Attached files

file filename
EX-32.2 - JRjr33, Inc.v215419_ex32-2.htm
EX-31.1 - JRjr33, Inc.v215419_ex31-1.htm
EX-31.2 - JRjr33, Inc.v215419_ex31-2.htm
EX-32.1 - JRjr33, Inc.v215419_ex32-1.htm
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008/ Amendment No. 1

Commission file number: 333-145738

CARDIO VASCULAR MEDICAL DEVICE CORP.
(Exact name of registrant as specified in its charter)

Delaware
 
98-0522188
(State of incorporation)
 
(I.R.S. Employer Identification No.)

 4500 Rockside Road, Suite 400, Independence, OH 44131
(Address of principal executive offices)

 440-759-7470
 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:
None

Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $0.0001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ¨ No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ¨ No  x

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 or 1934 during the past 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 x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer ¨
Accelerated  filer ¨
Non-accelerated filer ¨
Smaller  reporting company x
(Do not check if a smaller reporting company)
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ¨
No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently computed second fiscal quarter. $16,230,000 based upon $0.03 per share which was the last price at which the common equity purchased by non-affiliates was last sold, since there is no public bid or ask price.

The number of shares of the issuer’s common stock issued and outstanding as of March 18, 2009 was 54,100,000 shares.

Documents Incorporated By Reference:  None
 
 
 

 

TABLE OF CONTENTS

   
Page
PART I
 
3
Item 1
Business
3
Item 1A
Risk Factors
5
Item 1B
Unresolved Staff Comments
6
Item 2
Properties
6
Item 3
Legal Proceedings
6
Item 4
Submission of Matters to a Vote of Security Holders
6
     
PART II
 
6
Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
6
Item 6
Selected Financial Data
7
Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operation
7
Item 7A
Quantitative and Qualitative Disclosures About Market Risk.
10
Item 8
Financial Statements.
F-1
Item 9
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
11
Item 9A(T)
Controls and Procedures
11
Item 9B
Other Information
12
     
PART III
 
12
Item 10
Directors, Executive Officers and Corporate Governance
12
Item 11
Executive Compensation
13
Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
14
Item 13
Certain Relationships and Related Transactions, and Director Independence
15
Item 14
Principal Accountant Fees and Services
16
     
PART IV
 
16
Item 15
Exhibits and Financial Statement Schedules
16
SIGNATURES
17

Explanatory Note:

This report is being amended to remove the audit report of Davis Accounting, P.C.  We subsequently learned from the SEC that Davis Accounting, P.C.  had not been licensed in the state of Utah when he originally issued the 2008 report.  The columns of the financial statements will be marked as “Unaudited. This report will be amended when the financial statements of the Company have been reaudited by an auditor that is duly licensed and in good standing, and is registered with the PCAOB.
 
 
2

 
 
PART I

Item 1.  Business.

As used in this Annual Report on Form 10-K (this “Report”), references to the “Company,” the “Registrant,” “we,” “our,” “us,” or “Cardio Vascular” refer to Cardio Vascular Medical Device Corp., unless the context otherwise indicates .

Forward-Looking Statements

This Report contains forward-looking statements. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under “Liquidity and Capital Resources.” We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.

Corporate Background

We were incorporated under the laws of the State of Delaware on April 26, 2007. We intend to engage in the manufacturing and distribution of a new and improved maneuverable-coiled guidewire. We are a development stage company. We have not generated any revenue to date and our operations have been limited to organizational, start-up, and fund raising activities. We currently have no employees other than our officers, who are also our Directors.

During the period from April 26, 2007, through December 31, 2008, the Company was incorporated, completed the assignment of a patent pertaining to a maneuverable coiled guidewire, issued common stock for stock subscription agreements, and commenced a capital formation activity to affect a Registration Statement on Form SB-2 with the SEC to raise capital of up to $105,000 from a self-underwritten offering of 14,000,000 (post forward stock split)   shares of newly issued common stock in the public markets.  The Registration Statement on Form SB-2 was filed with the SEC on August 28, 2007, and declared effective on September 17, 2007.  On December 6, 2007, the Company completed the offering of its registered common stock

 
3

 
 
On December 19, 2008, Cardio Vascular Medical Device Corp. implemented a 1:4 stock dividend payment of its issued and outstanding shares of common stock. As a result of the dividend payment the issued and outstanding shares of common stock of the Company increased from 13,525,000 shares to 54,100,000 shares.
 
Our principal offices are located at 12 Shaar Hagai Street Haifa, Israel 34554. Our telephone number is 011-972-544-982397

Business Description

We intend to engage in the manufacturing and distribution of a new and improved maneuverable-coiled guidewire. We own the technology and patent for a new and improved maneuverable-coiled guidewire. Such patent, entitled the “Maneuverable-Coiled Guidewire,” was approved and granted by the United States Patent and Trademark Office on November 28, 2006, and was assigned the United States Patent No. 7,141,024. The inventor of the technology covered by such patent was Benny Gaber. The patent and all other intellectual property rights relating to the technology were acquired by us on May 28, 2007, in exchange for future royalties to be paid in the amount of one-half percent from revenues derived from the sale and/or licensing and/or manufacturing of the related patent. On such a date, we entered into a Patent Transfer and Sale Agreement with Benny Gaber, our President and Director, pursuant to which Mr. Gaber assigned to us all of his rights, title, and interest in the patent and other intellectual property rights related thereto. The assignment was recorded with the United States Patent and Trademark Office on June 5, 2007.

The invention is characterized by a maneuverable-coiled guidewire. A guidewire is a slender flexible metal wire with a very soft tip (usually made of a coil) that can be bent prior to insertion into the arteries during surgery. The surgeon, by twirling and manipulating it back and forth, tries to insert the tip into the desired branch when in a bifurcation. The invention is based on the “Buckling” theory in which the tip is bent according to the force applied to it. Our principal business plan is to develop a prototype and then manufacture and market the product and / or seek third party entities interested in licensing the rights to manufacture our product. We have not yet approached or spoken with any such potential partners or licensees.

Once a valid prototype is working, the Company will apply for an IRB (an approval by the Helsinki Committee) to start conducting trials in medical clinics and/or hospitals. Based on the results of these trials, the Company, in conjunction with the third party manufacturers will apply for FDA approval (501k). Once FDA approval is received, the Company will seek to license the related technology to medical companies, strategic partners and/or manufacture the products for medical clinics and/or hospitals.

Third-Party Manufacturers

We will rely on third parties to develop a prototype and to work with us to manufacture the product. If our manufacturing and distribution agreements are not satisfactory, we may not be able to develop or commercialize our device as planned. In addition, we may not be able to contract with third parties to manufacture our device in an economical manner. Furthermore, third-party manufacturers may not adequately perform their obligations, which may impair our competitive position. If a manufacturer fails to perform, we could experience significant time delays or we may be unable to commercialize or continue to market our maneuverable-coiled guidewire device.
 
 
4

 
 
Intellectual Property

On May 28, 2007, we acquired from Mr. Benny Gaber, the original patent owner, all rights, title, and interest in, including a patent, for a maneuverable-coiled guidewire . The assignment was recorded in the United States Patent and Trademark Office on June 5, 2007.

Competition

There are several companies in the guidewire field, including major companies such as J&J, Boston Scientific, Cook Medical, Medtronic, Inc., and Bard. Such companies offer a variety of products that are specifically related for the usage of a guidewire. The total number of guidewires in use today worldwide is estimated at more than 4,500,000 annually. We are not aware of any other company that has developed, manufactured, and/or marketed a device of a similar nature based on the “Buckling” theory in which the tip is bent according to the force applied to it, whereby the time to reach the site is diminished. Its unique design will enable the neurosurgeon to save time and reach the desired lesion in the heart and even the brain arteries. Our solution provides an innovative steerable guidewire to solve existing problems and introduce a new standard in stenting procedures.

Employees

Other than our current Directors and officers, Benny Gaber and Lavi Krasney, we have no other full time or part-time employees. If and when we develop the prototype for our maneuverable-coiled guidewire device and are able to begin manufacturing and marketing, we may need additional employees for such operations. We do not foresee any significant changes in the number of employees or consultants we will have over the next twelve months.

Item 1A.  Risk Factors

In addition to the risk factors described in our registration statement on Form SB-2, as filed with the Securities and Exchange Commission, and although smaller reporting companies are not required to provide disclosure pursuant to this Item, your attention is directed to the following risk factor that relates to our business.

We do not have sufficient cash to fund our operating expenses for the next twelve months, and plan to seek funding through the sale of our common stock. Without significant improvement in the capital markets, we may not be able to sell our common stock and funding may not be available for continued operations.

There is not enough cash on hand to fund our administrative and other operating expenses or our proposed research and development program for the next twelve months. In addition, we will require substantial new capital following the development of a strategic marketing plan for bringing our product to global markets in order to actually market, arrange for the manufacturing of, and sell our product. Because we do not expect to have any cash flow from operations within the next twelve months, we will need to raise additional capital, which may be in the form of loans from current stockholders and/or from public and private equity offerings. Our ability to access capital will depend on our success in implementing our business plan. It will also depend upon the status of the capital markets at the time such capital is sought. Without significant improvement in the capital markets, sufficient capital may not be available and the implementation of our business plan could be delayed. If we are unable to raise additional funds in the future, we may have to cease all substantive operations. In such an event, it would not be likely that investors would obtain a profitable return on their investment or a return of their investment at all.
 
 
5

 
 
RISKS RELATING TO OUR COMPANY

Item 1B.  Unresolved Staff Comments

None

Item 2.  Properties

Our Principal executive offices are located at c/o Benny Gaber, 12 Shaar Hagai Haifa Israel 34554. This location is the home of the CEO, Director, and we have been allowed to operate out of such location at no cost to the Company. We believe that this space is adequate for our current and immediately foreseeable operating needs. We do not have any policies regarding investments in real estate, securities, or other forms of property.

Item 3.  Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders.

During the year ending December 31, 2008, there has not been any matter which was submitted to a vote of the Company’s shareholders through the solicitation of proxies or otherwise.

PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock has been eligible to be traded on the Over-The-Counter Bulletin Board since February 2008 under the ticker symbol CVSL. There has been no active trading in the Company’s securities, and there has been no bid or ask prices quoted.

Holders

As of March 18, 2009, there were 54,100,000 common shares issued and outstanding, which were held by 47 stockholders of record.

Dividends

We have never declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earnings to finance our operations and expansion. The payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.
 
 
6

 
 
Equity Compensation Plans

We do not have any equity compensation plans.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

We did not sell any unregistered securities during the fiscal year ended December 31, 2008.

Purchases of Equity Securities by the Small Business Issuer and Affiliated Purchasers

We have not repurchased any shares of our common stock during the fiscal year ended December 31, 2008.

Item 6.  Selected Financial Data.

A smaller reporting company is not required to provide the information required by this item.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements contained in this prospectus, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of Cardio Vascular Medical Device Corp. and the services we expect to offer and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements, because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

This Management’s Discussion and Analysis or Plan of Operations (“MD&A”) section of this Report discusses our results of operations, liquidity and financial condition, and certain factors that may affect our future results. You should read this MD&A in conjunction with our financial statements and accompanying notes included in this Report. This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those presented under “Risk Factors” on elsewhere in this Report.

Plan of Operation

Since our inception, we have not generated any revenues and do not expect to generate any revenues over the next 12 months. Our principal business objective for the next 12 months will be to successfully develop a working prototype. We will rely on third parties to develop a prototype and to work with us to manufacture the product. If our manufacturing and distribution agreements are not satisfactory, we may not be able to develop or commercialize our device as planned. In addition, we may not be able to contract with third parties to manufacture our device in an economical manner. Furthermore, third-party manufacturers may not adequately perform their obligations, which may impair our competitive position. If a manufacturer fails to perform, we could experience significant time delays or we may be unable to commercialize or continue to market our maneuverable-coiled guidewire device.
 
 
7

 
 
We are not aware of any material trend, event, or capital commitment, which would potentially adversely affect liquidity. In the event such a trend develops, we believe that we will have sufficient funds available to satisfy working capital needs through lines of credit and the funds expected from equity sales.

Recently issued accounting pronouncements

In March 2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement 133” (“SFAS No. 161”).  SFAS No. 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how:  (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” ; and (c) derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  Specifically, SFAS No. 161 requires:

 
Disclosure of the objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation;
 
Disclosure of the fair values of derivative instruments and their gains and losses in a tabular format;
 
Disclosure of information about credit-risk-related contingent features; and
 
Cross-reference from the derivative footnote to other footnotes in which derivative-related information is disclosed.

SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008.  Earlier application is encouraged.  The management of the Company does not expect the adoption of this pronouncement to have a material impact on its financial statements.

On May 9, 2008, the FASB issued FASB Statement No. 162, “ The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (“GAAP”) for nongovernmental entities.

Prior to the issuance of SFAS No. 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (“AICPA”) Statement on Auditing Standards (“SAS”) No. 69, “ The Meaning of Present Fairly in Conformity with Generally Accept Accounting Principles.”   SAS No. 69 has been criticized because it is directed to the auditor rather than the entity.  SFAS No. 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity (not the auditor) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.

The sources of accounting principles that are generally accepted are categorized in descending order as follows:

 
a)
FASB Statements of Financial Accounting Standards and Interpretations, FASB Statement 133 Implementation Issues, FASB Staff Positions, and American Institute of Certified Public Accountants (AICPA) Accounting Research Bulletins and Accounting Principles Board Opinions that are not superseded by actions of the FASB.
 
 
8

 

 
b)
FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position.

 
c)
AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the FASB, consensus positions of the FASB Emerging Issues Task Force (EITF), and the Topics discussed in Appendix D of EITF Abstracts (EITF D-Topics).

 
d)
Implementation guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB, and practices that are widely recognized and prevalent either generally or in the industry.

SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendment to its authoritative literature. It is only effective for nongovernmental entities; therefore, the GAAP hierarchy will remain in SAS 69 for state and local governmental entities and federal governmental entities. The management of the Company does not expect the adoption of this pronouncement to have a material impact on its financial statements.

On May 26, 2008, the FASB issued FASB Statement No. 163, “ Accounting for Financial Guarantee Insurance Contracts ” (“SFAS No. 163”).  SFAS No. 163 clarifies how FASB Statement No. 60, “ Accounting and Reporting by Insurance Enterprises ” (“SFAS No. 60”), applies to financial guarantee insurance contracts issued by insurance enterprises, including the recognition and measurement of premium revenue and claim liabilities.  It also requires expanded disclosures about financial guarantee insurance contracts.

The accounting and disclosure requirements of SFAS No. 163 are intended to improve the comparability and quality of information provided to users of financial statements by creating consistency.  Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under SFAS No. 60, “ Accounting and Reporting by Insurance Enterprises. ”  That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, “ Accounting for Contingencies ” (“SFAS No. 5”).  SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation.  It also requires disclosure about (a) the risk-management activities used by an insurance enterprise to evaluate credit deterioration in its insured financial obligations and (b) the insurance enterprise’s surveillance or watch list.

SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for disclosures about the insurance enterprise’s risk-management activities.  Disclosures about the insurance enterprise’s risk-management activities are effective the first period beginning after issuance of SFAS No. 163.  Except for those disclosures, earlier application is not permitted.  The management of the Company does not expect the adoption of this pronouncement to have a material impact on its financial statements.

Liquidity and Capital Resources

As of December 31, 2008, we had $1,022 in cash as compared to $2,250 in cash as of December 31, 2007. The Company does not believe that such funds will be sufficient to fund its expenses over the next 12 months. There can be no assurance that additional capital will be available to the Company. The Company currently has no agreements, arrangements, or understandings with any person to obtain funds through bank loans, lines of credit, or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.
 
 
9

 
 
Lack of Insurance

The Company currently has no insurance in force for its office facilities and operations and it cannot be certain that it can cover the risks associated with such lack of insurance or that it will be able to obtain and/or maintain insurance to cover these risks at economically feasible premiums.

Going Concern Consideration

The Company is a development stage company and has not commenced planned principal operations. The Company had no revenues and incurred a net loss of $41,386 for the year ended December 31, 2008, and a net loss of $98,121 for the period from April 26, 2007 (inception), through December 31, 2007. The Company has incurred a cumulative net lost of $139,507 from April 26, 2007 (inception) to December 31, 2008. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements contained herein for the period ending December 31, 2008, have been prepared on a “going concern” basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the reasons discussed herein and in the footnotes to our financial statements included herein, there is a significant risk that we will be unable to continue as a going concern.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

A smaller reporting company is not required to provide the information required by this item.
 
 
10

 
 
Item 8.  Financial Statements.

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007
UNAUDITED

Financial Statements
 
   
Balance Sheets as of December 31, 2008, and 2007
F-2
   
Statements of Operations for the Year Ended December 31, 2008, Period Ended December 31, 2007, and Cumulative from Inception
F-3
   
Statements of Stockholders’ (Deficit) for the Period from Inception through December 31, 2008
F-4
   
Statements of Cash Flows for the Year Ended December 31, 2008, Period Ended December 31, 2007, and Cumulative from Inception
F-5
   
Notes to Financial Statements December 31, 2008, and 2007
F-6

 
F-1

 
 
CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (NOTE 2)
AS OF DECEMBER 31, 2008, AND 2007
(UNAUDITED)

   
2008
   
2007
 
             
ASSETS
           
             
Current Assets:
           
Cash in bank
 
$
1,022
   
$
2,250
 
Total current assets
   
1,022
     
2,250
 
Other Assets:
               
Patent, net of accumulated amortization of $405 and $149 respectively
   
4,595
     
4,851
 
Total other assets
   
4,595
     
4,851
 
Total Assets
 
$
5,617
   
$
7,101
 
                 
LIABILITIES AND STOCKHOLDERS' (DEFICIT)                
                 
Current Liabilities:
               
Accrued liabilities
 
$
16,449
   
$
8,807
 
Due to related parties
   
32,260
     
-
 
Total current liabilities
   
48,709
     
8,807
 
Long-term Debt:
               
Royalty obligation payable to a Director and stockholder
   
5,000
     
5,000
 
Total long-term debt
   
5,000
     
5,000
 
Total liabilities
   
53,709
     
13,807
 
Commitments and Contingencies Stockholders' (Deficit):
               
Common stock, par value $0.0001 per share, 200,000,000 shares authorized; 54,100,000 shares issued and outstanding in 2008, and 2007
   
5,410
     
5,410
 
Additional paid-in capital
   
86,005
     
86,005
 
(Deficit) accumulated during the development stage
   
(139,507
)
   
(98,121
)
Total stockholders' (deficit)
   
(48,092
)
   
(6,706
)
Total Liabilities and Stockholders' (Deficit)
 
$
5,617
   
$
7,101
 

The accompanying notes to the unaudited financial statements are
an integral part of these balance sheets.
 
 
F-2

 
 
CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (NOTE 2)
FOR THE YEAR ENDED DECEMBER 31, 2008, THE PERIOD ENDED DECEMBER 31, 2007,
AND CUMULATIVE FROM INCEPTION (APRIL 26, 2007)
THROUGH DECEMBER 31, 2008
(UNAUDITED)

   
Year Ended
   
Period Ended
   
Cumulative
 
   
December 31,
   
December 31,
   
From
 
   
2008
   
2007
   
Inception
 
                   
Revenues
 
$
-
   
$
-
   
$
-
 
Expenses:
                       
General and administrative-
                       
Consulting fees
   
9,000
     
67,585
     
76,585
 
Audit and accounting fees
   
18,500
     
13,450
     
31,950
 
Transfer agent fees
   
2,455
     
6,828
     
9,283
 
Legal fees
   
6,100
     
2,390
     
8,490
 
SEC and other filing fees
   
3,652
     
2,602
     
6,254
 
Bank charges
   
783
     
2,615
     
3,398
 
Others
   
640
     
2,022
     
2,662
 
Consulting fees
   
-
     
525
     
525
 
Amortization
   
256
     
149
     
405
 
Total general and administrative expenses
   
41,386
     
98,166
     
139,552
 
(Loss) from Operations
   
(41,386
)
   
(98,166
)
   
(139,552
)
Other Income:
                       
Interest income
   
-
     
45
     
45
 
Total other income
   
-
     
45
     
45
 
Provision for income taxes
   
-
     
-
     
-
 
Net (Loss)
 
$
(41,386
)
 
$
(98,121
)
 
$
(139,507
)
(Loss) Per Common Share:
                       
(Loss) per common share - Basic and Diluted
 
$
(0.00
)
 
$
(0.00
)
       
Weighted Average Number of Common Shares Outstanding - Basic and Diluted
   
54,100,000
     
39,255,600
         

The accompanying notes to the unaudited financial statements are
an integral part of these statements.
 
 
F-3

 

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' (DEFICIT) (NOTE 2)
FOR THE PERIOD FROM INCEPTION (APRIL 26, 2007)
THROUGH DECEMBER 31, 2008
(UNAUDITED)

                     
(Deficit)
       
                     
Accumulated
       
               
Additional
   
During the
       
   
Common stock
   
Paid-in
   
Development
       
Description
 
Shares
   
Amount
   
Capital
   
Stage
   
Totals
 
Balance - April 26, 2007
   
-
   
$
-
   
$
-
   
$
-
   
$
-
 
Common stock issued for cash
   
40,000,000
     
4,000
     
(3,000
)
   
-
     
1,000
 
Common stock issued for cash
   
14,000,000
     
1,400
     
108,490
     
-
     
109,890
 
Deferred offering costs
   
-
     
-
     
(20,000
)
   
-
     
(20,000
)
Common stock issued for services rendered
   
100,000
     
10
     
515
     
-
     
525
 
Net (loss) for the period
   
-
     
-
     
-
     
(98,121
)
   
(98,121
)
Balance - December 31, 2007
   
54,100,000
     
5,410
     
86,005
     
(98,121
)
   
(6,706
)
Net (loss) for the period
   
-
     
-
     
-
     
(41,386
)
   
(41,386
)
Balance - December 31, 2008
   
54,100,000
     
5,410
     
86,005
     
(139,507
)
   
(48,092
)

The accompanying notes to the unaudited financial statements are
an integral part of this statement.
 
 
F-4

 

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (NOTE 2)
FOR THE  YEAR ENDED DECEMBER 31, 2008, THE PERIOD ENDED
DECEMBER 31, 2007, AND CUMULATIVE FROM INCEPTION (APRIL 26, 2007)
THROUGH DECEMBER 31, 2008
(UNAUDITED)

   
Year Ended
   
Period Ended
   
Cumulative
 
   
December 31,
   
December 31,
   
From
 
   
2008
   
2007
   
Inception
 
Operating Activities:
                 
Net (loss)
 
$
(41,386
)
 
$
(98,121
)
 
$
(139,507
)
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
                       
Issuance of common stock for services rendered
   
-
     
525
     
525
 
Amortization
   
256
     
149
     
405
 
Changes in net liabilities- Accrued liabilities
   
7,642
     
8,807
     
16,449
 
Net Cash (Used in) Operating Activities
   
(33,488
)
   
(88,640
)
   
(122,128
)
Investing Activities:
                       
Investing activities
   
-
     
-
     
-
 
Net Cash Provided by Investing Activities
   
-
     
-
     
-
 
Financing Activities:
                       
Proceeds from loans from related parties
   
32,260
     
39,000
     
71,260
 
Payments on loan from related party
   
-
     
(39,000
)
   
(39,000
)
Common stock issued for cash
   
-
     
110,890
     
110,890
 
Deferred offering costs
   
-
     
(20,000
)
   
(20,000
)
Net Cash Provided by Financing Activities
   
32,260
     
90,890
     
123,150
 
Net Increase (Decrease) in Cash
   
(1,228
)
   
2,250
     
1,022
 
Cash - Beginning of Period
   
2,250
     
-
     
-
 
Cash - End of Period
 
$
1,022
   
$
2,250
   
$
1,022
 
Supplemental Disclosure of Cash Flow Information:
                       
Cash paid during the period for:
                       
Interest
 
$
-
   
$
-
   
$
-
 
Income taxes
 
$
-
   
$
-
   
$
-
 

On May 28, 2007, the Company acquired by assignment a United States patent named Maneuverable Coiled Guidewire from a Director and stockholder. Under Staff Accounting Bulletin Topic 5G, " Transfer of Nonmonetary Assets by Promoters and Shareholders," the Company recorded the transaction as a royalty obligation payable at the Director and stockholder's historical cost basis, determined under accounting principles generally accepted in United States of America in the amount of $5,000.

On September 24, 2007, the Company issued 25,000 shares of common stock in payment of consulting fees of $525.

The accompanying notes to the unaudited financial statements are
an integral part of these statements.
 
 
F-5

 
 
CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007

(1)
Summary of Significant Accounting Policies

Basis of Presentation and Organization

Cardio Vascular Medical Device Corp. (the “Company” or “Cardio Vascular”) is a Delaware corporation in the development stage.  The Company was organized on April 12, 2007, and incorporated under the laws of the State of Delaware on April 26, 2007.  The business plan of the Company is to develop a medical device application utilizing a patent pertaining to a maneuverable coiled guidewire.  The patent’s intended use is to improve stenting procedures in the medical field and to advance the technology related to guidewire usage.  The Company also plans to develop a prototype of the patent application, and then manufacture and market the product and/or seek third-party entities interested in licensing the rights to manufacture and market the guidewire.  The accompanying financial statements of Cardio Vascular Medical Device Corp. were prepared from the accounts of the Company under the accrual basis of accounting.

In addition, in 2007, the Company commenced a capital formation activity to affect a Registration Statement on Form SB-2 with the Securities and Exchange Commission, and raise capital of up to $105,000 from a self-underwritten offering of 14,000,000 (post forward stock split)   shares of newly issued common stock in the public markets.  The Company filed the SB-2 Registration Statement with the SEC on August 28, 2007, and it was declared effective on September 17, 2007.  On December 6, 2007, the Company completed and closed the offering by selling 14,000,000 (post forward stock split) registered shares of its common stock, par value of $0.0001 per share, at an offering price of $0.00785 per share for proceeds of $109,890.

Cash and Cash Equivalents

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

Revenue Recognition

The Company is in the development stage and has yet to realize revenues from planned operations.  It plans to realize revenues from licensing, manufacturing, selling, research and development, and royalty activities.  Revenues will be recognized by major categories under the following policies:

For licensing activities, revenue from such agreements will be realized over the term and under the conditions of each specific license once all contract conditions have been met.  Payments for licensing fees are generally received at the time the license agreements are executed, unless other terms for delayed payment are documented and agreed to between the parties.

For manufacturing and selling activities, revenues will be realized when the products are delivered to customers and collection is reasonably assured.
 
 
F-6

 
 
CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007

For research and development activities, revenues from such agreements will be realized as contracted services are performed or when milestones are achieved, in accordance with the terms of specific agreements.  Advance payments for the use of technology where further services are to be provided or fees received on the signing of research agreements are recognized over the period of performance of the related activities.  Amounts received in advance of recognition will be considered as deferred revenues by the Company.

For royalty activities, revenues will be realized once performance requirements of the Company have been completed and collection is reasonably assured.

Development Costs

The Company is in the development stage, and primarily involved in the development of a prototype application of a patent.  When it has been determined that a prototype can be economically developed, the costs incurred to develop this prototype will be capitalized accordingly.  Development costs capitalized will be amortized over the estimated useful life of the product following attainment of commercial production or written-off to expense if the product or project is abandoned.

Patent

The Company obtained a United States patent from a Director and stockholder by assignment effective June 5, 2007.  The patent was originally granted on November 28, 2006.  Under Staff Accounting Bulletin Topic 5G, “ Transfers of Nonmonetary Assets by Promoters and Shareholders ,” the Company recorded the transaction as a royalty obligation payable at the Director and stockholder’s historical cost basis in the amount of $5,000.  The historical cost of obtaining the patent has been capitalized by the Company, and is being amortized over a period of approximately 19.5 years.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives at each balance sheet date.  The Company records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed.  For the periods ended December 31, 2008, and 2007, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

Loss Per Common Share

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period.  Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  There were no dilutive financial instruments issued or outstanding for the periods ended December 31, 2008, and 2007.
 
 
F-7

 
 
CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007

Deferred Offering Costs

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated. For the period ended December 31, 2007, the Company recorded $20,000 in deferred offering costs as an offset to additional paid-in capital.

Income Taxes

The Company accounts for income taxes pursuant to SFAS No. 109, “ Accounting for Income Taxes” (“SFAS No. 109”). Under SFAS No. 109, deferred tax assets and liabilities are determined based on temporary differences between the basis of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets.  The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period.  Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry forward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset.  Any change in the valuation allowance will be included in income in the year of the change in estimate.

Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods.  Considerable judgment is required in estimating fair value.  Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange.  As of December 31, 2008, and 2007, the carrying value of the Company’s financial instruments approximated fair value due to their short-term nature and maturity.

Estimates

The financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of December 31, 2008, and 2007, and expenses for the year ended December 31, 2008, the period ended December 31, 2007, and cumulative from inception. Actual results could differ from those estimates made by management.
 
 
F-8

 
 
CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007

(2)
Development Stage Activities and Going Concern

The Company is currently in the development stage, and its business plan addresses the development of a medical device application utilizing a patent pertaining to a maneuverable coiled guidewire. The Company also plans to develop a prototype of the patent application and then manufacture and market the product and/or seek third-party entities interested in licensing the rights to manufacture and market the guidewire.

During the period from April 26, 2007, through December 31, 2008, the Company was incorporated, completed the assignment of a patent pertaining to a maneuverable coiled guidewire, issued common stock for stock subscription agreements, and commenced a capital formation activity to affect a Registration Statement on Form SB-2 with the SEC to raise capital of up to $105,000 from a self-underwritten offering of 14,000,000 (post forward stock split) shares of newly issued common stock in the public markets. The Registration Statement on Form SB-2 was filed with the SEC on August 28, 2007, and declared effective on September 17, 2007. On December 6, 2007, the Company completed the offering of its registered common stock as explained in Note 4.

While management of the Company believes that the Company will be successful in its planned operating activities, there can be no assurance that the Company will be successful in the development of a prototype of its patent, commercialization of the prototype, sale of its planned product, technology, or services that will generate sufficient revenues to sustain the operations of the Company. The Company also intends to conduct additional capital formation activities through the issuance of its common stock and to commence operations.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred an operating loss since inception, had negative working capital as of December 31, 2008, and 2007, and the cash resources of the Company were insufficient to meet its planned business objectives. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying 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 possible inability of the Company to continue as a going concern.

(3)
Patent Rights

On May 28, 2007, the Company acquired by assignment 100 percent of all rights, title, and interest to a United States patent owned by a Director and stockholder of the Company in exchange for the Company’s commitment to payments of one half percent of all future revenues received from the exploitation of the patent as royalties to the Director and stockholder. The patent was originally issued by the United States Patent and Trademark Office on November 28, 2006. The assignment of the patent by a Director and stockholder of the Company to the Company was recorded with the United States Patent and Trademark Office on June 5, 2007. The historical cost of the patent to the Director and stockholder in the amount of $5,000 is reflected on the accompanying balance sheet of the Company as the cost of the patent and a long-term royalty obligation due to a Director and stockholder. The Company recorded amortization of the cost of the patent in the amounts of $256 and $149 for the periods ended December 31, 2008, and 2007, respectively.

 
F-9

 

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007
 
(4)
Common Stock

On May 10, 2007, the Company issued 40,000,000 (post forward stock split) shares of common stock valued at a price of $0.000025 per share for common stock subscriptions receivable of $1,000. On August 1, 2007, the Company received $1,000 from seven stockholders of the Company in satisfaction of common stock subscriptions receivable that were entered into on May 10, 2007.

On September 24, 2007, the Company issued 100,000 (post forward stock split) shares of common stock valued at $525 for transfer agent services performed.

In addition, in 2007, the Company commenced a capital formation activity to affect a Registration Statement on Form SB-2 with the SEC, and raise capital of up to $105,000 from a self-underwritten offering of 14,000,000 (post forward stock split) shares of newly issued common stock in the public markets. The Company filed the SB-2 Registration Statement with the SEC on August 28, 2007, and was declared effective on September 17, 2007. On December 6, 2007, the Company completed and closed the offering by selling 14,000,000 (post forward stock split) registered shares of its common stock, par value of $0.0001 per share, at an offering price of $0.00785 per share for proceeds of $109,890. Deferred offering costs of the capital formation activity amounted to $20,000.

On December 30, 2008, the Company declared a 4-for-1 forward stock split of its issued and outstanding common stock to the holders of record on that date. Such forward stock split was effective as of December 19, 2008. The accompanying financial statements and related notes thereto have been adjusted accordingly to reflect this forward stock split.

(5)
Income Taxes

The provision (benefit) for income taxes for the periods ended December 31, 2008, and 2007, was as follows (using a 23.7 percent effective Federal and state income tax rate):
 
   
2008
   
2007
 
             
Current Tax Provision:
           
Federal and state-
               
Taxable income
 
$
-
   
$
-
 
Total current tax provision
 
$
-
   
$
-
 
                 
Deferred Tax Provision:
               
Federal and state-
               
Loss carryforwards
 
$
(9,808
)
 
$
(23,255
)
Change in valuation allowance
   
9,808
     
23,255
 
Total deferred tax provision
 
$
-
   
$
-
 
 
 
F-10

 

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007
 
The Company had deferred income tax assets as of December 31, 2008, and 2007, as follows:
 
   
2008
   
2007
 
             
Loss carry forwards
 
$
(33,063
)
 
$
(23,255
)
Less - Valuation allowance
   
33,063
     
23,255
 
Total net deferred tax assets
 
$
-
   
$
-
 
 
As of December 31, 2008, the Company had net operating loss carryforwards for income tax reporting purposes of approximately $139,507 that may be offset against future taxable income. The net operating loss carryforwards expire in the year 2028. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs or a change in the nature of the business. Therefore, the amount available to offset future taxable income may be limited.

No tax benefit has been reported in the financial statements for the realization of loss carryforwards, as the Company believes there is high probability that the carry forwards will not be utilized in the foreseeable future. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount.

(6)
Related Party Transactions

On May 28, 2007, a Director and stockholder of the Company assigned to the Company, in exchange for the Company’s commitment to royalty payments to the Director and stockholder of one-half percent of all future revenues received from the exploitation of the maneuverable coiled guidewire patent. The historical cost of the patent to the Director and stockholder in the amount of $5,000 is reflected on the accompanying balance sheet of the Company as the cost of the patent and a long-term royalty obligation due to a Director and stockholder.

On August 1, 2007, the Company received $1,000 from seven stockholders of the Company in satisfaction of common stock subscriptions receivable that were entered into on May 10, 2007.

For the period from September 28, 2007, through November 11, 2007, the Company received various working capital loans from a Director and stockholder of the Company totaling $39,000. The loans were repaid by the Company on December 3, 2007.

For the period ended December 31, 2007, the Company paid to a Director and stockholder of the Company $35,055 for consulting services rendered.

During the year ended December 31, 2008, the Company received various working capital loans from a Director and stockholder of the Company totaling $18,280. As of December 31, 2008, the Company owed to a Director and stockholder $18,280. The loan is unsecured, non-interest bearing, and has no terms for repayment.

 
F-11

 

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007
 
During the year ended December 31, 2008, the Company received various working capital loans from a stockholder of the Company totaling $13,980. As of December 31, 2008, the Company owed to a stockholder $13,980. The loan is unsecured, non-interest bearing, and has no terms for repayment.

(7)
Commitments and Contingencies

The Company is committed to paying royalties to a Director and stockholder based on one-half percent of all future revenues received from the exploitation of a patent as described in Note 3 above.

On September 17, 2007, the Company entered into a Consulting Agreement with Island Capital Management, LLC dba Island Stock Transfer (“Island Stock Transfer”) for consulting and advisory services. Under the Agreement, the Company agreed to pay to Island Stock Transfer initial fees amounting to $2,525 plus transaction fees payable as follows: (1) $1,000 due at the time of execution of the Agreement, and $1,000 within 60 days; (2) the issuance of 25,000 shares of the Company’s common stock with a value of $525; and (3) transaction fees in accordance with the fee schedule for services of Island Stock Transfer. The Company also has the right under the Agreement to repurchase the 25,000 shares of common stock from Island Stock Transfer for a period of one year for $10,000. Prior to March 31, 2008, the Company paid the initial fee of $2,000 for consulting and advisory services, and issued 25,000 shares of common stock for such services with a value of $525.

(8)
Recent Accounting Pronouncements

In March 2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement 133” (“SFAS No. 161”). SFAS No. 161 enhances required disclosures regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”; and (c) derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Specifically, SFAS No. 161 requires:

 
Disclosure of the objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation;
 
Disclosure of the fair values of derivative instruments and their gains and losses in a tabular format;
 
Disclosure of information about credit-risk-related contingent features; and
 
Cross-reference from the derivative footnote to other footnotes in which derivative-related information is disclosed.

SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Earlier application is encouraged. The management of the Company does not expect the adoption of this pronouncement to have a material impact on its financial statements.

On May 9, 2008, the FASB issued FASB Statement No. 162, “ The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (“GAAP”) for nongovernmental entities.

 
F-12

 

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007
 
Prior to the issuance of SFAS No. 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (“AICPA”) Statement on Auditing Standards (“SAS”) No. 69, “ The Meaning of Present Fairly in Conformity with Generally Accept Accounting Principles.” SAS No. 69 has been criticized because it is directed to the auditor rather than the entity. SFAS No. 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity (not the auditor) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.

The sources of accounting principles that are generally accepted are categorized in descending order as follows:

 
a)
FASB Statements of Financial Accounting Standards and Interpretations, FASB Statement 133 Implementation Issues, FASB Staff Positions, and American Institute of Certified Public Accountants (AICPA) Accounting Research Bulletins and Accounting Principles Board Opinions that are not superseded by actions of the FASB.

 
b)
FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position.

 
c)
AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the FASB, consensus positions of the FASB Emerging Issues Task Force (EITF), and the Topics discussed in Appendix D of EITF Abstracts (EITF D-Topics).

 
d)
Implementation guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB, and practices that are widely recognized and prevalent either generally or in the industry.

SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendment to its authoritative literature. It is only effective for nongovernmental entities; therefore, the GAAP hierarchy will remain in SAS 69 for state and local governmental entities and federal governmental entities. The management of the Company does not expect the adoption of this pronouncement to have a material impact on its financial statements.

On May 26, 2008, the FASB issued FASB Statement No. 163, “ Accounting for Financial Guarantee Insurance Contracts ” (“SFAS No. 163”). SFAS No. 163 clarifies how FASB Statement No. 60, “ Accounting and Reporting by Insurance Enterprises ” (“SFAS No. 60”), applies to financial guarantee insurance contracts issued by insurance enterprises, including the recognition and measurement of premium revenue and claim liabilities. It also requires expanded disclosures about financial guarantee insurance contracts.

 
F-13

 

CARDIO VASCULAR MEDICAL DEVICE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
DECEMBER 31, 2008, AND 2007
 
The accounting and disclosure requirements of SFAS No. 163 are intended to improve the comparability and quality of information provided to users of financial statements by creating consistency. Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under SFAS No. 60, “ Accounting and Reporting by Insurance Enterprises. ” That diversity results in inconsistencies in the recognition and measurement of claim liabilities because of differing views about when a loss has been incurred under FASB Statement No. 5, “ Accounting for Contingencies ” (“SFAS No. 5”). SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also requires disclosure about (a) the risk-management activities used by an insurance enterprise to evaluate credit deterioration in its insured financial obligations and (b) the insurance enterprise’s surveillance or watch list.

SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for disclosures about the insurance enterprise’s risk-management activities. Disclosures about the insurance enterprise’s risk-management activities are effective the first period beginning after issuance of SFAS No. 163. Except for those disclosures, earlier application is not permitted. The management of the Company does not expect the adoption of this pronouncement to have a material impact on its financial statements.

 
F-14

 

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

This report is being amended to remove the audit report of Davis Accounting, P.C. We subsequently learned from the SEC that Davis Accounting, P.C. had not been licensed in the state of Utah when he originally issued the 2008 report. The columns of the financial statements will be marked as “Unaudited.” This report will be amended when the financial statements of the Company have been reaudited by an auditor that is duly licensed and in good standing, and is registered with the PCAOB.

Item 9A. Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2008. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2008.

There has not been any change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9A(T). Controls and Procedures.

Management's annual report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
 
 
·
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

 
·
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

 
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Attestation report of the registered public accounting firm

This report is being amended to remove the audit report of Davis Accounting, P.C. We subsequently learned from the SEC that Davis Accounting, P.C. had not been licensed in the state of Utah when he originally issued the 2008 report. The columns of the financial statements will be marked as “Unaudited. This report will be amended when the financial statements of the Company have been reaudited by an auditor that is duly licensed and in good standing, and is registered with the PCAOB.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.

 
11

 

Changes in internal control over financial reporting

During the year ended December 31, 2008, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

The following table sets forth certain information regarding the members of our Board of Directors and our executive officers:
 
Name
 
Age
 
Positions and Offices Held
         
Benny Gaber
 
61
 
President and Director
         
Lavi Krasney
  
40
  
Secretary, Treasurer, and Director
 
Our Directors hold office until the next annual meeting of our shareholders, or until their successors are duly elected and qualified. Set forth below is a summary description of the principal occupation and business experience of each of our Directors and executive officers for at least the last five years.
 
Benny Gaber has been our President and a member of our Board of Directors since our inception in April 26, 2007. Mr. Gaber is the Managing Director of Benny Gaber Engineering, Ltd, an advisory company for mechanical engineering serving companies such as PML, Xtent, Nanomotion, and Orthogon. Prior to that, he was a technical group leader for Elbit Systems and the Ministry of Defense (Israel). Mr. Gaber holds nine international medical patents and three non-medical patents. Mr. Gaber graduated with B.Sc. and M.Sc. in Mechanical Engineering from the Technion Institute of Technology in Haifa.
 
Lavi Krasney has been our Secretary, Treasurer, and Director since inception in April 26, 2007. Over the years, Mr. Krasney has served as an investment counselor, managing multi-million dollar portfolios for private clients, institutions, and corporations. Prior to that, he studied and worked in the management internship program at Bank Hapoalim, which is considered by many to be the most prestigious and sought-after management trainee program in Israel. Mr. Krasney also served in the Intelligence Corp. of the Israeli Army. Mr. Krasney graduated magna cum laude with a B.A. in Economics from the University of Haifa and completed his MBA in Finance at Tel Aviv University.

There are no familial relationships among any of our directors or officers. None of our directors or officers is a director in any other U.S. reporting companies. None of our directors or officers has been affiliated with any company that has filed for bankruptcy within the last five years. The Company is not aware of any proceedings to which any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the Company or any of the Company’s subsidiaries or has a material interest adverse to it or any of its subsidiaries.

 
12

 

Each director of the Company serves for a term of one year or until the successor is elected at the Company's annual shareholders' meeting and is qualified, subject to removal by the Company's shareholders. Each officer serves, at the pleasure of the Board of Directors, for a term of one year and until the successor is elected at the annual meeting of the Board of Directors and is qualified.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires officers and directors of the Company and persons who own more than ten percent of a registered class of the Company's equity securities to file reports of ownership and changes in their ownership with the Securities and Exchange Commission, and forward copies of such filings to the Company. We believe, based solely on our review of the copies of such forms, that during the fiscal year ended December 31, 2008, all reporting persons complied with all applicable Section 16(a) filing requirements.

Auditors
 
This report is being amended to remove the audit report of Davis Accounting, P.C. The columns of the financial statements will be marked as “Unaudited. This report will be amended when the financial statements of the Company have been reaudited by an auditor that is duly licensed and in good standing, and is registered with the PCAOB.
 
We do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers. We do not have a “financial expert” on the board or an audit committee or nominating committee.
 
Potential Conflicts of Interest
 
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company has only two directors, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors.
 
Involvement in Certain Legal Proceedings

There are no legal proceedings that have occurred within the past five years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one's participation in the securities or banking industries, or a finding of securities or commodities law violations.

Item 11. Executive Compensation.

Summary Compensation

For the period ended December 31, 2007, the Company had paid to a Director and stockholder of the Company $35,055 for consulting services rendered.

We have no employment agreements with any of our directors or executive officers. We have no pension, health, annuity, bonus, insurance, stock options, profit sharing or similar benefit plans.

 
13

 
 
Since our incorporation on April 26, 2007, no stock options or stock appreciation rights were granted to any of our directors or executive officers. We have no long-term equity incentive plans.

Outstanding Equity Awards

None of our directors or executive officers holds unexercised options, stock that has not vested, or equity incentive plan awards.

Compensation of Directors

Since our incorporation on April 26, 2007, no compensation has been paid to any of our directors in consideration for their services rendered in their capacity as directors.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table lists, as of March 18, 2009, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

The percentages below are calculated based on 54,100,000 shares of our common stock issued and outstanding as of March 18, 2009. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock. Unless otherwise indicated, the address of each person listed is c/o Cardio Vascular Medical Device Corp. 12 Shaar Hagai Street Haifa, Israel 34554

Name and Address of
Beneficial Owner
 
Number of Shares of Common
Stock Beneficially
Owned or Right to
Direct Vote (1)
   
Percent of
Common
Stock Beneficially
Owned or Right
to Direct Vote (2)
 
Lavi Krasney
   
4,000,000
     
7.4
%
Asher Zwebner
   
4,000,000
     
7.4
%
Zev Bronfeld
   
2,800,000
     
5.1
%
Emareld Enterprises (3)
   
2,800,000
     
5.1
%
Benny Gaber (4)
   
1,600,000
     
2.9
%
Carrigan Investments Limited (4)
   
22,400,000
     
41
%

 
14

 
 
 
(1)
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the "SEC") and generally includes voting or investment power with respect to securities. In accordance with SEC rules, shares of common stock issuable upon the exercise of options or warrants which are currently exercisable or which become exercisable within 60 days following the date of the information in this table are deemed to be beneficially owned by, and outstanding with respect to, the holder of such option or warrant. Except as indicated by footnote, and subject to community property laws where applicable, to our knowledge, each person listed is believed to have sole voting and investment power with respect to all shares of common stock owned by such person.

 
(2)
Based on a percentage of the total of 54,100,000 shares outstanding.

 
(3)
Beneficial owner of Emerdale Enterprises Ltd.

 
(4)
On July 9, 2008, Benny Gaber and Arie Orenstein, principal shareholders of the Company, entered into Purchase and Sale Agreements which provided, among other things, for the sale of an aggregate of 5,600,000 shares of common stock ( pre 1-4 forward split ) of the Company to Carrigan Investment Limited.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

On May 28, 2007, a Director and stockholder of the Company assigned to the Company, in exchange for the Company’s commitment to royalty payments to the Director and stockholder of one-half percent of all future revenues received from the exploitation of the maneuverable coiled guidewire patent. The historical cost of the patent to the Director and stockholder in the amount of $5,000 is reflected on the accompanying balance sheet of the Company as the cost of the patent and a long-term royalty obligation due to a Director and stockholder.

On August 1, 2007, the Company received $1,000 from seven stockholders of the Company in satisfaction of common stock subscriptions receivable that were entered into on May 10, 2007.

For the period from September 28, 2007, through November 11, 2007, the Company received various working capital loans from a Director and stockholder of the Company totaling $39,000. The loans were repaid by the Company on December 3, 2007.

For the period ended December 31, 2007, the Company had paid to a Director and stockholder of the Company $35,055 for consulting services rendered.

During the year ended December 31, 2008, the Company received various working capital loans from a Director and stockholder of the Company totaling $18,280. As of December 31, 2008, the Company owed to a Director and stockholder $18,280. The loan is unsecured, non-interest bearing, and has no terms for repayment.

During the year ended December 31, 2008, the Company received various working capital loans from a stockholder of the Company totaling $13,980. As of December 31, 2008, the Company owed to a stockholder $13,980. The loan is unsecured, non-interest bearing, and has no terms for repayment.

Director Independence

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.” We do not believe that any of our directors currently meet the definition of “independent” as promulgated by the rules and regulations of the American Stock Exchange.

 
15

 

Item 14. Principal Accounting Fees and Services.

This report is being amended to remove the audit report of Davis Accounting, P.C. We subsequently learned from the SEC that Davis Accounting, P.C. had not been licensed in the state of Utah when he originally issued the 2008 report. The columns of the financial statements will be marked as “Unaudited. This report will be amended when the financial statements of the Company have been reaudited by an auditor that is duly licensed, in good standing, and is registered with the PCAOB.

The pre-approved fees billed to the Company are set forth below:

   
For Fiscal Year Ended 
December 31, 2008
   
Period From April
26, 2007
(Inception) to
December 31, 2007
 
Audit Fees (see above)
 
$
14,000
   
$
18,000
 
                 
Tax Fees( paid to Alan Weinberg CPA )
 
$
1,000
   
$
1,000
 

As of December 31, 2008, the Company did not have a formal documented pre-approval policy for the fees of the principal accountant. The Company does not have an audit committee. The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.

PART IV

Item 15. Exhibits. Financial Statement Schedules.

Exhibit                                Description

EXHIBIT
   
NUMBER
 
DESCRIPTION
     
3.1
 
Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to Cardio Vascular’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 28, 2007).
     
3.2
 
By-laws of the Company (incorporated by reference to Exhibit 3.2 to Cardio Vascular’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 28, 2007).
     
3.3
 
Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit 3.3 to Cardio Vascular’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 28, 2007).
     
10.1
 
Patent Sale and Assignment, dated May 28, 2007, between the Company and Benny Gaber (incorporated by reference to Exhibit 10.1 to Cardio Vascular’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 28, 2007).
 
10.2
 
United States Patent Assignment form #7141024 (incorporated by reference to Exhibit 10.2 to Cardio Vascular’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on August 28, 2007).
     
10.3
 
Purchase and Sale Agreement dated July 9, 2008, between Benny Gaber and Carrigan Investments Limited (incorporated by reference to Exhibit 10.2 to Cardio Vascular’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2008).
     
10.4
 
Purchase and Sale Agreement dated July 9, 2008, between Arie Orenstein and Carrigan Investments Limited (incorporated by reference to Exhibit 10.3 to Cardio Vascular’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2008).
 
 
16

 

SIGNATURES

 In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
CARDIO VASCULAR MEDICAL DEVICE CORP.
         
Date: March 21, 2011
 
By: 
/s/ David F. Hostelley
 
   
Name: David F. Hostelley
   
Title: President, Chief Executive Officer,
   
Chairman, and Director (Principal Executive
   
Officer)
     
Date: March 21, 2011
 
By:
/s/ David F. Hostelley
 
   
Name:    David F. Hostelley
   
Title:      Chief Financial Officer and Secretary and Director
   
(Principal Financial and Accounting Officer )

 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Date: March 21, 2011
 
By: 
/s/ David F. Hostelley
 
   
Name: David F. Hostelley
   
Title: President, Chief Executive Officer,
   
Chairman, and Director (Principal Executive
   
Officer)
     
Date: March 21, 2011
 
By:
/s/ David F. Hostelley
 
   
Name:    David F. Hostelley
   
Title:      Treasurer and Secretary and Director
   
(Principal Financial and Accounting Officer)
 
 
17