Item 1. Business
Forward Looking Statements
This annual report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our audited financial statements are expressed in U.S. dollars and are prepared in accordance with generally accepted accounting principles in the United States. They reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of our annual financial information.
The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report.
As used in this annual report, the terms “we”, “us” and “our” mean Celldonate Inc., unless otherwise indicated.
Business Overview
We are a development stage company in the business of developing mobile monetization solutions and applications. Since our inception we have been creating, testing and developing mobile applications, games and tools designed to engage consumers in transacting business via mobile devices. We were incorporated as a Nevada company on August 15, 2006 and we have no subsidiaries.
Until recently, we were focused on completing the development of a suite of applications aimed at individuals with Internet-enabled mobile devices known as the Celldonate mobile games suite. This suite includes a number of games of chance as well as skills-based games which individuals are able to play to earn points towards redeeming prizes from participating retailers and service providers. The Celldonate mobile games suite was originally developed to provide non-profit organizations with an alternative to conventional forms of fundraising by giving them the ability to license the applications and generate ongoing donation revenue by permitting individuals to play fun, interactive games on their mobile devices and receive prizes or information for doing so.
Over the past few years, mobile devices, social media and tablet computing have created new market opportunities for transacting business on mobile and internet-enabled devices - as a result, we have decided to adopt a more general strategy for the Celldonate mobile games suite by renaming it as the Celldonate mobile applications suite and including online deals, coupons and e-commerce-based transactions as features. Since mobile deals and offers presented to consumers have proven to be a valuable method of engaging people to interact with local merchants, we feel that transitioning the core of our business to mobile and online transaction systems is a prudent approach.
So far, we have not yet entered into any commitments or agreements related to the sale or marketing of the Celldonate mobile applications suite, although we plan to concentrate our efforts on doing so in Canada and the United States. Such agreements will determine the specific manner in which we are able to generate revenues from our business.
We have not generated any revenues from our business activities, and we do not expect to generate revenues for the foreseeable future. Since our inception, we have incurred operational losses, and we have been issued a going concern opinion by our auditors. We have also accumulated net losses since our inception and incurred a net loss for the most recent audited and interim periods. To finance our operations, we have received advances from related parties and completed several rounds of financing, raising $57,050 through private placements of our common stock.
Our plan of operations for the next 12 months is to develop mobile payment, mobile couponing and mobile offer-based solutions and applications. We plan to focus specifically on solutions for payments and redemptions of e-commerce-based transactions in which consumers receive mobile coupons, certificates or vouchers to be exchanged with merchants for products or services. We are seeking to enhance the experience of both consumers and merchants in this area by developing solutions that include credit card processing terminals, point-of-sale (POS) terminals and common scanning devices. Our goal is to create the most effective solution for tracking, authorizing, redeeming and settling mobile transactions on location.
The mobile coupon and payments industry recently began to experience significant growth. According to a report published by Juniper Research in November 2011, it is targeted to grow in value from a $5.6 billion industry in 2011 to $46 billion in 2015. In this context, we are aiming to address four key issues that the industry continues to face:
1.Coupon Redemption on Location
Even though coupons are now mobile, digital and interactive, a problem for merchants persists in terms of tracking, redeeming and accepting mobile coupons on location. We are seeking to create solutions that work with merchants’ current operational standards and devices by integrating mobile coupons with traditional forms of payment like credit card processing in order to minimize the requirement for merchants to integrate new software, training or technology into their business.
2.Making Payment to Merchants Simple
Currently, merchants are compensated by deal and offer publishers for the value of e-commerce transactions via checks delivered according to a pre-arranged schedule. Our plan is to seamlessly integrate merchant payments to into the merchants’ credit card-based accounts. We intend to provide any online or mobile offer company with the ability to connect to a simple solution that pays merchants instantly upon the redemption of an offer through their existing credit card processing terminals.
3.Social Aspects of Mobile Couponing
By focusing on leveraging consumer knowledge (where consumers are located, who their friends are, what their interest are, etc.), we hope to encourage consumers to share details, recommendations and suggestions about local businesses with their friends. With the consent of consumers, we plan to provide local businesses with this information which will, in turn, allow merchants to send those consumers offers and deals that may be relevant to them.
4.Integrating “User Request” Features into Mobile Applications
By enabling consumers to request deals from local businesses, we plan to create demand on an individual merchant level. We expect that providing merchants with the option of publishing special offers via email or SMS will engage the mobile community to transact business, with the result that consumers and merchants will connect with one another in a more efficient manner than ever before.
Our goal is to revolutionize the mobile couponing industry by creating products and services that matter to both merchants and mobile consumers, and we believe that the technologies, solutions and teams exist to establish an innovative transaction type in the mainstream consumer marketplace. We plan to generate revenue by charging a fee for each transaction completed using the Celldonate mobile applications suite, and since our applications will permit transactions to occur directly through various mobile devices, we intend to build this fee into our solutions and collect it unobtrusively. Because we have not yet entered into any commitments or agreements to sell or market the Celldonate mobile applications suite, we have not yet established a benchmark percentage fee, although we plan to do so in the near future.
Products
In order to successfully sell and market the Celldonate mobile applications suite, we plan to engage an operational team to develop the custom intellectual property and technology necessary to provide us with a competitive advantage. However, we may also decide to license, modify or amalgamate our solutions with other products and services available in the market that would complement or enhance certain features of the suite - for example, database infrastructure and server resources that could enable us to expand the scope of our technology.
We have completed the planning stage of our transition from a company focused on creating and marketing entertainment-based applications to one involved in creating mobile payment, couponing and offer-based solutions, and have entered into preliminary discussions with a number of parties regarding the development of the Celldonate mobile applications suite. We estimate that the suite will be ready to market in “beta” form before the end of 2012.
Markets
The number of organizations in the deal and offer industry has increased exponentially in the past few years, each of which has attempted to introduce different product offerings to the market. This growth began with the rise of the “daily deal” phenomenon, pioneered to a large extent by Groupon, but quickly morphed into an industry comprised of mobile offers, search-based offers, social offers and print offers. Today, virtually every major online and mobile publisher has a division dedicated to providing consumers with deals and offers in order to generate additional revenues. Interestingly, practically every one of these companies has its own technology solutions and processes for transacting, authorizing and redeeming the purchased deals and offers by merchants on location.
Since the mobile or online coupon industry has not yet adopted a universal redemption or settlement solution, the focus of our marketing strategy is to enter into strategic partnerships with various organizations, service providers, companies and social networks in the United States and Canada regarding the sale and marketing of the Celldonate mobile applications suite. We have not yet entered into any commitments or agreements related to such sale or marketing, although we plan to concentrate our efforts on doing so in those regions for at least the next 12 months. While opportunities exist in the United Kingdom, Asia and throughout the rest of the world, the bulk of the current “deal and offer” companies that stand to benefit from the types of solutions we are developing are located in North America. We therefore plan to locate our team of developers and consultants in the United States and Canada, and more particularly, in the New York, San Francisco and Vancouver, BC areas.
We have not yet entered into any commitments or agreements with any organizations, service providers, companies or social networks to sell or market the Celldonate mobile applications suite, and we have not yet adopted any specific sales and marketing plans apart from those described above. However, as the size and scope of our business increases, we plan to address any issues that arise as well as the need for us to hire additional marketing personnel.
Distribution
We intend to form relationships with major credit card processing agencies as well as medium- and large-scale companies in the deal and offer industry to establish a presence in local merchant marketplaces. Since these organizations are generally connected to local consumers, we expect that we will be able to leverage their existing relationships, sales agents and contractual partners to expedite the implementation and adoption of our solutions. We also believe that the contacts of our Board of Directors and management in this area will accelerate the pace of our client engagement and sales and marketing cycles.
Competition
There is currently a race to develop and market an effective solution for the payment and redemption of mobile couponing transactions. Major industry players such as Google, Apple, Groupon, Living Social, Facebook and others are working with companies like Paypal, American Express and Mastercard to address this issue, and we also face potential threats from developers of other mobile applications and payment-processing companies who wish to participate in this dynamic area. We believe that these organizations will seek to complete strategic acquisitions of companies that are able to gain strong early traction in the market, and our Board of Directors and management plan to use their contacts, knowledge and expertise to develop and market unique solutions that address the industry’s various concerns and permit the early adoption of the Celldonate mobile applications suite.
The product or service that most closely resembles the solutions we are developing is known as a CLO, or card linked offer. A CLO provides a marketing company using the technology with the ability to link an offer or deal directly to a consumer’s existing credit card - this allows the consumer to pay a merchant with his or her existing credit card upon arriving at the merchant’s location, with the payment processing system simply deducting the discount automatically from the regular purchase price.
CLOs still have significant limitations as follows:
●only three or four of the 200+ acquiring bank institutions that offer credit card processing terminals to merchants have created the technology and software required for CLOs - as such, many merchants cannot use CLOs as their systems do not run on the technology required by the solution
●CLOs deduct the amount due back to consumers “behind the scenes”, which means that merchants may never know that a consumer used an offer or coupon
●CLOs are unable to verify various types of offer terms (i.e. restrictions related to the timing of redemptions, the number of coupons permitted per customer, etc.)
●in order to redeem CLOs, consumers need to present the credit card they used to purchase an offer upon arrival at a merchant location in order to receive the discount - many consumers have more than one type of card, which makes keeping track of which offers were purchased with which card difficult
We believe that much more elegant and universal solutions exist to solve these problems and we are seeking to be the first company to bring these solutions to market.
The mobile applications industry is highly competitive, and as a development stage company we have a weak competitive position. We may compete with junior and senior companies who are actively seeking to develop and market applications that are similar to ours, and we may lack the technological information or expertise available to these competitors. Further, we may compete with other companies in the mobile applications industry for financing and such companies may have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on hiring consultants to promote their applications or entering into strategic partnerships to sell and distribute their products. Such competition could adversely impact our ability to obtain the financing necessary for us to carry out our business plan.
We also compete with other development stage technology-focused companies for financing from a limited number of investors that are prepared to invest in such companies. The presence of such competing junior companies may impact our ability to raise additional capital in order to fund our planned operations and activities if investors perceive that investments in our competitors are more attractive based on the merits of their technology or the price of the investment opportunity.
General competitive conditions may be substantially affected by various forms of communications legislation and/or regulation introduced from time to time by the governments of the United States and other countries, as well as factors beyond our control, including international and domestic economic conditions, the market for mobile applications, and the willingness of individuals to make donations to charitable or non-profit organizations.
In the face of competition, we may not be successful in carrying out our business plan and we cannot provide any assurance that suitable partners will exist for our applications in the retail, or service provider sectors. Despite this, we hope to compete successfully in the mobile applications industry by:
●keeping our costs low;
●relying on the strength of our management’s contacts; and
●using our size and experience to our advantage by adapting quickly to changing market conditions or responding swiftly to potential opportunities.
Intellectual Property
We currently own the intellectual property rights associated with the Celldonate mobile applications suite, although we have not obtained and do not plan to obtain patent protection for it. As we develop new mobile and online transaction solutions and applications, however, we intend to file for patent protection as necessary.
We also own the copyright in the contents of our website and the rights to a number of Internet domain names that could be associated with our business. Other than that, we do not have any other intellectual property and we have not filed for any protection of our trademark.
Employees and Consultants
As of March 31, 2012 we did not have any full-time or part-time employees. Michael Palethorpe, our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and director, works as a part-time consultant in the areas of business development and management, and we currently engage independent contractors in the areas of accounting and legal services.
Mr. Palethrope has extensive experience in the online offers, deals and e-commerce space, and we intend to enhance the composition of our Board by adding one to two members in the near future with similar experience, in addition to engaging an operational team to further develop the Celldonate mobile applications suite. Management’s plans in this regard are to hire one product manager, one operations manager, three software engineers, two quality assurance managers, one systems architect and one mobile and online design specialist once we have the necessary financial resources to do so.
Government Regulations
Our current and future operations are or will be subject to various laws and regulations in the United States and Canada, the countries in which we conduct or plan to conduct our activities. These laws and regulations govern communications, the Internet, gift cards and certificates, taxes, labor standards, occupational health and safety and other matters relating to the mobile applications industry. Permits, registrations or other authorizations may also be required to maintain our operations and to carry out our future activities, and these permits, registrations or authorizations will be subject to revocation, modification and renewal.
Governmental authorities have the power to enforce compliance with regulatory requirements and the provisions of required permits, registrations or other authorizations, and violators may be subject to civil and criminal penalties including fines, injunctions, or both. The failure to obtain or maintain a required permit may also result in the imposition of civil and criminal penalties, and third parties may have the right to sue to enforce compliance.
We expect to be able to comply with all applicable laws and regulations and do not believe that such compliance will have a material adverse effect on our competitive position. We intend to obtain all permits, licenses and approvals required by all applicable regulatory agencies to maintain our current operations and to carry out our future activities. We are not aware of any material violations of permits, licenses or approvals issued with respect to our operations, and we believe that we have complied with all applicable laws and regulations to date. We intend to continue complying with all laws and regulations, and at this time we do not anticipate incurring any material capital expenditures to do so.
Compliance with any unanticipated requirements could have a material adverse effect on our capital expenditures, earnings or competitive position. Our failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief, or both. Legislation affecting the mobile applications industry, gift cards and certificates, payment processing and the Internet in general is subject to constant review, and the regulatory burden frequently increases. Changes in any of these laws and regulations could have a material adverse effect on our business, and in view of the many uncertainties surrounding current and future laws and regulations, including their applicability to our operations, we cannot accurately predict their overall effect on our business.
Item 1A.
Item 1A. Risk Factors
Not required.
Item 1B.
Item 1B. Unresolved Staff Comments
None.
Item 2.
Item 2. Properties
Our executive office is located at 8665 West Flamingo Road, Suite 131-200, Las Vegas, Nevada 89147. This office is provided to us free of charge by a former officer and director. As of June 27, 2012 we had not entered into any lease agreement for this office, and we do not plan to recognize any rent expenses for it. We believe that this office is suitable for our current operations and we do not anticipate requiring any additional property in the foreseeable future.
Item 3.
Item 3. Legal Proceedings
We are not aware of any legal proceedings to which we are a party. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.
Item 4.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is not traded on any exchange. Our common stock is quoted on the OTC Bulletin Board under the trading symbol “CEAC”. 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 have little to do with a company’s operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.
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.
Our common stock became eligible for quotation on the OTC Bulletin Board on November 16, 2009. The following quotations reflect the high and low bids for our common stock based on inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
Holders
As of June 27, 2012 there were approximately 42 holders of record of our common stock. We do not believe that a significant number of beneficial owners hold their shares of our common stock in street name.
Dividends
As of June 27, 2012 we had not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock for the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our Board of Directors and will depend upon our future earnings, if any, our financial condition, our capital requirements, general business conditions and other factors.
Equity Compensation Plans
As of June 27, 2012 we did not have any equity compensation plans.
Recent Sales of Unregistered Securities
We did not make any unregistered sales of our equity securities during the period covered by this annual report.
Item 6.
Item 6. Selected Financial Data
Not required.
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 discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.
Results of Operations
Revenues
We have limited operational history. From our inception on August 15, 2006 to March 31, 2012 we did not generate any revenues. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.
Expenses
From our inception on August 15, 2006 to March 31, 2012 we incurred total expenses of $332,117, including $196,046 in accounting and legal fees, $64,024 in licenses and fees, $63,728 in consulting and development fees, $5,702 in office expenses, $2,089 in bank charges and $528 in amortization.
For the fiscal year ended March 31, 2012 we incurred total expenses of $63,259, including $37,338 in accounting and legal fees, $25,077 in licenses and fees, $245 in office expenses and $599 in bank charges. For the fiscal year ended March 31, 2011 we incurred total expenses of $59,922, including $39,882 in accounting and legal fees, $19,441 in licenses and fees and $599 in bank charges. Our total expenses for those two fiscal years were therefore roughly equivalent, with decrease in our accounting and legal fees for the fiscal year ended March 31, 2012 offset by the increase in our licenses and fees.
Net Loss
From our inception on August 15, 2006 to March 31, 2012 we incurred a net loss of $332,117. For the fiscal year ended March 31, 2012 we incurred a net loss of $63,259 and a net loss per share of $0.01. For the fiscal year ended March 31, 2011 we incurred a net loss of $59,922 and a net loss per share of $0.01.
Liquidity and Capital Resources
As of March 31, 2012 we had $40 in cash, $40 in total assets, $273,957 in total liabilities and a working capital deficit of $273,917. As of March 31, 2012 we had an accumulated deficit of $332,117. We are dependent on funds raised through equity financing and related parties. Our cumulative net loss of $332,117 from our inception on August 15, 2006 to March 31, 2012 was funded by equity financing and advances from related parties. Since our inception on August 15, 2006, we have raised gross proceeds of $57,050 in cash from the sale of our securities.
From our inception on August 15, 2006 to March 31, 2012 we spent $293,276 in cash on operating activities. During the fiscal year ended March 31, 2012 we spent $54,131 in cash on operating activities, compared to cash spending of $58,349 on operating activities during the fiscal year ended March 31, 2011. Our decrease in cash spending on operating activities during the fiscal ended March 31, 2012 was primarily due to increases in our accounts payable and accrued liabilities for the period, as offset by the decrease in our general and administrative expenses as described above.
From our inception on August 15, 2006 to March 31, 2012 we spent $528 in cash on investing activities, all of which was in the form of equipment purchases. We did not engage in any investing activities during the fiscal years ended March 31, 2012 or 2011.
From our inception on August 15, 2006 to March 31, 2012 we received $293,844 in cash from financing activities, including $236,794 in advances from related parties, and $57,050 in net proceeds from the issuance of our common stock. During the fiscal year ended March 31, 2012 we received $53,056 in cash from financing activities, compared to cash receipts of $57,066 from financing activities during the fiscal year ended March 31, 2011. All of our cash receipts from financing activities during these periods occurred in the form of advances from related parties.
Our decrease in cash for the fiscal year ended March 31, 2012 was $1,075 due to a combination of our operating and financing activities.
During the fiscal year ended March 31, 2012 our monthly cash requirements to fund our operating activities, was approximately $4,511, compared to approximately $4,862 during the fiscal year ended March 31, 2011. In the absence of the continued sale of our common stock or advances from related parties, our cash of $40 as of March 31, 2012 is sufficient to cover our current monthly burn rate for less than one month. Until we are able to complete private and/or public financing as described below, we anticipate that we will rely on advances from related parties to proceed with our plan of operations.
For the next 12 months (beginning July 2012) we intend to:
●obtain the necessary financing to fill a number of key operational positions;
●complete the development of the Celldonate applications suite, including “white label” applications for major deal and offer publishers seeking to engage their customers in mobile transactions; and
●enter into strategic transactions with sales and marketing agencies searching for mobile payment, mobile couponing and mobile offer-based solutions.
We believe that the recent alignment of consumer and financial markets with our business model and technologies will allow us to flourish, and we plan to concentrate our efforts on capital raising, team assembly and expanding our technology base and the appeal of the Celldonate applications suite over the next 12 months. We expect to require approximately $1,750,000 to continue our planned operations during that time.
Our planned expenditures for the next 12 months (beginning July 2012) are summarized as follows:
Our general and administrative expenses for the year will consist primarily of transfer agent fees, investor relations expenses and general office expenses. The professional fees are related to the costs of completing any strategic transactions into which we may enter as well as our regulatory filings throughout the year.
Based on our planned expenditures, we will require additional funds of approximately $1,750,000 to proceed with our business plan over the next 12 months. If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.
Future Financings
We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our securities and advances from related parties to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon obtaining outside financing to carry out our operations. Our financial statements for the year ended March 31, 2012 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.
We will require approximately $1,750,000 over the next 12 months in order to enable us to proceed with our plan of operations, including paying our ongoing expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we intend to raise the balance of our cash requirements for the next 12 months from private placements, advances from related parties or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us with financing, and there is no guarantee that any financing will be available to us or if available, on terms that will be acceptable to us.
If we are unable to obtain the necessary additional financing, then we plan to reduce the amounts that we spend on our operations, including our accounting and legal fees, so as not to exceed the amount of capital resources that are available to us. If we do not secure additional financing our current cash reserves and working capital will be not be sufficient to enable us to sustain our operations for the next 12 months, even if we do decide to scale back our operations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Critical Accounting Policies
Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.
Foreign Currency Translation
Our financial statements are presented in United States dollars. Transactions in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, except amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net loss.
Research and Development
Research and development expenditures are charged to operations as incurred.
Inflation
The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not required.
Item 8.
Item 8. Financial Statements and Supplementary Data
CELLDONATE INC.
(A Development Stage Company)
March 31, 2012 and 2011
Financial Statements
(Expressed in US Dollars)
Financial Statement Index
CELLDONATE INC.
(A Development Stage Company)
March 31, 2012 and 2011
Financial Statements
(Expressed in US dollars)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of
CELLDONATE INC.
We have audited the accompanying balance sheets of CELLDONATE INC. (a Development Stage Company) as at March 31, 2012 and 2011, and the statements of operations, stockholders’ deficiency and cash flows for the years ended March 31, 2012 and 2011, and for the period from August 15, 2006 (inception) to March 31, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at March 31, 2012 and 2011 and the results of its operations and its cash flows for the years ended March 31, 2012 and 2011, and for the period from August 15, 2006 (inception) to March 31, 2012 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 1 to the financial statements, the Company has no operations, a stockholders’ deficiency and a deficit accumulated during the development stage, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Smythe Ratcliffe LLP
Smythe Ratcliffe LLP
Chartered Accountants
Vancouver, Canada
June 25, 2012
CELLDONATE INC.
(A Development Stage Company)
Balance Sheets
(Expressed in US dollars)
Nature of operations and going concern (note 1)
See accompanying notes to financial statements.
CELLDONATE INC.
(A Development Stage Company)
Statements of Operations
(Expressed in US dollars)
See accompanying notes to financial statements.
CELLDONATE INC.
(A Development Stage Company)
Statements of Cash Flows
(Expressed in US dollars)
See accompanying notes to financial statements.
CELLDONATE INC.
(A Development Stage Company)
Statements of Stockholders’ Deficiency
(Expressed in US dollars)
See accompanying notes to financial statements.
CELLDONATE INC.
(A Development Stage Company)
Notes to Financial Statements
Years Ended March 31, 2012 and 2011
(Expressed in US dollars)
1.Nature of Operations and Going Concern
CELLDONATE INC. (the “Company”) was incorporated under Chapter 78 of the Nevada Revised Statutes of the State of Nevada on August 15, 2006, and has its head office in Las Vegas, Nevada. The Company is a development stage company in the business of developing mobile and social media advertising solutions. The Company develops online and mobile applications, games and tools, which are designed to engage consumers in transacting e-commerce transactions and presenting deals and offers to consumers. The Company will require additional financing to complete the development of its anticipated products and market them to customers. The Company has not generated any sales revenue since inception.
The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business. Several adverse conditions cast substantial doubt on the validity of this assumption. The Company has incurred losses since inception and has an accumulated deficit of $332,117 as of March 31, 2012, limited resources and no source of operating cash flows. As at March 31, 2012, the Company has a working capital deficiency of $273,917 (2011 - $210,658).
The Company’s continuance as a going concern is dependent on the success of the efforts of its directors and principal stockholders in providing financial support in the short term, raising additional equity or debt financing either from its own resources or from third parties, and achieving profitable operations. The Company is actively seeking additional equity funding to complete development of its anticipated products. In the event that such resources are not secured, the assets may not be realized or liabilities discharged at their carrying amounts, and the difference from the carrying amounts reported in these financial statements could be material.
The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of the assets or the amounts and classifications of the liabilities that may result from the inability of the Company to continue as a going concern.
2.Significant Accounting Policies
(a)Basis of presentation
These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP). The Company’s functional and reporting currency is the US dollar.
(b)Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to accounts payable and accrued liabilities, the fair value of warrants attached to common shares issued and the recoverability of income tax assets. While management believes the estimates used are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.
CELLDONATE INC.
(A Development Stage Company)
Notes to Financial Statements
Years Ended March 31, 2012 and 2011
(Expressed in US dollars)
2.Significant Accounting Policies (continued)
(c)Basic and diluted loss per share
Basic loss per share is computed using the weighted average number of common shares outstanding. Diluted earnings per share assumes the exercise of common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. However, the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that would be anti-dilutive.
(d)Foreign currency translation
Transactions in currencies other than the US dollar are translated into US dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, except amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net loss.
(e)Research and development
Research and development expenditures are charged to operations as incurred.
(f)Financial instruments
All financial instruments are classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for-trading are measured at fair value with gains and losses recognized in net income. Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income and reported in stockholders’ equity.
A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company prioritizes the inputs into three levels that may be used to measure fair value:
a)Level 1 -	Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
b)Level 2 -	Applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly, such as quoted prices for similar assets or liabilities in active markets, or indirectly, such as quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions.
c)Level 3 -	Applies to assets or liabilities for which there are unobservable market data.
CELLDONATE INC.
(A Development Stage Company)
Notes to Financial Statements
Years Ended March 31, 2012 and 2011
(Expressed in US dollars)
2.Significant Accounting Policies (continued)
(g)Financial instruments (continued)
Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as held-to-maturity, loans and receivables, or other financial liabilities are included in the initial carrying value of such instruments and amortized using the effective interest method. Transaction costs classified as held-for-trading are expensed when incurred, while those classified as available-for-sale are included in the initial carrying value.
(h)Income taxes
The Company uses the asset and liability approach in its method of accounting for income taxes that requires the recognition of deferred tax liabilities and assets for expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company recognizes the effect of uncertain tax positions where it is more likely than not based on technical merits that the position could be sustained where the tax benefit has a greater than 50% likelihood of being realized upon settlement. A valuation allowance against deferred tax assets is recorded if based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
(i)Recent accounting guidance not yet adopted
The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows.
3.Financial Instruments
The Company has designated its cash as held-for-trading; and accounts payable, accrued liabilities and amounts due to related parties, as other financial liabilities.
(a)Fair value
The fair values of the Company’s cash and accounts payable, accrued liabilities and amounts due to related parties approximate their carrying values due to the short-term maturity of these instruments.
(b)Credit risk
Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company’s financial asset that is exposed to credit risk is cash, which is minimized to the extent that it is placed with a major financial institution. Concentration of credit risk exists with respect to the Company’s cash as all amounts are held at a single major American financial institution.
CELLDONATE INC.
(A Development Stage Company)
Notes to Financial Statements
Years Ended March 31, 2012 and 2011
(Expressed in US dollars)
3.Financial Instruments (continued)
(c)Translation risk
The Company’s functional currency is the US dollar. The Company translates transactions in foreign currencies into US currency using rates on the date of the transactions. Translation risk is considered minimal as the Company does not incur any significant transactions in currencies other than US dollars.
(d)Interest rate risk
The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and liabilities.
(e)Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in satisfying its financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. At March 31, 2012, the Company had accounts payable of $29,663 (2011 - $23,115), which are due within 30 days or less, and amounts due to related parties with no specific terms of repayment.
As at March 31, 2012, accrued liabilities consist of accrued accounting and legal fees of $7,500 (2011 - $6,000).
4.Common Stock
During the years ended March 31, 2012 and 2011, no common shares were issued.
5.Related Party Transactions
(a)Due to related parties as at March 31, 2012 includes the following:
(i)$225,955 (2011 - $172,899) due to a company controlled by a director of the Company.
(ii)$7,851 (2011 - $7,851) due to a company controlled by a shareholder of the Company for payment of legal services made on behalf of the Company.
(iii)$2,988 (2011 - $2,988) due to directors of the Company for advances made to the Company.
(b)The Company entered into an agreement with a company controlled by a former director (major shareholder) of the Company for the facilitation of its business and technology development dated August 15, 2006, as amended May 8, 2009. The agreement requires the Company to pay a monthly fee of $1,500 for services provided by the related party and to reimburse the related party for expenses incurred on its behalf. The monthly fee can be waived at the discretion of the related company. The Company incurred charges of $nil (year ended March 31, 2011 - $nil; period from August 15, 2006 to March 31, 2012 - $63,728) for the year ended March 31, 2012 pursuant to this agreement, which has been expensed as consulting and development fees.
(c)In addition, for the year ended March 31, 2012, the Company was charged fees of $20,000 (year ended March 31, 2011 - $12,000; period from August 15, 2006 to March 31, 2012 - $48,600) by the related company for administrative costs related to the Company’s filing of its regulatory documents.
CELLDONATE INC.
(A Development Stage Company)
Notes to Financial Statements
Years Ended March 31, 2012 and 2011
(Expressed in US dollars)
5.Related Party Transactions (continued)
Related party transactions are recorded at the exchange amount, representing the amount agreed upon by the parties, are non-interest-bearing and have no specific terms of repayment.
6.Income Taxes
Deferred income taxes reflect the tax consequences for future years of differences between the tax basis of assets and liabilities and their financial reporting amounts.
The provision for income taxes differs from the result that would be obtained by applying the statutory tax rate of 35% (2011 - 35%) to income before income taxes as follows:
The potential benefit of net operating loss carry-forwards has not been recognized in these financial statements since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years. The components of deferred income tax assets and the amount of the valuation allowance are as follows:
CELLDONATE INC.
(A Development Stage Company)
Notes to Financial Statements
Years Ended March 31, 2012 and 2011
(Expressed in US dollars)
6.Income Taxes (continued)
The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the reliability of the deferred income tax assets such that a full valuation allowance has been recorded. These factors include the Company's current history of net losses and the expected near-term future losses. The operating losses amounting to $332,117 will expire between 2027 and 2032 if they are not utilized. The following table lists the fiscal year in which the loss was incurred and the expiration date of the operating loss carry-forwards:
For the years ended March 31, 2012 and 2011, the Company did not have any unrecognized tax benefits and thus no interest and penalties relating to unrecognized tax benefits were recognized. The Company records interest and penalties on unrecognized tax benefits, if any, as a component of income tax expense. In addition, the Company does not expect that the amount of unrecognized tax benefits will change substantially within the next 12 months.
The Company’s US federal income tax returns are open to examination by the Internal Revenue Service for the 2007, 2008, 2009, 2010, 2011 and 2012 taxation years.
7.Segmented Information
The Company operates primarily in one business segment being development of mobile technology with substantially all of its assets and operations located in Canada.
8.Subsequent Event
The Company has evaluated subsequent events for the period after March 31, 2012 and determined that there were no material subsequent events to be disclosed in these financial statements.
Item 9.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Item 9A. Controls and Procedures
Disclosure Controls
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) designed to provide reasonable assurance the information required to be reported in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified and pursuant to the SEC’s rules and forms, including controls and procedures designed to ensure that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, and the material weaknesses outlined below, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting. Under the supervision of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2012 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 our annual or interim financial statements will not be prevented or detected on a timely basis. In our assessment of the effectiveness of internal control over financial reporting as of March 31, 2012, we determined that there were significant deficiencies that constituted material weaknesses, as described below.
1.Certain entity level controls establishing a “tone at the top” were considered material weaknesses. We do not have a majority of independent directors on our board or audit committee. We have no policy on fraud and no code of ethics at this time.
2.All cash management is conducted by our sole officer, which may result in the misappropriation of funds.
3.The lack of independent directors exercising an oversight role increases the risk of management override and potential fraud.
4.We are in the development stage with limited resources and limited monitoring of internal control and assessment of risk is conducted.
Management is currently evaluating remediation plans for the above control deficiencies.
In light of the existence of these control deficiencies, management concluded that there is 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, management has concluded that we did not maintain effective internal control over financial reporting as of March 31, 2012 based on criteria established in Internal Control-Integrated Framework issued by COSO.
Changes in Internal Control
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the fiscal year ended March 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report.
Item 9B.
Item 9B. Other Information
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
The following table sets forth the name, age and position of our executive officers and directors as of June 27, 2012.
Name Age Position
Michael Palethorpe President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer, Director
Ray Bell Director
Our current directors will serve as such until our next annual shareholder meeting or until their successors are elected who accept the position. Officers hold their positions at the pleasure of our Board of Directors. There are no arrangements, agreements or understandings between non-management security holders and our management under which non-management security holders may directly or indirectly participate in or influence the management of our affairs.
Michael Palethorpe - President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer, Director
Michael Palethorpe has been our Chief Financial Officer, Principal Accounting Officer and Treasurer since our inception on August 15, 2006, and our President, Chief Executive Officer and Secretary since June 29, 2011. He also served as our director from our inception on August 15, 2006 to August 27, 2007, and was reappointed as our director on January 5, 2009.
For the past three years , Mr. Palethorpe has provided training, development, analysis and sales-related services to a number offer and “daily deal”-type businesses. In 2011, he founded Deal Seals Inc., a company focused on acquiring deal inventory from local merchants and brokering it to deal publishers, and he currently serves as its Chief Executive Officer. Prior to establishing Deal Seals, he served as the Director of Sales for Wantsa Media (Canada) Inc., a company founded by David Strebinger, our former officer and director, from 2010 to 2011. In that role, Mr. Palethorpe assembled and supervised over 80 commission-based sales agents who were responsible for working with local merchants to create appealing consumer offers. During his time with Wantsa Media, the company developed a robust a scalable global platform for transacting offers and deals with online and mobile consumers.
From 2007 to 2011, Mr. Palethorpe worked as an account manager for Metasoft Systems Inc., an information technology consulting and software development firm. In 2008, he was the company’s top U.S. account manager, breaking several monthly sales records, and beginning in 2009 he managed a team that more than doubled the company’s sales over the next two years.
From 2005 to 2006, Mr. Palethorpe worked in a self-employed capacity providing services to non-profit and philanthropic organizations on a number of projects. He is not currently a director of any other public company or any company registered as an investment company.
Ray Bell - Director
Ray Bell served as our director from our inception on August 15, 2006 to August 27, 2007, and was reappointed as our director on January 5, 2009. He holds a Bachelor of Arts degree from Ohio State University.
Since January 2004, Mr. Bell has been involved in the real estate industry, as a property developer in the mountains of northeast Georgia, USA. For the past 35 years, he has also served as a Senior Captain/Instructor with Delta Airlines, Inc. At one time, Mr. Bell was also employed for seven years as the National Sales Director of Smith Barney and Primerica Financial Services. In that role, he personally recruited over 1200 people across the United States and Canada on the company’s behalf and acquired extensive business knowledge and experience.
Mr. Bell is not currently a director of any other public company or any company registered as an investment company.
Significant Employees
Other than as described above, we do not expect any other individuals to make a significant contribution to our business.
Family Relationships
There are no family relationships among our directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Legal Proceedings
None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past 10 years:
●any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
●any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
●being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
●being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated;
●any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business activity;
●and judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws and regulations, or any settlement to such actions; or
●any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.
Section 16(a) Beneficial Ownership Compliance Reporting
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our common stock to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended March 31, 2012 our directors, executive officers and 10% stockholders complied with all applicable filing requirements.
Code of Ethics
We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because we have not yet finalized the content of such a code.
Audit Committee
On November 16, 2009 we established an audit committee and directed the audit committee to carry out its duties in accordance with a charter. Our entire Board of Directors carries out the functions of the audit committee.
Our Board has determined that we do not have an audit committee financial expert on our Board carrying out the duties of the audit committee. The Board has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having an audit committee financial expert on the Board.
Nomination Procedures for Directors
We do not have a nominating committee. Our Board of Directors selects individuals to stand for election as members of the Board, and does not have a policy with regards to the consideration of any director candidates recommended by our security holders. Our Board has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when it considers a nominee for a position on our Board. If security holders wish to recommend candidates directly to our Board, they may do so by communicating directly with our President at the address specified on the cover of this annual report.
Item 11.
Item 11. Executive Compensation
None of our directors or executive officers received any compensation from us during our last two completed fiscal years. Pursuant to Item 402(a)(5) of Regulation S-K we have omitted all tables and columns since no compensation has been awarded to, earned by, or paid to these individuals.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Compensation Committee
We currently do not have a compensation committee of the Board of Directors or a committee performing similar functions. It is the view of the Board that it is appropriate for us not to have such a committee because of our size and because the Board as a whole participates in the consideration of executive compensation.
Compensation of Directors
Our directors have not received any compensation for their services as directors from our inception on August 15, 2006 to March 31, 2012. We have no formal plan for compensating our directors for their services in the future in their capacity as directors, although such directors are expected in the future to receive options to purchase shares of our common stock as awarded by our Board of Directors or any compensation committee that may be established.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
We do not have any compensation plans or individual compensation arrangements under which our securities are authorized for issuance to either employees or non-employees.
The following table sets forth the ownership, as of June 27, 2012, of our common stock by each of our directors, by all of our executive officers and directors as a group and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of June 27, 2012, there were 22,910,000 shares of our common stock issued and outstanding. All persons named have sole or shared voting and investment control with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this annual report.
(1)Michael Palethorpe is our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and director.
(2)Ray Bell is our director.
(3)David Strebinger was our President, Chief Executive Officer and director from our inception on August 15, 2006 until May 9, 2011, and our Secretary from August 27, 2007 until May 9, 2011.
(4)Includes 5,000,000 shares owned by Caring Capital Corporation, a company controlled by David Strebinger, 5,000,000 shares owned by Mr. Strebinger directly, and 2,020,000 shares owned by Chelsea Greene, the spouse of Mr. Strebinger.
(5)Includes 2,020,000 shares owned by Chelsea Greene and 5,000,000 shares owned by David Strebinger, the spouse of Ms. Greene.
(6)Includes 2,000,000 shares owned by John Greene and 2,000,000 shares owned by Bernadette Greene, the spouse of Mr. Greene.
(7)Includes 2,000,000 shares owned by Bernadette Greene and 2,000,000 shares owned by John Greene, the spouse of Ms. Greene.
Change of Control
As of June 27, 2012 we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
As at March 31, 2012 we were indebted $225,955 to Caring Capital Corporation, a company controlled by David Strebinger, our former President, Chief Executive Officer, Secretary and director, for consulting and development costs paid on our behalf. This amount is non-interest bearing and has no specific terms of repayment. In addition, during the year ended March 31, 2012 that company charged us $20,000 in administrative costs related to the preparation of our regulatory filings throughout the year.
As at March 31, 2012 we were indebted $7,851 to Chelber Real Estate Inc., a company controlled by Chelsea Greene, our shareholder and the spouse of Mr. Strebinger, for legal fees paid on our behalf. This amount is non-interest bearing and has no specific terms of repayment.
As at March 31, 2012 we were indebted $2,938 to Mr. Strebinger for advances made to us for the purpose of working capital. This amount is non-interest bearing and has no specific terms of repayment. As at March 31, 2012 we were also indebted $50 to Michael Palethorpe, our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and director, for advances made to us for the same purpose.
Other than as described above, we have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of those 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 two fiscal years.
Director Independence
The OTC Bulletin Board on which our common stock is quoted on does not have any director independence requirements. We currently use NASDAQ’s general definition for determining director independence, which states that “independent director” means a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, that, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director. Only one of our current directors, Ray Bell, meets this definition of independence.
Item 14.
Item 14. Principal Accountant Fees and Services
Audit and Non-Audit Fees
The following table sets forth the fees for professional audit services and the fees billed for other services rendered by our auditors, Smythe Ratcliffe LLP, in connection with the audit of our financial statements for the years ended March 31, 2012 and 2011, and any other fees billed for services rendered by our auditors during these periods.
Since our inception, our Board of Directors, performing the duties of the audit committee, has reviewed all audit and non-audit related fees at least annually. The Board, acting as the audit committee, pre-approved all audit related services for the year ended March 31, 2012.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules
(a)(1)	Financial Statements
See the “Index to Financial Statements” set forth on page.
(a)(2)	Financial Statement Schedules
None. The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or the notes related thereto.
Exhibit
Number
Exhibit
Description
3.1
Articles of Incorporation (1)
3.2
Bylaws (1)
10.6
Agreement with Caring Capital Corporation dated August 15, 2006 (1)
10.7
Amendment Agreement with Caring Capital Corporation dated May 8, 2009 (1)
31.1
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema
101.CAL
XBRL Taxonomy Extension Calculation Linkbase
101.DEF
XBRL Taxonomy Extension Definition Linkbase
101.LAB
XBRL Taxonomy Extension Label Linkbase
101.PRE
XBRL Taxonomy Presentation Linkbase
(1)Included as exhibits to our registration statement on Form S-1 filed with the SEC on May 18, 2009.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: June 27, 2012 Celldonate Inc.
By: /s/ Michael Palethorpe
Michael Palethorpe
President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer, Director
Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE
TITLE
DATE
/s/ Michael Palethorpe
President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer, Director
June 27, 2012
Michael Palethorpe
/s/ Ray Bell
Director
June 27, 2012
Ray Bell