Note 1 – Basis of Presentation and SUMMARY OF Significant Accounting Policies

Description of BUSINESS

Mariposa Health Inc., (“Mariposa US” or the “Company”) was incorporated under the laws of the State of Delaware on June 23, 2014 with the intention to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business. On December 8, 2014, our sole officer and director, Richard Chiang, entered into a Share Purchase Agreement pursuant to which he sold 10,000,000 shares of our common stock that he owned to Expert Capital Investments Limited for an aggregate purchase price of $40,000. These shares represented 100% of our issued and outstanding common stock. Effective upon the closing date of the Share Purchase Agreement, Expert Capital Investments Limited became our sole stockholder. On March 5, 2015, we filed an Amended and Restated Certificate of Incorporation under which we changed our name to Mariposa Health, Inc. and effected a 1:5 reverse split to reduce our outstanding shares of common stock from 10,000,000 shares to 2,000,000 shares and to authorize a classified Board of Directors. Under a classified Board of Directors, directors serve staggered, three-year terms. Approximately one-third of our board of directors will be elected each year.

On June 17, 2015, Mariposa US entered into the Purchase Agreement with Mariposa Health Pty Limited (“Mariposa Australia”). Pursuant to the Purchase Agreement, at closing, stockholders of Mariposa Australia received one share of Mariposa US’s common stock for each issued and outstanding share of Mariposa Australia’s common stock. As a result, at closing Mariposa US issued 7,561,211 shares of its common stock to the stockholders of Mariposa Australia and reserved 438,789 additional shares of its common stock or a total of 8,000,000 shares of its common stock should holders of warrants issued by Mariposa Australia to certain lenders exercise their rights to acquire up to 438,789 shares of Mariposa US shares of common stock, representing 80% of Mariposa US’s outstanding common stock or 10,000,000 shares of common stock on a fully diluted basis following the Purchase.

Immediately following the execution of the Purchase Agreement the Company, appointed Dr. Phillip Comans, Kevin Lynn and Margaret Bridges as directors, effective at the effective time of the Purchase.

Upon closing of the transaction, under the Purchase Agreement, Mariposa Australia became the surviving corporation, and wholly-owned subsidiary of Mariposa US. The transaction was accounted for as a reverse merger, and the historical financial information is that of Mariposa Australia.

Mariposa Australia is an Australian pharmaceutical R&D company with two projects in mid-Phase II clinical development to treat COPD and asthma and TA-270 an oral anti-inflammatory and anti-oxidant drug, and HI-1640V, a product to address chronic obstructive pulmonary disease ("COPD"), including bronchitis and emphysema.

On June 7, 2015 Mariposa Australia entered into an Exclusive License Agreement (the "License Agreement") with Shanxi Kangbao Biological Product Co., Ltd. ("Shanxi") under which the Company granted to Shanxi an exclusive license to manufacture, trial, produce, make, use, distribute, offer for sell, import and export, market, sell, hire out, lease, supply, or otherwise dispose of the oral vaccine HI-164/HI-164OV product in China, Taiwan, Macao and Hong Kong in return for (i) milestone payments from Shanxi of up to AUD$8,291,819 (USD$6,440,498), and (ii) potentially significant royalties based upon net sales of our oral vaccine HI-164/HI-164OV product in China, Taiwan, Macao and Hong Kong.

Our strategy is to expedite clinical development, regulatory approval, and commercialization of our COPD product candidates. Phase 2 clinical data was generated for the oral vaccine to non-typeable H. Influenzae, HI-164OV and an oral treatment (tablet dose form), TA-270, We plan to begin a Phase II trials for HI-164OV and TA-270 at the earliest time depending on the time of obtaining sufficient funding. We plan to assess new dose forms, in particular of TA-270, with the intent to optimize the product and patent offerings. Trials and product development may be conducted in the United States, the European Union ("EU") or Australia depending on clinical and regulatory conditions, and our capacity to engage personnel and contractors. We believe data from these trials and research activities, if positive, may lead to U.S., EU or Australian regulatory approval for the treatment of COPD after completing Phase 3 trials. If successful in Phase II clinical trials, we plan to partner TA-270 and HI-164OV product candidates with a large pharmaceutical company or biotechnology company to undertake Phase III clinical trials and to gain regulatory approvals in the United States and elsewhere. Alternatively, if funding is available on suitable terms the commercial strategy could involve our undertaking Phase III clinical trials before partnering. The Company expects that data from clinical trials, whether conducted in the United States, EU or Australia, will form part of the regulatory package for each of these territories.

The Company’s operational model is to minimize overhead costs by having a small product development staff to manage third parties in the development process. To reduce financial risk and financing requirements, the Company is directing their resources to the preclinical and early clinical phases of development. The Company plans to co-develop with or to license to marketing partners our therapeutic product candidates where the size of the necessary clinical studies and the cost associated with the later clinical development phases are significant. By forming strategic alliances with pharmaceutical and/or biotech companies, the Company believes that their technology can be more rapidly developed and successfully introduced into the marketplace.

The Company believes there is a significant opportunity for an existing pharmaceutical company that is already supplying drugs to address COPD to add additional treatment therapies or to complement their existing drugs by adding their products to their range of products to be able to validate the compound through Phase II trials.

Patents and Trademarks

Product	Patent family	Purpose	Status	Expiry
TA-270	1	Substance certain indications	Granted in US, EU	10/2016
	2	Substance production	Granted in US, EU	9/2019
	3	Improved substance	Granted in US, EU	6/2022
	4	Indication: COPD	Granted	12/2025
MH-003		Indication: Respiratory sleep disturbances	International phase	10/2029
HI-164	1	Isolate selection	Granted in US, EU	8/2025
	2	Probiotic additive	Granted in US, EU	5/2021
	3	Indication: asthma	Pending in US, EU	3/2028
	4	Commercial isolates	Pending in US, EU	9/2029