Zero Candida Technologies Incorporated — Interim / Quarterly Report 2025

May 29, 2025

ZERO CANDIDA TECHNOLOGIES INC.

CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

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NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim financial statements of the Company for the three months ended March 31, 2025 have been prepared by management and approved by the Audit Committee and Board of Directors of the Company. The Company’s independent auditors have not performed a review of these interim financial statements in accordance with the standards established by the Canadian Institute of Chartered Professional Accountants for a review of interim financial statements by an entity’s auditors.

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
CAD in thousands

INDEX

Consolidated Statements of Financial Position 3
Consolidated Statements of Profit or Loss and Other Comprehensive Income 4
Consolidated Statements of Changes in Equity 5
Consolidated Statements of Cash Flows 6
Notes to the Consolidated Financial Statements 7-13

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	Note	As of March 31,		As of December 31,
		2025	2024	2024
Assets
Current assets
Cash in banks		183	147	241
Bank Deposits		2,516	1,479	2,811
Other accounts receivable		80	35	134
Total current assets		2,779	1,661	3,186
Non-current assets
Right for use of leased assets		27	33	28
Total non-current assets		27	33	28
Total assets		2,806	1,694	3,214
Liabilities and shareholders' equity
Current liabilities
Accounts payable		-	*-	4
Other accounts payable, including related parties		1,074	460	840
Current maturities of lease liabilities		9	9	9
Total current liabilities		1,083	469	853
Non-current liabilities
Lease liabilities		19	24	20
Total non-current liabilities		19	24	20
Total liabilities		1,102	493	873
Shareholders' Equity
Share capital		196	-*	951
Share premium		11,341	2,444	11,220
Share-based payments		1,473	3,456	1,558
Foreign currency translation adjustments		(520)	56	(156)
Accumulated deficit		(10,786)	(4,755)	(10,476)
Total equity		1,704	1,201	2,341
Total equity and liabilities		2,806	1,694	3,214

*See Note 1 A for reverse acquisition

/s/ “Eli Ben-Haroosh”	/s/ “Sophie Galper Komet”	May 28, 2025
Eli Ben Haroosh	Sophie Galper Komet
Chief Executive Officer and Director	Chief Financial Officer	Date of approval of the financial statements

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CAD in thousands

	Note	For Three months ended on March 31,		For Year Ended on December 31,
		2025	2024	2024
Research and development expenses		(154)	(386)	(1,276)
General and administrative expenses		(199)	(175)	(965)
Issuance costs in reverse acquisition	1	-	-	(4,000)
Net operating loss		(353)	(561)	(6,241)
Finance expense		-	(1)	(141)
Finance income		43	-	99
Loss		(310)	(562)	(6,283)
Other comprehensive loss:
Amounts that will not be reclassified subsequently to profit or loss:
Foreign currencies translation adjustments		(364)	(56)	200
Total other comprehensive income (loss)		(364)	(56)	200
Total comprehensive loss		(674)	(618)	(6,083)
Loss per share attributable to ordinary shareholders of the Company:
Basic and Diluted loss per share		** (0.00)	** (0.00)	(0.00) **

• See Note 1 A for a reverse acquisition
  ** Represent amount less than CAD 0.01

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CAD in thousands

Share Capital

Share Premium

Share-based Payments

Foreign Currencies

Accumulated Deficit

Total

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				translation adjustments
Balance as of January 1, 2023*	**-	37	1,386	2	(1,680)	(255)
Issuance of shares	-	2,258	-	-	-	2,258
Share-based payments	-	-	1,769	-	-	1,769
Loss for the year	-	-	-	-	(2,513)	(2,513)
Other comprehensive loss	-	-	-	42	-	42
Balance as of December 31, 2023*	**-	2,295	3,155	44	(4,193)	1,301
Issuance of shares	-	5,157	(2,607)	-	-	2,550
Share-based payments	-	-	1,010	-	-	1,010
Loss for the year	-	-	-	-	(6,283)	(6,283)
Other comprehensive loss	-	-	-	(200)	-	(200)
Reverse acquisition	196	3,768	-	-	-	3,963
Balance as of December 31, 2024	196	11,220	1,558	(156)	(10,476)	2,341
Issuance of shares	-	121	(121)	-	-	-
Share-based payments	-	-	36	-	-	36
Loss for the year	-	-	-	-	(310)	(310)
Other comprehensive loss	-	-	-	(364)	-	(364)
Reverse acquisition	-	-	-	-	-	-
Balance as of March 31, 2025	196	11,341	1,473	(520)	(10,786)	1,703

• See Note 1 A for a reverse acquisition
  ** Represent amount less than CAD 1

The accompanying notes are an integral part of these consolidated financial statements.

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ZERO CANDIDA TECHNOLOGIES INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
CAD in thousands

	For the three months ended on March 31,	For the year ended on December 31,
	2025	2024	2024
Cash flows from operating activities
Loss	(310)	(562)	(6,283)
Adjustments required for presenting Cash flows and cash equivalents from operating activities (Appendix A):	320	383	5,343
Net cash used in operating activities	10	(179)	(940)
Cash flows from investing activities
Long term deposits	295	-	(1,347)
Net cash used in investing activities	295	-	(1,347)
Cash flows from financing activities
Shares issuance and premium on shares	-	149	2,550
Repayment of lease	1	2	4
Net cash provided by financing activities	1	151	2,554
Net increase in cash in banks	306	(28)	267
Exchange rate differences on balances of cash in banks	(364)	1	(200)
Cash in banks at the beginning of year/period	241	174	174
Cash in banks at the end of year/period	183	147	241

Appendix A - Adjustments required for presenting cash flows from operating activities:

	For the three months ended on March 31,	For the year ended on December 31,
	2025	2024	2024
Significant non-cash transactions:
Depreciation	(1)	(2)	(9)
Financing expenses, net	51	303	8
Share-based payments	36		1,010
Issuance costs in reverse acquisition	-		4,000
Changes in operating assets and liabilities:
Increase in accounts payable	180	19	416
Increase in other accounts receivable	54	63	(80)
	320	383	5,345

• See Note 1 A for a reverse acquisition

The accompanying notes are an integral part of these consolidated financial statements.

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ZERO CANDIDA TECHNOLOGIES INC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

CAD in thousands (except for number of shares and share price)
Note 1 - General

A. General description of the Company and its operations

Zero Candida Ltd. (“Zero Candida”, “ZC”) was incorporated as a privately held company registered in Israel Company No. 516520657 on January 3th 2022 and since then has developed a AI smart tampon-like device, designed to treat Candidiasis and transfer the AI with WIFI to the doctor, a very common fungal infection. The patent technology is a combination of a therapy light source with a selected wavelength and intensity, and a transparent gel-based drug delivery system as well as maintaining the optimum Ph in the vagina. The device is used for up to one night and in 3 hours demonstrated a 99.9999% Elimination of the fungus in the vagina.

Zero Candida entered into a triple sleeve reverse merger agreement (the "Agreement") with the Stock Exchange Skeleton 1319743 Ltd. (“131”) pursuant to the agreement, ZC and 131 agreed to a proposed purchase by ZC of 100% of the issued and outstanding securities of Zero Candida in exchange for the issuance of ZC's securities. The transaction was intended to constitute a reverse takeover of ZC. In accordance with the agreement, the transaction was considered a triple sleeve reversal merger, where the wholly owned Israeli subsidiary of 131 Ltd., which was incorporated solely for the purpose of the transaction, was merge with Zero Candida. The reverse merge consisted of two simultaneous mergers, whereby, ZC merged in Israel with a fully owned subsidiary company of 131 formed under the Company Law of Israel in the name 1319743 BC Ltd. and immediately following this merger, the merged entity Zero Candida Ltd. shall be upon a reverse merger with 131, a fully owned subsidiary of 131. The application of the Company for a reverse merger with 1319743 BC Ltd. was approved by the Israeli Corporate Registered on August 15, 2024.

On November 13,2024, “Zero Candida Technologies Inc.” (formerly 1319743 B.C. Ltd.) (the “Company”) closed its business acquisition of Zero Candida, accordingly, the company changed its name to Zero Candida Technologies Inc.

The Company (i) completed the 131 Share Split following which the Company had a total of 2,000,000 131 Shares issued and outstanding; (ii) issued 10.66767 Company Shares for each ZC Share, being approximately 86.45% of the issued and outstanding share capital of the Company post Completion of the Transaction, at a deemed price of $2.00 per each such Common Share, for aggregate deemed consideration of $36,000,000 on a fully-diluted basis. Following the closing of the Transaction, ZC became a wholly-owned subsidiary of the Company. In addition, following Completion of the Transaction, the Company issued a total of 1,213,416 incentive stock options to officers, director and employees of ZC (10.66767 incentive Options in exchange for each currently outstanding ZC Option). The terms of the exercise of the Options shall be consistent with the terms of the originally issued underlying ZC securities. Subsequently, the exchange ratio was amended by the parties to 9.6165.

immediately following the completion of the Acquisition, the following persons were appointed as officers of the Company: Eli Ben-Haroosh, Chief Executive Officer and Director, Asher Holzer, Director, Orit Berger, Director, Sophya Galper-Komet, Chief Financial Officer and Corporate Secretary, Christina Cameron, Director.

On November 25th Company’s shares commenced trading on TSX Venture Exchange (the "TSXV") under the ticker symbol “ZCT”.

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ZERO CANDIDA TECHNOLOGIES INC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

CAD in thousands (except for number of shares and share price)
Note 1 – General (Continued)

A. General description of the Company and its operations (Continued)

The purchase price for the acquisition was approximately CAD 4 million, determined in accordance with the value of ZC LTD.'s capital instruments on November 25, 2024. The excess purchase price over the carrying amount of assets and liabilities value of the Company's in the amount of approximately CAD 4 million was recorded as registration expenses (issuance expenses) within the profit or loss statements.

The results of the merger transaction by share split resulted in the fact that, from a legal point of view, the company owns Zero Candida Ltd. Since the controlling owners of Zero Candida Ltd. gain control of the company, it was determined that Zero Candida Ltd. is the accounting acquirer of the activity and therefore the transaction was treated as a reverse acquisition which does not constitute Business combination.

Accordingly, in the consolidated financial statements the comparative financial information as of December 31, 2023 and for the two years ended on December 31, 2023, consist of the financial information of the Zero Candida that is considered as the accounting acquirer for accounting of reverse acquisition.

In connection with the reverse acquisition, the Israeli Tax Authorities issue to Zero Candida LTD tax ruling that under certain compliance with condition, including a restriction on performing a disposition of the Company and Zero Candida LTD shares, is differing the tax evet arise in the acquisition to the date of actual disposal of the Company's and Zero Candida LTD Zero Candida LTD shares.

The Product

The Company developed a smart tampon-like device, designed to treat Candidiasis, a very common fungal infection. The device is based on smart technology that distributes light and a sensor that gathers and conveys data. The technology and the sensor are patented and together they provide focused and very precise treatment, supported by proven scientific data.

The Company aims to create an approved pilot prototype for pre-clinical safety testing, followed by clinical testing on humans, that will start by the beginning of 2025.

Patents

On May 2023, the Company was granted a South African patent (Patent No: 2022/09265), As of the valuation date the has applied for Patents in Israel, the US, and Canada. The abstract in the patent application states the following claims:

“Bio adhesive mini tablets offer potential for improved residence time in the vaginal cavity targeting contact with mucosal tissue and prolonged release of the drug. Mini tablets with a matrix of either HPMC or HPC were found to possess adequate mechanical strength, bio adhesive behavior towards cow vaginal tissue, and show pH independent controlled release of the drug, suggesting that both systems are equally suited for the treatment of both pre- and post-menopausal women. Mini-tablet formulations based on MC or HEC were mechanically weaker and disintegrated fast upon contact with fluids and therefore released the full drug load within a few minutes. Bio adhesion towards vaginal tissue could not be successfully evaluated, either in the rotating cylinder test or in the detachment test”.

B. Definitions

In these financial statements:

Related parties - as defined in IAS 24

CAD - Canadian dollar

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ZERO CANDIDA TECHNOLOGIES INC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

CAD in thousands (except for number of shares and share price)
Note 1 – General (Continued)

C. Material event in the reporting period

Effects of the “Iron Swords” war

Following the brutal attacks on Israel, the mobilization of army reserves and the Government declaration of a state of war (“Iron Swords” war) in October 2023, there was a decrease in Israel’s economic and business activity. The security situation has led, inter alia, to a disruption in the chain of supply and production, a decrease in the volume of national transportation, a shortage in manpower as well as a decrease in the value of financial assets and a rise in the exchange rate of foreign currencies in relation to the shekel.

The Company has examined the effects of the aforesaid and based on several scenarios that were examined, has reached the conclusion that the Company is able to continue paying its liabilities in the foreseeable future. In this examination, the Company relied on forecasts and on the liquid assets at its disposal, unutilized credit facilities, possibilities for cost cutting, streamlining plans, unencumbered assets, and so forth.

D. Disclosure of certain risks and uncertainties

The Company’s operations of developing and designing a medical device is subject to local and international regulatory requirements and standards and is characterized by frequent significant changes in technology and requirements heavy regulations in the global market and the Israeli market.

The Company is in a preliminary development phase and its success depends on several factors including, among others: the knowledge and technology it has in comparison to its competitors, compliance with regulatory and standard requirements, dependence on professional and key personnel, fund raising for R&D activity and finding a strategic partner for penetrating the global market. Some of the Company’s competitors or potential competitors may have greater or better knowledge, technology, financial resources, and business experience. Therefore, the Company’s ability to continue and achieve its research and development goals and plans and the ability to introduce to the markets medical devices that meets market requirements in quality and prices are not guaranteed.

The Company’s activity is affected by the various supervisory authorities’ policy to approve its products. Delayed or refused approval to develop and market products by the Company will negatively affect further development and the progression to the next development phase. Hence the field of therapeutic vaccine combines varied and numerous uncertainties. Even at a very late stage of development, the product may not perform as expected or may fail to meet various regulatory criteria. Consequently, development may cease with a loss of the vast resources invested prior thereto.

The Company’s research and development operations is dependent upon certain key personnel including related parties.

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ZERO CANDIDA TECHNOLOGIES INC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

CAD in thousands (except for number of shares and share price)

Note 1 – General (Continued)

E. Financial position

The Company has incurred continuous losses from its research and development activities and has generated negative cash flows from operating activities of CAD 939 and CAD 669 during 2024 and 2023, respectively.

The Company has so far financed its operations mainly through equity resulting from raising capital. The Company is expected to generate further losses from research and development operations which will be expressed in negative cash flows from operating activity. Hence the continuation of the Company's operations depends on raising the required financing resources, generating income and reaching profitability, which are not guaranteed at this point. The Company's ability to continue as a going concern, is dependent on the Company meeting the factors of the business plan designed by Management, forecasts and related key assumption, potential liquidity risks and cash flow projection.

As part of their ongoing responsibilities, the Company's Board of Directors and Management have undertaken a thorough review of the Company's cash flow forecast and potential liquidity risks. Forecasts of operating results and cash flow projections were prepared for the period of 12 months from the date of approval of the financial statements. According to such projections, the Company's Board of Directors and Management believe that the Company has sufficient resources for the continuation of its research and development activities and to meet its obligations for at least 12 months from the date of approval of the financial statements.

As of December 31, 2024, the Company's balance of cash and cash equivalents and bank deposits in total amount of CAD 3,052.

Note 2 – Basis of presentation

A. Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).

The financial statements were authorized for issuance by the Company's Board of Directors on March 26, 2025.

B. Use of estimates and judgments

The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The preparation of accounting estimates used in the preparation of the Company's financial statements requires that management of the Company makes assumptions regarding circumstances and events that involve considerable uncertainty. Company Management prepares the estimates on the basis of past experience, various facts, external circumstances, and reasonable assumptions according to the pertinent circumstances of each estimate. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

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ZERO CANDIDA TECHNOLOGIES INC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

CAD in thousands (except for number of shares and share price)

Note 2 – Basis of presentation (Continued)

B. Use of estimates and judgments (Continued)

Information about assumptions made by the Company with respect to the future and other reasons for uncertainty with respect to estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in the following table:

Estimate	Principal assumptions	Possible effects	Reference
Recoverability of development costs	The criteria for recognizing development project costs as intangible assets have met.	Amortization of the development costs in profit or loss	Development costs have been expensed as incurred, see Note 9.
Recognition of deferred tax asset in respect of tax losses	The probability that in the future there will be taxable profits against which carried forward losses can be utilized	Recognition or reversal of deferred tax asset in profit or loss	For information on losses for which a deferred tax asset was not recognized, see Note 11.
Fair value of share-based payments	The fair value of share-based payments is determined upon initial recognition by an acceptable option pricing model.	The inputs to the model include share price, exercise price and assumptions regarding expected volatility, expected life of share option and expected dividend yield.	See Note 14 regarding share-based payments.
Determining the lease term	In order to determine the lease term, the Group takes into consideration the period over which the lease is non-cancellable, including renewal options that are reasonably certain it will exercise and/or termination options that it is reasonably certain it will not exercise.	An increase or decrease in the initial measurement of a right-of-use asset and lease liability and in depreciation and financing expenses in subsequent periods.	See Note 5 regarding leases.
Determining the discount rate of a lease liability	The discount discounts the lease payments using its incremental borrowing rate.	An increase or decrease in the lease liability, right-of-use asset and depreciation and financing expenses recognized.	See Note 5 regarding leases.

C. Classification of expenses recognized in the statement of income

Preparation of the financial statements requires the Company to determine the fair value of certain assets and liabilities. Classification of expenses is recognized in the statement of income is based on the nature of the expense. This method of classification is appropriate for understanding the business of the Company.

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ZERO CANDIDA TECHNOLOGIES INC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

CAD in thousands (except for number of shares and share price)

Note 2 – Basis of presentation (Continued)

D. Determination of fair value

Preparation of the financial statements requires the Group to determine the fair value of certain assets and liabilities. When determining the fair value of an asset or liability, the Company uses observable market data as much as possible. There are three levels of fair value measurements in the fair value hierarchy that are based on the data used in the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly

Level 3: inputs that are not based on observable market data.

E. Historical cost basis

The financial statements have been prepared on a historical cost basis, except for:

• Financial instruments, derivatives and other assets and liabilities measured at fair value through profit or loss;
• Financial instruments measured at fair value through other comprehensive income
• Provisions;
• Assets and liabilities for employee benefits;

F. Foreign currency transactions

Functional and presentation currencies

The consolidated financial statements of the Company are presented in CAD (hereafter: "Presentation Currency"), which is the Company's reporting currency, and all values are rounded to the nearest thousands, except when otherwise indicated.

The New Israel Shekel ("NIS") is the currency of the primary economic environment in which the operations of the Israel subsidiary company, (hereafter: "Functional Currency").

Translation from Functional Currency to Presentation Currency performed as follow: (1) all assets and liabilities were translated using the closing exchange rate as of the balance sheet date; (2) equity items were translated using historical exchange rates; (3) items of comprehensive income/loss, unless this is not practicable to assess the cumulative effect of the rates prevailing on the transaction dates; were translated at the average exchange of each reported yea; and (4) the resulting translation differences have been reported as foreign currencies translation adjustments within other comprehensive income/loss.

Transactions, assets and liabilities in foreign currency

Transactions denominated in foreign currencies are initially recognized in functional currency at the exchange rate at the date of the transaction. Following the initial recognition, monetary assets and liabilities denominated in foreign currency are remeasured to the functional currency at the exchange rate of each reporting date. Exchange rate differences are recognized in profit or loss.

Non-monetary assets and liabilities denominated in foreign currency and measured at cost are measured at the exchange rate at the date of the transaction.

Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are measured into the functional currency using the exchange rate prevailing at the date when the fair value was determined.

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ZERO CANDIDA TECHNOLOGIES INC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

CAD in thousands (except for number of shares and share price)

Note 2 – Basis of presentation (Continued)

G. Operating Cycle

The operating cycle of the Company is one year. Thus, current assets and current liabilities include items the realization of which is intended and anticipated to take place within one year.

H. Consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company that is controlled by the Company (subsidiary).

Significant intercompany balances and transactions and gains or losses resulting from intercompany transactions are eliminated in the consolidated financial statements.

Subsidiary is an entity controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control is lost. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group

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