Cannonau Corp. - Quarter Report: 2021 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

EXCHANGE ACT

Commission File Number: 333-145876

CANNONAU CORP

(Exact name of registrant as specified in its charter)

Nevada		84-2870437
(State or other jurisdiction of incorporation or organization)		(IR.S. Employer Identification No.)

937 Old Seneca Turnpike Road
Skaneateles, NY		13252-9318
(Address of principal executive offices)		(Zip Code)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the 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

Indicate by check mark 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) ☒ Yes ☐ 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 ☒
	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 ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 241,377,179 shares of common stock as of December 1, 2021.

TABLE OF CONTENTS


PART I

Item 1	Financial Statements	4
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3	Quantitative and Qualitative Disclosures About Market Risks	12
Item 4	Controls and Procedures	12

PART II

Item 1	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3	Default Upon Senior Securities	15
Item 4	Mine Safety Disclosure	16
Item 5	Other Information	16
Item 6	Exhibits	15

SIGNATURES		16

PART 1 FINANCIAL STATEMENTS

CANNONAU CORP.

FINANCIAL STATEMENTS

FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2021

C O N T E N T S

Consolidated Balance Sheets (Unaudited)			5

Consolidated Statements of Operations (Unaudited)			6

Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited)			7

Consolidated Statements of Cash Flows (Unaudited)			8

Notes to the Financial Statements (Unaudited)			9

Cannonau Corp.

Consolidated Balance Sheets


		September 30, 2021			December 31, 2020
		(Unaudited)
Current Assets
Cash and cash equivalents	$	1,394		$	164
Accounts receivables		5,032			—
Inventory		19,174			19,174
Total current assets		25,600			19,338

TOTAL ASSET		25,600			19,338
Current Liabilities
Accounts payable and accrued liabilities		17,160			17,326
Due to related party		226,707			150,833
Total current liabilities		243,867			168,159
Stockholders' Deficit
Preferred stock authorized 10,000,000 shares, par value $.001, issued and outstanding 0 shares.
Common stock authorized 290,000,000 shares, par value $.001, issued and outstanding 241,377,179		241,377			241,377
Common stock issuable		27,000			27,000
Additional paid-in capital		3,136,382			3,136,382
Accumulated deficit		(3,623,026	)		(3,553,580	)
Total stockholders' deficit		(218,267	)		(148,821	)

Total liabilities and stockholders' deficit	$	25,600		$	19,338


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

Cannonau Corp.

Consolidated Statement of Operations

For the nine months ended September 30, 2021 and 2020

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020

Revenues	$	93		$	1,087		$	5,705		$	1,835
Cost of Sales		148			1,368			656			1,561
Gross Profit		(55	)		(281	)		5,049			274
Operating expenses:
General and administrative		1,763			12,116			26,703			23,244
Compensation		15,795			10,560			36,915			30,820
Professional fees		1,803			7,109			10,876			10,309
Total operating expenses		19,361			29,785			74,494			64,373
Other expenses (income)					—						—
Net Loss	$	(19,416	)	$	(30,066	)	$	(69,445	)	$	(64,099	)

Net loss per share (basic and diluted)	$	(0.00008	)	$	(0.16453	)	$	(0.00029	)	$	(0.00028	)

Weighted average shares outstanding		241,377,179			182,735			241,377,179			227,432,671




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

Cannonau Corp.

Consolidated Statement of Stockholders' Deficit

As of September 30, 2021 and 2020

(Unaudited)


	Common Stock				Additional Paid In Capital			Common Stock Issuable		Accumulated Deficit			Total

Balances, December 31, 2019		182,735				3,361,585		$	27,000	$	(3,467,047	)	$	(78,462	)
Net loss 1st Quarter		-		-		-			-		(21,064	)		(21,064	)
Net loss 2nd Quarter		-		-		-			-		(12,969	)		(12,969	)
Net loss 3rd Quarter		-		-		-			-		(30,066	)		(30,066	)
Conversion of debt		241,194,444		241,194		(225,202	)		—					15,992
Balances September 30, 2020		241,377,179	$	241,194	$	3,136,383		$	27,000	$	(3,531,146	)	$	(126,569	)

Balance, December 31, 2020		241,377,179	$	241,377	$	3,136,382		$	27,000	$	(3,553,580	)	$	(148,821	)
Net loss 1st Quarter		-		-		-			-		(30,893	)		(30,893	)
Net loss 2nd Quarter		-		-		-			-		(19,137	)		(19,137	)
Net loss 3rd Quarter		-		-		-			-		(19,416	)		(19,416	)
Balances September 30, 2021		241,377,179	$	241,377	$	3,136,382		$	27,000	$	(3,623,026	)	$	(218,267	)



The accompanying notes are an integral part of these unaudited consolodated financial statements

Cannonau Corp.
Consolidated Statement of Cash Flows
For the nine months ended September 30, 2021 and 2020
(Unaudited)


		2021			2020
Cash Flows from Operating Activities:
Net loss	$	(69,445	)	$	(64,099	)
Adjustments to reconcile net loss
Changes in operating assets and liabilities
Accounts receivables		(5,033	)
Inventory		—			(8,130	)
Accounts payable and accrued liabilities		(166	)		7,678
Net Cash used in Operating Activities		(74,644	)		(64,551	)
Cash flows from investing activities:
Net Cash Provided by (used in) Investing Activities		—			—
Cash Flows From financing Activities:
Proceeds from related party		75,875			71,559
Repurchase of common stock		—			(6,000	)
Cash proceeds from common stocks		—
Net Cash Provided by Financing Activities		75,875			65,559
Increase (decrease) in cash		1,231			1,008
Cash, beginning of year		164			70
Cash, end of year	$	1,394		$	1,078

Supplemental Disclosures:
Cash paid for interest	$	—		$	—
Cash paid for Taxes	$	—		$	—
Non-Cash financing activities
Shares issued to convert amounts due to related party				$	15,992


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

CANNONAU CORP.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 1. FORMATION AND BUSINESS OF THE COMPANY

Business Description

Cannonau Corp. (the “Company”) was incorporated under the laws of the State of Nevada on April 3, 2007 as Pacific Blue Energy Corp. On April 5, 2010, the Company acquired a 100% interest of Ship Ahoy LLC, a limited liability company in Arizona, in exchange for $300,000 and 1,000,000 common shares of the Company. This investment was subsequently abandoned by the Company. The Company is currently developing CBD based products. On August 22, 2019, the Company changed its' name to Cannonau Corp. to reflect its' focus on its new CBD based products.

NOTE 2. BASIS OF PRESENTATION AND GOING CONCERN

Basis of Presentation and Principles of Consolidation

These interim consolidated financial statements of the Company and its subsidiaries are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The results reported in the unaudited condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report for the year ended December 31, 2020.

Going Concern

The Company currently has limited operations. These unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business.

As reflected in the accompanying unaudited consolidated financial statements, the Company had an accumulated deficit of $3,623,027 at September 30, 2021 and had a net loss and net cash flow used in operating activities of $ 74,643 and $64,551 for the nine months ended September 30, 2021 and 2020, respectively. The Company has a limited operating history, and its continued growth is dependent upon the continuation of selling its products; hence generating revenues and obtaining additional financing to fund future obligations and pay liabilities arising from normal business operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital, implement its business plan, and generate significant revenues. There are no assurances that the Company will be successful in its efforts to generate significant revenues, maintain sufficient cash balance or report profitable operations or to continue as a going concern. The Company plans on raising capital through the sale of equity or debt instruments to implement its business plan. However, there is no assurance these plans will be realized and that any additional financings will be available to the Company on satisfactory terms and conditions, if any.

The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

CANNONAU CORP.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES

Uses of estimates in the preparation of financial statements

The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America (“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 financial statements and the reported amounts of net revenue and expenses during each reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Revenue Recognition

During the nine months ended September 30, 2021 our revenue recognition policy was in accordance with ASC 605, “Revenue Recognition”, which requires the recognition of sales following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

Net loss per common share – basic and diluted

Authoritative guidance on Earnings per Share requires dual presentation of basic and diluted earnings or loss per share (“EPS”) for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution; diluted EPS reflects 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 earnings of the entity.

Basic loss per share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if dilutive securities and 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 earnings of the Company, unless the effect is to reduce a loss or increase earnings per share.

Stock-based compensation

In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), the Company measures the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services.

During the nine months ended September 30, 2021, and 2020, there were no stock based awards issued or outstanding.

Fair value of financial instruments

We value our financial assets and liabilities on a recurring basis using the fair value hierarchy established in Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures.

ASC 820 describes three levels of inputs that may be used to measure fair value, as follows:

CANNONAU CORP.

Notes to the Consolidated Financial Statements

(Unaudited)

Level 1 input, which include quoted prices in active markets for identical assets or liabilities.

Level 2 inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and

Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

Reclassification

Certain prior period amounts have been reclassified to conform to current presentation.

Income Taxes

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate is 21%.

NOTE 4. INVENTORIES

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first in first out method and net realizable value is the estimated selling price less costs of disposal in the ordinary course of business. The cost of inventories includes direct costs plus shipping and packaging materials.

NOTE 5. RELATED PARTY TRANSACTION

During the nine months ending September 30,2021 the company received a total of $75,875 from the legal custodian of the company for operating expenses and is treated as advances and short-term loans. As of September 30, 2021, and December 31, 2020, the total accumulated loans and advances were $226,707 and 150,833 respectively.

NOTE 6. STOCKHOLDERS’ (DEFICIENCY)

Preferred stock

The Company is authorized to issue 10,000,000 shares of Preferred Stock, par value $.001 per share. As of September 30, 2021 and December 30, 2020, no shares of Preferred Stock were issued and outstanding.

Common stock

The company is authorized to issue 290,000,000 shares, par value $.001 issue and outstanding 241,377,179 shares as of September 30,2020 and December 31, 2020.

There was no stock issuance, nor any transactions affecting outstanding stocks or paid in capital during the nine months ending September 30, 2021.

CANNONAU CORP.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 6. COMMITMENTS AND CONTINGENCIES

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.

In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision.

NOTE 7. SUBSEQUENT EVENTS

The company has evaluated subsequent events for recognition and disclosure through December 9, 2021 which is the date the financial statements were available to be issued. No other matters were identified affecting the accompanying financial statements and related disclosures.

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

Forward Looking Statements

This section and other parts of this Form 10-Q quarterly report includes "forward-looking statements", that involves risks and uncertainties. All statements other than statements of historical facts, included in this Form 10-Q that address activities, events, or developments that we expect or anticipate will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, references to future success, reference to intentions as to future matters, and other such matters are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors that we believe are appropriate in the circumstances. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks, uncertainties, and other factors, many of which are beyond our control.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results.

Overview

Cannonau Corp. (the "Company", "we", or "us") was incorporated under the laws of the State of Nevada on April 3, 2007.

Certain statements contained below are forward-looking statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Our auditors have issued a going concern opinion in the financial statements for the year ended December 31, 2020.

RESULTS OF OPERATIOMS

Working Capital

	September 30,				December 31,
	2021				2020

Current Assets			$ 25,600				$ 19,338
Current Liabilities			242,867				168,159
Working Capital (Deficit)		$	(217,267	)		$	(148,821	)

Cash Flows

	September 30,			September 30,
	2021			2020

Cash Flows from (used in) Operating Activities		$	(74,645)		$	(64,551)
Cash Flows from (used in) Financing Activities			75,875			65,559
Net Increase (decrease) in Cash During Period		$	1,230		$	1,008

Operating Revenues

We have generated revenues of $93 for the three months ended September 30, 2021 and $1,087 for the three months ended September 30, 2020.

We have generated revenues of $5,705 for the nine months ended September 30, 2021 and $1,835 for the nine months ended September 30, 2020.

Operating Expenses and Net Loss

Operating expenses for the three months ended September 30, 2021 were $19,361 compared with $29.785 for the three months ended September 30, 2020. Operating expenses for the three months ended September 30, 2021 consisted of general and administrative expenses of $1,763 compared to $12,116 for the three months ended September 30, 2021, compensation expense of $15,795 compared to $10,560 for the three months ended September 30, 2020, and professional fees of $1,803 compared to $7,109 for the three months ended September 30, 2020.

Operating expenses for the nine months ended September 30, 2021 were $74,495 compared with $64,373 for the nine months ended September 30, 2020. Operating expenses for the nine months ended September 30, 2021 consisted of general and administrative expenses of $26,704 compared to $23,224 for the nine months ended September 30, 2020; compensation expense of $36,915 for the nine months ended September 30, 2020 compared to $30,820 for the nine months ended September 30, 2020; and professional fees of $10.876 for the nine months ended September 30, 2021 compared to $10,309 for the nine months ended September 30, 2020.

During the three months ended September 30, 2021, the Company recorded a net loss of ($19,416) compared with net loss of $(30,066) for the three months ended September 30, 2020.

During the nine months ended September 30, 2021, the Company recorded a net loss of ($69,446) compared with net loss of $(64,099) for the nine months ended September 30, 2020.

Liquidity and Capital Resources

As of September 30, 2021, the Company's cash balance was $1,394 compared to cash balance of $164 at December 31, 2020. As of September 30, 2021, the Company's total assets were $25,600 compared to total assets of $19,338 as at December 31, 2020.

As of September 30, 2021, the Company had total liabilities of $243,867 compared with total liabilities of $168,159 as of December 31, 2020. Liabilities as of September 30, 2021 consisted of accounts payable and accrued liabilities of $17,160 compared to $17,236 as of December 31, 2020; and due to related party of $226,707 compared to $150,833 as of December 31, 2020.

Cashflow from Operating Activities

During the nine months ended September 30, 2021 the Company used ($74,645) of cash for operating activities compared to the use of ($64,551) of cash for operating activities during the nine months ended September 30, 2020.

Cashflow from Financing Activities

During the nine months ended September 30, 2021 the Company received cash from financing activities of $75,875 as compared to $65,559 for the nine months ended September 30, 2020.

Subsequent Developments

None.

Going Concern

We have not attained profitable operations and are dependent upon the continued financial support from our shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from our future business. These factors raise substantial doubt regarding our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have no significant 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 stockholders.

Future Financing

The Company will consider selling securities in the future to fund operations. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. A complete summary of these policies is included in the notes to our consolidated financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and rates. The Company's market risk arises primarily from the fact that the area in which we do business is highly competitive and constantly evolving. The market in which we do business is highly competitive and constantly evolving. We face competition from the larger and more established companies, from companies that have greater resources, including but not limited to, more money, and greater ability to expand their markets also cut into our potential customers. Many of our competitors have longer operating histories, significantly greater financial strength, nationwide advertising coverage and other resources that we do not have.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on their evaluation of our disclosure controls and procedures(as defined in Rule 13a-15e under the Securities Exchange Act of 1934 the "Exchange Act"), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this quarterly report on Form 10-Q such disclosure controls and procedures were not effective due to the lack of segregation of duties and lack of a formal review process that includes multiple levels of review to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms because of the identification of a material weakness in our internal control over financial reporting which we view as an integral part of our disclosure controls and procedures. The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by an external consultant with no oversight by a professional with accounting expertise. Our CEO/CFO does not possess accounting expertise and our company does not have an audit committee. This weakness is due to the company's lack of working capital to hire additional staff. To remedy this material weakness, we intend to engage another accountant to assist with financial reporting as soon as our finances will allow.

Changes in Internal Control over Financial Reporting

Except as noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None

ITEM 1A.

RISK FACTORS

Not Applicable

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4.

MINE SAFETY DISCLOSURE.

Not Applicable

ITEM 5.

OTHER INFORMATION

None

Item 6. EXHIBITS

Exhibit 31.1	Certification of the Principal Executive Officer Pursuant to Rule 13A-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2	Certification of the Principal Financial Officer Pursuant to Rule 13A-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1	Certification of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2	Certification of the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: December 9, 2021		Cannonau Corp.

		By: /s/Carmen J. Carbona
		Carmen J. Carbona, Chief Executive Officer and President


Dated: December 9, 2021		Cannonau Corp.
		By: /s/Carmen J. Carbona
		Carmen J. Carbona, Chief Financial Officer and President