Crona Corp.
See accompanying notes, which are an integral part of these unaudited
financial statements
See accompanying notes, which are an integral part of these unaudited
financial statements
Crona Corp.
See accompanying notes, which are an integral part of these
unaudited financial statements
See accompanying notes, which are an integral part of these unaudited
financial statements
Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
June 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 six months ended June 30, 2022. The Company currently has losses of $23,738 and $105,687 for the six months ended June 30, 2022
and the period from inception (October 6, 2016) to June 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.
8
Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
June 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.
Basic Income (Loss) Per Share
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 June 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 being 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 six months ended June 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.
9
Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2022
Recent Accounting Pronouncements
There have been no recent accounting
pronouncements or changes in accounting pronouncements during the six months ended June 30, 2022, that are of significance or potential
significance to the Company.
Note 4 – RELATED PARTY TRANSACTIONS
As of June 30, 2022 our sole director Andrei
Gurduiala has advanced to the Company $89,587. 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 June 30, 2022 and December 31, 2021,
the software costs were $20,000. There were no amortization expenses as the software is still in development.
As of June 30, 2022 and December 31, 2021,
the website costs were $2,000. For the six months ended June 30, 2022 and 2021, the amortization expenses were $333 and $0, respectively.
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. For the six months ended June 30, 2022 and 2021 rent expense was $2,225.
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 June 30, 2022, the
Company had net operating loss carry forwards of $22,194 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 June
30, 2022 was $22,194. The net change in valuation allowance for the six months ended June 30, 2022 was $4,985. 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 June
30, 2022. All tax years since inception remain open for examination by taxing authorities.
10
Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2022
The provision for Federal income tax consists of the following:
| |
|
As of June 30, 2022 |
|
As of December 31, 2021 |
| Non-current deferred tax assets: |
|
|
|
|
| Net operating loss carry forward |
$ |
(22,194) |
$ |
(17,209) |
| Valuation allowance |
|
22,194 |
|
17,209 |
| 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 June 30, 2022 |
|
As of December 31, 2021 |
| Computed “expected” tax expense (benefit) |
$ |
(4,985) |
$ |
(3,695) |
| Change in valuation allowance |
|
4,985 |
|
3,695 |
| 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 June 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.
11
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
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.
12
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.
13
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 six months ended June
30, 2022 and 2021:
Revenue and cost of goods sold
For the three months ended June 30, 2022 and 2021 Crona
Corp. had not generated any revenue.
For the six months ended June 30, 2022 and 2021 Crona Corp.
had not generated any revenue.
Operating expenses
Total operating expenses for the three
months ended June 30, 2022 were $17,860. The operating expenses for the three months ended June 30, 2022 included general and administrative
expenses of $1,112, professional fees of $16,581 and amortization expenses of $167.
Total operating expenses for the three
months ended June 30, 2021 were $6,114. The operating expenses for the three months ended June 30, 2021 included general and administrative
expenses of $3,912 and professional fees of $2,202.
Total operating expenses for the six
months ended June 30, 2022 were $23,738. The operating expenses for the six months ended June 30, 2022 included general and administrative
expenses of $2,225, professional fees of $21,180 and amortization expenses of $333.
Total operating expenses for the six
months ended June 30, 2021 were $11,735. The operating expenses for the six months ended June 30, 2021 included general and administrative
expenses of $5,026 and professional fees of $6,709.
The Company had consulting services
and assistance in obtaining DTC eligibility for the three and six months ended June 30, 2022. This has resulted in an increase in operating
expenses for the three and six months ended June 30, 2022 compared to the operating expenses for the three and six months ended June 30,
2021.
Net Loss
The net loss for the three months ended June 30, 2022 and 2021
was $17,860 and $6,114, respectively.
The net loss for the six months ended
June 30, 2022 and 2021 was $23,738 and $11,735, respectively.
The net loss increased for the three
and six months ended June 30, 2022 compared to the three and six months ended June 30, 2021, because there were no consulting services
and assistance in obtaining DTC eligibility for the three and six months ended June 30, 2021.
Liquidity and capital resources
As of June 30, 2022, our total assets were $21,887.
14
As of June 30, 2022, our total liabilities were $89,587.
As of June 30, 2022, we had a working capital deficit of
$68,196.
CASH FLOWS FROM OPERATING ACTIVITIES
We have not generated positive
cash flows from operating activities. For the six months ended June 30, 2022 net cash flows from operating activities was $33,129, consisted
of a net loss of $23,738, amortization expenses of $333, prepaid expenses of $220 and accounts payable of $9,504.
CASH FLOWS FROM INVESTING ACTIVITIES
For the six months ended June 30, 2022 we generated $0 in
investing activities.
CASH FLOWS FROM FINANCING ACTIVITIES
For the six months ended June 30, 2022 net
cash flows from financing activities was $33,129, 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.