Item 1. Description of Business
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. 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.
GENERAL
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 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 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. As of December 31, 2020, Crona Corp. has generated revenues of $36,210 in Romania, Bucharest. 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, Entertainment clubs).
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 studio. 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 in the particular nation or region. In connection with the license agreement, the Company may receive a cash advance.
Crona Corp. signed a Recording Studio Contract with the following customers: NM & Mike J Production, Vent Event Romania, World Music Ltd. and MALISTIRNO SRL.
Crona Corp. has generated revenues since inception of $36,210 for providing recording service to our customers.
STARTUP EQUIPMENT
We believe that a lot of talented people will be interested in our service. The Company has purchased initially needed equipment for the recording purposes, which is presented as following:
·
Sound System tp20000Q power amplifier 2100W* 4CH
·
Professional recording sound card USB audio interface Hot Roland AU-53
·
Sound Recording Microphone BM-680
·
Karaoke audio mixer player 4K Ultra
·
Mixer Large Sound Console LX9-20
·
Closed monitoring headphone
·
Professional Studio Broadcasting Recording Condenser Microphone Kit with Microphone stand- NM-650
·
Studio Monitor Speakers One Pair FMUSER FU-584 100W
·
2-Way Active Studio monitor Speaker- Hivi X3
·
Screen display stand desktop lift multi-screen- D7T Three
·
Electric Guitar Hollow Body Wine Red G5122-1965
·
NUX MG-20 Guitar Modeling Processor Drum Pattern
·
Bass Guitar Black Color 4002
·
Practical guitar transposer
·
African drum sheepskin for drum heads professional
·
UpBright Adapter for M-Audio Keystation Line MAudio Key Station Pro
·
Connector Power adapter NAC3FCA PowerCon 20A AC Cable 20pcs
·
Nylon cable ties HWEXPRESS, 100 PCS 3 x100 (mm) Self
·
HAMA Cables
·
MOGAMI CP12S/HR4P
·
4pin Adapter cable for DSLR Rig Power V-Mount Limit
·
Sound Card/6 channel Audio Card CMI8738-6CH PCI-E
·
Voice recording software GoldWave
·
Voice recording software Mixcraft
·
Voice recording software Blaze Media Pro
On March 21, 2018, the Company transferred all the equipment to the prior director Andrei Gurduiala, as a result the Company is unable to conduct its business currently, as the equipment was its core production tool. As of the date of filing Crona Corp. is planning to expand the range of recording equipment and obtain needed software for recording purposes in Romania. There will be additional recording equipment, which will make the sound clearer and software will help in adding special effects. Through the use of the newly purchased equipment, we could 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 will be rented on either an hourly, daily, weekly, or monthly basis as dictated by the clients’ needs. Our sole officer and director will also serve as engineer, producer for our business and the Company will provide duplication services at competitive rates and according to the clients’ budgets.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
We have no employees to date. 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.
Item 1A.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 2.
Item 2. Description of Property
We do not own any real estate or other properties.
Item 3.
Item 3. Legal Proceedings
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
There is a limited public market for our common shares. Our common shares are not quoted on the OTC Bulletin Board at this time. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.
OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
As of December 31, 2020, no shares of our common stock have traded.
Number of Holders
As of December 31, 2020, the 6,087,500 issued and outstanding shares of common stock were held by a total of 27 shareholders of record.
Dividends
No cash dividends were paid on our shares of common stock during the fiscal years ended December 31, 2020 and 2019. We have not paid any cash dividends since our inception and do not foresee declaring any cash dividends on our common stock in the foreseeable future.
Recent Sales of Unregistered Securities
None.
Purchase of our Equity Securities by Officers and Directors
None.
Other Stockholder Matters
None.
Item 6.
Item 6. Selected Financial Data
Not applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
FISCAL YEAR ENDED DECEMBER 31, 2020 COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2019.
Our net loss for the fiscal year ended December 31, 2020 was $24,062 compared to a net loss of $1,200 during the fiscal year ended December 31, 2019. The changes are related to increase in operating expenses. 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 gain on debt forgiveness of $3,000.
Operating expenses for the year ended December 31, 2020 consisted of professional fees of $26,691 and general and administrative expenses of $371. Operating expenses for the year ended December 31, 2019 consisted of professional fees of $1,200. The increase in expenses is related to renew the Company's operation.
LIQUIDITY AND CAPITAL RESOURCES
FISCAL YEARS ENDED DECEMBER 31, 2020 and 2019
As of December 31, 2020, our total assets were $8,886 and our total liabilities were $35,748 which comprised of accounts payable and related party advances.
As of December 31, 2019, our total assets were $0 and our total liabilities were $2,800 which comprised of accounts payable.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the fiscal year ended December 31, 2020, net cash flows from operating activities were $36,358.
Cash Flows from Investing Activities
For the fiscal year ended December 31, 2020, we generated $2,000 in investing activities.
Cash Flows from Financing Activities
We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the fiscal year ended December 31, 2020, net cash flows from financing activities was $38,358, which was due to related party advances.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Annual Report, we do not have any material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any 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 investors.
GOING CONCERN
The independent auditors' report accompanying our December 31, 2020 and 2019 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.
Item 8.
Item 8. Financial Statements and Supplementary Data
CRONA CORP.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Crona Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Crona Corp. (the Company) as of December 31, 2020 and 2019, and the related statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and negative operating cash flows since inception. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have served as the Company’s auditor since 2017.
Tampa, Florida
March 31, 2021
3001 N. Rocky Point Dr. East, Suite 200 i Tampa, Florida 33607 i 813.367.3527
CRONA CORP.
BALANCE SHEETS
ASSETS
December 31, 2020
December 31, 2019
Current Assets
Prepaid expenses
$
6,886
$
-
Total Current Assets
6,886
-
Long-term Assets
Deposit for w ebsite
2,000
-
Total Long-term Assets
2,000
-
Total Assets
$
8,886
$
-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accounts payable
$
$
2,800
Related party advances
35,358
-
Total Current Liabilities
35,748
2,800
Total Liabilities
35,748
2,800
Commitments and contingencies (Note 5)
Stockholders’ Deficit
Common stock, par value $0.001; 75,000,000 shares authorized, 6,087,500 shares issued and outstanding
6,088
6,088
Additional paid in capital
31,403
31,403
Accumulated deficit
(64,353)
(40,291)
Total Stockholders’ Deficit
(26,862)
(2,800)
Total Liabilities and Stockholders’ Deficit
$
8,886
$
-
See accompanying notes to financial statements.
CRONA CORP.
STATEMENTS OF OPERATIONS
For the Year ended
December 31, 2020
For the Year ended
December 31, 2019
REVENUES
$
-
$
-
OPERATING EXPENSES
Professional fees
26,691
1,200
General and administrative expenses
-
TOTAL OPERATING EXPENSES
27,062
1,200
Gain on forgiveness of debt
3,000
-
NET LOSS FROM OPERATIONS
(24,062)
(1,200)
PROVISION FOR INCOME TAXES
-
-
NET LOSS
$
(24,062)
$
(1,200)
NET LOSS PER SHARE: BASIC AND DILUTED
$
(0.00)
$
(0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
6,087,500
6,087,500
See accompanying notes to financial statements.
CRONA CORP.
STATEMENTS OF STOCKHOLDERS’ DEFICIT
See accompanying notes to financial statements.
CRONA CORP.
STATEMENTS OF CASH FLOWS
For the Year ended December 31, 2020
For the Year ended December 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(24,062)
$
(1,200)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on forgiveness of debt
(3,000)
-
Changes in operating assets and liabilities:
Prepaid expenses
(6,886)
-
Accounts payable
(2,410)
1,200
CASH FLOWS FROM OPERATING ACTIVITIES
(36,358)
-
CASH FLOWS FROM INVESTING ACTIVITIES
Deposit for website
(2,000)
-
CASH FLOWS FROM INVESTING ACTIVITIES
(2,000)
-
CASH FLOWS FROM FINANCING ACTIVITIES
Related party advances
38,358
-
CASH FLOWS FROM FINANCING ACTIVITIES
38,358
-
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 to financial statements.
Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2020 and 2019
Note 1 - ORGANIZATION AND NATURE OF BUSINESS
Crona Corp. (“the Company”) was incorporated in the State of Nevada on October 6, 2016. Crona Corp. was established for the purpose of quality sound recording needs. The Company is located in Romania and began its operations in early 2017.
The Company provides recording, studio and engineer/producer services for record labels, music producers and recording artists.
Note 2 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with Generally Accepted Accounting Principles (GAAP), which contemplate continuation of the Company as a going concern. The Company generated no revenues for the year ended December 31, 2020. The Company currently has losses of $24,062 and $1,200 for the years ended December 31, 2020 and 2019, 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.
Any results of financial impact of the COVID-19 pandemic cannot be reasonably estimated now but it may have a material adverse impact on our results of operations and business.
Note 3 - SUMMARY OF SIGNIFCANT 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.
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.
Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2020 and 2019
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 606. 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 December 31, 2020, there were no potentially dilutive debt or equity instruments issued or outstanding.
Leases
In February 2016, ASC Topic 842, Leases, was issued to replace the leases requirements in ASC Topic 840, Leases. The main difference between previous GAAP and ASC Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP.
On January 1, 2019, the Company adopted the new guidance. As permitted under the new guidance, the Company ha s d made the accounting policy election not to apply the recognition provisions of the new guidance to short term leases; instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements or changes in accounting pronouncements during the year ended December 31, 2020, that are of significance or potential significance to the Company.
Note 4 - RELATED PARTY TRANSACTIONS
For the year ended December 31, 2020 our sole director Andrei Gurduiala has advanced to the Company $35,358. This advance is unsecured, non-interest bearing and due on demand. In March 2020, a $3,000 advance from Robert T. Malasek, former Director, was forgiven and is included on the statements of operations as a gain on forgiveness of debt.
Note 5 - 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. For the years ended December 31, 2020 and 2019 rent expense was $371 and $0, respectively.
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.
Crona Corp.
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2020 and 2019
Note 6 - INCOME TAXES
The Company adopted the provisions of uncertain tax positions as addressed in ASC 740 “Income Taxes” (“ASC 740”). As a result of the implementation of ASC 740, the Company recognized no increase in the liability for unrecognized tax benefits. As of December 31, 2020, the Company had net operating loss carry forwards of approximately $14,102 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 December 31, 2020 and 2019 was $13,514 and $8,581, respectively. The net change in valuation allowance during the years ended December 31, 2020 and 2019 was $4,933 and $252, respectively. 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 December 31, 2020. All tax years since inception remain open for examination by taxing authorities.
The provision for Federal income tax consists of the following:
As of December 31, 2020
As of December 31, 2019
Non-current deferred tax assets:
Net operating loss carry forward
$
(13,514)
$
(8,581)
Valuation allowance
13,514
8,581
Net deferred tax assets
$
-
$
-
The actual tax benefit at the expected rate of 21% differs from the expected tax benefit for the years ended December 31, 2020 and 2019 as follows:
As of December 31, 2020
As of December 31, 2019
Computed “expected” tax expense (benefit)
$
(4,933)
$
(252)
Change in valuation allowance
4,933
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 7 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2020, 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.
Item 9.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A(T).
Item 9A(T). Controls and Procedures
Management’s Report on Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2020 the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
1.
We do not have an Audit Committee - While not being legally obligated to have an audit committee, it is management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.
2.
We did not maintain appropriate cash controls - As of December 31, 2020, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.
3.
We did not implement appropriate information technology controls - As at December 31, 2020, the Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2020 based on criteria established in Internal Control-Integrated Framework issued by COSO.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of December 31, 2020, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.
PART III
Item 10.
Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company
DIRECTORS AND EXECUTIVE OFFICERS
The name, address and position of our present officers and directors are set forth below:
Name and Address of Executive
Officer and/or Director
Age
Position
Andrei Gurduiala
President, Chief Executive Officer, Secretary, Chief Financial Officer and Chief Accounting Officer
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.
Biographical Information and Background of officer and director
Andrei Gurduiala
Mr. Gurduiala has served as our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director since October 6, 2016 to March 21, 2018 and from March 20, 2020 till the present.
Our sole officer and director background mainly contains from following:
Experience:
Band group “New Emblem”, Bucharest
2005-2007- nylon guitar player, sometimes plays the drums
“Ancris” IT Company, Bucharest
2007-2010- worked with the software program for background music
“Soundgroup” Company, Bucharest
2010-2012- mixering and mastering of electronic tracks
“One Wave Production” Studio, Bucharest
2012-2016- music producer for solo musician and music bands
Education:
1995-1998-Graduated from Stefan Neaga College of Music, Chisinau city, Moldova
Profession: guitar and piano musician
2000-2005- National University of Music Bucharest (UNMB), ElectroAcoustical Music and Multimedia, Bucharest
Profession: master of sound digital interactions
Achievements:
Organized local concerts for guest-musicians in Bucharest (2011-2014)
Took the participation in the international festival “Ethno-Jazz” (2010)
Took the participation in the international festival “Martisor” (2013)
AUDIT COMMITTEE
We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive.
SIGNIFICANT EMPLOYEES
We have no employees other than our Treasurer and sole director, Andrei Gurduiala; he currently devotes approximately twenty hours per week to company matters. We intend to hire employees on an as needed basis.
Item 11.
Item 11. Executive Compensation
The following tables set forth certain information about compensation paid, earned or accrued for services by our President, and Secretary and all other executive officers (collectively, the “Named Executive Officers”) for the years ended December 31, 2020 and 2019.
SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
Salary (US$)
Bonus (US$)
Stock Awards (US$)
Option Awards (US$)
Non-Equity Incentive Plan Compensation (US$)
Nonqualified Deferred Compensation Earnings (US$)
All Other Compensation (US$)
Total (US$)
Andrei Gurduiala
-
-
-
-
-
-
-
-
Robert T. Malasek
(President)
-
-
-
-
-
-
-
-
There are no current employment agreements between the company and its sole officer. The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer. There are no other stock option plans, retirement, pension, or profit-sharing plans for the benefit of our officers and directors other than as described herein.
CHANGE OF CONTROL
As of December 31, 2020, we had no pension plans or compensatory plans or other arrangements that provide compensation in the event of a termination of employment or a change in our control.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table provides certain information regarding the ownership of our common stock, as of December 31, 2020 and as of the date of the filing of this annual report by:
•
each of our executive officers;
•
each director;
•
each person known to us to own more than 5% of our outstanding common stock; and
•
all of our executive officers and directors and as a group.
The percent of class is based on 6,087,500 shares of common stock issued and outstanding as of the date of this annual report.
Item 13.
Item 13. Certain Relationships and Related Transactions
During the year ended December 31, 2020, we had not entered into any transactions with our sole officer or director, or persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.
Item 14.
Item 14. Principal Accountant Fees and Services
During the year ended December 31, 2020, we incurred $24,000 in fees to our principal independent accountants for professional services rendered in connection with the audit of our financial statements.
During the year ended December 31, 2019, we incurred $0 in fees to our principal independent accountants for professional services rendered in connection with the audit of our financial statements.
PART IV
Item 15.
Item 15. Exhibits
The following exhibits are filed as part of this Annual Report.
Exhibits:
31.1
Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
32.1 Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act
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.
CRONA CORP.
Dated: April 01, 2021
By: /s/ Andrei Gurduiala
Andrei Gurduiala, President and
Chief Executive Officer and
Chief Financial Officer