that the number of high-risk patients needed to be screened with CT to save one life from lung cancer was 320. Consequently, estimates of the cost of CT screening vary from as low as $19,000 up to about $169,000 per life-year saved

                    

                    

·	A new sensor for MRSA was manufactured and tested (in-vivo) with 20 selected subjects, half of whom were carrying MRSA. There was no improvement of results and the target of 95% sensibility has not been achieved.

·	A series of ten new nanosensors for the lung cancer device were manufactured and a final prototype of the lung cancer device was finished and two devices were manufactured. These two devices are intended to be used in the testing of patients during the hospital trial.

·	Development of the algorithms to improve pattern recognition.

·	Approval of the Ethical Committee to allow testing in three national hospitals in Spain.

·	Preparation for and assessment of applying for intellectual property protection.

·	establishment registration and device listing;

·	QSR, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures;

·	labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling;

·	medical device reporting regulations, which require that manufacturers report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; and

·	corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FD&C Act that may present a risk to health.

·	warning letters;

·	fines and civil penalties;

·	unanticipated expenditures;

·	delays in approving or refusal to approve our applications, including supplements;

·	withdrawal of FDA approval;

·	product recall or seizure;

·	interruption of production;

·	operating restrictions;

·	injunctions; and

·	criminal prosecution.

 

 

 

 

 

 

 

 

 

·	MML do not control the amount and timing of resources that our strategic partners may devote to its products;

·	MML do not control the decision to pursue or amend a product, the timing of development activities, product launches and extent of marketing and sales activities;

·	MML partners may experience financial difficulties;

·	business combinations or significant changes in a partner’s business strategy may also adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement;

·	a collaborator could independently move forward with a competing product developed either independently or in collaboration with others, including MML’s competitors; and

·	collaborative arrangements are often terminated or allowed to expire, which would delay the development and may increase the cost of developing MML’s products.

 

·	announcements of new offerings, products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;

·	price and volume fluctuations in the overall stock market from time to time;

·	significant volatility in the market price and trading volume of technology companies in general;

·	whether our results of operations meet the expectations of securities analysts or investors;

·	actual or anticipated changes in the expectations of investors or securities analysts;

·	litigation involving us, our industry, or both;

·	regulatory developments in the United States, foreign countries, or both;

·	general economic conditions and trends;

·	departures of key employees; and

·	an adverse impact on the company from any of the other risks cited herein.

Quarter Ended		High Bid				Low Bid
December 31, 2016		$	0.24			$	0.10
September 30, 2016		$	0.20			$	0.10
June 30, 2016		$	0.19			$	0.14
March 31, 2016		$	0.21			$	0.09
December 31, 2015		$	0.56			$	0.19
September 30, 2015		$	0.68			$	0.35
June 30, 2015		$	1.26			$	0.57
March 31, 2015		$	1.40			$	0.98

Our business plan is to develop devices to be used at the POC in hospitals and other medical care centers to detect AMI, MRSA/SA and the signs of lung cancer, and where necessary, to fund the medical trials of those medical devices. Up to June 20, 2016, our principal activity was funding the development of the Sgenia Products. Because the development activities of the Sgenia Products has slowed, and certain milestones have not been achieved, one of which is the start of hospital testing, we have not been providing additional funding for the development of the Sgenia Products as provided in the License Agreement. Additionally, because of the development status we have not been successful in obtaining our funding for further development of the Sgenia Products.

 

Going Concern

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	Page
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets	F-2
Statements of Operations	F-3
Statement of Stockholders’ (Deficit)	F-4
Statements of Cash Flows	F-5
Notes to Financial Statements	F-6 to F-13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		December 31, 2016				December 31, 2015
Assets
Current assets:
Cash		$	10,271			$	989
Prepaid expense			9,375				4,167
Investment in joint venture			249,336				-
Total current assets			268,982				5,156
Total assets		$	268,982			$	5,156
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses		$	23,691			$	33,850
Accounts payable and accrued expenses - related party			85,671				49,951
Loans payable			-				110,000
Convertible notes, net of discount			73,319				-
Stock payable			67,500				67,500
Total current liabilities			250,181				261,301
Stockholders’ equity (deficit)
Common stock, 500,000,000 shares authorized, $0.001 par value,     16,677,339 and 7,087,919, shares issued and outstanding respectively			16,677				7,088
Additional paid-in capital			1,562,516				1,047,797
Accumulated deficit			(1,560,392	)			(1,311,030	)
Total stockholders’ equity (deficit)			18,801				(256,145	)
Total liabilities and stockholders’ equity (deficit)		$	268,982			$	5,156

 

		Year ended December 31, 2016				Year ended December 31, 2015
Revenues		$	-			$	-
Expense:
Research and development			-				32,215
General and administrative expenses			134,353				114,261
Total expenses			134,353				146,476
Loss from operations			(134,353	)			(146,476	)
Other expense:
Interest expense			(71,845	)			(3,729	)
Loss in equity method investment			(43,164	)			-
Total other expense			(115,009	)			(3,729	)
Net loss		$	(249,362	)		$	(150,205	)
Net loss per common share:
Basic and diluted		$	(0.02	)		$	(0.02	)
Weighted average common shares outstanding:
Basic and diluted			12,563,806				7,087,828

 

		Common Stock
		Shares				Amount				Additional Paid-in Capital				Accumulated Deficit				Stockholders’ Equity(Deficit)
Balance as of December 31, 2014			7,087,828			$	7,088			$	1,047,798			$	(1,160,825	)		$	(105,940	)
Net Loss			-				-				-				(150,205	)			(150,205	)
Balance as of December 31, 2015			7,087,828				7,088				1,047,798				(1,311,030	)			(256,145	)
Shares issued for cash			9,589,511				9,590				140,410				-				150,000
Beneficial conversion features of convertible debt			-				-				374,308				-				374,308
Net Loss			-				-				-				(249,362	)			(249,362	)
Balance as of December 31, 2016			16,677,339			$	16,678			$	1,562,516			$	(1,560,392	)		$	18,801

 

		Year ended December 31, 2016				Year ended December 31, 2015
Operating Activities
Net loss		$	(249,362	)		$	(150,205	)
Adjustment to reconcile to net loss to net cash used in operating activities:
Amortization of debt discount			60,462				-
Loss in equity method investment			43,164				-
Changes in operating assets and liabilities:
Prepaid expense			(5,208	)			(4,167	)
Accounts payable and accrued expenses			(2,994	)			16,432
Accounts payable and accrued expenses - related party			35,720				44,506
Cash used in operating activities			(118,218	)			(93,434	)
Investing Activities
Investment in joint venture			(292,500	)			-
Cash used in investing activities			(292,500	)			-
Financing Activities
Proceeds from third party loan			-				90,000
Proceeds from sale of common stock			150,000
Proceeds from convertible notes payable			270,000				-
Cash provided by financing activities			420,000				90,000
Net increase (decrease) in cash			9,282				(3,434	)
Cash, beginning of year			989				4,423
Cash, end of year		$	10,271			$	989
Supplemental disclosure of cash flows information
Cash paid for income taxes		$	-			$	-
Cash paid for interest		$	-			$	-
Non-cash Investing and Financing activities:
Beneficial conversion features of convertible debt		$	374,308			$	-

 

 

1.	Nature of operations

 

 

 

2.	Going concern

3.	Summary of significant accounting policies

 

4.	Equity Method Investment

Current Assets
Cash		$	165,334
Prepaid expenses			5,813
			171,147
Property and equipment			17,818
Intellectual property			975,000
Total Assets		$	1,163,965
Current Liabilities
Accounts payable - trade		$	3,523
Accrued liabilities			18,286
Total Current Liabilities			21,809
Equity
Share capital			1,625,000
Subscription receivable			(357,500	)
Other comprehensive income			(17,433	)
Accumulated deficit			(107,911	)
Total equity			1,142,156
Total Equity and Liabilities		$	1,163,965

Revenue		$	–
General and administrative expenses			107,911
Net loss		$	(107,911	)

5.	Loan payable

6.	Convertible Debt

Principal balances of the convertible notes		$	387,165
Less discount related to beneficial conversion features			(374,308	)
Add amortization of debt discount			60,462
Balance at December 31, 2016		$	73,319

7.	Common stock

8.	Commitments

 

9.	Income taxes

10.	Related party transactions

11.	Subsequent events

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Name	Age	Position
Carlos Jose Gil	46	Chief Executive Officer, Director

Name and Principal Position	Year		Salary				Bonus				Total
Carlos Jose Gil	2016		$	61,124			$	-0-			$	61,124
	2015		$	59,404			$	-0-			$	59,404

 

·	each of our directors;

·	each of our named executive officers;

·	all of our current directors and executive officers as a group; and

·	each person, or group of affiliated persons, who beneficially owned more than 5% of our common stock.

Name and Address of Beneficial Owner(s)	Amount and Nature of Beneficial Owner(s) (1)	Percentage of Beneficial Ownership (1)
Carlos José Gil, CEO and Director (2)	-0-	-0-
All officers and directors (1 person)	-0-	-0-

(1)	This table is based on 20,083,381 shares of common stock issued and outstanding as of the date indicated above.
(2)	Mr. Gil’s address is Avda Cortes Valencianas 58, Planta 5, Valencia, Spain. (3) Valley Heights, Inc. address is Suite 1-A, 5, Eusebio A Morales, El Cangrego, Panama City, Republic of Panama

 

Number	Description
3.1*	Articles of Incorporation (Incorporated by reference to Exhibit 3.1 of the Form -S1 filed with the Securities and Exchange Commission on March 17, 2009).
3.2*	Certificate of Amendment to the Certificate of Incorporation (Incorporated by reference to Exhibit 3.3 of the Form 8-K filed with the Securities and Exchange Commission on November 25, 2013).
3.3*	Amended and Restated By-laws (Incorporated by reference to Exhibit 3.4 of the Form 8-K filed with the Securities and Exchange Commission on November 25, 2013).
3.4*	Certificate of Amendment to Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 of hte Form 8-K filed with the Securities and Exchange Commision on August 4, 2016).
3.5*	Certificate of Correction to Certificate of Incorporation (Incorporated by reference to Exhibit 3.2 of the Form 8-K filed with teh Securities and Exchange Commission on August 4, 2016).
10.1*	Development and Exclusive License Agreement, by and among the Company, Sgenia Solutions, S.L., and ZENON Biosystem, S.L., dated November 26, 2013 (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on December 6, 2013).
10.2*	Amendment No. 1 to Development and Exclusive License Agreement, dated December 4, 2013, delaying the effective date and adding Sgenia Industrial, S.L. as a party (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on December 6, 2013).
10.3*	Form of Employment Agreement with Mr. Carlos Jose Gil, dated December 5, 2013 (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on December 6, 2013).
10.4*	Form of Debt Conversion Agreement dated December 4, 2013, between B. Alejandro Vasquez and the Company, for the issuance of 366,340 shares (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on December 6, 2013).
10.5*	Form of Debt Conversion Agreement dated December 4, 2013, for the issuance of 796,872 shares (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on December 6, 2013).
10.6*	Form of Securities Purchase Agreement, dated December 4, 2013 (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on December 6, 2013).
10.7*	Amendment No. 2 to Development and Exclusive License Agreement, dated April 28, 2015 (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on May 2, 2015)
10.8*	Amendment No. 3 to Development and Exclusive License Agreement, dated July 21, 2015 (Incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the Securities and Exchange Commission on July 24, 2015)
10.9*	Form Securities Purchase Agreement, dated April 20, 2016.
10.10*	Form Securities Exchange Agreement, dated May 17, 2016.
10.11*	Form Convertible Note, issued on April 20, 2016.
10.12*	Form Convertible Note, issued on May 17, 2016.
23.1**	Consent from GBH CPAs, PC
31.1**	Certification of the Chief Executive Officer and the Principal Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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