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 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):
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 6,087,500 common shares issued and outstanding as of May 13, 2021.
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. for last five years
On October 6, 2016, the Company was incorporated under the laws of the State of Nevada. We are engaged in 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
We were incorporated on October 6, 2016 in the State of Nevada, USA. The Company’s business operations are located in Romania. We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings.
We can book as little as one hour or as many as 24 hours per day, allowing the business to focus on providing recording services for record labels, music producers, and recording artists. The facility and its equipment are rented on either an hourly, daily, weekly, or monthly basis as dictated by the clients’ needs. In addition to studio and engineer/producer services, and in the course of ongoing business, it is customary in the recording industry that the Studio will occasionally enter into certain licensing agreements that will provide revenue over and above the rental and services income. There is no particular standard as to the frequency or amount of this revenue and it is negotiated on an individual basis. These licensing agreements can include, but are not limited to, production agreements, writer agreements, and performing agreements, all yielding a percentage of revenue earned through the exploitation of the product produced.
Our target markets are artists, organizers of various events and representatives of various industries of show business (TV, cinema, and entertainment clubs).
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We expect to face strong competition from well-established companies and small independent companies like our self that may result in price reductions and decreased demand for service of music studios. There are several companies in Romania in our industry, such as: DAW.RO, INES Studios, and Harmonix Recording Studio. Management believes that we can develop ourselves in the industry, once we attract customers and become profitable.
Licensing
From time to time the Company may enter into licensing agreements with music production and distribution companies.
The license agreements may typically grant the production and distribution company rights to a music single or all of an act's music in a particular country or region with a term of three to fifteen years. The production or distribution company can then distribute the music in record or CD format, mp3, ring tone, or any other music media licensed in the agreement.
The Company will typically receive royalties of a negotiated percentage between 18% and 75% of sales of the production and Distribution Company’s published dealer price less certain packaging deductions. In addition, the Company may receive between 18% and 75% of net royalty receipts received in the particular nation or region. In connection with the license agreement, the Company may receive a cash advance.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research expenditures since our incorporation.
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 was 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 prospectus. 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.
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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 compensate 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.
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 months ended March 31, 2021 and 2020:
Revenue and cost of goods sold
For the three months ended March 31, 2021 and 2020 Crona Corp. had not generated any revenue.
Operating expenses
Total operating expenses for the three months ended March 31, 2021 were $5,621. The operating expenses for the three months ended March 31, 2021 included professional fees of $4,508 and general and administrative expenses of $1,113.
Total operating expenses for the three months ended March 31, 2020 were $5,300. The operating expenses for the three months ended March 31, 2020 included audit fees of $5,000 and professional fees of $300.
The Company had no rent expense for the three months ended March 31, 2020. This has resulted in an increase in operating expenses for the three months ended March 31, 2021 compared to the operating expenses for the three months ended March 31, 2020.
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Net Loss
The net loss for the three months ended March 31, 2021 and 2020 was $5,621 and $2,300, respectively. On March 19, 2020, Robert T. Malasek advanced to the Company $3,000 to cover the costs on professional services of Globex Transfer, LLC. On March 19, 2020 Robert T. Malasek forgave the mentioned indebtedness. This resulted in a gain on debt forgiveness of $3,000.
Liquidity and capital resources
As at March 31, 2021, our total assets were $7,768.
As at March 31, 2021, our total liabilities were $40,251.
As at March 31, 2021, we had a working capital deficit of $34,483.
CASH FLOWS FROM OPERATING ACTIVITIES
We have not generated positive cash flows from operating activities. For the three months ended March 31, 2021 net cash flows used in operating activities was $4,500.
CASH FLOWS FROM INVESTING ACTIVITIES
For the three months ended March 31, 2021 we generated $0 in investing activities.
CASH FLOWS FROM FINANCING ACTIVITIES
For the three months ended March 31, 2021 net cash flows provided by financing activities was $4,500.
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.
