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EX-32.1 - EXHIBIT 32.1 - CannaMED Enterprises, Inc.ex_107904.htm
EX-31.1 - EXHIBIT 31.1 - CannaMED Enterprises, Inc.ex_107903.htm
 

 



 

UNITED STATES

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, 2017

 

or

 

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

 

For the transition period from __________ to __________

 

Commission File Number 000-55308

 

CannaMED Enterprises, Inc.

formerly

Redwood Valley Acquisition Corporation

(Exact name of registrant issuer as specified in its charter)

 

Delaware

 

47-2072746

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

391 East Brown Street, Stroudsburg, PA

 

18301

(Address of principal executive offices)

 

(zip code)

 

Registrant’s phone number, including area code (949) 673-4510

  

Securities registered under Section 12(b) of the Exchange Act:

None.

 

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.0001 par value per share

  

(Title of Class)

 

Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 

Check whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes No

 

Check 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 No

 

Check whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files). Yes No

 

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller reporting company

(Do not check if a smaller reporting company) Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

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

 

As of March 30, 2018, there were no non-affiliate holders of common stock of the Company.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at March 30, 2018

Common Stock, $0.0001 par value

 

3,500,000

 



 

 

 

 

 

FORWARD-LOOKING STATEMENTS

 

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of CannaMED Enterprises, Inc. (the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

 

2

 

 

 

PART I

 

Item 1.

Description of Business.

 

CannaMED Enterprises, Inc. (“CannaMED” or “the Company”) was incorporated on September 25, 2014 under the laws of the state of Delaware under the name Redwood Valley Acquisition Corporation (“Redwood Valley “) to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company was 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. The Company’s objectives were to locate and negotiate with a business entity for the combination of that target company with Redwood Valley. This combination would 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.

 

During the period covered by this report, the Company located such a target and began the process to effect a change in control. On August 24, 2015, the following events occurred which resulted in a change of control of the Company:

 

 

1.

The officers and directors of Redwood Valley, James Cassidy and James McKillop, entered into a Share Purchase Agreement (the “SPA”) pursuant to which they entered into an agreement to sell an aggregate of 19,500,000 shares of their shares of the Company’s common stock to Mikhail Artamonov, at an aggregate purchase price of $75,000. These shares represented 98% of the Company’s issued and outstanding common stock. Effective upon the closing date of the Share Purchase Agreement, James Cassidy and James McKillop executed the agreement and owned 7% of shares of the Company’s stock, respectively, and Mikhail Artamonov, was the majority stockholder of the Company.

 

2.

The Company redeemed and cancelled an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $.0001 per share and cancelled such shares. The then current officers and directors resigned.

 

3.

Mikhail Artamonov was named President, Secretary and Chief Financial Officer of the Company. He now serves as the Chief Executive Officer, Secretary, Chief Financial Officer and Director of the Company.

 

On August 25, 2015, the Company issued 3,000,000 shares of its common stock at par representing 86% of the total outstanding 3,500,000 shares of common stock to Mikhail Artamonov, the sole officer and director of the Company. The company effected a change of control and changed its name to CannaMED Enterprises, Inc. With this change of direction, the Company intends to consult with or effect a business combination with a private company to develop as medical cannabis industry innovators, utilizing the Company’s team of healthcare and business professionals to start and/or source, research, evaluate and purchase products and companies. The Company will strive to develop environmentally friendly and economically sustainable business within the swiftly developing medical cannabis industry.

 

The Company envisions to initially enter into joint ventures or acquire partial ownership in:

 

 

a laboratory for medical cannabis testing, a pharmacy to perform research;

 

a pharmacy to perform research and development of the newest medical cannabis formulations;

 

a clinical practice to establish the network dispensaries;

 

a packaging company;

 

a research facility; and

 

real estate to establish the foundation for the growing network

 

Item 1A.

Risk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

3

 

 

 

Item 1B.

Unresolved Staff Comments.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 2.

Description of Property.

 

The Registrant neither rents nor owns any properties. The Registrant currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

 

Item 3.

Legal Proceedings.

 

The Company is not a party to any legal proceeding or litigation.

 

Item 4.

Mine Safety Disclosures.

 

Not Applicable.

 

PART II

 

Item 5.

Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

 

Common Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $.0001 per share (the “Common Stock”). The Common Stock is not listed on a publicly-traded market. As of March 30, 2018, there were three holders of record of the Common Stock.

 

Preferred Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 20,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”). The Company has not yet issued any of its Preferred Stock.

 

Dividend Policy

 

The Company has not declared or paid any cash dividends on its Common Stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the Board of Directors and will depend on the Company’s earnings, if any, its capital requirements and financial condition and such other factors as the Board of Directors may consider.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its Common Stock or Preferred Stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

 

Recent Sales of Unregistered Securities

 

There were no unregistered sales of equity securities during the year ended December 31, 2017.

 

Issuer Purchases of Equity Securities

 

None.

 

4

 

 

Item 6.

Selected Financial Data.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation.

 

The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to developing a unique business model.

 

We believe we will be able to meet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.

 

Liquidity and Capital Resources

 

As of December 31, 2017 and December 31, 2016, the Company had assets equal to $2,500 and $0, respectively. As of December 31, 2017 and December 31, 2016, the Company had liabilities equal to $41,584 and $13,026, respectively. For the twelve month periods ending December 31, 2017 and December 31, 2016, financing activities were made to the Company in the form of related party payables totaled $27,478 and $13,026, respectively. Additional contributions from shareholders made to the company during the twelve-month period ending December 31, 2016 totaled $14,412.

 

The following is a summary of the Company’s cash flows provided by (used in) operating, investing and financing activities for the years ended December 31, 2017 and December 31, 2016.

   

Fiscal Years Ended
December 31,

 
   

2017

   

2016

 
                 

Net Cash (Used in) Operating Activities

  $ (27,478

)

  $ (27,438

)

Net Cash (Used in) Investing Activities

    -       -  

Net Cash Provided by Financing Activities

  $ 27,478     $ 27,438  

Net Increase (Decrease) in Cash and Cash Equivalents

  $ -     $ -  

 

The Company has no assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

 

Results of Operations

 

The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from September 25, 2014 (Inception) to December 31, 2017.

 

For the fiscal year ended December 31, 2017, the Company had a net loss of $26,058, consisting of accounting, auditing, and expenses incurred in relation to the filing of the Company’s Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, and informational reports on Form 8-K.

 

5

 

 

 

For the fiscal year ended December 31, 2016, the Company had a net loss of $22,713, consisting of accounting, auditing, and expenses incurred in relation to the filing of the Company’s Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.

 

Off-Balance Sheet Arrangements

 

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Contractual Obligations

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 8.

Financial Statements and Supplementary Data.

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

None

 

Item 9A.

Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act 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 Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

In accordance with Exchange Act Rules 13a-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including the Company’s President, Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, the Company’s President, Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were ineffective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.

 

6

 

 

 

Evaluation of Internal Controls over Financial Reporting

 

The management of CannaMED Enterprises, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) of the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed 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. These internal controls include policies and procedures that:

 

 

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets;

 

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;

 

Provide reasonable assurance that receipts and expenditures are being made only in accordance with the authorization of our management and directors; and

 

Provide reasonable assurance that unauthorized acquisition, use or disposition of company assets that would have a material impact on financial statements will be prevented or detected on a timely basis.

 

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

 

Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) of 2013. Based on their evaluation, management concluded that internal control over financial reporting was ineffective as of December 31, 2017.

 

This annual report does not include a report from the Company’s registered public accounting firm regarding internal control over financial reporting due to the permanent exemption established by the Securities and Exchange Commission for public companies designated as small filers.

 

Changes in Internal Controls over Financial Reporting

 

There have been no significant changes in the Company’s internal controls over financial reporting during the year ended December 31, 2017 that have materially affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting.

 

Item 9B.

Other Information.

 

None.

 

PART III

 

Item 10.

Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.

 

(a) Identification of Directors and Executive Officers. The following table sets forth certain information regarding the Company’s directors and executive officers:

 

Name

 

Age

 

Position

 

 

 

 

 

Mikhail Artamonov

 

48

 

President, Secretary, Chief Financial Officer and Director

 

7

 

 

The Company’s officers and directors are elected annually for a one-year term or until their respective successors are duly elected and qualified or until their earlier resignation or removal.

 

(b) Significant Employees.

 

As of the date hereof, the Company has no significant employees.

 

(c) Family Relationships.

 

There are no family relationships among directors, executive officers, or persons nominated or chosen by the issuer to become directors or executive officers.

 

(d) Involvement in Certain Legal Proceedings.

 

There are no legal proceedings, as of the date hereof.

 

Compliance with Section 16(a) of the Exchange Act

 

Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

 

Based solely on the Company’s review of the copies of the forms received by it during the fiscal year ended December 31, 2017, and written representations that no other reports were required, the Company believes that no person who, at any time during such fiscal year, was a director, officer or beneficial owner of more than 10% of the Company’s common stock failed to comply with all Section 16(a) filing requirements during such fiscal years.

 

Code of Ethics

 

We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serve in these capacities.

 

Nominating Committee

 

We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

 

Audit Committee

 

The Board of Directors acts as the audit committee.

 

Item 11.

Executive Compensation.

 

The following table sets forth the cash compensation paid by the Company to its President and all other executive officers who earned annual compensation exceeding $100,000 for services rendered during the fiscal years ended December 31, 2017 and 2016.

 

Name and Position

 

Year

 

Other Compensation

Mikhail Artamonov,

 

2016

 

None

President, Secretary, Chief Financial Officer and Director

 

& 201

 

 

 

8

 

 

Director Compensation

 

We do not currently pay any cash fees to our directors, nor do we pay directors’ expenses in attending board meetings.

 

Employment Agreements

 

The Company is not a party to any employment agreements.

 

Item 12.

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

 

(a) The following tables set forth certain information as of March 30, 2018, regarding (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director, nominee and executive officer of the Company and (iii) all officers and directors as a group.

 

Name and Address

 

Amount

and Nature

of
Beneficial

Ownership

   

Percentage
of Class

 

Mikhail Artamonov

    3,000,000 (1)      86

%

                 

James Cassidy

    250,000       7

%

                 

James McKillop

    250,000       7

%

 

(1)

Mikhail Artamonov serves as the sole officer and director of the Company.

 

(b) The Company currently has not authorized any compensation plans or individual compensation arrangements.

 

Item 13.

Certain Relationships and Related Transactions.

 

Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.

 

Item 14.

Principal Accounting Fees and Services.

 

Audit Fees

 

The aggregate fees billed to the Company, for professional services rendered for the audit of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-Q or annual reports on 10-K, or services that are normally provided in connection with statutory and regulatory filings, were $3,838 for the fiscal year ended December 31, 2017 and $5,280 for the fiscal year ended December 31, 2016.

 

Audit-Related Fees

 

There were no fees billed to the Company for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements for the fiscal years ended December 31, 2017 and December 31, 2016.

 

Tax Fees

 

There were no fees billed to the Company for professional services for tax compliance, tax advice, and tax planning for the fiscal years ended December 31, 2017 and December 31, 2016.

 

Audit Committee’s Pre-Approval Process

 

The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.

 

9

 

 

 

Item 15.

Exhibits, Financial Statement Schedules.

 

(a) We set forth below a list of our audited financial statements included in Item 8 of this annual report on Form 10-K.

 

Statement

 

Page*

 

 

 

Report of Independent Registered Public Accounting Firm

 

F-1

 

 

 

Balance Sheets at December 31, 2017 and 2016

 

F-2

 

 

 

Statements of Operations for the Years Ended December 31, 2017 and December 31, 2016

 

F-3

 

 

 

Statements of Changes in Stockholders’ Deficit for the Years Ended December 31, 2017 and December 31, 2016 

 

F-4

 

 

 

Statements of Cash Flows for the Years Ended December 31, 2017 and December 31, 2016

 

F-5

 

 

 

Notes to Financial Statements

 

F-6

 


*Page F-1 begins on the page following this index.

 

10

 

  

 

Report of Independent Registered Public Accounting Firm

 

To the shareholders and the board of directors of Cannamed Enterprises, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Cannamed Enterprises, Inc. (the "Company") as of December 31, 2017 and 2016, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

/s/ BF Borgers CPA PC

BF Borgers CPA PC

 

We have served as the Company's auditor since 2017.

Lakewood, CO

March 30, 2018

 

F-1

 

 

 

CANNAMED ENTERPRISES, INC.

(Formerly Redwood Valley Acquisition Corporation)

BALANCE SHEETS

 

   

December 31,

 
   

2017

   

2016

 

ASSETS

               

CURRENT ASSETS

               

Prepaid expenses

  $ 2,500     $ -  

TOTAL ASSETS

  $ 2,500     $ -  
                 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

               

CURRENT LIABILITIES:

               

Accounts payable and accrued expenses

  $ 1,080     $ -  

Related party payable

    40,504       13,026  

TOTAL LIABILITIES

    41,584       13,026  
                 

STOCKHOLDERS’ DEFICIT:

               

Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued and outstanding as of December 31, 2017 and December 31, 2016, respectively

    -       -  

Common stock, $0.0001 par value, 100,000,000 shares authorized, 3,500,000 shares issued and outstanding as of December 31, 2017 and December 31, 2016

    350       350  

Discount on common stock

    (350

)

    (350

)

Additional paid in capital

    21,730       21,730  

Accumulated deficit

    (60,814

)

    (34,756

)

Total Stockholders’ Deficit

    (39,084

)

    (13,026

)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

  $ 2,500     $ -  

 

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

 

F-2

 

 

 

CANNAMED ENTERPRISES, INC.

(Formerly Redwood Valley Acquisition Corporation)

STATEMENTS OF OPERATIONS

 

   

Years Ended

December 31,

 
   

2017

   

2016

 
                 

REVENUES

  $ -     $ -  

COST OF REVENUES

    -       -  

GROSS PROFIT

    -       -  

Operating expenses

    26,058       22,713  

TOTAL OPERATING EXPENSES

    (26,058

)

    (22,713  
                 

LOSS FROM OPERATIONS

    (26,058

)

    (22,713

)

LOSS BEFORE PROVISION FOR INCOME TAXES

    (26,058

)

    (22,713

)

Provision for income taxes

    -       -  
                 

NET LOSS

  $ (26,058

)

  $ (22,713

)

NET LOSS PER SHARE OF COMMON STOCK - Basic and diluted

  $ (0.01 )   $ (0.01 )

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and diluted

    3,500,000       3,500,000  

 

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

 

F-3

 

 

 

CANNAMED ENTERPRISES, INC.

(Formerly Redwood Valley Acquisition Corporation)

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

 

                           

Discount

                 
                           

On

                 
   

Common Stock

           

Common

   

Accumulated

   

Stockholder’s

 
   

Shares

   

Amount

   

APIC

   

Stock

   

Deficit

   

Equity

 

Balance, 12/31/2015

    3,500,000     $ 350     $ 7,318     $ (350

)

  $ (12,043

)

  $ (4,725

)

                                                 

Contribution from shareholders

                    14,412                       14,412  

Net loss

    -       -       -       -       (22,713

)

    (22,713

)

Balance, 12/31/2016

    3,500,000     $ 350     $ 21,730     $ (350

)

  $ (34,756

)

  $ (13,026

)

                                                 

Net loss

    -       -       -       -       (26,058

)

    (26,058

)

Balance, 12/31/2017

    3,500,000     $ 350     $ 21,730     $ (350

)

  $ (60,814

)

  $ (39,084

)

 

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

 

F-4

 

 

 

CANNAMED ENTERPRISES, INC.

(Formerly Redwood Valley Acquisition Corporation)

STATEMENTS OF CASH FLOWS

 

   

Years Ended

December 31,

 
   

2017

   

2016

 
                 

OPERATING ACTIVITIES:

               

Net loss

  $ (26,058

)

  $ (22,713

)

Changes in Operating Assets and Liabilities

               

Prepaid expenses

    (2,500 )        

Accrued liabilities

    1,080       (4,725

)

Net cash used in operating activities

    (27,478

)

    (27,438

)

                 

INVESTING ACTIVITIES:

    -       -  

Net cash used in investing activities

    -       -  
                 

FINANCING ACTIVITIES:

               

Proceeds from related party payable

    27,478       13,026  

Proceeds from stockholders’ contribution

    -       14,412  

Net cash provided by financing activities

    27,478       27,438  

Net increase (decrease) in cash

    -       -  

Cash at beginning of period

    -       -  

Cash at end of period

  $ -       -  
                 

Supplemental disclosure of cash flow information:

               

Cash paid for interest

  $ -     $ -  

Cash paid for income tax

  $ -     $ -  

 

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

 

F-5

 

 

CANNAMED ENTERPRISES, INC.

(Formerly Redwood Valley Acquisition Corporation)

NOTES TO FINANCIAL STATEMENTS

 

 
 

NOTE 1 – BASIS OF PRESENTATION AND ORGANIZATION

 

Nature of Operations and Background

 

CannaMED Enterprises, Inc. (“CannaMED” or “the Company”) was incorporated on September 25, 2014 under the laws of the state of Delaware under the name Redwood Valley Acquisition Corporation (“Redwood Valley “) to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company was 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. The Company’s objectives were to locate and negotiate with a business entity for the combination of that target company with Redwood Valley. This combination would 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.

 

During the period covered by this report, the Company located such a target and began the process to effect a change in control. On August 24, 2015, the following events occurred which resulted in a change of control of the Company:

 

 

1.

The officers and directors of Redwood Valley, James Cassidy and James McKillop, entered into a Share Purchase Agreement (the “SPA”) pursuant to which they entered into an agreement to sell an aggregate of 19,500,000 shares of their shares of the Company’s common stock to Mikhail Artamonov, at an aggregate purchase price of $75,000. These shares represented 98% of the Company’s issued and outstanding common stock. Effective upon the closing date of the Share Purchase Agreement, James Cassidy and James McKillop executed the agreement and owned 7% of shares of the Company’s stock, respectively, and Mikhail Artamonov, was the majority stockholder of the Company.

 

2.

The Company redeemed and cancelled an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $.0001 per share and cancelled such shares. The then current officers and directors resigned.

 

3.

Mikhail Artamonov was named President, Secretary and Chief Financial Officer of the Company. He now serves as the Chief Executive Officer, Secretary, Chief Financial Officer and Director of the Company.

 

On August 25, 2015, the Company issued 3,000,000 shares of its common stock at par representing 86% of the total outstanding 3,500,000 shares of common stock to Mikhail Artamonov, the sole officer and director of the Company. The company effected a change of control and changed its name to CannaMED Enterprises, Inc. With this change of direction, the Company intends to consult with or effect a business combination with a private company to develop as medical cannabis industry innovators, utilizing the Company’s team of healthcare and business professionals to start and/or source, research, evaluate and purchase products and companies. The Company will strive to develop environmentally friendly and economically sustainable business within the swiftly developing medical cannabis industry.

 

The Company envisions to initially enter into joint ventures or acquire partial ownership in:

 

 

a laboratory for medical cannabis testing, a pharmacy to perform research;

 

a pharmacy to perform research and development of the newest medical cannabis formulations;

 

a clinical practice to establish the network dispensaries;

 

a packaging company;

 

a research facility; and

 

real estate to establish the foundation for the growing network

 

F-6

 

 

Basis of Presentation

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany accounts and transactions have been eliminated.

 

Use of Estimates

 

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

 

Income Taxes

 

CannaMED accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

 

ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

 

Cash and Cash Equivalents

 

Cash and cash equivalents includes all highly liquid instruments with an original maturity of three months or less as of December 31, 2017. The Company did not have cash equivalents as of December 31, 2017 and December 31, 2016.

 

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 December 31, 2017 and December 31, 2016.

 

Fair Value of Financial Instruments

 

The Company adopted ASC 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

 

 

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

 

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

 

 

Level 3 inputs to the valuation methodology are unobservable and significant to the fair measurement.

 

The carrying value of cash, accounts payables and accrued expenses approximates their fair values due to their short-term maturities at December 31, 2017 and December 31, 2016.

 

F-7

 

 

Revenue Recognition

 

The Company will recognize revenue in accordance with ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery of product has met the criteria established in the arrangement or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. This occurs when the products or services are completed in accordance with the contracts we have with clients. In connection with our products and services arrangements, if we are paid in advance, these amounts will be classified as deferred revenue and amortized over the term of the agreement.

 

Net Loss Per Share

 

Basic net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share is computed by dividing the loss applicable to common shareholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Due to the Company’s losses in the periods presented, the Company currently has no dilutive securities and as such, basic and diluted loss per share are the same for such periods.

 

 

NOTE 2 – GOING CONCERN

 

CannaMED has not yet generated any revenue since inception to date and has sustained operating loss. As of December 31, 2017, the Company had working capital deficit of $39,084 and an accumulated deficit of $60,814. 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 financial statements 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 financial statements 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, loans from officers, 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

 

In March 2016, the FASB issued an amendment to the guidance on stock compensation. The amendment simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company is currently evaluating the impact this guidance will have on its financial statements, but anticipates that adoption of this guidance will reduce its effective tax rate.

 

In March 2016, the FASB issued an update to the guidance on revenue recognition. The update clarifies the implementation guidance on principal versus agent considerations, including how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements. In April 2016, the FASB issued another update to the guidance on revenue recognition. This update clarifies the implementation guidance on identifying performance obligations and licensing, while retaining the related principles for those areas. The amendments in these updates are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. The Company is currently evaluating the impact the revenue recognition guidance, including these updates, will have on its financial statements.

 

F-8

 

 

In February 2016, the FASB issued an amendment to the guidance on leases. The amendment improves transparency and comparability among companies by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on its financial statements.

 

There are no other recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows.

 

 

 

NOTE 4 – PREPAID EXPENSES

 

The Company had $2,500 and $0 in prepaid expenses as of December 31, 2017 and December 31, 2016, respectively. They originate from accounting fees which will be expensed over the next three months as services are rendered.

 

 

 

NOTE 5CURRENT LIABILITIES

 

Accrued Liabilities

The Company had $1,080 and $0 in accrued liabilities as of December 31, 2017 and December 31, 2016, respectively, which originate from unpaid fees due at the end of the period.

 

Related Party Payable

 

Total related party payables were $40,504 and $13,026, as of December 31, 2017 and December 31, 2016, respectively. Related party payables consist of bills paid by the Company’s Chief Executive Officer on behalf of the Company. This liability does not accrue interest and is payable on demand.

 

 

NOTE 6 – STOCKHOLDERS’ DEFICIT

 

Preferred Stock - The Company is authorized to issue 20,000,000 shares of preferred stock with a par value of $0.0001 per share. There were no preferred shares issued as of December 31, 2017 and 2016.

 

Common Stock - Common stock consists of $0.0001 par value, 100,000,000 shares authorized. As of December 31, 2017, there were 3,500,000 common shares issued and outstanding.

 

The current ownership structure is as follows: 

   

Common

Shares

   

Percent

 

Mikhail Artamonov

    3,000,000       86

%

James McKillop

    250,000       7

%

James Cassidy

    250,000       7

%

      3,500,000       100

%

 

 

NOTE 7 – CONTRIBUTION FROM SHAREHOLDER

 

Contributions were made to the company by its principal shareholder to pay for audit, accounting, and filing expenses totaling $-0- and $14,412 for the fiscal years ended December 31, 2017 and December 31, 2016, respectively. These contributions were booked to Additional Paid in Capital as they were not loans and will not be repaid.

 

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

Lease commitment

 

The Company had no lease commitments as of December 31, 2017 and 2016.

 

 

NOTE 9 – INCOME TAX

 

The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

 

F-9

 

 

The provision (benefit) for income taxes consists of the following for the years ended December 31, 2017 and 2016:

 

     

December 31,

 
     

2017

   

2016

 

Current

U.S.

  $ 100     $ 100  
                   

Deferred

U.S.

           

Total

  $     $  

 

A valuation allowance for the net deferred tax assets has been recorded as it is more likely than not that these benefits will not be realized through future operations.

 

Deferred tax assets consist of the following as of December 31, 2017 and 2016:

   

December 31,

 
   

2017

   

2016

 

Net operating loss carryforward

  $ (25,871

)

  $ (14,786

)

general business tax credit

           

Accrued expenses

           

Other

           
      (25,871

)

    (14,786

)

Valuation allowance

    25,871       14,786  

Total

  $     $  

 

As of December 31, 2017 and 2016, the Company had net operating loss carryforwards (“NOL”) for federal and state reporting purposes of approximately $25,871 and $14,786, respectively, which expire in various years through 2037. The Federal and state tax codes provide for restrictive limitations on the annual utilization of NOLs to offset taxable income when the stock ownership of a company significantly changes, as defined.

 

The income tax provision effective rate of 0% differs from that computed using the 31% federal income tax rate, a 2.7% federal benefit of state tax deduction, combined with an 8.84% California state income tax rate, for a blended rate of 42.5%. During the years ended December 31, 2017 and 2016, the valuation allowance increased by $11,085 and $9,662, respectively.

 

   

December 31,

 
   

2017

   

2016

 

Tax benefit at statutory federal rate

  $ (8,782

)

  $ (7,654

)

State taxes, net of federal tax benefit

    (2,303

)

    (2,008

)

Increase (decrease) in valuation allowance

    11,085       9,662  

Other

           

Permanent Items

           

General business tax credit

           

Total

  $     $  

 

F-10

 

 

 

(b) Index to Exhibits required by Item 601 of Regulation S-K.

 

Exhibit

 

Description

*3.1

 

 

Certificate of Incorporation

 

 

 

 

*3.2

 

 

By-laws

 

 

 

31.1

 

Certification of the Company’s Principal Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2017

 

 

 

32.1

 

Certification of the Company’s Principal Executive and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

 

 

 

101.INS 

 

XBRL Instance Document.

 

 

 

101.SCH 

 

XBRL Taxonomy Extension Schema Document.

 

 

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document.

 

 

 

101.DEF 

 

XBRL Taxonomy Extension Definition Linkbase Document

 

 

 

101.LAB 

 

XBRL Taxonomy Extension Label Linkbase Document

 

 

 

101.PRE 

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

 

   

* Filed as an exhibit to the Company’s Form 10-K, as filed with the Securities and Exchange Commission on March 22, 2016 and incorporated herein by this reference.

 

11

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) 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.

 

 

CANNAMED ENTERPRISES, INC.

 

 

 

Dated: March 30, 2018

By:

/s/ Mikhail J. Artamonov

 

 

Mikhail J. Artamonov

 

 

President and Director

 

 

Principal Executive Officer

 

 

Principal Financial Officer

 

 

Principal Accounting Officer

 

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

 

Title

 

Date

/s/ Mikhail J. Artamonov

 

President, Secretary, Chief

 

March 30, 2018

Mikhail J. Artamonov

 

Financial Officer and Sole Director

 

 

 

 

(Principal Executive Officer, Principal Financial

Officer and Principal Accounting Officer)

 

 

 

 

12