SECURITIES AND EXCHANGE  COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934

For the quarterly period ended June 30, 2015

OR

[

]

TRANSITION REPORT PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934

For the transition period from   _________ to _________

(Exact name of registrant as specified in its charter)

(Registrant's telephone number, including area code)

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 of 1934 during the preceding 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller  reporting company" in Rule 12b-2 of the Exchange  Act.

 

Large accelerated filer [  ]	Accelerated Filer [  ]
Non-accelerated filer (do not check if a smaller reporting company) [  ]	Smaller reporting company [X]

 

Class	Outstanding Common Shares at August 12, 2015
Common Stock, par value $0.0001	20,500,000

 

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ELM VALLEY ACQUISITION CORPORATION 

CONDENSED BALANCE SHEETS

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ELM VALLEY ACQUISITION CORPORATION

UNAUDITED CONDENSED  STATEMENTS OF OPERATIONS

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ELM VALLEY ACQUISITION CORPORATION

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS

 

 

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ELM VALLEY ACQUISITION CORPORATION

Notes to Unaudited Condensed Financial Statements

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS

 

Elm Valley Acquisition Corporation ("Elm Valley" or "the Company") was incorporated on September 25, 2014 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected  mergers and acquisitions. The Company's operations to date have been limited to issuing shares to its original  shareholders. The Company will attempt to locate and negotiate with a business  entity for the combination of that target company with Elm Valley. The combination will normally  take the form of a merger, stock-for-stock exchange  or stock-for-assets exchange. In most instances the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal  Revenue Code of 1986, as amended.  No assurances can be given that the Company will be successful in locating  or negotiating with any target company. The Company has been formed to provide a method for a foreign or domestic  private company to become a reporting company with a class of securities registered under the Securities Exchange  Act of 1934.

BASIS OF PRESENTATION

The summary of significant accounting policies  presented below is designed to assist in understanding the Company's unaudited condensed financial statements.  Such unaudited condensed financial statements and accompanying notes are the representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting  principles generally accepted in the United States of America ("GAAP")  in all material  respects, and have been consistently applied in preparing the accompanying  unaudited  condensed  financial statements.

Certain information and footnote  disclosures normally  present in annual financial statements prepared  in accordance with accounting principles generally accepted  in the United States of America ("U.S. GAAP") were omitted pursuant  to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements and footnotes included  in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2015. The results for the three months ended June 30, 2015, are not necessarily indicative of the results to be expected  for the year ending December  31, 2015.

USE OF ESTIMATES

The preparation of unaudited condensed financial statements in conformity with GAAP requires  management to make estimates and assumptions that affect the reported  amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported  amounts of revenues  and expenses  during the reporting periods. Actual results could differ from those estimates. 

 

CASH

 

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of June 30, 2015 and December  31, 2014.

CONCENTRATION OF RISK

Financial instruments that potentially subject the  Company to concentrations of  credit  risk  consist  principally  of  cash.  The  Company  places  its  cash  with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of June 30, 2015.

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INCOME TAXES

Under ASC 740, "Income Taxes," deferred  tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying  amounts of existing assets and liabilities and their respective tax bases. Deferred  tax assets and liabilities are measured  using enacted tax rates expected  to apply to taxable income in the years in which those temporary differences are expected  to be recovered or settled.  Valuation allowances are established when it is more likely than not that some or all of the deferred  tax assets will not be realized. As of June 30, 2015 there were no deferred  taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

LOSS PER COMMON SHARE

Basic loss per common share excludes  dilution  and is computed  by dividing net loss by the weighted  average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution  that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted  in the issuance  of common stock that then shared in the loss of the entity.  As of June 30, 2015, there are no outstanding dilutive  securities.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows guidance  for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed  at fair value in the condensed financial statements (unaudited) on a recurring basis. Additionally, the Company adopted guidance  for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the condensed financial statements (unaudited) on a nonrecurring basis. The guidance  establishes a fair value hierarchy that prioritizes the inputs to valuation  techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to  measurements  involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 inputs are inputs other than quoted prices included  within Level 1 that are observable for the asset or liability, either directly  or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The carrying  amounts of financial assets such as cash approximate their fair values because of the short maturity  of these instruments.

NOTE 2 - GOING CONCERN

The Company has not yet generated any revenue since inception to date and has sustained operating losses during the period ended June 30, 2015.

The Company had working capital of $0 and an accumulated deficit of $712 as of June 30, 2015. The Company's continuation as a going concern is dependent on its ability to generate  sufficient cash flows from a business  combination or other operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.

The accompanying condensed financial statements (unaudited) have been prepared assuming  that the Company will continue  as a going concern;  however,  the above condition raises substantial doubt about the Company's ability to do so. The condensed financial statements (unaudited) do not include any adjustments to reflect the possible  future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue  as a going concern.

In order to maintain  its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity.  However,  the Company currently has no commitments from any third parties for the purchase  of its equity. If the Company is unable to acquire additional working capital,  it will be required  to significantly reduce its current level of operations.

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

On June 12, 2015, the Financial Accounting Standards Board ("FASB")  issued Accounting Standards Update (ASU) No. 2015-10-Technical Corrections and Improvements. The amendments in this Update cover a wide range of Topics in the Codification. The amendments in this Update represent changes to make minor corrections or minor improvements to the Codification that are not expected  to have a significant effect on current accounting practice  or create a significant administrative cost to most entities. This Accounting Standards Update is the final version of Proposed  Accounting Standards Update 2014-240-Technical Corrections and Improvements, which has been deleted. Transition guidance  varies based on the amendments in this Update. The amendments in this Update that require transition guidance  are effective for all entities  for fiscal years, and interim periods within those fiscal years, beginning after December  15, 2015. Early adoption  is permitted, including adoption  in an interim period. All other amendments will be effective upon the issuance  of this Update. Management is in the process of assessing the impact of this ASU on the Company's financial statements.

NOTE 4 - STOCKHOLDERS' EQUITY

On September 25, 2014 the Company issued 20,000,000 founders  common stock to two directors and officers  of which 19,500,000 were redeemed  on July 1, 2015.

 

On July 2, 2015, the Company issued 20,000,000 shares to four shareholders. 

 

The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of August 12, 2015, 20,500,000 shares of common stock and no preferred stock were issued and outstanding.

NOTE 5 - SUBSEQUENT EVENT

With the following events, the Company effected  a change in control:

On July 1, 2015, the Company redeemed  an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $.0001 per share for an aggregate redemption price of $1,950.

On July 1, 2015, James Cassidy resigned  as the Company's president, secretary and director  and James McKillop  resigned as the Registrant's vice president and director  and Daniel Walls was elected the sole director  of the Company and appointed to serve as its President, Secretary, and Treasurer.

On July 2, the Company issued shares of its common stock pursuant to Section 4(2) of the Securities Act of 1933 at par representing 97.5% the total outstanding 20,500,000 shares of common stock as follows:

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Elm Valley Acquisition Corporation was incorporated on September 25, 2014 under the laws of the State of Delaware  to engage in any lawful corporate undertaking, including, but not limited to, selected  mergers and acquisitions. Elm Valley Acquisition Corporation ("Elm Valley" or the "Company") is a blank check company and qualifies as an "emerging growth company"  as defined in the Jumpstart Our Business Startups  Act which became law in April, 2012.

Subsequent Event

Subsequent to the period covered by this Report, the Company effected a change in control with the following events:

On July 1, 2015, the Company redeemed  an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $.0001 per share for an aggregate redemption price of $1,950.

 

On July 1, 2015, James Cassidy resigned  as the Company's president, secretary and director  and James McKillop  resigned as the Registrant's vice president and director  and Daniel Walls was elected the sole director  of the Company and appointed to serve as its President, Secretary, and Treasurer.

On July 2, the COmpany issued shares of its common stock pursuant to Section 4(2) of the Securities Act of 1933 at par representing 97.5% the total outstanding 20,500,000 shares of common stock as follows:

With the issuance  of the stock and the redemption of 19,500,000 shares of stock , the Company effected  a change in its control and the new majority shareholder(s) elected new management of the Company.  The Company may develop its business  plan by future acquisitions or mergers but no agreements have been reached regarding any acquisition or other business  combination. If the Company makes any acquisitions, mergers or other business  combination, the Company will file a Form 8-K but until such time the Company remains a shell company.

The Company intends to consult with or effect a business  combination with a private company engaged in the cannabis/marijuana business.  The Company intends to assist in that company's expansion  in their growth and stability in the emerging  cannabis  industry  with a particular expertise in farming,  distribution and scaling operations.  The Company anticipates that this emerging  industry will provide large demand and a variety of growth opportunities. No agreements have been executed  and if and when such a business  combination is effected, the Company will file a Form 8-K.

Prior to the change in control,  the Company's operations were limited to issuing shares of common stock to its original  shareholders and filing a registration statement on Form 10 with the Securities and Exchange Commission pursuant  to the Securities Exchange  Act of 1934 as amended to register  its class of common stock.

Elm Valley has no operations nor does it currently engage in any business  activities generating revenues.  Elm Valley's  principal business  objective is to achieve a business  combination with the target company.

A combination will normally  take the form of a merger, stock-for-stock exchange  or stock-for-assets exchange.  In most instances the target company will wish to structure the business  combination to be within the definition of  a tax-free  reorganization under Section 351 or Section 368 of the Internal  Revenue Code of 1986, as amended.

 

No assurances can be given that Elm Valley will be successful in locating  or negotiating with any target company.

 

As of June 30, 2015 Elm Valley had not generated revenues  and had no income or cash flows from operations since inception.  For the six months ended June 30, 2015 Elm Valley had sustained net loss of $0, and had an accumulated deficit of $712.

 

The Company's independent auditors  have issued a report raising substantial doubt about the Company's ability to continue  as a going concern. At present,  the Company has no operations and the continuation of Elm Valley as a going concern is dependent upon financial support from its stockholders, its ability to obtain necessary equity financing to continue  operations and/or to successfully locate and negotiate with a business  entity for the combination of that target company with Elm Valley.

 

Prior to the change in control,  management paid all the expenses of Elm Valley with no expectation of repayment at any time.

 

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk. 

 

Information not required  to be filed by Smaller reporting companies.

 

ITEM 4.  Controls  and Procedures. 

 

Disclosures and Procedures

 

Pursuant  to Rules adopted by the Securities and Exchange  Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls  and procedures pursuant  to Exchange  Act Rules. This evaluation was done as of the end of the period covered by this report under the supervision and with the participation of the Company's then principal executive officer (who was also the principal financial officer).

 

Based upon that evaluation, he believes  that the Company's disclosure controls  and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required  to be disclosed by the Company in its periodic  reports is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls  and procedures include,  without limitation, controls  and procedures designed to ensure that information required  to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's  management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required  disclosure.

 

This Quarterly 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 Quarterly Report.

 

Changes in Internal  Controls

 

There was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation that occurred  during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal  control over financial reporting.

 

 

PART II -- OTHER INFORMATION`

 

ITEM 1.  LEGAL PROCEEDINGS

 

There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 

 

From inception (September 25, 2014), the Company has issued 20,000,000 common shares pursuant  to Section 4(2) of the Securities Act of 1933 for an aggregate purchase  price of $2,000 as folllows:

 

On September 25, 2014, the Company issued the following shares of its common stock:

On July 1, 2015, 19,500,000 of the then outstanding 20,000,000 shares were redeemed  pro rata from the two shareholders.

On July 2, 2015, the Company issued 20,000,000 shares of common stock at par pursuant  to Section 4(2) of the Securities Act of 1933 as follows:

ITEM 3. DEFAULTS  UPON SENIOR SECURITIES 

 

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY  HOLDERS 

 

Not applicable.

ITEM 5. OTHER INFORMATION

(a)        Not applicable.

(b)        Item 407(c)(3) of Regulation S-K:

During the quarter covered by this Report, there have not been any material  changes to the procedures by which security  holders may recommend nominees  to the Board of Directors.

ITEM 6. EXHIBITS

(a)                Exhibits

31    Certification of the Chief Executive Officer and Chief Financial  Officer  pursuant  to  Section  302  of the Sarbanes-Oxley Act of 2002

32    Certification of the Chief Executive Officer and Chief Financial  Officer  pursuant  to  Section  906  of the Sarbanes-Oxley Act of 2002

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SIGNATURES

Pursuant  to the requirements of the Securities Exchange  Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	ELM VALLEY ACQUISITION CORPORATION
Dated: August 14, 2015	By:	/s/ Daniel Walls
		Daniel Walls
		President, Chief Financial Officer