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 did not execute its business plan 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.
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 March 31, 2022 and
December 31, 2021 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 March 31, 2022, the Company had $-0- in cash and cash equivalents. The Company had net loss of $117,146 for
the three months ended March 31, 2022, has negative working capital of $1,641,723 and
accumulated deficit of $3,900,053 on
March 31, 2022. 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.
As
of March 31, 2022 the Company had no cash on hand. Company has prepared the consolidated financial statements on a going concern basis.
All of the Company’s financial support is being provided by Custodian Ventures. There can be no assurance that Custodian Ventures
will continue to fund the Company 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 March 31, 2022 and December 31, 2021,
there were 31,932,843 shares of Common Stock issued and outstanding.
Preferred
stock
On
February 9, 2022 the Company amended their Articles of Incorporation to create a class of 10,000,000 shares of $0.001 par value Series
A Preferred Stock.
Dividend
Provisions
Subject
to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time
hereafter come into existence, the holders of shares of Series A Preferred Stock shall be entitled to receive dividends, out of any assets
legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and rights convertible
into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the
Common Stock of the Corporation, as and if declared by the Board of Directors, as if the Series A Preferred Stock had been converted
into Common Stock.
Liquidation
Preference.
In
the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, the holders of the Series
A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to
the holders of Common Stock, or any other series or class of common stock of the Corporation, whether now in existence or hereafter created
by amendment to the articles of incorporation of the Corporation or by a certificate of designation, by reason of their ownership thereof,
and senior, prior, and in preference to any other series or class of preferred stock of the Corporation, whether now in existence or
hereafter created by amendment to the articles of incorporation of the Corporation or by a certificate of designation, an amount per
share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series A Preferred Stock (each,
the “the Original Issue Price”) for each share of Series A Preferred Stock then held by them, plus declared but unpaid dividends.
Unless the Corporation can establish a different Original Issue Price in connection with a particular sale of Series A Preferred Stock,
the Original Issue Price shall be $0.001 per share for the Series A Preferred Stock. If, upon the occurrence of any liquidation, dissolution
or winding up of the Corporation, the assets and funds thus distributed among the holders of the Series A Preferred Stock shall be insufficient
to permit the payment to such holders of the full aforesaid preferential amounts, then, the entire assets and funds of the corporation
legally available for distribution shall be distributed first to the Series A Preferred Stock, and then ratably among the holders of
the each other series of Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.
Right
to Convert. Subject to Section 4(d)(3), each share of Series A Preferred Stock shall be convertible, at the option of the holder(s)
thereof only, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock,
into fifty (50) fully paid and nonassessable shares of Common Stock.
As
of March 31, 2022, none 0 of the Series A Preferred Shares were issued and outstanding
NOTE
5 – RELATED PARTY NOTES PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES
As
of March 31, 2022 and December 31, 2021, the Company had $1,038,956 and $980,598 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. Since David Lazar was appointed as the Custodian of the Company on December 9, 2021 (see Note 1) he has
extended interest free demand notes to the Company to fund operations. These loans have been classified as related party loans on the
Company’s balance sheets. As of March 31, 2022 and December 31, 2021 these loans amounted to $69,031 and $10,243.
NOTE
6 – COMMITMENTS AND CONTINGENCIES
The
Company did not 0 have any contractual commitments as of March 31, 2022 and December 31, 2021.
NOTE
7 – SUBSEQUENT EVENTS
On
April 11, 2022 in return for the management services provided by Mr. Lazar, as the Company’s sole employee and executive officer,
and in consideration of providing the Company its strategic plan and only source of liquidity, all 10,000,000 shares of Series A Preferred
Stock was awarded to Custodian Ventures in return for a reduction of $10,000 of Mr. Lazar’s loan.