NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF
BUSINESS
Zenosense, Inc. (the “Company”) was incorporated
under the laws of the State of Nevada on August 11, 2008.
Effective December 4, 2013, the Company entered into
a development and exclusive license agreement (“License Agreement”) whereby the Company will provide a third party with capital
for the development of sensory technology for a methicillin resistant Staphylococcus aureus / Staphylococcus aureus (“MRSA/SA”)
detection device and a cancer detective device and other improvements and variations to the products (the “Sgenia Products”)
to be used in the hospital and health care environments, in exchange for a worldwide, exclusive license to manufacture, market and sell
the resulting products, subject to certain limitations and a royalty arrangement on a revenue sharing basis. The License Agreement was
modified in April 2015 and July 2015 to extend to additional cancer sensory products and to modify and extend the development schedule
and change the research funding budget to accommodate the lung cancer product as well as MRSA/SA product.
On June 20, 2016, the Company entered into a joint
venture arrangement by way of a Subscription and Shareholders’ Agreement (“MML SSA”) with a third party medical detection
device developer (“Partner”) utilizing a joint venture vehicle, MIDS Medical Ltd (“MML”), a UK Limited company
of which the Company owns a 40% interest awarded on July 1, 2016, in exchange for its participation and funding to support MML during
a Phase 1 and prospectively during a Phase 2 development of the Partner’s MIDS universal immunoassay detection technology platform
(“MIDS”). MML will have the right, under license, to use the MIDS Intellectual Property (“MIDS IP”) during the
development and the MIDS IP will be transferred to MML in the event MML concludes a commercial deal for MIDS with a third party.
Following an extensive revision to the MIDS core Hall
effect sensor electronics during the first half of 2018, MML reported, in June, 2018, that testing had confirmed and had materially improved
upon the testing results announced in late 2017, with a near doubling of sensitivity of detection. MML informed the Company that two brands
of commercially available paramagnetic assay beads were tested: GE Sera-Mag™ (3μm) and Thermo Fisher Scientific M-270 Dynabeads®
(2.8 μm), both of which are thought suitable for a HS troponin assay and have similar paramagnetic characteristics. MML also stated
that the MIDS level of detail of both these brands was seen on a reliable, repeatable basis at around 50,000 beads, with good signal linearity
(required for accurate assay quantitation) at higher numbers. This number of beads detected at the level of detail is, according to MML, well
within the range advised by MML’s assay consultants as suitable for a HS troponin assay.
On August 31, 2018, the Company and MML entered into
an agreement with an investor for the funding of MML of up to US$1,200,000 in exchange for up to 10.31% equity ownership in
MML. The Company’s ownership of MML may be diluted based on the amount of the investor funds.
The Company has been dormant since November, 2018.
The Company’s year-end is December 31st.
On December 9, 2021, the Eighth Judicial District
Court in Clark County, Nevada Case No: A-21-843440-B appointed Custodian Ventures, managed by David Lazar as the Company’s custodian.
David Lazar, 31, has been CEO and Chairman of the
Company since December 9, 2021. David Lazar is a private investor. Mr. Lazar has been a partner at Zenith Partners International since
2013, where he specializes in research and development, sales, and marketing. From 2014 through 2015, David was the Chief Executive Officer
of Dico, Inc., which was then sold to Peekay Boutiques. Since February of 2018, Mr. Lazar has been the managing member of Custodian Ventures
LLC, where he specializes in assisting distressed public companies. Since March 2018, David has acted as the managing member of Activist
Investing LLC, which specializes in active investing in distressed public companies. David has a diverse knowledge of financial, legal,
and operations management; public company management, accounting, audit preparation, due diligence reviews, and SEC regulations.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying financial statements have been prepared
in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™”
(the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied
by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”)
in the United States.
Principles of Consolidation
The consolidated financial statements include the
financial statements of all the subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.
Management’s Representation of Interim
Financial Statements
The accompanying unaudited condensed consolidated
financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations,
and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated
financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial
position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative
of results for a full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto.
Use of estimates
The preparation of consolidated financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the calculation of stock-based compensation, and disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of expenses during the reporting period. Management makes these estimates using the best information available
at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates
and assumptions include valuation of inventory, and recoverability of carrying amount and the estimated useful lives of long-lived assets.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand,
cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have
remaining maturities of three months or less when initially purchased. As of September 30, 2021 and December 31, 2020 the Company had no cash
on hand.
Income taxes
The Company accounts for income taxes under FASB ASC
740, ”Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, ”Accounting
for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement
recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax
position must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest amount
of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its
conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change
its judgment regarding the likelihood of a tax position’s sustainability under audit.
Net Loss per Share
Net loss per common share is computed by dividing
net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260,
“Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income
by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are
determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that
impact the Company’s operations.
NOTE 3 – GOING CONCERN
As of September 30, 2021, the Company had $-0- in
cash and cash equivalents. The Company had net loss of $175,074 for the nine months ended September 30, 2021, has negative working
capital of $1,455,978 and accumulated deficit of $3,714,308 on September 30, 2021. The Company’s principal sources of
liquidity have been cash provided by operating activities, as well as financial support from related parties. The Company’s operating
results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to maintain profitability
and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses in line
with revenue forecasts, the Company may not be able to maintain profitability. These factors raise substantial doubt about the Company’s
ability to continue as a going concern.
The Company will focus on improving operation efficiency
and cost reduction, developing core cash-generating business, and enhancing marketing function. Actions include developing more customers,
as well as creating synergy using the Company’s resources.
The Company believes that available cash and cash
equivalents, the cash provided by operating activities, together with actions as developing more customers and create synergy of the Company’s
resources, should enable the Company to meet presently anticipated cash needs for at least the next 12 months after the date that the
financial statements are issued and the Company has prepared the consolidated financial statements on a going concern basis. If the Company
encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures
to conserve liquidity, which could include, but not necessarily be limited to, obtaining financial support from related parties, and controlling
overhead expenses. Management cannot provide any assurance that the Company’s efforts will be successful. The consolidated financial
statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the outcome of these uncertainties.
NOTE 4 – EQUITY
Common stock
The Company has authorized 500,000,000 shares
of $0.001 par value, common stock. As of September 30, 2021 and December 31, 2020, there were 31,932,843 shares of Common
Stock issued and outstanding.
NOTE 5 – RELATED PARTY NOTES PAYABLE,
ACCRUED EXPENSES AND OTHER LIABILITIES
As of September 30, 2021 and December 31, 2020, the
Company had $922,242 and $747,168 in accounts payable, accrued expenses and accrued interest; respectively. Additionally, as
of the same dates the Company had $108,496 due to former related parties, and $425,240 in convertible notes, outstanding.
NOTE 6 – COMMITMENTS AND CONTINGENCIES
The Company did not have any contractual commitments
as of September 30, 2021 and December 31, 2020.
NOTE 7 – SUBSEQUENT EVENTS
On December 9, 2021, the Eighth Judicial District
Court in Clark County, Nevada Case No: A-21-843440-B appointed Custodian Ventures, managed by David Lazar as the Company’s custodian.