CCCP 10-Q
Crona Corp. (CCCP)
0UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For the quarterly period ended
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
7380 (Primary Standard Industrial Classification Number) |
EIN (IRS Employer Identification Number) |
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Street: City: ZIP: Country: +
(Address and telephone number of principal executive offices)
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| Securities registered under Section 12(b) of the Exchange Act: | ||
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| N/a | N/a | N/a |
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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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. (Check one):
Large accelerated filer ( )
Accelerated filer ( )
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 7(a)(2)(B) of the Securities Act. ( )
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ( )
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: common shares issued and outstanding as of November 9, 2022.
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Crona Corp.
QUARTERLY REPORT ON FORM 10-Q |
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| Table of Contents | ||
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PART I |
FINANCIAL INFORMATION: |
Page |
| Item 1. | Financial Statements | 3 |
| Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021 | 4 | |
| Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (Unaudited) | 5 | |
| Statements of Stockholders’ Deficit for the three and nine months ended September 30, 2022 and 2021 (Unaudited) | 6 | |
| Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (Unaudited) | 7 | |
| Notes to the Financial Statements | 8 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 15 |
| Item 4. | Controls and Procedures | 15 |
| PART II | OTHER INFORMATION: | |
| Item 1. | Legal Proceedings | 15 |
| Item 1A. | Risk Factors | 16 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 16 |
| Item 3. | Defaults Upon Senior Securities | 16 |
| Item 4. | Submission of Matters to a Vote of Securities Holders | 16 |
| Item 5. | Other Information | 16 |
| Item 6. | Exhibits | 16 |
| Signatures | 16 |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying interim financial statements of Crona Corp. (“the Company”, “we”, “us” or “our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.
The interim financial statements should be read in conjunction with the Company’s latest annual financial statements.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
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Crona Corp.
BALANCE SHEETS
September 30, 2022 and December 31, 2021
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September 30, 2022 (Unaudited) |
December 31, 2021 | |||
| ASSETS | ||||
| Current Assets | ||||
| Prepaid expenses | $ | $ | ||
| Total Current Assets | ||||
| Long-term Assets | ||||
| Software | ||||
| Website, net | ||||
| Total Long-term Assets | ||||
| Total Assets | $ | $ | ||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||
| Liabilities | ||||
| Current Liabilities | ||||
| Accounts payable | $ | $ | ||
| Related party advances | ||||
| Total Current Liabilities | ||||
| Total Liabilities | ||||
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Commitments and contingencies (Note 6)
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||||
| Stockholders’ Deficit | ||||
| Common stock, par value $; shares authorized, shares issued and outstanding | |
| ||
| Additional paid in capital | ||||
| Accumulated deficit | ( |
( | ||
| Total Stockholders’ Deficit | ( |
( | ||
| Total Liabilities and Stockholders’ Deficit | $ | $ |
See accompanying notes, which are an integral part of these unaudited financial statements
4
Crona Corp.
STATEMENTS OF OPERATIONS
Three and nine months ended September 30, 2022 and 2021 (UNAUDITED)
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Three months ended September 30, 2022 |
Three months ended September 30, 2021 |
Nine months ended September 30, 2022 |
Nine months ended September 30, 2021 | |||||||
| REVENUES | $ | $ | $ | $ | ||||||
| OPERATING EXPENSES | ||||||||||
| Professional fees | ||||||||||
| General and administrative expenses | ||||||||||
| Amortization expenses | ||||||||||
| TOTAL OPERATING EXPENSES | |
|||||||||
| LOSS FROM OPERATIONS | ( |
( |
( |
( | ||||||
| PROVISION FOR INCOME TAXES | ||||||||||
| NET LOSS | $ | ( |
$ | ( |
$ | ( |
$ | ( | ||
| NET LOSS PER SHARE: BASIC AND DILUTED | $ | ( |
$ | ( |
$ | ( |
$ | ( | ||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED |
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See accompanying notes, which are an integral part of these unaudited financial statements
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Crona Corp.
STATEMENTS OF STOCKHOLDERS’ DEFICIT
Three and nine months ended September 30, 2022 and 2021 (UNAUDITED)
| Common Stock | |||||
| Shares | Amount |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Equity (Deficit) | |
| For the nine months ended September 30, 2021 | |||||
| Balance, December 31, 2020 | $ |
$ |
$ ( |
$ ( | |
| Net loss | - | ( |
( | ||
| Balance, September 30, 2021 | 6,087,800 | $ 6,088 | $ 31,403 | $ (79,207) | $ (41,716) |
| For the three months ended September 30, 2021 | |||||
| Balance, June 30, 2021 | $ |
$ |
$ ( |
$ ( | |
| Net loss | - | ( |
( | ||
| Balance, September 30, 2021 | $ |
$ |
$ ( |
$ ( | |
| For the nine months ended September 30, 2022 | |||||
| Balance, December 31, 2021 | $ |
$ |
$ ( |
$ ( | |
| Net loss | - | ( |
( | ||
| Balance, September 30, 2022 | 6,087,800 | $ 6,088 | $ 31,403 | $ (108,207) | $ (70,805) |
| For the three months ended September 30, 2022 | |||||
| Balance, June 30, 2022 | $ |
$ |
$ ( |
$ ( | |
| Net loss | - | ( |
( | ||
| Balance, September 30, 2022 | $ |
$ |
$ ( |
$ ( | |
See accompanying notes, which are an integral part of these unaudited financial statements
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Crona Corp.
STATEMENTS OF CASH FLOWS
Nine months ended September 30, 2022 and 2021 (UNAUDITED)
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Nine Months ended September 30, 2022 |
Nine Months ended September 30, 2021 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net loss | $ | ( |
$ | ( |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Amortization expenses | ||||
| Changes in operating assets and liabilities: | ||||
| Prepaid expenses | ( |
|||
| Accounts payable | ( |
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| CASH FLOWS FROM OPERATING ACTIVITIES | ( |
( | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Related party advances | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| NET INCREASE (DECREASE) IN CASH | ||||
| Cash, beginning of period | ||||
| Cash, end of period | $ | $ | ||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
| Interest paid | $ | $ | ||
| Income taxes paid | $ | $ |
See accompanying notes, which are an integral part of these unaudited financial statements
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Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2022
The accompanying financial statements of Crona Corp. are unaudited, but in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the Company’s financial position, results of operations, and cash flows as of and for the dates and periods presented. The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.
These unaudited financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in the Company’s Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (the “Commission”) on March 31, 2022.
Note 1 – ORGANIZATION AND NATURE OF BUSINESS
Crona Corp. (“the Company”) was incorporated in the State of Nevada on October 6, 2016. The Company’s office is in Romania. Crona Corp. provides recording and music recognition services. We are developing an application that would easily and quickly identify your favorite music tracks thanks to unique music recognition algorithms.
Note 2 – GOING CONCERN
The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company generated no revenues for the nine months ended September 30, 2022. The Company currently has losses of $26,347 and $108,296 for the nine months ended September 30, 2022 and the period from inception (October 6, 2016) to September 30, 2022, respectively, and has not completed its efforts to establish a stabilized source of revenue sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements have been prepared in accordance with GAAP. The Company’s year-end is December 31.
Use of Estimates
The preparation of 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 financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
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Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2022
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. An entity must also disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract.
The contract between the Company and the customer is signed without specific quantity of service to be used from the date of signing. The revenue depends on the hours spent on the recording services. The rates of the specific services are set out in the contract. The Company’s revenues are recognized at a point-in-time as ownership of track, mix or master (when it is approved by the customer) is transferred at a distinct point in time per the terms of a contract. The Company shall not be liable for any failure to perform its obligations if such failure is due to circumstances beyond its reasonable control. Any liability of the Company shall be limited to the total of all amounts paid by the customer for services under the contract.
The Company computes income (loss) per share in accordance with ASC 260 “Earnings per share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of September 30, 2022, there were no potentially dilutive debt or equity instruments issued or outstanding.
Software Development Costs
In accordance with ASC 985-20 "Costs of software to be sold, leased, or marketed" the Company capitalizes software development costs once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized software represents development costs for external- use software. External-use software is defined as software to be sold, leased or marketed. The Company amortizes these costs over the estimated life of software. The software is still in development and no amortization expense has been recognized yet. Amortization will begin once development is complete.
Impairment of Long-Lived Assets
The Company reviews long-lived assets, including tangible assets and other intangible assets with definitive lives, for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 985 “Software”. ASC 985-20 requires the unamortized capitalized software costs be compared to the net realizable value of that product. The amount by which the unamortized capitalized software costs exceed the net realizable value of that asset shall be written off. There were no impairments recognized during the nine months ended September 30, 2022 and the year ended December 31, 2021.
Leases
The Company accounts for leases in accordance with Accounting Standards Update (“ASU”) No. 2016-02, “Leases”. Under this guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. The guidance permits companies to make an accounting policy election not to apply the recognition provisions of the guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company has elected not to apply the standard to short-term leases.
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Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2022
Recent Accounting Pronouncements
There have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30, 2022, that are of significance or potential significance to the Company.
Note 4 – RELATED PARTY TRANSACTIONS
As of September 30, 2022 and December 31, 2021, our sole director Andrei Gurduiala has advanced to the Company $102,072 and $56,458, respectively. This advance is unsecured, non-interest bearing and due on demand.
Note 5 – LONG TERM ASSETS
The Company amortizes software costs and website costs using the straight-line method over a period of three years.
As of September 30, 2022 and December 31,
2021, the software costs were $
As of September 30, 2022 and December 31,
2021, the website costs were $
Note 6 – COMMITMENTS AND CONTINGENCIES
In November 20, 2020, the Company has entered
into a new rental agreement for a $371 monthly fee, starting on December 1, 2020, for a period of one year. In January 2022, the Company
extended the lease agreement for a period of one year. The lease was terminated in July 2022. For the nine months ended September 30,
2022 and 2021 rent expense was $
From time-to-time, the Company is subject to various litigation and other claims in the normal course of business. The Company establishes liabilities in connection with legal actions that management deems to be probable and estimable. No amounts have been accrued in the financial statements with respect to any matters.
Note 7 – INCOME TAXES
The Company adheres to the provisions of uncertain tax positions as addressed in ASC 740 “Income Taxes” (“ASC 740”). As of September 30, 2022, the Company had net operating loss carry forwards of $22,742 that may be available to reduce future years’ taxable income in varying amounts through 2041. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
The valuation allowance at September 30, 2022 was $22,742. The net change in valuation allowance for the nine months ended September 30, 2022 was $5,533. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized.
The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of September 30, 2022. All tax years since inception remain open for examination by taxing authorities.
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Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2022
The provision for Federal income tax consists of the following:
| As of September 30, 2022 | As of December 31, 2021 | |||
| Non-current deferred tax assets: | ||||
| Net operating loss carry forward | $ | ( |
$ | ( |
| Valuation allowance | ||||
| Net deferred tax assets | $ | $ |
The actual tax benefit at the expected rate of 21% differs from the expected tax benefit for the periods as follows:
| As of September 30, 2022 | As of December 31, 2021 | |||
| Computed “expected” tax expense (benefit) | $ | ( |
$ | ( |
| Change in valuation allowance | ||||
| Actual tax expense (benefit) | $ | $ |
The related deferred tax benefit on the above unutilized tax losses has a full valuation allowance not recognized against it as there is no certainty of its realization. Management has evaluated tax positions in accordance with ASC 740 and has not identified any significant tax positions, other than those disclosed.
Note 8 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 2022, through the date when financial statements were issued, and has determined that it does not have any material subsequent events to disclosure in these financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward looking statement notice
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward- looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this quarterly report and in our unaudited interim financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
DESCRIPTION OF BUSINESS
Brief description of Crona Corp.
The Company was incorporated on October 6, 2016 under the laws of the State of Nevada. We are engaged in the recording services business. Andrei Gurduiala has served as our President, Treasurer and as a Director, from October 6, 2016, until March 21, 2018. On March 21, 2018, our board appointed Robert T. Malasek as a Director, Chief Executive Officer, Chief Financial Officer and Secretary of the Company. On March 20, 2020, our board appointed initial Incorporator of the Company Andrei Gurduiala as a Director, President, Treasurer and Secretary of the Company. As of date these financial statements were issued, our board of directors is comprised of one person: Andrei Gurduiala.
We are authorized to issue 75,000,000 shares of common stock, par value $0.001 per share. On November 25, 2016, Andrei Gurduiala, our former President and a Director purchased an aggregate of 5,000,000 shares of common stock at $0.001 per share, for aggregate proceeds of $5,000.
General description of our activity
Currently, the main activity of Crona Corp. is providing music-recognition services.
Crona Corp. is developing a personal assistant program that would easily identify favorite music tracks. Due to unique algorithms of music recognition, users can expand their media library much faster. Such an effective functionality would be achieved by a simple principle of the program. A user needs to push the search button. Then, the program analyzes a music fragment. After successful recognition, data about the music track is displayed on the screen.
A convenient interface gives an opportunity to play favorite tracks quickly and efficiently. Integration with the music streaming services would allow the user to create playlists and add them to the media library in just a few clicks. All recent tracks are saved so the users can always find them again later. As a result, there would be an option to read lyrics and share a track with others.
For better program exploitation, artificial intelligence (“AI”) would be used. It will recommend tracks based on users’ preferences and search results. This function will become a unique feature of our mobile application.
We expect AppStore and Google Play to be the major platforms for our program to be submitted. Also, this information would be posted to our website corpcrona.com and would be an effective advertisement instrument for program promotion.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research expenditures since our incorporation.
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BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction which we would conduct activities.
We do not believe that any existing or probable government regulation on our business, including any applicable export or import regulation or control imposed by China or Romania will have a material impact on the way we conduct our business.
FACILITIES
Our previously leased office was located at Strada C. A. Rosetti 5, Bucharest 030167 Romania. Our current office is located at Jean-Louis Calderon 31, Bucharest, 030167, Romania. Our telephone number is +40371700093.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
We have no employees as of the date of this report. Our sole officer and director, Andrei Gurduiala, currently devotes approximately 20 hours per week to company matters. After receiving funding, Andrei Gurduiala plans to devote, as much time to the operation of the Company as he determines is necessary for him to manage the affairs of the Company. As our business and operations increase, we will assess the need for full time management and administrative support personnel.
LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section includes a number of forward-looking statements that reflect our current views regarding the future events and financial performance of Crona Corp.
We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
Have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
Comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis) unless the SEC determines that the application of such additional requirements is necessary or appropriate in the public interest, after considering protection of investors, and whether the action will promote efficiency, competition and capital formation; Submit certain executive compensation on matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;”
Disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.
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In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
RESULTS OF OPERATION
Results of Operations for the three and nine months ended September 30, 2022 and 2021:
Revenue and cost of goods sold
For the three months ended September 30, 2022 and 2021 Crona Corp. had not generated any revenue.
For the nine months ended September 30, 2022 and 2021 Crona Corp. had not generated any revenue.
Operating expenses
Total operating expenses for the three months ended September 30, 2022 were $2,609. The operating expenses for the three months ended September 30, 2022 included professional fees of $2,442 and amortization expenses of $167.
Total operating expenses for the three months ended September 30, 2021 were $3,119. The operating expenses for the three months ended September 30, 2021 included general and administrative expenses of $1,113 and professional fees of $2,006.
Total operating expenses for the nine months ended September 30, 2022 were $26,347. The operating expenses for the nine months ended September 30, 2022 included general and administrative expenses of $2,225, professional fees of $23,622 and amortization expenses of $500.
Total operating expenses for the nine months ended September 30, 2021 were $14,854. The operating expenses for the nine months ended September 30, 2021 included general and administrative expenses of $8,715 and professional fees of $6,139.
The Company had consulting services and assistance in obtaining DTC eligibility for the nine months ended September 30, 2022. This has resulted in an increase in professional fees for the nine months ended September 30, 2022 compared to the operating expenses for the nine months ended September 30, 2021. The Company cancelled lease in July, 2022. This has resulted in a decrease in general and administrative expenses for the three and nine months ended September 30, 2022 compared to the operating expenses for the three and nine months ended September 30, 2021.
Net Loss
The net loss for the three months ended September 30, 2022 and 2021 was $2,609 and $3,119, respectively.
The net loss for the nine months ended September 30, 2022 and 2021 was $26,347 and $14,854, respectively.
The net loss increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, because there were no consulting services and assistance in obtaining DTC eligibility for the nine months ended September 30, 2021.
Liquidity and capital resources
As of September 30, 2022, our total assets were $31,465.
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As of September 30, 2022, our total liabilities were $102,270.
As of September 30, 2022, we had a working capital deficit of $92,305.
CASH FLOWS FROM OPERATING ACTIVITIES
We have not generated positive cash flows from operating activities. For the nine months ended September 30, 2022 net cash flows used in operating activities was $45,615, which consisted of a net loss of $26,347, amortization expenses of $500, prepaid expenses of $9,965 and accounts payable of $9,802.
CASH FLOWS FROM INVESTING ACTIVITIES
For the nine months ended September 30, 2022 we generated $0 in investing activities.
CASH FLOWS FROM FINANCING ACTIVITIES
For the nine months ended September 30, 2022 net cash flows provided by financing activities was $45,615, which was due to related party advances.
OFF-BALANCE SHEET ARRANGEMENTS
We have no 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit 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.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2022. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Changes in Internal Controls over Financial Reporting
There was no change in the Company’s internal control over financial reporting during the quarterly 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
We are not involved in any pending legal proceeding nor are we aware of any pending or threatened litigation against us.
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ITEM 1A. RISK FACTORS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
The following exhibits are included as part of this report by reference:
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.
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CRONA CORP.
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| Dated: November 9, 2022 |
By: /s/ Andrei Gurduiala
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Andrei Gurduiala, President and Chief Executive Officer and Chief Financial Officer
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