UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
October 31, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
SENSASURE TECHNOLOGIES
INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada | | 001-41209 | | 87-2406468 |
(State or other jurisdiction
of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
4730 S. Fort Apache Rd., Suite 300 Las Vegas, NV | | 89147 |
(Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including
area code: (347) 325-4677
N/A
(Former name or former address, if changed since
last report)
Securities registered pursuant to Section 12(b) of
the Securities Exchange Act of 1934:
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common Stock, $0.01 par value | | SSTC | | OTC QB |
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 ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted 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 such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
Emerging growth company | ☒ | | |
If an emerging company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act ☒
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As
of December 15, 2023, 56,349,183 shares of common stock, $0.01 par value per share, were issued and outstanding.
SENSASURE TECHNOLOGIES, INC.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. Dollars, except share data or otherwise
stated)
FOR THE THREE AND SIX MONTHS PERIOD
OCTOBER 31, 2023 AND 2022
INDEX TO FINANCIAL STATEMENTS
SENSASURE TECHNOLOGIES,
INC.
CONDENSED INTERIM CONSOLIDATED
BALANCE SHEETS
(In U.S. Dollars, except
share data or otherwise stated)
as of October 31, 2023
and April 30, 2023
| |
Note | |
As at
October 31,
2023
(unaudited) | | |
As at
April 30,
2023
(audited) | |
| |
| |
$ | | |
$ | |
ASSETS | |
| |
| | |
| |
Current assets: | |
| |
| | |
| |
Cash | |
3(b) | |
| 3,135 | | |
| 26,786 | |
Restricted cash held in trust | |
3(b) | |
| - | | |
| 172 | |
Accounts receivable | |
| |
| 788 | | |
| - | |
Subscription receivable | |
4,8(b) | |
| - | | |
| - | |
Prepayments and other receivables | |
| |
| 11,435 | | |
| 12,688 | |
Total current assets | |
| |
| 15,358 | | |
| 39,646 | |
Total assets | |
| |
| 15,358 | | |
| 39,646 | |
| |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFIECIENCY | |
| |
| | | |
| | |
Current liabilities: | |
| |
| | | |
| | |
Accounts payable and accrued liabilities | |
5 | |
| 109,579 | | |
| 105,868 | |
Accounts payable and accrued liabilities to a related party | |
7(c) | |
| 470,445 | | |
| 486,826 | |
Demand Loans | |
6 | |
| 137,694 | | |
| 113,375 | |
Loans from related parties | |
7(b) | |
| 76,074 | | |
| 82,823 | |
Amount due to related parties | |
7(a) | |
| 371,736 | | |
| 312,347 | |
Total current liabilities | |
| |
| 1,165,528 | | |
| 1,101,239 | |
| |
| |
| | | |
| | |
Total liabilities | |
| |
| 1,165,528 | | |
| 1,101,239 | |
| |
| |
| | | |
| | |
STOCKHOLDERS’ DEFICIECY | |
| |
| | | |
| | |
Class A Preferred stock, $0.001 par value, 5,000,000 authorized as at October 31, 2023 and April 30, 2023, respectively. Issued and outstanding shares: Nil and Nil as at October 31, 2023 and April 30, 2023, respectively. | |
8 | |
| - | | |
| - | |
Class B Preferred stock, $0.001 par value, 5,000,000 authorized as at October 31, 2023 and April 30, 2023, respectively. Issued and outstanding shares: Nil and Nil as at October 31, 2023 and April 30, 2023, respectively. | |
8 | |
| - | | |
| - | |
Common stock, $0.01 par value, 250,000,000 authorized as at October 31, 2023 and April 30, 2023, respectively. Issued and outstanding common shares: and 56,349,183 as at October 31, 2023 and 56,349,183 at April 30, 2023, respectively. | |
8 | |
| 447,431 | | |
| 425,431 | |
Shares to be issued (804,000 and 804,000 common shares at October, 2023 and April 30, 2023 respectively) | |
8 | |
| 15,755 | | |
| 15,755 | |
Additional paid-in capital | |
| |
| 4,665,073 | | |
| 4,533,073 | |
Foreign currency translation reserve | |
| |
| (170,131 | ) | |
| (231,505 | ) |
Accumulated deficit | |
| |
| (6,334,768 | ) | |
| (6,027,209 | ) |
Total deficit attributable to equity holders of the Company | |
| |
| (1,376,640 | ) | |
| (1,284,455 | ) |
Total equity attributable to non-controlling interests | |
| |
| 45,669 | | |
| 42,061 | |
Development reserve | |
8(d) | |
| 180,801 | | |
| 180,801 | |
Total deficit | |
| |
| (1,150,170 | ) | |
| (1,061,593 | ) |
Total liabilities and stockholders’ deficiency | |
| |
| 15,358 | | |
| 39,646 | |
Reverse Recapitalization (Note 1)
Contingencies (Note 9)
Subsequent events (Note 10)
The accompanying notes are an integral part of the condensed interim
consolidated financial statements.
SENSASURE TECHNOLOGIES,
INC.
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF LOSS
FOR THE THREE AND SIX
MONTHS ENDED OCTOBER 31, 2023 AND 2022
(In U.S. Dollars, except
share data or otherwise stated)
| |
Note | |
Three Months
Ended
October 31,
2023
(unaudited) | | |
Three Months
Ended
October 31,
2022
(unaudited) | | |
Six
Months
Ended
October 31,
2023
(unaudited) | | |
Six
Months
Ended
October 31,
2022
(unaudited) | |
| |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| |
| | |
| | |
| | |
| |
Revenue | |
3(a) | |
| 811 | | |
| 680 | | |
| 1,146 | | |
| 4,414 | |
| |
| |
| | | |
| | | |
| | | |
| | |
Expenses | |
| |
| | | |
| | | |
| | | |
| | |
General and administrative expense | |
8(b) | |
| (154,467 | ) | |
| (132,641 | ) | |
| (296,352 | ) | |
| (313,909 | ) |
Research and development expense | |
3(f),7 | |
| (3,231 | ) | |
| (19,421 | ) | |
| (10,145 | ) | |
| (19,421 | ) |
TOTAL OPERATING EXPENSES | |
| |
| (157,698 | ) | |
| (152,062 | ) | |
| (306,497 | ) | |
| (333,330 | ) |
| |
| |
| | | |
| | | |
| | | |
| | |
Interest expenses, net | |
6,7 | |
| (1,968 | ) | |
| (1,995 | ) | |
| (4,009 | ) | |
| (4,132 | ) |
Other income (expenses), net | |
| |
| | | |
| | | |
| | | |
| | |
NET LOSS BEFORE INCOME TAXES | |
| |
| (158,855 | ) | |
| (153,377 | ) | |
| (309,360 | ) | |
| (333,048 | ) |
Income taxes | |
| |
| | | |
| | | |
| | | |
| | |
NET LOSS | |
| |
| (158,855 | ) | |
| (153,377 | ) | |
| (309,360 | ) | |
| (333,048 | ) |
Less: net loss attributable to non-controlling interests | |
| |
| 164 | | |
| 4,277 | | |
| 1,801 | | |
| 5,797 | |
Net loss attributable to the Company | |
| |
| (158,691 | ) | |
| (149,100 | ) | |
| (307,559 | ) | |
| (327,251 | ) |
| |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss per share | |
| |
| (0.003 | ) | |
| (0.001 | ) | |
| (0.005 | ) | |
| (0.003 | ) |
| |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding | |
| |
| 56,349,183 | | |
| 105,723,183 | | |
| 56,349,183 | | |
| 105,723,183 | |
The accompanying notes are an integral part
of the condensed interim consolidated financial statements.
See effect of reverse recapitalization (Note
1)
SENSASURE TECHNOLOGIES,
INC.
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE AND SIX
MONTHS ENDED OCTOBER 31, 2023 AND 2022
(In U.S. Dollars, except
share data or otherwise stated)
| |
Three Months
Ended
October 31,
2023
(unaudited) | | |
Three Months
Ended
October 31,
2022
(unaudited) | | |
Six
Months
Ended
October 31,
2023 (unaudited) | | |
Six
Months
Ended
October 31,
2022
(unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Net loss for the period | |
| (158,855 | ) | |
| (153,377 | ) | |
| (309,360 | ) | |
| (333,048 | ) |
Foreign currency translation adjustments | |
| 48,585 | | |
| 61,005 | | |
| 66,783 | | |
| 73,357 | |
Total comprehensive loss for the period | |
| (110,270 | ) | |
| (92,372 | ) | |
| (242,577 | ) | |
| (259,691 | ) |
| |
| | | |
| | | |
| | | |
| | |
Attributable to: | |
| | | |
| | | |
| | | |
| | |
Net loss attributable to the Company | |
| (158,691 | ) | |
| (149,100 | ) | |
| (307,559 | ) | |
| (327,251 | ) |
Foreign currency translation adjustments attributable to the Company | |
| 44,353 | | |
| 57,058 | | |
| 61,374 | | |
| 68,612 | |
Net loss attributable to non-controlling interests | |
| (164 | ) | |
| (4,277 | ) | |
| (1,801 | ) | |
| (5,797 | ) |
Foreign currency translation adjustments attributable to non-controlling interests | |
| 4,232 | | |
| 3,947 | | |
| 5,409 | | |
| 4,745 | |
| |
| (110,270 | ) | |
| (92,372 | ) | |
| (242,577 | ) | |
| (259,691 | ) |
The accompanying notes are an integral part
of the condensed interim consolidated financial statements.
See effect of reverse recapitalization (Note
1)
SENSASURE TECHNOLOGIES,
INC.
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
(In U.S. Dollars, except
share data or otherwise stated)
FOR THE THREE AND SIX
MONTHS ENDED OCTOBER 31, 2023 AND 2022
| |
| | |
Common
Stock | | |
Class
A
Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Foreign
Currency Translation Reserve | | |
Accumulated
deficit | | |
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
Balance
at July 31, 2023 (unaudited) | |
| | | |
| 56,349,183 | | |
| 436,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,599,073 | | |
| (214,484 | ) | |
| (6,176,077 | ) | |
| (1,339,302 | ) | |
| 41,601 | | |
| 180,801 | | |
| (1,116,900 | ) |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 11,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 66,000 | | |
| - | | |
| - | | |
| 77,000 | | |
| - | | |
| - | | |
| 77,000 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (158,691 | ) | |
| (158,691 | ) | |
| (164 | ) | |
| - | | |
| (158,855 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 44,353 | | |
| - | | |
| 44,353 | | |
| 4,232 | | |
| - | | |
| 48,585 | |
Balance
at October 31, 2023 (unaudited) | |
| | | |
| 56,349,183 | | |
| 447,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,665,073 | | |
| (170,131 | ) | |
| (6,334,768 | ) | |
| (1,376,640 | ) | |
| 45,669 | | |
| 180,801 | | |
| (1,150,170 | ) |
| |
| | |
Common
Stock | | |
Class
A Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Accumulated
Other Comprehensive Loss | | |
Accumulated
deficit | | |
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | |
Balance
at July 31, 2022 (unaudited) | |
| | | |
| 105,723,183 | | |
| 615,731 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 4,205,409 | | |
| (235,688 | ) | |
| (5,495,271 | ) | |
| (909,819 | ) | |
| 53,275 | | |
| 240,641 | | |
| (615,903 | ) |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 6,380 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8,196 | | |
| - | | |
| - | | |
| 14,576 | | |
| - | | |
| - | | |
| 14,576 | |
Issuance
of common shares for service | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| - | | |
| - | | |
| - | | |
| 2,520 | | |
| - | | |
| - | | |
| 2,520 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (149,100 | ) | |
| (149,100 | ) | |
| (4,277 | ) | |
| - | | |
| (153,377 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 57,058 | | |
| - | | |
| 57,058 | | |
| 3,947 | | |
| - | | |
| 61,005 | |
Balance
at October 31, 2022 (unaudited) | |
| | | |
| 105,723,183 | | |
| 622,111 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| 4,213,605 | | |
| (178,630 | ) | |
| (5,644,371 | ) | |
| (984,765 | ) | |
| 52,945 | | |
| 240,641 | | |
| (691,179 | ) |
| |
| | |
Common
Stock | | |
Class
A Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Foreign
Currency Translation Reserve | | |
Accumulated
deficit | | |
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
Balance
at April 30, 2023 (audited) | |
| | | |
| 56,349,183 | | |
| 425,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,533,073 | | |
| (231,505 | ) | |
| (6,027,209 | ) | |
| (1,284,455 | ) | |
| 42,061 | | |
| 180,801 | | |
| (1,061,593 | ) |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 22,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 132,000 | | |
| - | | |
| - | | |
| 154,000 | | |
| - | | |
| - | | |
| 154,000 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (307,559 | ) | |
| (307,559 | ) | |
| (1,801 | ) | |
| - | | |
| (309,360 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 61,374 | | |
| - | | |
| 61,374 | | |
| 5,409 | | |
| - | | |
| 66,783 | |
Balance
at October 31, 2023 (unaudited) | |
| | | |
| 56,349,183 | | |
| 447,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,665,073 | | |
| (170,131 | ) | |
| (6,334,768 | ) | |
| (1,376,640 | ) | |
| 45,669 | | |
| 180,801 | | |
| (1,150,170 | ) |
| |
| | |
Common
Stock | | |
Class
A Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Accumulated Other Comprehensive Loss | | |
Accumulated
deficit | | |
Equity
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | |
Balance
at April 30, 2022 (audited) | |
| | | |
| 105,723,183 | | |
| 609,351 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 4,197,213 | | |
| (195,610 | ) | |
| (4,433,352 | ) | |
| 177,602 | | |
| (881,448 | ) | |
| 240,641 | | |
| (463,205 | ) |
Subsidiary
issuance of shares pursuant to private placement | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 45 | | |
| - | | |
| 45 | |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 12,760 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 16,392 | | |
| - | | |
| - | | |
| 29,152 | | |
| - | | |
| - | | |
| 29,152 | |
Issuance
of common shares for service | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| - | | |
| - | | |
| - | | |
| 2,520.00 | | |
| - | | |
| - | | |
| 2,520 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (327,251 | ) | |
| (327,251 | ) | |
| (5,797 | ) | |
| - | | |
| (333,048 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 68,612 | | |
| - | | |
| 68,612 | | |
| 4,745 | | |
| - | | |
| 73,357 | |
Effect
of dilution of ownership in subsidiary pursuant to issuance of shares | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (51,632 | ) | |
| (883,768 | ) | |
| (935,400 | ) | |
| 935,400 | | |
| - | | |
| - | |
Balance
at October 31, 2022 (unaudited) | |
| | | |
| 105,723,183 | | |
| 622,111 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| 4,213,605 | | |
| (178,630 | ) | |
| (5,644,371 | ) | |
| (984,765 | ) | |
| 52,945 | | |
| 240,641 | | |
| (691,179 | ) |
The accompanying notes are an integral part
of the condensed interim consolidated financial statements.
See effect of reverse recapitalization (Note
1)
SENSASURE TECHNOLOGIES,
INC.
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS
ENDED OCTOBER 31, 2023 AND 2022
(In U.S. Dollars, except
share data or otherwise stated)
| |
| |
Six Months | | |
Six Months | |
| |
| |
Ended | | |
Ended | |
| |
| |
October 31, | | |
October 31, | |
| |
| |
2023 | | |
2022 | |
| |
Note | |
(unaudited) | | |
(unaudited) | |
| |
| |
$ | | |
$ | |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| |
| | |
| |
Net loss | |
| |
(309,360) | | |
(333,048) | |
Adjustments for: | |
| |
| | | |
| | |
Amortization of vested shares | |
8(b) | |
| 154,000 | | |
| 29,152 | |
Issuance of shares for services | |
8(b) | |
| - | | |
| 2,520 | |
Changes in: | |
| |
| | | |
| | |
Accounts receivable | |
| |
| (788 | ) | |
| (2,089 | ) |
Prepayments and other receivables | |
| |
| 1,253 | | |
| (1,750 | ) |
Accounts payable and accrued liabilities to third parties and a related party | |
| |
| (12,670 | ) | |
| (43,363 | ) |
Amounts due to related parties | |
| |
| 59,389 | | |
| 51,544 | |
Long term payable to a related party | |
| |
| - | | |
| (17,935 | ) |
Net cash used in operating activities | |
| |
| (108,176 | ) | |
| (314,969 | ) |
| |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| |
| | | |
| | |
Proceeds from subsidiary issuance of shares to noncontrolling interests | |
| |
| - | | |
| 45 | |
Proceeds from related party loans | |
| |
| 70,279 | | |
| - | |
Net cash provided by financing activities | |
| |
| 70,279 | | |
| 45 | |
| |
| |
| | | |
| | |
Effect of exchange rate changes on cash and restricted cash held in trust | |
| |
| 14,074 | | |
| 26,387 | |
Net decrease in cash and restricted cash held in trust | |
| |
| (23,823 | ) | |
| (288,537 | ) |
Cash and restricted cash held in trust at the beginning of period | |
| |
| 26,958 | | |
| 437,177 | |
Cash and restricted cash held in trust at the end of period | |
| |
| 3,135 | | |
| 148,640 | |
| |
| |
| | | |
| | |
Supplemental cash flows information | |
| |
| | | |
| | |
Income tax paid | |
| |
| - | | |
| - | |
Interest paid | |
| |
| - | | |
| - | |
The accompanying notes are an integral part
of the condensed interim consolidated financial statements.
See effect of reverse recapitalization (Note
1)
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
1. | DESCRIPTION
OF BUSINESS |
SensaSure Technologies, Inc. (“SensaSure”
or “Company”) was incorporated on September 8, 2020 under the laws of the State of Nevada with an authorized share capital
of 250,000,000 common shares, 5,000,000 of Class A and 5,000,000 Class B preferred shares. The Company did not issue any number of common
shares, Class A and Class B preferred shares before December 21, 2020.
Sensa Bues AB (“Sensa Bues”) was incorporated
in the Kingdom of Sweden in November 2009. Sensa Bues AB owns the core intellectual properties for the design of sample collection devices
and the methodologies to collect, extract and detect the non-volatile substances presented within aerosols in exhaled breath. These aerosols,
which originate from the lungs and blood, are captured using electret-based filter technologies. This non-invasive breath-based
biological sample collection and testing methodology is called ExaBreath (“EB”) technology.
Sensa Bues AB performs medical device design and
research focusing on developing and commercializing EB for disease detection, exposure monitoring, and drug metabolism.
On December 21, 2020, the Company completed a
reverse recapitalization via a share exchange agreement with Sensa Bues AB and the shareholders who owned 270,339 common shares that represented
72.82% of the total issued and outstanding common shares in Sensa Bues AB. Under the share exchange agreement, the shareholders of Sensa
Bues AB, agreed to exchange their shares of Sensa Bues AB for common shares of SensaSure at an exchange ratio of approximate 1:49.99.
Pursuant to the share exchange transactions (see share exchange agreement noted above), SensaSure issued a total of 13,515,183 common
shares and the then-shareholders of Sensa Bues AB hold their ownership of Sensa Bues AB through SensaSure (Note 8 (b)). Upon completion
of the share exchange transaction, SensaSure became the controlling shareholder that owned 74.82% the total issued and outstanding common
shares in Sensa Bues AB and parent company of Sensa Bues AB (“Subsidiary”). No goodwill or other intangible assets were recorded
during the reverse capitalization. As noted earlier, this transaction has been accounted for as a reversed recapitalization, the operating
results included in this discussion reflect the historical operating results of Sensa Bues AB prior to the reverse capitalization transaction.
During April 2021, the Company increased its ownership
interest in Sensa Bues AB pursuant to private placements completed by Sensa Bues AB where 277,296 common shares and 93,032 common shares
were issued to the Company and noncontrolling interests respectively. (Note 8 (b)).
During the six months ended October 31, 2022,
the Company increased its ownership interest in Sensa Bues AB pursuant to private placements completed by Sensa Bues where 2,200,000 common
shares and 440 common shares were issued to the Company and noncontrolling interests respectively. (Note 8 (b)).
On October 31, 2023, the Company owned 93.53%
(93.53% - April 30, 2023) of the total issued and outstanding common shares in Sensa Bues. On October 31, 2022, the Company owned 93.53%
(74% - April 30, 2022) of the total issued and outstanding common shares in Sensa Bues AB (Note 8 (c)).
2. |
BASIS OF PRESENTATION, MEASUREMENT AND CONSOLIDATION |
(a) |
Basis of Presentation |
The accompanying
unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States (“US GAAP”) for interim financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction
with the Company’s audited consolidated financial statements for the years ended April 30, 2023 and 2022 and their accompanying
notes.
The accompanying
unaudited condensed interim consolidated financial statements are expressed in United States dollars (“USD”). In the opinion
of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position
and results of operations for the interim periods presented have been reflected herein. Operating results for the interim periods presented
herein are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. The Company’s fiscal
year-end is April 30.
The unaudited
condensed interim consolidated financial statements include the accounts of the Company and its less than wholly owned subsidiary, Sensa
Bues AB. Intercompany accounts and transactions have been eliminated.
Certain
prior quarter amounts have been reclassified for consistency with the current period presentation. These reclassifications has no effect
on the reported results of the operations or cash flows.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
(b) |
Basis of Consolidation |
Sensa Bues AB and SensaSure were deemed to be
under common control. Accordingly, the combination of the two entities has been accounted for as a reorganization of entities under common
control in accordance with ASC 805 guidelines, whereby the resulting controlling entity, namely, SensaSure recognized the assets and liabilities
of the Sensa Bues AB transferred at their carrying amounts with a carry-over basis. The reorganization of entities under common control
was retrospectively applied to the financial statements of all prior periods when the financial statements are issued for a period that
includes the date the share exchange transaction occurred.
Equity interests in Sensa Bues AB held by parties
other than SensaSure are presented as non-controlling interests in equity.
(c) |
Liquidity and going concern |
The Company is in the early stages of commercializing
its product and in the process of its initial public offering. It is concurrently in development mode, operating research and development
programs in order to develop an ecosystem of technologies and commercialize other proposed products. The Company has incurred recurring
losses from operations, and as at October 31, 2023 and April 30, 2023, had an accumulated deficit of $6,334,768 and $6,027,209 respectively,
a working capital deficiency of $1,150,170 and $1,061,593 respectively. The Company, during year ended April 30, 2022 and April 30, 2021,
through several private placements, raised $368,200 and $893,014 respectively (Note 8 (b)). The Company, during year ended April 30, 2023,
obtained working capital loans from related parties in the amount of $39,979. On March 30, 2021, Sensa Bues AB, through an agreement with
a vendor that is controlled by a then-director of Sensa Bues AB, modified the payment term of payable balance in the amount of $333,744
to settle the payable balance in seven installments, the payable balance became current on April 30, 2023 (Note 7 (c)).
The Company’s operating plan is predicated
on a variety of assumptions including, but not limited to, the level of product demand, cost estimates, its ability to continue to raise
additional financing and the state of the general economic environment in which the Company operates. There can be no assurance that these
assumptions will prove to be accurate in all material respects, or that the Company will be able to successfully execute its operating
plan. In the absence of additional appropriate financing, the Company may have to modify its operating plan or slow down the pace of development
and commercialization of its proposed products.
These conditions raise substantial doubt about
the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent on the Company’s
ability to meet obligations as they become due and to obtain additional equity or alternative financing required to fund operations until
sufficient sources of recurring revenues can be generated.
These unaudited condensed interim consolidated
financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company expects to finance their future operations
primarily through cash flow from capital contributions from the shareholders of the Company. In the event that the Company requires additional
funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives,
the shareholders of the Company indicated the intent and ability to provide additional equity financing.
In December 2019, a novel strain of coronavirus
(COVID-19) emerged. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy,
it had spread to several other countries and infections have been reported globally.
During the past several years, as a result of
COVID-19 infections having been reported throughout both the United States and Sweden, certain national, provincial, state and local governmental
issued proclamations and/or directives aimed at minimizing the spread of COVID-19. Due to the disruption of the COVID-19 crisis, the Company’s
business activities might be subject to certain level of adverse impact. At the date of approval of these unaudited condensed interim
consolidated financial statements, it is still not possible to reliably estimate the effect of these developments as well as the impact
on the financial results and condition of the Company in future periods. Management is monitoring these developments on the Company’s
operations and is taking all steps to ensure that employees are following all public health and safety protocols.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
3. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The Company sells devices with collection mechanism for biological
samples based upon exhaled breath. Revenue comprises devices delivered to the Company’s customers.
In accordance with ASC 606 - Revenue from Contracts with Customers,
the Company recognizes revenue upon the transfer of goods to a customer at an amount that reflects the expected consideration to be received
in exchange for those goods. The Company accounts for a customer contract when the rights of the parties, including the payment terms,
are identified, the contract has commercial substance, collection of consideration is probable, and the contract has been signed and agreed
to by both parties. Revenue is recognized when performance obligations are satisfied by transferring control or economic benefit of the
goods to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for its goods.
The principles in ASC 606 are applied using the following five steps:
| 1. | Identify the contract with a customer; |
| 2. | Identify the performance obligation(s) in the contract; |
| 3. | Determine the transaction price; |
| 4. | Allocate the transaction price to the performance obligation(s)
in the contract; and |
| 5. | Recognize revenue when (or as) the performance obligation(s)
are satisfied. |
(b) | Cash and restricted cash held in trust |
Cash includes cash on hand and balances with banks.
Restricted cash includes proceeds from private placements and shareholder loans financing completed by the Company during years ended
April 30, 2021, 2022, 2023 and quarter ended October 31, 2023 that are held in an escrow account. As per the share subscription agreements
from January to April 2021, and the Escrow Agreement dated January 26, 2021, restricted cash can only be used for expenses related to
listing process and for professional expenses of the first eighteen months’ statutory filings from the date the Company successfully
completes the listing process.
(c) | Non-controlling interests |
The non-controlling interests represent the portion
of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Company. Non-controlling interests are presented
as a separate component of equity on the consolidated balance sheets, statements of loss, statements of comprehensive loss and statements
of stockholders’ deficiency attributed to controlling and non-controlling interests.
(d) | Critical management judgment and use of estimates |
The preparation of the consolidated financial
statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the 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. Areas involving significant estimates and assumptions include: deferred income tax
assets and related valuation allowance, accruals, stock options, principles of consolidation and reverse recapitalization and assumptions
used in the going concern assessment. Actual results could differ from those estimates. These estimates are reviewed periodically, and,
as adjustments become necessary, they are reported in earnings in the period in which they become known.
Accounts receivable consists of amounts due to
the Company from research institutions. Accounts receivable is reported on the balance sheets net of an estimated allowance for doubtful
accounts. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on historical experience,
assessment of specific risk, review of outstanding invoices, and various assumptions and estimates that are believed to be reasonable
under the circumstances, and recognizes the provision as a component of selling, general and administrative expenses. Uncollectible accounts
are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is
uncollectible.
(f) | Research and development |
Research and development and all patent maintenance
and related filing costs are charged to operations as incurred as the Company is uncertain as to any future economic benefit.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
(g) | Stock based compensation |
The Company accounts for share-based payments
in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire and compensate for goods or
services received, including grants of employee shares, be recognized in the statement of loss based on their fair values, net of estimated
forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period,
which is generally the vesting period.
The Company accounts for stock-based compensation
awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments
issued in exchange for such services, whichever is more readily determinable. The Company issues compensatory shares for services including,
but not limited to, executive, management, operations, corporate communication, finance and administrative consulting services.
(h) | Foreign Currency Translation |
The functional currency of the Company’s
Swedish-based subsidiary is the Swedish Krona (“SEK”) and the US-based parent is the U.S. dollar (“USD”). Transactions
denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing
at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate
prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the
transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net loss for
the reporting period. In translating the financial statements of the Company’s Swedish subsidiary from their functional currency
into the Company’s reporting currency of USD, balance sheet accounts are translated using the closing exchange rate in effect at
the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period.
Adjustments resulting from the translation, if any, are included in accumulated other comprehensive loss in equity. The Company has not,
to the date of These unaudited condensed interim consolidated financial statements, entered into derivative instruments to offset the
impact of foreign currency fluctuations.
(i) | Fair Value of financial instruments |
The Company’s financial instruments consist
primarily of cash and restricted cash held in trust, accounts receivable, subscription receivable, other receivables, accounts payable
and accrued liabilities, demand loans, loans from related parties, amounts due to related parties. The carrying amounts of these balances
approximate their fair values due to the short-term maturities of these instruments. The carrying value of long term payable to a related
party approximates its fair values due to current market rate on such debt.
ASC 820 defines fair value, establishes a framework
for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair
value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10
also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
| ● | Level
1 – Valuation based on quoted market prices in active markets for identical assets or liabilities. |
|
● |
Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets. |
|
● |
Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value. |
In instances where the determination of the fair
value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which
the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment,
and considers factors specific to the asset or liability.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet
financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable
to market rates. These financial instruments include cash and restricted cash held in trust, accounts receivable, subscription receivable,
other receivables, accounts payable and accrued liabilities, demand loans, loans from related parties, amounts due to related parties
and long term payable to a related party. The Company’s cash and restricted cash held in trust, which are carried at fair values,
are classified as Level 1. The Company’s bank accounts are maintained with financial institutions of reputable credit, therefore,
bear minimal credit risk.
Income taxes are computed under the asset and
liability method reflecting both current and deferred taxes, which reflect the tax impact of all events included in the consolidated financial
statements. The balance sheet approach (i) reflects a current tax liability or asset recognized for estimated taxes payable or refundable
on tax returns for the current and prior years, (ii) reflects a deferred tax liability or asset recognized for the estimated future tax
effects attributable to temporary differences and carry forwards, (iii) measures current and deferred tax liabilities and assets using
the enacted tax rate of which the effects of future changes in tax laws or rates are not anticipated, and (iv) reduces deferred tax assets,
if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.
ASC 740 prescribes a recognition threshold and
a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
The Company recognizes deferred tax assets only to the extent that management concludes these assets are more-likely-than-not to be realized.
Significant judgement is required in assessing and estimating the more-likely-than-not tax consequences of the events included in the
consolidated financial statements. Management considers all available positive and negative evidence, including future reversals of existing
temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. The Company records uncertain tax
positions in accordance with ASC 740 on the basis of a two-step process in which (i) management determines whether it is more likely-
than-not that the tax position will be sustained on the technical merits of the position and (ii) for those tax positions that meet the
more likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely
to be realized upon ultimate settlement with the related tax authority.
The Company has adopted the Financial Accounting
Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculation
of “basic” and “diluted” earnings per share. Basic earnings (loss) per share includes no dilution and is computed
by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period.
Diluted earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted
earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares
outstanding as at October 31, 2023, April 30, 2023 and October 31, 2022.
Operating
segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing performance. All revenues are currently earned in Sweden
and significantly all of the assets of the Company are used for the Company’s medical device design and research and distribution
activities that is carried out in Sweden. The Company has one reportable segment and operating segment: Medical device design and research
and distribution.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
(m) | Recently issued accounting pronouncements |
In June 2016, the FASB issued ASU 2016-13, “Financial
Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with
subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the
use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to
estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial
asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime
expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This
pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On
November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective
date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL),
the revised effective for fiscal years beginning after December 15, 2022. The Company does not expect that this guidance will have a significant
impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12,
Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates
certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting
entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. Most amendments within the standard are required
to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. There
is no significant impact from adopting ASU 2019-12 on the Company’s financial condition, results of operations, and cash flows.
In April 2021, The FASB issued ASU 2021-04 to
codify the final consensus reached by the Emerging Issues Task Force (EITF) on how an issuer should account for modifications made to
equity-classified written call options (hereafter referred to as a warrant to purchase the issuer’s common stock). The guidance
in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified
as an exchange of the original warrant for a new warrant. This guidance applies whether the modification is structured as an amendment
to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant. The Company adopted
this guidance for the fiscal year beginning April 1, 2022. There is no significant impact from adopting ASU 2021-04 on the Company’s
financial condition, results of operations, and cash flows.
The Company continue to evaluate the impact of
the new accounting pronouncement, including enhanced disclosure requirements, on our business processes, controls and systems.
4. | SUBSCRIPTION
RECEIVABLE |
During the year ended April 30, 2021, SensaSure,
via several private placements with proceeds of $793,000 for 12,200,000 common shares subscribed, issued 11,780,000 common shares. The
proceeds received was reflected as an increase in common stock in amount of $117,800 and additional paid-in capital in amount of $647,900
respectively. The Company recognized a subscription receivable and shares to be issued in amount of $27,300 at April 30, 2021. The number
of shares to be issued was 420,000. During the year ended April 30, 2022, the Company received the subscription proceeds and issued 420,000
common shares accordingly (Note 8 (b)).
5. |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES TO THIRD PARTIES |
| |
As of | |
| |
October 31,
2023 | | |
April 30,
2023 | |
Accounts payable | |
$ | 46,079 | | |
$ | 53,868 | |
Accrued liabilities | |
| 63,500 | | |
| 52,000 | |
| |
$ | 109,579 | | |
$ | 105,868 | |
At
October 31, 2023 and April 30, 2023, the Company had balances in unsecured demand loans from several noncontrolling interests in Sensa
Bues AB and a shareholder totaling $26,223 (SEK 293,000) and $28,550 (SEK 293,000), respectively. The loans had an interest rate of 20%
per annum. For the six months ended October 31, 2023 and 2022, interest expense was $2,719 and
$2,802, respectively.
At October 31, 2023 and April 30, 2023, the Company
had balances in unsecured demand loans from a party who has a noncontrolling interests in Sensa Bues AB of $41,192 (SEK 460,247) and $44,846
(SEK 460,247), respectively. The loans had an interest rate of 2% per annum. For the six months ended October 31, 2023 and 2022 , interest
expense was $427 and $440, respectively.
At October 31, 2023, the Company had balance in
demand loan in the amount of $70,279 from several shareholders (April 30, 2023 - $39,979). Those loans are unsecured, non-interest bearing
and due on demand.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
7. |
RELATED PARTIES TRANSACTIONS |
The Company had the following balances and transaction
with related parties except disclosed in other notes.:
(a) | Amounts
due to related parties |
At October 31, 2023 and April 30, 2023, salary
payable to the former CEO of the Company who is also a director of Sensa Bues AB included in amounts due to related parties was $371,736
and $312,347, respectively.
On March 31, 2021, the Company, Sensa Bues AB
and the former CEO of the Company who is also a director of Sensa Bues AB reached an agreement to settle account payable in the amount
of $326,337 by issuing options to purchase common shares of Sensa Bues AB with a guarantee of subscription of the Company’s common
shares upon exercise of the option by the optionee (Note 2 (c) and Note 8 (b)). The agreement allows the director to subscribe aggregated
3,400 common shares of Sensa Bues AB. The term of the Agreement is for thirty-six months from March 31, 2021. The Company guaranteed that
it shall purchase shares of the optionee during the term of the agreement based on the formula of 50 common shares of the Company for
each one shares the optionee subscribed of Sensa Bues AB.
At October 31, 2023 and April 30, 2023, expenses
paid on behalf of the Company by two former directors of Sensa Bues AB included in amounts due to related parties was $nil and $ nil,
respectively.
At October 31, 2023 and April 30, 2023, amounts
payable to a former director of Sensa Bues AB included in amounts due to related parties was $nil and $ nil, respectively.
(b) | Loans
from related parties |
At October 31, 2023 and April 30, 2023, balances
of loan from a former director of SensaSure were $49,224 (SEK550,000) and $53,591 (SEK550,000), respectively. The loan is unsecured, bearing
interest at 2% per annum and due on demand. The interest expense was $510 and $568 for six months ended October 31, 2023 and 2022, respectively.
At October 31, 2023 and April 30, 2023, balances
of loan from a former director of SensaSure were $26,850 (SEK300,000) and $29,232 (SEK300,000), respectively. The loan is unsecured, bearing
interest at 2% per annum and due on demand. The interest expense was $278 and $319 for six months ended October 31, 2023 and 2022, respectively.
(c) | Payables
and interest accrual to a related party |
The accounts payable balance related to professional
services provided by a vendor that is controlled by a then-director of Sensa Bues AB.
As at October 31, 2023 and 2022, the interest
accrual balance related to overdue invoices from the related party vendor was $138,483 and was included in accounts payable and accrued
liabilities to a related party.
As at October 31, 2023, the total accounts payable
and accrued liabilities to the related party was $470,445 (April 30, 2023 - $486,826).
For the six months ended October 31, 2023, the
total purchase from the related party representing the research and development and patent expenses was in amount of $10,145 (October
31, 2022 - $19,421).
On March 30, 2021, Sensa Bues AB, through a settlement
agreement with the vendor, modified the payment term of accounts payable balance related to professional services provided in the amount
of $333,744 (SEK2,798,280), and the parties agreed to settle the accounts payable balance in seven installments (Note 2 (c)) and the payable
balance became current on April 30, 2023. Management has evaluated the terms of the agreement in accordance with the guidance provided
by ASC 470 and concluded that there was no extinguishment accounting applicable to the modification. The payment modification did not
include overdue invoices related interest accruals. At October 31, 2023, the accounts payable balance related to professional services
provided by the related party vendor that was not included in the above settlement was $6,701 (April 30, 2023 - $6,701).
At October 31, 2023, the current portion of the
modified payable balance was $232,458 (April 30, 2023 - $240,012) and the long term portion was $nil (Aril 30, 2023 - $Nil).
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
8. |
STOCKHOLDERS’ DEFICIENCY |
(a) | Authorized
and Issued Stock |
At
October 31, 2023, the Company is authorized to issue 250,000,000 (April 30, 2023
– 250,000,000) shares of common stock ($0.01 par value).
At
October 31, 2023 and 2022, the Company is authorized to issue 5,000,000 (April
30, 2023 – 5,000,000) shares of Class A preferred stock ($0.001 par value). Class A preferred stock has a conversion rate of 1 to
1,000 common shares and such conversion can occur subject to various performance condition, service conditions and lock up period that
will vary for each of the issuances. When conversion is available it shall be at the discretion of the preferred shareholder. Sale of
the converted shares shall not occur until sixty (60) months after a NASDAQ listing. There shall be no dividend rights assigned to the
Class A preferred shares. There shall be no registration rights attached to the converted shares. Voting rights per preferred share are
1,000 common shares.
On January 31, 2022, the board of directors of
the Company has discussed and approved the conversion of the classes A preferred stock to be done prior to filing an application to the
OTC Markets for trading on the OTC Markets ATS. The Conversion was completed on January 31, 2022 and Class A preferred stock were converted
into 24,371,000 of common shares of the Company. All service conditions and lock up period applied to each of the issuances remained unchanged.
At
October 31, 2023, the Company is authorized to issue 5,000,000
(April 30, 2023– 5,000,000) shares of Class B preferred stock ($0.001 par value). Class B preferred stock has a conversion rate
of 1 to 1,000 common shares and such conversion can occur subject to various performance condition, service conditions and lock up period
that will vary for each of the issuances. There shall be no dividend rights assigned to the Class B preferred shares. There shall be no
registration rights attached to the converted shares. Vested common shares may become free trading when certain conditions are met. Each
consultant to be advised of their specific conditions that must be met. Voting rights per share are equal to 1,000 common votes for each
preferred share.
On January 31, 2022, the board of directors of
the Company has discussed and approved the conversion of the classes B preferred stock to be done prior to filing an application to the
OTC Markets for trading on the OTC Markets ATS. Conversion was completed on January 31, 2022 and Class B preferred stock were converted
into 31,500,000 of common shares of the Company. All service conditions and lock up period applied to each of the issuances remained unchanged.
At October 31, 2023, common shares issued and
outstanding totaled 56,349,183 (April 30, 2023 – 56,349,183) shares (Note 8 (b)).
At October 31, 2023, there were Nil Class A shares
of Preferred Stock that were issued and outstanding (April 30, 2023 – Nil) (Note 8 (b)).
At October 31, 2023, there were Nil Class B shares
of Preferred Stock that were issued and outstanding (April 30, 2023 – Nil) (Note 8 (b)).
Share issuance during the year ended April
30, 2021
During the year ended April 30, 2021, Sensa Bues
AB, via a private placement for proceeds of $99,643, issued 10,000 common shares to SensaSure. SensaSure’s common stock has been
adjusted retroactively to give effect for the exchange ratio upon the issuance and resulted in issuance of 499,935 shares of common stock
of SensaSure. The proceeds received was reflected as an increase in common stock in amount of $4,999 and additional paid-in capital in
amount of $94,644, respectively.
On December 21, 2020, the Company completed a
reverse recapitalization via a share exchange agreement with Sensa Bues AB and the shareholders who owned 270,339 common shares that represented
72.82% of the total issued and outstanding common shares in Sensa Bues AB. Under the share exchange agreement, the shareholders of Sensa
Bues AB, agreed to exchange their shares of Sensa Bues AB for common shares of SensaSure at an exchange ratio of approximate 1:49.99.
Pursuant to the share exchange transactions (see share exchange agreement noted above), SensaSure issued a total of 13,515,183 common
shares and the then-shareholders of Sensa Bues AB hold their ownership of Sensa Bues AB through SensaSure. (Note 1). Shareholders agreed
that from the Effective Date of share exchange agreement the Shareholders shall have up to 243,402 shares to sell when a trading market
begins on the OTC Markets. Eighteen (18) months after the initial listing date of the shares on the NASDAQ Market, the Shareholder shall
have 1,914,704 shares available to sell. Twenty-four (24) months after the initial listing date of the shares on the NASDAQ Market, the
Shareholders shall have 5,744,109 shares available to sell. Any remaining shares held by the Shareholders may be sold subject to Rule
144 trading requirements and Officer/Director restrictions, if applicable. The Shareholders will not (1) offer, pledge, announce the intention
to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any of the Securities or any
securities convertible into, exercisable or exchangeable for or that represent the right to receive shares of Common Stock (including,
without limitation, shares of Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules
and regulations of the Securities and Exchange Commission (the “SEC”) and securities which may be issued upon exercise of
a stock option or warrant) whether now owned or hereafter acquired, or (2) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the Securities, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of shares of Common Stock or such other securities, in cash or otherwise; Shareholders further agreed
that any sale of the Securities for twelve months following the end of the Lock Up Period shall be subject to the volume restrictions
of Rule 144.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
During the year ended April 30, 2021, Sensa Bues
AB, via several private placements for proceeds of $27,671, issued 93,032 common shares to noncontrolling interests (Note 8 (c)). The
proceeds were reflected as an increase of $27,671 in noncontrolling interests.
During the year ended April 30, 2021, SensaSure
acquired an additional 267,296 common shares (Note 8 (c)) of Sensa Bues AB for cash consideration of $80,800. The additional investment
in Sensa Bues AB and the corresponding increase in Sensa Bues AB’ share capital was eliminated upon consolidation and had no cash
flow impact.
During the year ended April 30, 2021, SensaSure,
via several private placements with proceeds of $793,000 for 12,200,000 restricted common shares, issued 11,780,000 common shares. The
proceeds received was reflected as an increase in common stock in amount of $117,800 and additional paid-in capital in amount of $647,900
respectively. The Company recognized a subscription receivable in amount of $27,300 as well as shares to be issued at April 30, 2021.
The number of shares to be issued was 420,000. The Company received the subscription proceeds subsequently to year end and issued 420,000
common shares accordingly (Note 4). The subscribers entered into lock up agreement pursuant to which (1) The Shareholders shall 1,715,800
of the shares subscribed to sell when a trading market begins on the OTC Markets; (ii) The Shareholders shall have 5,346,000 of their
remaining shares available to sell Six (6) months after the initial listing date of the shares on the NASDAQ Market; (iii) The Shareholders
shall have their remaining shares for trading Eighteen (18) months after the initial listing date of the shares on the NASDAQ Market;
and (iv) In the event the stock does not begin trading on the NASDAQ Market within a period of Thirty-Six (36) months after the execution
of the Share Exchange Agreement, the Shareholders shall have up to Thirty Percent (30%) of their remaining shares available to sell after
the initial listing date of the shares on the OTC Market. The balance of the Shareholder’s shares shall be available for trading
Sixty (60) months after the initial listing date of the shares on the OTC Market (the “Lock Up Period”).
During year ended April 30, 2022, the Company
has revised the lock up periods of certain shareholders, resulting in a change of total number of shares to be released at different time.
This process was completed on April 4, 2022. After the revision, the shareholders shall have 10,898,736 shares available to sell upon
a trading market begins on OTC Market, 7,738,000 shares available to sell upon six months after a trading market begins on OTC Market,
4,750,000 shares available to sell upon initial listing date on the Nasdaq Market, 6,280,000 shares available to sell upon six months
after initial listing date on the Nasdaq Market, 800,000 shares available to sell upon twelve months after initial listing date on the
Nasdaq Market, 3,838,213 shares available to sell upon eighteen months after the initial listing date on Nasdaq Market, 6,620,863 shares
available to sell upon twenty four months after the initial listing date on Nasdaq Market and the balance of the shareholders’ shares
will be available to sell upon sixty months after the initial listing date on Nasdaq Market. Shareholders further agreed that any sale
of the Securities for twelve months following the end of the Lock Up Period shall be subject to the volume restrictions of Rule 144.
During the year ended April 30, 2021, SensaSure
issued 22,000,000 common shares to directors of the Company for director services that starts from May 1, 2021 to April 30, 2026. If a
director fails to complete the term of his responsibility the unearned portion of the shares shall be returned to the treasury stock of
the Company. The fair value of the shares issued, in amount of $502,614, was determined by allocating the Enterprise Equity Value on a
fully-diluted basis. During the year ended April 30, 2022, three directors left the Company and the 7,931,000 unvested shares was cancelled
accordingly. The fair value of the vested portion of share based compensation expenses, in the amount of $88,210, was amortized and recorded
in general and administrative expenses as well as an increase in common stock in amount of $38,610 and additional paid in capital in amount
of $49,600 respectively during the year ended April 30, 2022. During December 2022, two directors left the Company and the 8,587,000
unvested shares was cancelled accordingly. The fair value of the vested portion of share based compensation expenses, in the amount of
$36,440, was amortized and recorded in general and administrative expenses as well as an increase in common stock in amount of $15,950
and additional paid in capital in amount of $20,490 respectively during the year ended April 30, 2023.
During the year ended April 30, 2021, SensaSure
issued 24,371 Class A Preferred Stock to directors of the Company for services provided. The fair value of the shares issued, in amount
of $360,795, was determined based on the common stock fair value and factoring in the conversion rights which are subject to performance
condition. Estimates of the timing and successful completion of the performance conditions were made by management. The fair value of
the shares issued was recorded as share-based compensation and included in general and administrative expenses with a credit of $24 and
$360,771 in Class A Preferred Stock and additional paid-in capital, respectively.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
On January 31, 2022, the board of directors of
the Company has discussed and approved the conversion of the classes A preferred stock to be done prior to filing an application to the
OTC Markets for trading on the OTC Markets ATS. Conversion was completed on January 31, 2022 and Class A preferred stock were converted
into 24,371,000 of common shares of the Company. All service conditions and lock up period applied to each of the issuances
remained unchanged. During December 2022, upon a voluntarily surrender from a director of the Company, the Company cancelled 21,637,000 common
shares that were converted from Class A Preferred Stock during year ended April 30, 2022, and $216,370 was reduced from common stock
and transferred to additional paid-in capital.
During the year ended April 30, 2021, SensaSure
issued 31,500 Class B Preferred Stock to directors and consultants of the Company for services to be provided. The fair value of the shares
issued, in amount of $502,952, was determined based on the common stock fair value and factoring in the conversion rights which are subject
to performance conditions. Estimates of the timing and successful completion of the performance conditions were made by management. The
fair value will be recorded as an expense as well as an increase in Class B Preferred Stock and additional paid-in capital upon satisfaction
of the vesting conditions.
On January 31, 2022, the board of directors of
the Company has discussed and approved the conversion of the classes B preferred stock to be done prior to filing an application to the
OTC Markets for trading on the OTC Markets ATS. Conversion was completed on January 31, 2022 and Class B preferred stock were converted
into 31,500,000 of common shares of the Company. All service conditions and lock up period applied to each of the issuances remained unchanged.
During December 2022, upon a voluntarily surrender
from a director of the Company, the Company cancelled 27,950,000 common shares that were converted from Class B Preferred Stock
during year ended April 30, 2022.
During the year ended April 30, 2021, the Company,
Sensa Bues AB and a director of the Company reached an agreement to settle accounts payable in the amount of $326,337 by issuing options
to purchase common shares of Sensa Bues AB with a guarantee of subscription of the Company’s common shares upon exercise of the
option by the optionee (Note 2 (c) and Note 7 (a)). The fair value of the stock option was determined based on the fair value of the services
provided by the director. The difference between the carrying amount of the liability settled and the fair value of options issued is
$nil. The term of the Agreement is for thirty-six months from March 31, 2021. The Company guaranteed that it shall purchase shares of
the optionee during the term of the agreement based on the formula of 50 common shares of the Company for each one shares the optionee
subscribed of Sensa Bues AB.
Share issuance during the year ended April 30, 2022
The Company recognized a subscription receivable
in amount of $27,300 as well as shares to be issued at April 30, 2021. The number of shares to be issued was 420,000. The Company received
the subscription proceeds during the year ended April 30, 2022 and issued 420,000 common shares accordingly (Note 4).
During the year ended April 30, 2022, SensaSure,
via several private placements, raised proceeds of $340,900 ($0.07 per share) and issued 4,870,000 common shares. The proceeds received
was reflected as an increase in common stock in amount of $48,700 and additional paid-in capital in amount of $292,200 respectively. The
subscribers entered into lock up agreement and the shareholders shall have 502,584 shares available to sell upon a trading market begins
on OTC Market, 356,484 shares available to sell upon six months after a trading market begins on OTC Market, 218,663 shares available
to sell upon initial listing date on the Nasdaq Market, 289,278 shares available to sell upon six months after initial listing date on
the Nasdaq Market, 37,012 shares available to sell upon twelve months after initial listing date on the Nasdaq Market, 176,781 shares
available to sell upon eighteen months after the initial listing date on Nasdaq Market, 304,862 shares available to sell upon twenty four
months after the initial listing date on Nasdaq Market and the balance of the shareholders’ shares will be available to sell upon
sixty months after the initial listing date on Nasdaq Market.
During the year ended April 30, 2022, the Company
approved the issuance of 2,118,000 shares of the common stock to several consultants and directors. The fair value of the share-based
compensation was in the amount of $148,260 and was included in the general and admirative expenses as well as a credit made in common
stock in amount of 21,180 and additional paid-in capital in amount of 127,080 respectively. The fair value of the shares of common stock
issued was determined by using the most recent private placement price at $0.07 per share. One of the consultants is a related party individual
and the share awards was 2,100,000 common shares with an amount of 147,000.
During the year ended April 30, 2022, SensaSure
issued 3,080,000 common stock to a consultant of the Company for services to be provided in future including completion of certain financing
projects and regulatory services. The fair value of the shares of common stock issued was determined by using the most recent private
placement price at $0.07 per share. At April 30, 2022 and 2023, none of these services were rendered. Accordingly, the Company has not
recognized any share based compensation expense during the year.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
Share issuance and shares to be issued during the year ended April
30, 2023
During the year ended April 30, 2023, included
into shares to be issued were 54,000 common stock for services provided by the directors. The fair value of the share-based
compensation was in the amount of $3,780 and was determined by using the most recent private placement price at $0.07 per share.
The fair value of the share-based compensation was included in the general and admirative expenses as well as a credit made in shares
to be issued.
On January 31, 2022, the board of directors of
the Company has discussed and approved the conversion of the classes B preferred stock to be done prior to filing an application to the
OTC Markets for trading on the OTC Markets ATS. Conversion was completed on January 31, 2022 and Class B preferred stock were converted
into 31,500,000 of common shares of the Company. All service conditions and lock up period applied to each of the issuances remained unchanged.
As at April 30, 2023, 750,000 common shares related service conditions were met and the Company included 750,000 common shares into shares
to be issued. The fair value of the share-based compensation was in the amount of $11,975. The fair value of the share-based compensation
was included in the general and admirative expenses as well as a credit made in shares to be issued.
During the three months ended July 31, 2022, SensaSure
acquired an additional 2,200,000 common shares of Sensa Bues AB for cash consideration of $225,641. The additional investment
in Sensa Bues AB and the corresponding increase in Sensa Bues AB’ share capital was eliminated upon consolidation and had no cash
flow impact.
During the three months ended January 31, 2023,
the Company approved the issuance of 8,800,000 shares of the common stock to a director of the Company. The shares issued would
be vested in a 24-month term with a date of commencement at December 15, 2022. During year ended April 30, 2023, 1,650,000 common
shares vested and the fair value of the share-based compensation was in the amount of $115,500 and was included in the general and
admirative expenses as well as a credit made in common stock in amount of 16,500 and additional paid-in capital in amount of 99,000 respectively.
The fair value of the shares of common stock issued was determined by using the most recent private placement price at $0.07 per
share. For six months ended October 31, 2023, there were 2,200,000 number of shares vested and the Company recorded $22,000 and $132,000
into common stock and additional paid-in capital respectively.
During the year ended April 30, 2021, the Company issued 22,000,000
common shares to the directors. Those common shares issued were subject to a 60 months service period. The detailed accounting treatment
for those issued but unvested shares are as below:
| |
| | |
Common
shares vested | | |
Common
shares cancelled upon
resignation | | |
At
year end | | |
At
year end | | |
At
year | | |
At
year end | |
| |
Common
shares issued | | |
Common
shares | | |
Common
Stock | | |
Additional
paid-in Capital | | |
Common
shares | | |
Common
Stock | | |
Additional
paid-in Capital | | |
Common
shares outstanding | | |
Common
shares vested | | |
end Common
Stock | | |
Additional
paid-in Capital | |
| |
Shares | | |
Shares | | |
$ | | |
$ | | |
Shares | | |
$ | | |
$ | | |
Shares | | |
Shares | | |
$ | | |
$ | |
At
April 30, 2021 | |
| 22,000,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 22,000,000 | | |
| - | | |
| - | | |
| - | |
Amortization
of vested shares | |
| - | | |
| 3,861,000 | | |
| 38,610 | | |
| 49,600 | | |
| | | |
| - | | |
| - | | |
| - | | |
| 3,861,000 | | |
| 38,610 | | |
| 49,600 | |
Cancellation
of common shares | |
| - | | |
| - | | |
| - | | |
| - | | |
| (7,931,000 | ) | |
| - | | |
| - | | |
| (7,931,000 | ) | |
| - | | |
| - | | |
| - | |
At
April 30, 2022 | |
| 22,000,000 | | |
| 3,861,000 | | |
| 38,610 | | |
| 49,600 | | |
| (7,931,000 | ) | |
| - | | |
| - | | |
| 14,069,000 | | |
| 3,861,000 | | |
| 38,610 | | |
| 49,600 | |
Amortization
of vested shares | |
| - | | |
| 1,621,000.00 | | |
| 15,950 | | |
| 20,490 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,621,000 | | |
| 15,950 | | |
| 20,490 | |
Cancellation
of common shares | |
| - | | |
| 0.00 | | |
| 0.00 | | |
| 0.00 | | |
| (8,587,000 | ) | |
| - | | |
| - | | |
| (8,587,000 | ) | |
| - | | |
| - | | |
| - | |
At
April 30, 2023 | |
| 22,000,000 | | |
| 5,482,000 | | |
| 54,560 | | |
| 70,090 | | |
| (16,518,000 | ) | |
| - | | |
| - | | |
| 5,482,000 | | |
| 5,482,000 | | |
| 54,560 | | |
| 70,090 | |
At April 30, 2023, there were 2,800,000 unvested
common shares that was converted from Class B shares of Preferred Stock during year ended April 30, 2022. At April 30, 2023, there were
750,000 vested and to be issued common shares that was converted from Class B shares of Preferred Stock during year ended April 30, 2022.
The dollar value associated with those shares in the amount of $35,500 was not included in the common stock.
For six months ended October 31, 2022, there were
1,276,000 number of shares vested and the Company recorded $12,760 and $16,392 into common stock and additional paid-in capital respectively.
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
At October 31, 2023 and April 30, 2023, there
were 4,950,000 and 7,150,000 unvested common shares that was issued to the director of the Company respectively. The dollar value associated
with those unvested shares in the amount of $49,500 (April 30, 2023 - $71,500) was not included in the common stock.
At October 31, 2023 and April 30, 2023, there
were 3,080,000 unvested common shares that was issued to a consultant of the Company. The dollar value associated with those unvested
shares in the amount of $30,800 was not included in the common stock.
(c) |
Noncontrolling interest |
During the six months ended October 31, 2023 and
2022, pursuant to private placements completed by Sensa Bues AB, the Company’s ownership interests and noncontrolling interests’
ownership in Sensa Bues AB changed as below:
| |
As At | | |
As At | | |
As At | | |
As At | |
| |
October 31, | | |
April 30, | | |
October 31, | | |
April 30, | |
| |
2023 | | |
2023 | | |
2022 | | |
2022 | |
| |
(%) | | |
(%) | | |
(%) | | |
(%) | |
Ownership percentage | |
| | |
| | |
| | |
| |
Common shareholders of the Company | |
| 93.53 | | |
| 93.53 | | |
| 93.53 | | |
| 74.00 | |
Noncontrolling interests | |
| 6.47 | | |
| 6.47 | | |
| 6.47 | | |
| 26.00 | |
| |
For the
quarter | | |
For the
quarter | |
| |
ended | | |
ended | |
| |
October 31, | | |
October 31, | |
| |
2023 | | |
2022 | |
| |
$ | | |
$ | |
Transfer from noncontrolling interests | |
| | |
| |
Increase in the Company’s accumulated deficit for Sensa Bues AB issuance of common shares to the Company and noncontrolling interests (Note 8 (b)) | |
| - | | |
| (883,768 | ) |
Change from net loss attributable to the Company and transfer from noncontrolling interests | |
| - | | |
| (883,768 | ) |
In compliance with the
Swedish Annual. Accounts Act (the “Act”), SensaBues financial statements recognize a development reserve. This reserve is
considered restricted and is not distributable as dividends. SensaBues can transfer from the balance of development reserve to accumulated
deficit those amounts to the extent of those qualified expenses that occurred in the prior year. For the year ended April 30, 2023, SensaBues
transferred $59,804 from development reserve to accumulated deficits (2022 – $108,102). For the six months ended October 31, 2023,
SensaBues transferred $Nil from development reserve to accumulated deficits
SENSASURE TECHNOLOGIES, INC.
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31,
2023 AND 2022
(continued)
From time to time, the Company may be involved
in litigation relating to claims arising out of operations in the normal course of business. As at October 31, 2023 and April 30, 2023
there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s
operations. There are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a
material interest adverse to the Company’s interest.
The Company’s management has evaluated subsequent
events up to December 15, 2023, the date the consolidated financial statements were issued, pursuant to the requirements of ASC 855 and
has determined the following material subsequent events that are needed to be disclosed:
Subsequent to the six months ended October 31,
2023, due to the difficulties in raising adequate capital, the significant cost of maintaining the patents, and delays in engaging appropriate
commercialization partners, the management of the Company believe that the current business of commercializing the exhale breath technology
patents is no longer feasible. The management of the Company is in the process of establishing a new business segment to develop energy
and energy related businesses and proceed to wind up its Swedish subsidiary, Sensabues AB.
On December 11, 2023, the Company and Formation
Minerals Inc., a Nevada corporation and a wholly-owned subsidiary of the Parent (“Merger Sub”) entered into an Agreement and
Plan of Merger (the “Merger Agreement”) with Verde Bio Holdings, Inc., a Nevada corporation (the “Verde”).
Pursuant to the Merger Agreement, subject to the
terms and conditions set forth therein upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”),
Verde will merge with and into the Merger Sub (the “Merger” and, together with the other transactions contemplated by the
Merger Agreement, the “Transactions”), with Merger Sub continuing as the surviving corporation in the Merger and as a wholly-owned
subsidiary of the Company. In the Merger, all of the issued and outstanding capital stock of Verde immediately prior to the Effective
Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist in exchange for the right for Verde’s
stockholders to receive the Merger Consideration Shares. In consideration for the Merger, Verde’s stockholders shall be entitled
to receive from the Company, shares of capital stock of the Company based upon the exchange ratios set forth in the Merger Agreement (collectively,
the “Merger Consideration Shares”).
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
References to the “Company,”
“Sensasure,” “our,” “us” or “we” refer to Sensasure Technologies Inc. The following discussion
and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed
financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis
set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report
on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these
forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject
to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied
by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,”
“should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,”
“estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or
contribute to such a discrepancy include, but are not limited to, those described in our other U.S. Securities and Exchange Commission
(“SEC”) filings.
Overview
SensaSure is a medical technology
or “MedTech”, company supplying a simple device and method to collect a breath sample for lab-based analysis. Exhaled breath
contains aerosols which originate from the lungs and blood. These aerosols contain revealing information for analytics, diagnostics, and
therapeutics. SensaSure’s patented method is called ExaBreath (EB) and it can collect, extract, detect and identify non-volatile
compounds present in every exhaled breath by utilizing existing lab-based testing infrastructure and procedures. EB is applicable in toxicology,
pharmacology, and clinical biochemistry. We have not applied for, nor has our EB device received approval from any government agency in
the European Union or from the U.S. Food and Drug Administration (“FDA”). We can provide no assurance that any government
regulatory body will clear our EB device for commercial use.
We believe EB may enhance
the overall user experience in a wide range of applications and markets such as workplace drug testing, anti-doping in sport, law enforcement,
e-health, and telemedicine. In the case of anti-doping, EB may reduce the time, cost, and overall burden that drug programs place on athletes,
other participants, and the wider stakeholders such as leagues and associations. EB may improve the user experience for both donors and
collectors during sample collection process.
Drug control programs represent
significant market segments due to the necessity of testing in most sports, industries, law enforcement agencies, ministries, police forces,
criminal justice systems and by many employers for the insurance industry.
We believe that our business
model will follow a methodology to try to reduce risks, including transferring the manufacturing costs to third parties to reduce capital
investment which we hope will provide relatively higher margin business based upon our EB collection device to improve user acceptability
and analytical credibility in areas such as anti-doping in sport. We expect that this will increase the credibility and perceived value
of doping control programs resulting in a stronger deterrence factor and better protection for the integrity of sport.
The global device market
in drug testing is estimated to be nearly $4.5 billion in 2020 and is estimated to reach $10 billion by 2025 (According to BCC Research,
Drug Testing Market Report 2019). The estimates provided here are based on varying estimates from research companies and actual numbers
may vary significantly. While there are several basic types of drug tests, the most common method is urine testing.
Current Challenges
Due to the difficulties in
raising adequate capital, the significant cost of maintaining the patents, and delays in engaging appropriate commercialization partners,
we believe that the current business of commercializing the exhale breath technology patents is no longer feasible. We intend to establish
a new business segment to develop energy and energy related businesses and proceed to wind up its Swedish subsidiary, Sensabues AB.
Our New Business Segment and Ongoing Development
We intend to establish a new business segment
to develop energy and energy related businesses. On October 30, 2023, we entered into a contractor agreement with Verde Bio Holdings,
Inc., a Nevada corporation (“Verde”) to conduct feasibility studies and establish commercial relationships to enter into energy
and energy related businesses. The initial term of the agreement is three (3) months, and we shall pay Verde $100,000 in cash or its equivalent
in restricted shares of common stock of the Company.
Critical accounting policies
The unaudited condensed consolidated
Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US
GAAP”) and are expressed in United States Dollars. Significant accounting policies are summarized below:
The Company sells devices with collection mechanism for biological
samples based upon exhaled breath. Revenue comprises devices delivered to the Company’s customers.
In accordance with ASC 606 - Revenue from Contracts with Customers,
the Company recognizes revenue upon the transfer of goods to a customer at an amount that reflects the expected consideration to be received
in exchange for those goods. The Company accounts for a customer contract when the rights of the parties, including the payment terms,
are identified, the contract has commercial substance, collection of consideration is probable, and the contract has been signed and agreed
to by both parties. Revenue is recognized when performance obligations are satisfied by transferring control or economic benefit of the
goods to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for its goods.
The principles in ASC 606 are applied using the following five steps:
| 1. | Identify the contract with a customer; |
| 2. | Identify the performance obligation(s) in the contract; |
| 3. | Determine the transaction price; |
| 4. | Allocate the transaction price to the performance obligation(s)
in the contract; and |
| 5. | Recognize revenue when (or as) the performance obligation(s)
are satisfied. |
(b) |
Cash and restricted cash held in trust |
Cash includes cash on hand and balances with banks.
Restricted cash includes proceeds from private placements and shareholder loans financing completed by the Company during years ended
April 30, 2021, 2022, 2023 and quarter ended October 31, 2023 that are held in an escrow account. As per the share subscription agreements
from January to April 2021, and the Escrow Agreement dated January 26, 2021, restricted cash can only be used for expenses related to
listing process and for professional expenses of the first eighteen months’ statutory filings from the date the Company successfully
completes the listing process.
(c) |
Non-controlling interests |
The non-controlling interests represent the portion
of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Company. Non-controlling interests are presented
as a separate component of equity on the consolidated balance sheets, statements of loss, statements of comprehensive loss and statements
of stockholders’ deficiency attributed to controlling and non-controlling interests.
(d) |
Critical management judgment and use of estimates |
The preparation of the consolidated financial
statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the 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. Areas involving significant estimates and assumptions include: deferred income tax
assets and related valuation allowance, accruals, stock options, principles of consolidation and reverse recapitalization and assumptions
used in the going concern assessment. Actual results could differ from those estimates. These estimates are reviewed periodically, and,
as adjustments become necessary, they are reported in earnings in the period in which they become known.
Accounts receivable consists of amounts due to
the Company from research institutions. Accounts receivable is reported on the balance sheets net of an estimated allowance for doubtful
accounts. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on historical experience,
assessment of specific risk, review of outstanding invoices, and various assumptions and estimates that are believed to be reasonable
under the circumstances, and recognizes the provision as a component of selling, general and administrative expenses. Uncollectible accounts
are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is
uncollectible.
(f) |
Research and development |
Research and development and all patent maintenance
and related filing costs are charged to operations as incurred as the Company is uncertain as to any future economic benefit.
(g) |
Stock based compensation |
The Company accounts for share-based payments
in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire and compensate for goods or
services received, including grants of employee shares, be recognized in the statement of loss based on their fair values, net of estimated
forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period,
which is generally the vesting period.
The Company accounts for stock-based compensation
awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments
issued in exchange for such services, whichever is more readily determinable. The Company issues compensatory shares for services including,
but not limited to, executive, management, operations, corporate communication, finance and administrative consulting services.
(h) |
Foreign Currency Translation |
The functional currency of the Company’s
Swedish-based subsidiary is the Swedish Krona (“SEK”) and the US-based parent is the U.S. dollar (“USD”). Transactions
denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing
at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate
prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the
transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net loss for
the reporting period. In translating the financial statements of the Company’s Swedish subsidiary from their functional currency
into the Company’s reporting currency of USD, balance sheet accounts are translated using the closing exchange rate in effect at
the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period.
Adjustments resulting from the translation, if any, are included in accumulated other comprehensive loss in equity. The Company has not,
to the date of These unaudited condensed interim consolidated financial statements, entered into derivative instruments to offset the
impact of foreign currency fluctuations.
(i) |
Fair Value of financial instruments |
The Company’s financial instruments consist
primarily of cash and restricted cash held in trust, accounts receivable, subscription receivable, other receivables, accounts payable
and accrued liabilities, demand loans, loans from related parties, amounts due to related parties. The carrying amounts of these balances
approximate their fair values due to the short-term maturities of these instruments. The carrying value of long term payable to a related
party approximates its fair values due to current market rate on such debt.
ASC 820 defines fair value, establishes a framework
for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair
value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10
also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
| ● | Level
1 – Valuation based on quoted market prices in active markets for identical assets or liabilities. |
|
● |
Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets. |
|
● |
Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value. |
In instances where the determination of the fair
value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which
the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment,
and considers factors specific to the asset or liability.
Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet
financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable
to market rates. These financial instruments include cash and restricted cash held in trust, accounts receivable, subscription receivable,
other receivables, accounts payable and accrued liabilities, demand loans, loans from related parties, amounts due to related parties
and long term payable to a related party. The Company’s cash and restricted cash held in trust, which are carried at fair values,
are classified as Level 1. The Company’s bank accounts are maintained with financial institutions of reputable credit, therefore,
bear minimal credit risk.
Income taxes are computed under the asset and
liability method reflecting both current and deferred taxes, which reflect the tax impact of all events included in the consolidated financial
statements. The balance sheet approach (i) reflects a current tax liability or asset recognized for estimated taxes payable or refundable
on tax returns for the current and prior years, (ii) reflects a deferred tax liability or asset recognized for the estimated future tax
effects attributable to temporary differences and carry forwards, (iii) measures current and deferred tax liabilities and assets using
the enacted tax rate of which the effects of future changes in tax laws or rates are not anticipated, and (iv) reduces deferred tax assets,
if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.
ASC 740 prescribes a recognition threshold and
a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.
The Company recognizes deferred tax assets only to the extent that management concludes these assets are more-likely-than-not to be realized.
Significant judgement is required in assessing and estimating the more-likely-than-not tax consequences of the events included in the
consolidated financial statements. Management considers all available positive and negative evidence, including future reversals of existing
temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. The Company records uncertain tax
positions in accordance with ASC 740 on the basis of a two-step process in which (i) management determines whether it is more likely-
than-not that the tax position will be sustained on the technical merits of the position and (ii) for those tax positions that meet the
more likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely
to be realized upon ultimate settlement with the related tax authority.
The Company has adopted the Financial Accounting
Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculation
of “basic” and “diluted” earnings per share. Basic earnings (loss) per share includes no dilution and is computed
by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period.
Diluted earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted
earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares
outstanding as at October 31, 2023, April 30, 2023 and October 31, 2022.
Operating segments are components of an enterprise
about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding
how to allocate resources and in assessing performance. All revenues are currently earned in Sweden and significantly all of the assets
of the Company are used for the Company’s medical device design and research and distribution activities that is carried out in
Sweden. The Company has one reportable segment and operating segment: Medical device design and research and distribution.
(m) |
Recently issued accounting pronouncements |
In June 2016, the FASB issued ASU 2016-13, “Financial
Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with
subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the
use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to
estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial
asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime
expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This
pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On
November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective
date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL),
the revised effective for fiscal years beginning after December 15, 2022. The Company does not expect that this guidance will have a significant
impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12,
Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates
certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting
entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. Most amendments within the standard are required
to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. There
is no significant impact from adopting ASU 2019-12 on the Company’s financial condition, results of operations, and cash flows.
In April 2021, The FASB issued ASU 2021-04 to
codify the final consensus reached by the Emerging Issues Task Force (EITF) on how an issuer should account for modifications made to
equity-classified written call options (hereafter referred to as a warrant to purchase the issuer’s common stock). The guidance
in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified
as an exchange of the original warrant for a new warrant. This guidance applies whether the modification is structured as an amendment
to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant. The Company adopted
this guidance for the fiscal year beginning April 1, 2022. There is no significant impact from adopting ASU 2021-04 on the Company’s
financial condition, results of operations, and cash flows.
The Company continue to evaluate the impact of
the new accounting pronouncement, including enhanced disclosure requirements, on our business processes, controls and systems.
Results of Operations
Consolidated Financial Position
As of October 31, 2023 we
have Total Assets of $15,358 compared to $39,646 at April 30, 2023. The decrease of $24,288 during the six month period is due primarily
to the decrease in our cash and restricted cash held in trust. Our Total Assets consist of Current Assets only.
Our Current Liabilities as
of October 31, 2023 are $1,165,528 compared to $1,101,239 at April 30, 2023. The increase in our current liabilities of $64,289 is mainly
attributed to an increase in amount due to related parties (see note 7 of unaudited interim condensed consolidated financial statements).
We have no long term liabilities at October 31, 2023 and April 30, 2023.
Due
to the difficulties in raising adequate capital, the significant cost of maintaining the patents, and delays in engaging appropriate
commercialization partners, we believe that the current business of commercializing the exhale breath technology patents is no longer
feasible. We intend to establish a new business segment to develop energy and energy related businesses and proceed to wind up its Swedish
subsidiary, Sensabues AB.
The following table is from
our unaudited condensed interim balance sheet as of October 31, 2023.
| |
At Octobe 31,
2023
(unaudited) | | |
At April 30, 2023
(audited) | |
| |
$ | | |
$ | |
ASSETS | |
| | |
| |
Current assets: | |
| | |
| |
Cash | |
| 3,135 | | |
| 26,786 | |
Restricted cash held in trust | |
| - | | |
| 172 | |
Accounts receivable | |
| 788 | | |
| - | |
Subscription receivable | |
| - | | |
| - | |
Prepayments and other receivables | |
| 11,435 | | |
| 12,688 | |
Total current assets | |
| 15,358 | | |
| 39,646 | |
Total assets | |
| 15,358 | | |
| 39,646 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFIECIENCY | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable and accrued liabilities | |
| 109,579 | | |
| 105,868 | |
Accounts payable and accrued liabilities to a related party | |
| 470,445 | | |
| 486,826 | |
Demand Loans | |
| 137,694 | | |
| 113,375 | |
Loans from related parties | |
| 76,074 | | |
| 82,823 | |
Amount due to related parties | |
| 371,736 | | |
| 312,347 | |
Total current liabilities | |
| 1,165,528 | | |
| 1,101,239 | |
| |
| | | |
| | |
Total liabilities | |
| 1,165,528 | | |
| 1,101,239 | |
| |
| | | |
| | |
STOCKHOLDERS’ DEFICIECY | |
| | | |
| | |
Class A Preferred stock, $0.001 par value, 5,000,000 authorized as at October 31, 2023 and April 30, 2023, respectively. Issued and outstanding shares: Nil and Nil as at October 31, 2023 and April 30, 2023, respectively. | |
| - | | |
| - | |
Class B Preferred stock, $0.001 par value, 5,000,000 authorized as at October 31, 2023 and April 30, 2023, respectively. Issued and outstanding shares: Nil and Nil as at October 31, 2023 and April 30, 2023, respectively. | |
| - | | |
| - | |
Common stock, $0.01 par value, 250,000,000 authorized as at October 31, 2023 and April 30, 2023, respectively. Issued and outstanding common shares: and 56,349,183 as at October 31, 2023 and 56,349,183 at April 30, 2023, respectively. | |
| 447,431 | | |
| 425,431 | |
Shares to be issued (804,000 and 804,000 common shares at October, 2023 and April 30, 2023 respectively) | |
| 15,755 | | |
| 15,755 | |
Additional paid-in capital | |
| 4,665,073 | | |
| 4,533,073 | |
Foreign currency translation reserve | |
| (170,131 | ) | |
| (231,505 | ) |
Accumulated deficit | |
| (6,334,768 | ) | |
| (6,027,209 | ) |
Total deficit attributable to equity holders of the Company | |
| (1,376,640 | ) | |
| (1,284,455 | ) |
Total equity attributable to non-controlling interests | |
| 45,669 | | |
| 42,061 | |
Development reserve | |
| 180,801 | | |
| 180,801 | |
Total deficit | |
| (1,150,170 | ) | |
| (1,061,593 | ) |
Total liabilities and stockholders’ deficiency | |
| 15,358 | | |
| 39,646 | |
Consolidated Results of Operations
Comparative Results for the three months ended
October 31, 2023 and 2022
The Company had revenue from
sales for the three months period ended October 31, 2023 of $811. The loss per share, both basic and diluted, was $0.003 (October 31,
2022 – $0.001). This was anticipated by the Company since the efforts of the Company have been focused on commercialization of the
technologies and maintaining operations.
For the three months period
ended October 31, 2023 we had a revenue of $811 which is an increase in revenue from the same period ended October 31, 2022 which had
a revenue in the amount of $680.
Our total general administrative
expenses and research and development expenses have decreased and were in the amount of $157,698 (October 31, 2022 - $152,062).
Comparative Results for the six months ended October
31, 2023 and 2022
The Company had revenue from
sales for the six months period ended October 31, 2023 of $1,146. The loss per share, both basic and diluted, was $0.005 (October 31,
2022 – $0.003). This was anticipated by the Company since the efforts of the Company have been focused on commercialization of the
technologies and maintaining operations.
For the six months period
ended October 31, 2023 we had a revenue of $1,146 which is an decrease in revenue from the same period ended October 31, 2022 which had
a revenue in the amount of $4,414. This was due to the delays in engaging appropriate commercialization partners to develop exhale breath
technology.
Our total general administrative
expenses and research and development expenses have decreased and were in the amount of $306,497 (October 31, 2022 - $333,330). The reduction
in costs is largely due to savings in legal and other overhead expenses.
The following provides
the details for the results of our operations for the periods ended October 31, 2023 and 2022.
| |
Three Months Ended October 31, 2023 (unaudited) | | |
Three Months Ended October 31, 2022 (unaudited) | | |
Six Months Ended October 31, 2023 (unaudited) | | |
Six Months Ended October 31, 2022 (unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Revenue | |
| 811 | | |
| 680 | | |
| 1,146 | | |
| 4,414 | |
| |
| | | |
| | | |
| | | |
| | |
Expenses | |
| | | |
| | | |
| | | |
| | |
General and administrative expense | |
| (154,467 | ) | |
| (132,641 | ) | |
| (296,352 | ) | |
| (313,909 | ) |
Research and development expense | |
| (3,231 | ) | |
| (19,421 | ) | |
| (10,145 | ) | |
| (19,421 | ) |
TOTAL OPERATING EXPENSES | |
| (157,698 | ) | |
| (152,062 | ) | |
| (306,497 | ) | |
| (333,330 | ) |
| |
| | | |
| | | |
| | | |
| | |
Interest expenses, net | |
| (1,968 | ) | |
| (1,995 | ) | |
| (4,009 | ) | |
| (4,132 | ) |
Other income (expenses), net | |
| | | |
| | | |
| | | |
| | |
NET LOSS BEFORE INCOME TAXES | |
| (158,855 | ) | |
| (153,377 | ) | |
| (309,360 | ) | |
| (333,048 | ) |
Income taxes | |
| | | |
| | | |
| | | |
| | |
NET LOSS | |
| (158,855 | ) | |
| (153,377 | ) | |
| (309,360 | ) | |
| (333,048 | ) |
Less: net loss attributable to non-controlling interests | |
| 164 | | |
| 4,277 | | |
| 1,801 | | |
| 5,797 | |
Net loss attributable to the Company | |
| (158,691 | ) | |
| (149,100 | ) | |
| (307,559 | ) | |
| (327,251 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss per share | |
| (0.003 | ) | |
| (0.001 | ) | |
| (0.005 | ) | |
| (0.003 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding | |
| 56,349,183 | | |
| 105,723,183 | | |
| 56,349,183 | | |
| 105,723,183 | |
The condensed interim consolidated
statements of comprehensive loss for the three months ended October 31, 2023 over 2022 in the table below reflect the total comprehensive
loss for the period and the amount attributable to common shareholders and non- controlling interests.
| |
Three Months
Ended
October 31,
2023
(unaudited) | | |
Three Months
Ended
October 31,
2022
(unaudited) | | |
Six Months
Ended
October 31,
2023
(unaudited) | | |
Six Months
Ended
October 31,
2022
(unaudited) | |
| |
$ | | |
$ | | |
$ | | |
$ | |
| |
| | |
| | |
| | |
| |
Net loss for the period | |
| (158,855 | ) | |
| (153,377 | ) | |
| (309,360 | ) | |
| (333,048 | ) |
Foreign currency translation adjustments | |
| 48,585 | | |
| 61,005 | | |
| 66,783 | | |
| 73,357 | |
Total comprehensive loss for the period | |
| (110,270 | ) | |
| (92,372 | ) | |
| (242,577 | ) | |
| (259,691 | ) |
| |
| | | |
| | | |
| | | |
| | |
Attributable to: | |
| | | |
| | | |
| | | |
| | |
Net loss attributable to the Company | |
| (158,691 | ) | |
| (149,100 | ) | |
| (307,559 | ) | |
| (327,251 | ) |
Foreign currency translation adjustments attributable to the Company | |
| 44,353 | | |
| 57,058 | | |
| 61,374 | | |
| 68,612 | |
Net loss attributable to non-controlling interests | |
| (164 | ) | |
| (4,277 | ) | |
| (1,801 | ) | |
| (5,797 | ) |
Foreign currency translation adjustments attributable to non-controlling interests | |
| 4,232 | | |
| 3,947 | | |
| 5,409 | | |
| 4,745 | |
| |
| (110,270 | ) | |
| (92,372 | ) | |
| (242,577 | ) | |
| (259,691 | ) |
At October 31, 2023 we have
a total of 56,349,183 shares of common stock outstanding.
| |
| | |
Common
Stock | | |
Class
A
Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Foreign
Currency Translation Reserve | | |
Accumulated
deficit | | |
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
Balance
at July 31, 2023 (unaudited) | |
| | | |
| 56,349,183 | | |
| 436,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,599,073 | | |
| (214,484 | ) | |
| (6,176,077 | ) | |
| (1,339,302 | ) | |
| 41,601 | | |
| 180,801 | | |
| (1,116,900 | ) |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 11,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 66,000 | | |
| - | | |
| - | | |
| 77,000 | | |
| - | | |
| - | | |
| 77,000 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (158,691 | ) | |
| (158,691 | ) | |
| (164 | ) | |
| - | | |
| (158,855 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 44,353 | | |
| - | | |
| 44,353 | | |
| 4,232 | | |
| - | | |
| 48,585 | |
Balance
at October 31, 2023 (unaudited) | |
| | | |
| 56,349,183 | | |
| 447,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,665,073 | | |
| (170,131 | ) | |
| (6,334,768 | ) | |
| (1,376,640 | ) | |
| 45,669 | | |
| 180,801 | | |
| (1,150,170 | ) |
| |
| | |
Common
Stock | | |
Class
A Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Accumulated
Other Comprehensive Loss | | |
Accumulated
deficit | | |
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | |
Balance
at July 31, 2022 (unaudited) | |
| | | |
| 105,723,183 | | |
| 615,731 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 4,205,409 | | |
| (235,688 | ) | |
| (5,495,271 | ) | |
| (909,819 | ) | |
| 53,275 | | |
| 240,641 | | |
| (615,903 | ) |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 6,380 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8,196 | | |
| - | | |
| - | | |
| 14,576 | | |
| - | | |
| - | | |
| 14,576 | |
Issuance
of common shares for service | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| - | | |
| - | | |
| - | | |
| 2,520 | | |
| - | | |
| - | | |
| 2,520 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (149,100 | ) | |
| (149,100 | ) | |
| (4,277 | ) | |
| - | | |
| (153,377 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 57,058 | | |
| - | | |
| 57,058 | | |
| 3,947 | | |
| - | | |
| 61,005 | |
Balance
at October 31, 2022 (unaudited) | |
| | | |
| 105,723,183 | | |
| 622,111 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| 4,213,605 | | |
| (178,630 | ) | |
| (5,644,371 | ) | |
| (984,765 | ) | |
| 52,945 | | |
| 240,641 | | |
| (691,179 | ) |
| |
| | |
Common
Stock | | |
Class
A Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Foreign
Currency Translation Reserve | | |
Accumulated
deficit | | |
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
Shares | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
Balance
at April 30, 2023 (audited) | |
| | | |
| 56,349,183 | | |
| 425,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,533,073 | | |
| (231,505 | ) | |
| (6,027,209 | ) | |
| (1,284,455 | ) | |
| 42,061 | | |
| 180,801 | | |
| (1,061,593 | ) |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 22,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 132,000 | | |
| - | | |
| - | | |
| 154,000 | | |
| - | | |
| - | | |
| 154,000 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (307,559 | ) | |
| (307,559 | ) | |
| (1,801 | ) | |
| - | | |
| (309,360 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 61,374 | | |
| - | | |
| 61,374 | | |
| 5,409 | | |
| - | | |
| 66,783 | |
Balance
at October 31, 2023 (unaudited) | |
| | | |
| 56,349,183 | | |
| 447,431 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 804,000 | | |
| 15,755 | | |
| 4,665,073 | | |
| (170,131 | ) | |
| (6,334,768 | ) | |
| (1,376,640 | ) | |
| 45,669 | | |
| 180,801 | | |
| (1,150,170 | ) |
| |
| | |
Common
Stock | | |
Class
A Preferred Stock | | |
Class
B Preferred Stock | | |
Shares
to be issued | | |
Additional
paid-in Capital | | |
Accumulated Other Comprehensive Loss | | |
Accumulated
deficit | | |
Equity
(Deficit) | | |
Non-
controlling interests | | |
Development
Reserve | | |
Total | |
| |
Note | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
Shares | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | | |
US$ | |
Balance
at April 30, 2022 (audited) | |
| | | |
| 105,723,183 | | |
| 609,351 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 4,197,213 | | |
| (195,610 | ) | |
| (4,433,352 | ) | |
| 177,602 | | |
| (881,448 | ) | |
| 240,641 | | |
| (463,205 | ) |
Subsidiary
issuance of shares pursuant to private placement | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 45 | | |
| - | | |
| 45 | |
Amortization
of vested shares | |
| 8 | | |
| - | | |
| 12,760 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 16,392 | | |
| - | | |
| - | | |
| 29,152 | | |
| - | | |
| - | | |
| 29,152 | |
Issuance
of common shares for service | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| - | | |
| - | | |
| - | | |
| 2,520.00 | | |
| - | | |
| - | | |
| 2,520 | |
Loss
for the period | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (327,251 | ) | |
| (327,251 | ) | |
| (5,797 | ) | |
| - | | |
| (333,048 | ) |
Foreign
translation adjustment | |
| | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 68,612 | | |
| - | | |
| 68,612 | | |
| 4,745 | | |
| - | | |
| 73,357 | |
Effect
of dilution of ownership in subsidiary pursuant to issuance of shares | |
| 8 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (51,632 | ) | |
| (883,768 | ) | |
| (935,400 | ) | |
| 935,400 | | |
| - | | |
| - | |
Balance
at October 31, 2022 (unaudited) | |
| | | |
| 105,723,183 | | |
| 622,111 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 36,000 | | |
| 2,520 | | |
| 4,213,605 | | |
| (178,630 | ) | |
| (5,644,371 | ) | |
| (984,765 | ) | |
| 52,945 | | |
| 240,641 | | |
| (691,179 | ) |
Due to the difficulties in
raising adequate capital, the significant cost of maintaining the patents, and delays in engaging appropriate commercialization partners,
we believe that the current business of commercializing the exhale breath technology patents is no longer feasible. We intend to establish
a new business segment to develop energy and energy related businesses and proceed to wind up its Swedish subsidiary, Sensabues AB. We
believe that it will be necessary to sell additional shares to have the funds necessary to continue to pay the legal and accounting fees
as the Company continues the process to have its shares trading in a public market. In addition, we may use additional shares to pursue
the development of the new business segment.
Liquidity and Capital Resources
Our cash flows used in operating
activities for the six month period ended October 31, 2023 compared to the same period in 2022 reflects a decrease of $206,793 net cash
used in operating activities. Our net cash provided by financing activities reflects an increase of $70,234 for the six month period ended
October 31, 2023 compared to the same period in 2022. Cash and restricted cash held in trust at the beginning of the period ended October
31, 2023 was $26,958 compared to $437,177 Cash and restricted cash held in trust at the beginning of the same period in 2022. Cash and
restricted cash held in trust at the end of the period ended October 31, 2023 was $3,135 compared to $148,640 Cash and restricted cash
held in trust at the end of the same period in 2022.
We believe that it will be
necessary to raise additional cash to continue to pay the legal and accounting fees as the Company continues the process to have its shares
trading in a public market. In addition, Company may use additional shares to pursue the development of the new business segment.
The table below provides
the unaudited condensed interim consolidated statements of cash flows for the six months ended October 31, 2023 and 2022.
| |
Six Months | | |
Six Months | |
| |
Ended | | |
Ended | |
| |
October 31, | | |
October 31, | |
| |
2023 | | |
2022 | |
| |
(unaudited) | | |
(unaudited) | |
| |
$ | | |
$ | |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | |
| |
Net loss | |
| (309,360 | ) | |
| (333,048 | ) |
Adjustments for: | |
| | | |
| | |
Amortization of vested shares | |
| 154,000 | | |
| 29,152 | |
Issuance of shares for services | |
| - | | |
| 2,520 | |
Changes in: | |
| | | |
| | |
Accounts receivable | |
| (788 | ) | |
| (2,089 | ) |
Prepayments and other receivables | |
| 1,253 | | |
| (1,750 | |
Accounts payable and accrued liabilities to third parties and a related party | |
| (12,670 | ) | |
| (43,363 | ) |
Amounts due to related parties | |
| 59,389 | | |
| 51,544 | |
Long term payable to a related party | |
| - | | |
| (17,935 | ) |
Net cash used in operating activities | |
| (108,176 | ) | |
| (314,969 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
Proceeds from subsidiary issuance of shares to noncontrolling interests | |
| - | | |
| 45 | |
Proceeds from related party loans | |
| 70,279 | | |
| - | |
Net cash provided by financing activities | |
| 70,279 | | |
| 45 | |
| |
| | | |
| | |
Effect of exchange rate changes on cash and restricted cash held in trust | |
| 14,074 | | |
| 26,387 | |
Net decrease in cash and restricted cash held in trust | |
| (23,823 | ) | |
| (288,537 | ) |
Cash and restricted cash held in trust at the beginning of period | |
| 26,958 | | |
| 437,177 | |
Cash and restricted cash held in trust at the end of period | |
| 3,135 | | |
| 148,640 | |
| |
| | | |
| | |
Supplemental cash flows information | |
| | | |
| | |
Income tax paid | |
| - | | |
| - | |
Interest paid | |
| - | | |
| - | |
Critical Accounting Policies and Estimates
This management’s discussion
and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements,
which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities
in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial
instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that
we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions. During the six month period ended October 31, 2023, we have made no material changes or additions with
regard to such estimates and judgments.
Off-Balance Sheet Arrangements
As of October 31, 2023, we
did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or
contractual obligations, save and except for the $100,000 in cash or its equivalent in restricted shares of common stock of the Company
payable to Verde Bio Holdings, Inc.
JOBS Act
On April 5, 2012, the JOBS
Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying
public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new
or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay
the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the
relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may
not be comparable to companies that comply with public company effective dates.
Additionally, we are in the
process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain
conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not
be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial
reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by
the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about
the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items
such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee
compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until
we are no longer an “emerging growth company,” whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
We have not engaged in any
hedging activities since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which
we are exposed.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure
controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports
is recorded, processed, summarized and reported within the time communicated to the Company’s management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition
of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed
to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives. In designing and evaluating
the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and procedures. Therefore, even a system which is determined
to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls
are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
At the end of the period
being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management,
including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of
the Company’s disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective to ensure that the material information required to be included
in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive
and financial officer, as well as recorded, processed, summarized and reported within the time periods specified in Securities and Exchange
Commission rules and forms relating to the Company.
Changes in Internal Control over Financial Reporting
There were no changes in
the Company’s internal controls over financial reporting that occurred during the six month period ended October 31, 2023 that have
materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause
our actual results to differ materially from those in this report include the risk factors described in our 10-K report filed with the
SEC on August 14, 2023. As of the date of this Report, there have been no material changes to the risk factors disclosed in our final
prospectus filed with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
There have been no sales
of the Securities of the Company for the financial reporting that occurred during the fiscal quarter ended October 31, 2023, covered by
this Quarterly Report on Form 10-Q.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits
The following exhibits are filed as part of this 10-Q:
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
SENSASURE TECHNOLOGIES, INC. |
|
|
(Registrant) |
|
|
|
|
|
By: |
/S/ JAMES HIZA |
|
By: |
/S/ JAMES HIZA |
|
James Hiza |
|
|
James Hiza |
|
Chief Executive Officer |
|
|
Acting Chief Financial Officer |
|
(Principal Executive Officer) |
|
|
(Principal Financial and Accounting Officer) |
|
|
|
|
|
Date: |
December 18, 2023 |
|
Date: |
December 18, 2023 |
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In connection with the Quarterly Report of SensaSure
Technologies Inc. (the “Company”) on Form 10-Q for the quarter ended October 31, 2023, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I James Hiza, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
In connection with the Quarterly Report of SensaSure
Technologies Inc. (the “Company”) on Form 10-Q for the quarter ended October 31, 2023, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I James Hiza, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: