Item 1. Business
This annual report contains forward-looking statements. 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 and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this current report and unless otherwise indicated, the terms "we", "us", "our" and "Coronado" mean Coronado Corp., unless otherwise indicated.
General Overview
We were incorporated in the State of Nevada on January 9, 2006. Effective December 14, 2009 we relocated our principal place of business and corporate offices to 518 17th Street, Suite 1000, Denver Colorado, our telephone number is 303 623 1440. Management was of the view that a change in business direction would be in the best interests of our shareholders; particularly given the inability to capitalize and expand on our past business plan. Management has chosen to research opportunities in different industry sectors with a focus on the resource sector. The anticipation is this research will lead to an acquisition in some form or manner. Our fiscal year end is December 31st. On June 25, 2010, we increased our authorized capital to include 200,000,000 shares of preferred stock having $0.001 par value. Our directors and a majority of our shareholders approved the creation of preferred stock on April 28, 2010. Our authorized capital consists of 100,000,000 shares of common stock, $0.001 par value and 200,000,000 shares of preferred stock, $0.001 par value.
Effective December 14, 2009, we appointed Larry Kellison to our board of directors and to act as our President, Secretary, Treasurer and Chief Financial Officer. Mr. Kellison is a Certified Petroleum Geologist with more than 30 years of varied oil and gas experience. In conjunction with the appointment of Mr. Kellison, we have accepted the resignations of Alejandro Quesada, Floricel Leiton and Shawn Phillips as directors and/or officers of our company.
Effective December 17, 2009, we appointed Donald Sharpe, Drew Bonnell and Michael David to our board of directors and have appointed Donald Sharpe as our President and Drew Bonnell as our Chief Financial Officer, Secretary and Treasurer. Mr. David will be an independent director and will act as Chairman of our company’s audit committee once formed. In conjunction with the appointments of Messrs. Sharpe and Bonnell, we have accepted the resignation of Mr. Kellison as President and Chief Financial Officer, Secretary and Treasurer. Mr. Kellison will serve as our company’s Chief Operating Officer. Our board of directors now consists of Larry Kellison, Donald Sharpe, Drew Bonnell and Michael David. Mr. Sharpe is a Professional Geophysicist with 30 years experience in the oil and gas business. Mr. Bonnell holds a Masters in Business Administration with 33 years business related experience. Mr. David is a Chartered Accountant with 27 years business related experience.
Prior to the December 2009 change our principal place of business and corporate offices were located at Tibas del Correo, 50 metros Norte y 25 metros al Este, San Jose, Republic of Costa Rica, telephone number 702-987-1847. Coronado was originally formed as a health services company that intended to build and operate a dental clinic in Costa Rica. Our company’s fiscal year end was March 31st.
Since inception to mid December 2009 our company actively pursued its dental and health related business. These activities were more fully described in past quarterly Form 10-Q and annul Form 10-K reports filed with the Securities and Exchange Commission. A change occurred on March 31, 2009, when our company transferred ownership of its wholly-owned subsidiary, Bosque Tranquilo S.A., to Alejandro Quesada, a former officer and director of our company, including all assets, title, interest and liabilities of the subsidiary. In consideration of this transfer, Mr. Quesada has agreed to waive any claim to money owed to him by our company as of March 31, 2009. Effective March 30, 2009, Mr. Quesada resigned his officer positions of our company and appointed Floricel Letion to the positions of Chief Executive Officer, Chief Financial Officer, Secretary, and Treasurer. These transactions were more fully described in company Current Reports on Form 8-K filed with the Securities and Exchange Commission on April 3 and 6, 2009.
From April 1, 2009 through to December 2009 our company redirected its business focus towards launching and operating a website to promote dental services and vacation packages in Costa Rica. Specifically, our company was to introduce the public to the services of various third-party dentists and dental clinics in Costa Rica for a fee from both the consumer and the dentist. The plan was for our company to also arrange for hotel accommodations and tour packages for those individuals. Management at the time was to utilize the services of the dentists and dental clinics with whom Coronado Corp has introduced to. Management registered the internet domain name www.dental-vacation.com, which was to be used for promoting these services. Due to the inability to generate revenues and continue with operations, management elected to alter our company’s business direction in mid December 2009.
On December 16, 2009, our company entered into a Letter Agreement with an oil and gas operator, pursuant to which we would participate for a 15% working interest in a 26,000 acre unit project in Alaska, which was a farm-out from BP Exploration (Alaska) Inc. Consideration for the assignment of the interest in the project would primarily consist of our company funding certain costs in regards to a 2009-2010 winter drilling program and a 15% share of the costs to restart the local processing plant. A deposit of $325,000 pending BP Exploration’s consent to the proposed assignment to Coronado Corp. was posted to secure the Letter Agreement on behalf of the company, funded in equal amounts of $162,500 each by D. Sharpe Management Inc., a privately held company owned and controlled by our president, and by Michael Bodino, a company shareholder. BP Exploration’s consent to the assignment was granted on January 12, 2010.
Due to the severe timing restrictions involved, we were unable to secure funding as required to participate in the project, and the Letter Agreement and obligations pursuant to the agreement expired on January 15, 2010, thus terminating the agreement with the oil and gas operator. With the expiry of the Letter Agreement the company has expensed the $325,000 deposit. Management continues to research other potential resource opportunities.
Our company has sustained losses since inception, January 9, 2006, to December 31, 2010, of $593,529 and relies solely upon the sale of securities and loans from corporate officers and directors for funding.
Our Current Business
Since our change of management in December 2009, we are engaged in the business of exploration and development of oil and gas properties. Over the next twelve months we intend to secure a project of merit within the resource sector and commence with further development of the project.
Competition
The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staff. Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. There are other competitors that have operations in the areas we are interested in and the presence of these competitors could adversely affect our ability to acquire additional leases and/or equipment as required.
Governmental Regulations
Our oil and gas operations are subject to various national, state and/or provincial, and local governmental regulations. Matters subject to regulation include discharge permits for drilling operations, drilling and abandonment bonds, reports concerning operations, the spacing of wells, and pooling of properties and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas. The production, handling, storage, transportation and disposal of oil and gas, by-products thereof, and other substances and materials produced or used in connection with oil and gas operations are also subject to regulation under federal, state, provincial and local laws and regulations relating primarily to the protection of human health and the environment. To date, expenditures related to complying with these laws, and for remediation of existing environmental contamination, have not been significant in relation to the results of operations of our company. The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations.
Research and Development
We have incurred $Nil in research and development expenditures over the last fiscal year.
Employees
Currently our only employees are our directors and officers. Our officers and directors are donating their time to the development of our company and intend to do whatever work is necessary in order to bring us to the point of being able to implement our business plan.
Item 1A.
Item 1A. Risk Factors
Our business operations are subject to a number of risks and uncertainties, including, but not limited to those set forth below:
We are a start-up company with a lack of operating history and profitability. Coronado Corp. has incurred losses since inception, and we expect those losses to continue in the future. As a result, we may have to suspend or cease operations.
We were incorporated on January 9, 2006, and we have not started any business operations nor realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. As a result, it is possible that we may not generate any revenues in the future. Since inception, to December 31, 2010, Coronado Corp. has incurred a net loss of $593,529.
In order to generate revenue, we are dependent on our ability to find a project within our new focus area, the resource sector, and at some point develop this project to the point of production and sales.
Based upon current plans, we expect operating losses in future periods. If we do not generate enough future revenues to cover our expenses before the business has become profitable, we would have to suspend or cease operations and you could lose your investment.
Because Coronado Corp. is a small company and does not have much capital, if we are unable to raise additional funds to meet our needs we may have to scale back our operations, which could result in a loss of your investment.
Because we are a small company with limited financial resources, we may be unable to sufficiently finance our operations until we generate revenues sufficient to cover our expenses. If that were the case, we would have to raise more capital to finance our operations in order for the business to be successful.
If we are unable to raise the capital required to finance our operations, then we would be unable to generate revenues sufficient to maintain our business and this could result in a loss of your investment.
Because Mr. Sharpe, Mr. Kellison, and Mr. Bonnell have other outside business activities, they can only dedicate a limited amount of their time to Coronado Corp.’s operations. This could result in periodic interruptions or suspensions of the business plan.
Because our company officers, Mr. Sharpe, Mr. Kellison, and Mr. Bonnell have other outside business interests, they will only be able to devote a limited amount of their time to our operations. Coronado Corp. operations may occur at times which are inconvenient to Mr. Sharpe, Mr. Kellison and Mr. Bonnell, which could result in the development of our plan being periodically interrupted or suspended.
If our officers and directors resign or die without having found replacements, our operations may be suspended or cease altogether. Should that occur, it could result in a loss of your investment.
We have three officers and four directors and we are entirely dependent upon them in order to conduct our operations. If they should resign or die, there may be no one to run Coronado Corp. The company has no Key Man insurance. If such an event were to take place and we were unable to find other persons to run Coronado Corp., our operations could be suspended or cease entirely, and this could result in the loss of your investment.
We will incur ongoing costs and expenses for SEC reporting and compliance, without revenue we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all.
Our common shares are quoted on the OTC Electronic Bulletin Board. To maintain eligibility for quotation on the OTCBB, issuers must remain current in their filings with the SEC. Market Makers are not permitted to quote a security whose issuer does not meet this filing requirement. Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their required filing during that time. In order for us to remain in compliance we will require future revenues to cover the cost of these filings, which could comprise a substantial portion of our available cash resources. If we are unable to generate sufficient revenues to remain in compliance it may be difficult for you to resell any shares you may purchase, if at all.
Trading of our stock may be restricted by the SEC's "Penny Stock" regulations, which may limit a stockholder's ability to buy and sell our stock.
The U.S. Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors." The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.
The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder's ability to buy and sell our stock.
In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Trading in our common shares on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.
Our common shares are currently listed for public trading on the OTC Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance.
In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.
Trends, Risks and Uncertainties
We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.
Item 1B.
Item 1B. Unresolved Staff Comments
None.
Item 2.
Item 2. Properties
Executive Offices
Our principal place of business is located at 518 17th Street, Suite 1000, Denver Colorado, telephone number (303) 623 1440. The office space is a 200 square foot room, temporarily provided to us rent-free as we research opportunities. The availability of this space for our use could change at any time.
We do not have any investments or interests in any real estate. We do not invest in real estate mortgages, nor do we invest in Securities of, or interests in, persons primarily engaged in real estate activities.
Item 3.
Item 3. Legal Proceedings
We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.
Item 4.
Item 4. (Removed and Reserved)
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is currently quoted on the Over-The-Counter Bulletin Board (OTCBB) under the symbol “CRAO”. Our common stock has been quoted on the OTCBB since February 14, 2007.
Our common stock has not had any trading activity, since first being quoted on February 14, 2007, and since then has had a high bid of $0.05 and a low bid of $0.00. The high and low bid information was obtained from www.otcbb.com. OTCBB quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Our shares are issued in registered form. Island Stock Transfer is the registrar and transfer agent for our common shares.
On April 15, 2011, the shareholders' list showed 32 registered shareholders and 5,000,000 common shares outstanding.
Dividend Policy
We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.
Equity Compensation Plan Information
We have not approved or adopted any equity compensation plans.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
We did not sell any equity securities which were not registered under the Securities Act during the year ended December 31, 2010 that were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended December 31, 2010.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended December 31, 2010.
Item 6.
Item 6. Selected Financial Data
As a “smaller reporting company”, we are not required to provide the information required by this Item.
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 consolidated audited financial statements and the related notes that appear 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. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 5 of this annual report.
Our consolidated audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Overview
The following plan of operation should be read in conjunction with our financial statements and the notes thereto included elsewhere in this report. Statements contained herein which are not historical facts are forward-looking statements, as that term is defined by the Private Securities Litigation Reform Act of 1995, including statements relating to our plans, objectives, expectations and intentions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. We caution investors that any forward-looking statements made by us are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.
Results of Operations
We have conducted no material operations during the period ended December 31, 2010, and do not have any present operations. During the period ended December 31, 2010, we generated no revenues. Accordingly, a discussion of our results of operations is not meaningful and will not be presented herein.
The following table provides selected financial data about our company as of and for the period ended December 31, 2010 and the year ended December 31, 2009.
Liquidity and Capital Resources
The report of our auditors on our audited financial statements for the fiscal year ended December 31, 2010, contains a going concern qualification as we have suffered losses since our inception. We have minimal assets and have achieved no operative revenues since our inception. We have depended on loans and sales of equity securities to conduct operations. Unless and until we commence material operations and achieve material revenues, we will remain dependent on financings to continue our operations. We will be required to raise additional capital over the next twelve months to meet our ongoing expenses.
Plan of Operation and Cash Requirements
Our plan over the next 12 months is to research projects of merit principally within the resource sector. We anticipate that this research will ultimately lead to a potential acquisition in some form or manner. In order to carry out our plans we will require the matching funding to cover acquisition costs, working capital, and any other related or ongoing expenditures until sufficient revenue is generated to sustain operations.
On December 16, 2009, our company entered into a Letter Agreement with an oil and gas operator, pursuant to which we would participate for a 15% working interest in a 26,000 acre unit project in Alaska, which was a farm-out from BP Exploration (Alaska) Inc. Consideration for the assignment of the interest in the project would primarily consist of our company funding certain costs in regards to a 2009-2010 winter drilling program and a 15% share of the costs to restart the local processing plant. A deposit of $325,000 pending BP Exploration’s consent to the proposed assignment to Coronado Corp. was posted to secure the Letter Agreement on behalf of the company, funded in equal amounts of $162,500 each by D. Sharpe Management Inc., a privately held company owned and controlled by our president, and by Michael Bodino, a company shareholder. BP Exploration’s consent to the assignment was granted on January 12, 2010.
Due to the severe timing restrictions involved, we were unable to secure funding as required to participate in the project, and the Letter Agreement and obligations pursuant to the agreement expired on January 15, 2010, thus terminating the agreement with the oil and gas operator. With the expiry of the Letter Agreement, the company has expensed the $325,000 deposit.
On March 1, 2010 we engaged FIG Partners LLC of Atlanta Georgia (FIG) to provide advisory services and act on a best efforts basis as the Company’s exclusive placement agent in connection with a debt/equity financing relating to the Alaska oil and gas project described above. A non-refundable retainer of $12,500 was advanced on behalf of the company by D. Sharpe Management Inc., a privately held company owned and controlled by our president. The engagement agreement provided for a further $12,500 to be advanced on March 15, 2010 but this will not be paid. The Company agreed to pay FIG a fee equal to 6% of the principal value of securities sold by the Company, plus five year term warrants to purchase common stock in the company equal to 6% of the principal value of the equity offering, or, in the event of non-equity securities being issued by the company, five year term warrants with a strike price equal to the 30-day Volume Weighted Average Price on the day of closing the offering, or $0.50, whichever is greater. Retainer amounts advanced to FIG will be applied against the placement fee due upon completion of any capital raised for the company by FIG. Management intends to research other potential resource opportunities elsewhere.
In order to proceed with our plans and to fund overhead and administration expenses, effective March 2010, shareholders of our company advanced approximately $40,000 in loans bearing 10% annual interest, which have been secured by promissory notes. In September 2010, shareholders advanced another $50,000 in shareholder loans bearing 10% annual interest, which have been secured by promissory notes. On September 20, 2010 the Company paid $50,000 to Katten Muchin Rosenman LLP of New York, New York as retainer to prepare legal documentation of a proposed agreement related to the Alaska oil and gas project described above. These negotiations for the Alaska project were terminated on October 11, 2010 and the $50,000 was charged to expense through professional fees. On January 13, 2011 the Company received $5,000 in the form of a shareholder loan.
If we are unable to generate enough revenue to stay in business or run out of cash, we will have to find alternative sources for money, be it a public offering, a private placement of securities or loans from our officers or others, and/or other sources or methods of financing. Equity financing could result in additional dilution to existing shareholders. If we are unable to meet our needs for cash, then we may be unable to continue, develop, or expand our activities or operations.
While the officers and directors have generally indicated a willingness to provide services and financial contributions if necessary, there are presently no agreements, arrangements, commitments, or specific understandings, either verbally or in writing, between the officers and directors and Coronado Corp.
If we are unable to pay for our expenses because we do not have enough money, we will cease operations until we raise more money. If we cannot or do not raise more money, we will be forced to cease operations.
We have no present plans to purchase or sell any plant or significant equipment. We also have no present plans to add employees although we may do so in the future if we engage in any merger or acquisition transactions.
Coronado Corp. has never declared bankruptcy, been in receivership, or been involved in any kind of legal proceeding.
Assuming maintenance of our current operations and the investigation of possible acquisitions, over the next twelve months we expect to expend funds as follows:
Estimated Net Expenditures During the Next Twelve Months
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed.
The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Results of Operations - Twelve Months Ended December 31, 2010 and Nine Months Ended December 31, 2009
The following summary of our results of operations should be read in conjunction with our financial statements for the year ended December 31, 2010, which are included herein.
Our operating results for the twelve months ended December 31, 2010, for the nine months ended December 31, 2009 and the changes between those periods for the respective items are summarized as follows:
Our accumulated losses increased to $593,529 as of December 31, 2010. Our financial statements report a net loss of $145,620 for the year ended December 31, 2010 compared to a net loss of $342,300 for the nine month period ended December 31, 2009. Our losses have decreased primarily as a result of an exploration advance of $325,000 that was expensed for the nine month period ending December 31, 2009 offset by an increase in general and administrative costs and professional fees for the same periods.
Our total liabilities as of December 31, 2010 were $479,232 as compared to total liabilities of $334,800 as of December 31, 2009. The increase was due to increases in accounts payable and accrued liabilities, amounts due to related parties, and accrued interest to related parties.
Liquidity and Financial Condition
Working Capital
Cash Flows
Operating Activities
Net cash used by operating activities was $97,262 in the year ended December 31, 2010 compared with $6,191 in the nine months ended December 31, 2009. The increase in use of cash of $91,071 in operating activities is mainly attributable to the increase in general and administrative costs and professional fees.
Investing Activities
Net cash used in investing activities was $nil in the year ended December 31, 2010 compared to net cash used in investing activities of $nil in the nine months ended December 31, 2009.
Financing Activities
Net cash provided by financing activities was $96,074 in the year ended December 31, 2010 compared to $nil in the nine months ended December 31, 2009. The increase in cash provided by financing activities was attributable to net shareholder loans received, after repayments, during the period.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Going Concern
As of December 31, 2010, the Company has accumulated losses of $593,529 since inception, has a working capital deficiency of $479,075 and has earned no revenues since inception. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2011. The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these financial statements relate to the provision for income taxes, depreciation and amortization.
Long-Lived Assets
In accordance with ASC 360, Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
Financial Instruments
The Company’s financial instruments consist principally of cash and cash equivalents, accounts payable, and notes payable. Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Management believes that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
Recent Accounting Pronouncements
The Company has evaluated all the recent accounting pronouncements through the filing date and believes that none of them will have a material effect on the Company.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 8.
Item 8. Financial Statements and Supplementary Data
CORONADO CORP.
(A Development Stage Company)
FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
CORONADO CORP.
(A Development Stage Company)
FOR THE PERIOD OF JANUARY 9, 2006 (INCEPTION) TO DECEMBER 31,
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Coronado Corp. (a development stage company)
Denver, Colorado 80202
We have audited the accompanying balance sheets of Coronado Corp. (a development stage company) (the “Company”) as of December 31, 2010, and the related statements of operations and comprehensive loss, stockholders’ deficit and cash flows for the year then ended. 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 audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an 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 of December 31, 2010, and the results of its operations and its cash flows for the year then ended, 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 not generated revenue and has a working capital deficit. These conditions raise significant doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
April 15, 2011
Coronado Corp.
(A Development Stage Company)
Balance Sheets
The accompanying notes are an integral part of these financial statements.
Coronado Corp.
(A Development Stage Company)
Statements of Operations
The accompanying notes are an integral part of these financial statements.
Coronado Corp.
(A Development Stage Company)
Statements of Stockholders’ Deficit
For the Period from January 9, 2006 (Inception) to December 31, 2010
The accompanying notes are an integral part of these financial statements.
Coronado Corp.
(A Development Stage Company)
Statements of Cash Flows
The accompanying notes are an integral part of these financial statements.
Coronado Corp.
(A Development Stage Company)
Notes to the Financial Statements
1.
Organization and Going Concern
Coronado Corp. (the “Company”, “we” or “our”) is a Nevada corporation incorporated on January 9, 2006. Effective December 14, 2009 the Company relocated offices to Denver Colorado. Throughout the Company’s history and prior to this relocation, the Company was based in San Jose, Costa Rica. The Company purchased a wholly-owned subsidiary, “Bosque Tranquilo S.A.” in San Jose, Costa Rica on October 12, 2006. On March 31, 2009, the Company disposed of Bosque Tranquilo S.A.
The Company is a development stage company, which as of December 14, 2009 is reviewing opportunities primarily within the resource sector. Prior to December 14, 2009 the Company had intended to offer dental services in Costa Rica. To date, the Company’s activities have been limited to its formation and the raising of equity capital. The Company previously had a fiscal year end of March 31, but during the prior period changed its fiscal year end to December 31.
Going Concern and Liquidity Considerations
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of December 31, 2010, the Company has accumulated losses of $593,529 and a working capital deficiency of $479,075. In addition, the Company has earned no revenues since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2011. The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.
2.
Significant Accounting Policies
Basis of Consolidation
For March 31, 2009, these financial statements include the accounts of the Company and its wholly-owned subsidiary, Bosque Tranquilo S.A. All intercompany balances and transactions have been eliminated. At March 31, 2009 the Company disposed of Bosque Tranquillo S.A.
Basis of Presentation
The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (US GAAP) applicable to development stage companies.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.
Coronado Corp.
(A Development Stage Company)
Notes to the Financial Statements
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $157 and $1,345 in cash and cash equivalents at December 31, 2010 and 2009, respectively.
Financial Instruments
The Company’s financial instruments consist principally of cash and cash equivalents, accounts payable, and notes payable. Pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Management believes that the recorded values of our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
Property and Equipment
Property and equipment are stated at cost. The Company has adopted the policy of depreciation being computed by use of the straight-line method over the estimated useful lives of the assets, which is up to 5 years for equipment and the shorter of lease terms or 10 years for leasehold improvements. The depreciation expense on property and equipment was $3,386 for the year ended March 31, 2009. At March 31, 2009, the Company disposed of all its property and equipment.
Income Taxes
Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with ASC 740, Income Taxes, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carryforwards when realization is more likely than not.
The Company accounts for uncertain tax positions in accordance with the authoritative guidance issued by the FASB on income taxes which addresses how we should recognize, measure and present in our financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return. Pursuant to this guidance, we can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than 50% likely of being realized upon settlement. No liability for unrecognized tax benefits was recorded as of December 31, 2010 and 2009.
Loss per Share
The Company has adopted ASC 260 Earnings Per Share, (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income/loss by the weighted average number of shares of common stock outstanding during the period.
Coronado Corp.
(A Development Stage Company)
Notes to the Financial Statements
Foreign Currency Transactions
The Company’s functional currency is the US dollar.
For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.
No significant realized exchange gains or losses were recorded from January 9, 2006(inception) to the period ended December 31, 2010.
Comprehensive Loss
ASC 220, Comprehensive Income, establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. From January 9, 2006(inception) to December 31, 2010, the Company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss from January 9, 2006(inception) to December 31, 2010.
Revenue Recognition
The Company recognizes revenue from the sale of products and services in accordance with ASC 605, “Revenue Recognition.” Revenue will be recognized only when all of the following criteria have been met:
(i)
Persuasive evidence for an agreement exists;
(ii)
Delivery has occurred;
(iii)
The fee is fixed or determinable; and
(iv)
Collection is reasonably assured.
Recent Accounting Pronouncements
The Company has evaluated all the recent accounting pronouncements through the filing date and believes that none of them will have a material effect on the Company.
3.
Capital Stock
Share Issuances
Since January 9, 2006(inception), the Company has issued 75,000 shares, 3,000,000 shares, and 2,100,000 shares of common stock at approximately $0.006, $0.01, and $0.04 per share respectively, resulting in total proceeds of $114,454.
On March 4, 2010, the Company cancelled 175,000 common shares for no consideration. These shares were owned by former shareholders and were cancelled as a result of a management change in December 2009.
Coronado Corp.
(A Development Stage Company)
Notes to the Financial Statements
4.
Income Taxes
The company has incurred operating losses of $935,830, which, if unutilized, will begin to expire in 2026. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have been offset by a valuation allowance.
The potential future tax benefits of these losses have not been recognized in these financial statements due to uncertainty of their realization. When the future utilization of some portion of the carryforwards is determined not to be “more likely than not,” a valuation allowance is provided to reduce the recorded tax benefits from such assets.
5.
Notes Payable - Related Parties
As at December 31, 2010, the Company is indebted to a privately held company owned and controlled by the Company’s president in the amount of $162,500, and to another shareholder in the amount of $162,500. The amounts bear 10% annual interest and are unsecured and have no terms of repayment. As at December 31, 2010, $33,854 in accrued interest has been recorded. Refer to Note 7.
As at December 31, 2010, the Company is indebted to shareholders in the amount of $90,000. The amounts bear 10% annual interest, are unsecured and $40,000 matured on December 31, 2010 and $50,000 matures on June 30, 2011. As at December 31, 2010, $4,750 in accrued interest has been recorded. The note holders of the $40,000 have agreed to extend the notes maturity date, subject to interest continuing to accrue, while a project of merit continues to be pursued, and/or an alternate liquidation plan is found for the company.
As at December 31, 2010, the Company is indebted to various shareholders in the amount of $1,500, net of repayments during the period. The amounts are unsecured, non-interest bearing and have no terms of repayment.
Coronado Corp.
(A Development Stage Company)
Notes to the Financial Statements
6.
Disposition of Subsidiary
At March 31, 2009, the Company disposed of its 100% wholly-owned subsidiary, Bosque Tranquilo S.A., to a former officer, who is also a stockholder and was a director of the Company. Summarized financial information for the disposition is set forth below.
7.
Exploration Advance
On December 16, 2009, the Company entered into a Letter Agreement with an oil and gas operator, pursuant to which the Company would participate for a 15% working interest in a 26,000 acre unit project in Alaska, which was a farm-out from BP Exploration (Alaska) Inc. Consideration for the assignment of the interest in the project would primarily consist of the Company funding certain costs in regards to a 2009-2010 winter drilling program and a 15% share of the costs to restart the local processing plant. A deposit of $325,000 pending BP Exploration’s consent to the proposed assignment to Coronado Corp. was posted to secure the Letter Agreement on behalf of the Company, funded in equal amounts of $162,500 each by D. Sharpe Management Inc., a privately held company owned and controlled by our president, and by Michael Bodino, a company shareholder. BP Exploration’s consent to the assignment was granted on January 12, 2010. Due to the severe timing restrictions involved, the Company was unable to secure funding as required to participate in the project, and the Letter Agreement and obligations pursuant to the agreement expired on January 15, 2010, thus terminating the agreement with the oil and gas operator. The Company expensed the $325,000 deposit and recorded it within the period ending December 31, 2009. The Company continued to pursue this opportunity with the operator in attempts to secure some manner of participation in their Alaska project, however, further negotiations were terminated on October 11, 2010.
8.
Agreement
On March 1, 2010 the Company engaged FIG Partners LLC of Atlanta Georgia (FIG) to provide advisory services and act on a best efforts basis as the Company’s exclusive placement agent in connection with a debt/equity financing relating to the Alaska oil and gas project described in Note 7. A non-refundable retainer of $12,500 was advanced on behalf of the company by D. Sharpe Management Inc., a privately held company owned and controlled by our president. The engagement agreement provided for a further $12,500 to be advanced on March 15, 2010 but this amount will not be paid. The Company has agreed to pay FIG a fee equal to 6% of the principal value of securities sold by the Company, plus five year term warrants to purchase common stock in the Company equal to 6% of the principal value of the equity offering, or, in the event of non- equity securities being issued by the Company, five year term warrants with a strike price equal to the 30-day Volume Weighted Average Price on the day of closing the offering, or $0.50, whichever is greater. As of the date of these financial statements, no warrants have been issued as no successful financing has been obtained. Retainer amounts advanced to FIG will be applied against the placement fee due upon completion of any capital raised for the Company by FIG.
Coronado Corp.
(A Development Stage Company)
Notes to the Financial Statements
9.
Professional Fees
On September 20, 2010 the Company paid $50,000 to Katten Muchin Rosenman LLP of New York, New York as retainer to prepare legal documentation of a proposed agreement related to the Alaska oil and gas project described in Note 7. The negotiations for the Alaska project were terminated on October 11, 2010 and the $50,000 was charged to expense through professional fees.
10.
Subsequent Event
On January 13, 2011 the Company received $5,000 from a shareholder loan for $5,000 bearing interest at 10%, unsecured and maturing on January 13, 2012.
Item 9.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and interim periods, including the interim period up through the date the relationship ended.
Item 9A.
Item 9A. Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the quarterly period covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective as of December 31, 2010.
Management’s Report on Internal Control Over Financial Reporting.
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed, under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2010 was not effective for the reason described herein.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) inadequate segregation of duties consistent with control objectives. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of December 31, 2010.
Management believes that the material weakness set forth above did not have an effect on our financial results.
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) unauthorized acquisitions, use, or disposition of the Company’s assets that could have a material affect on the Company’s financial statements are prevented or timely detected.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparations and presentations. 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.
In connection with the preparation of this Annual Report on Form 10-K for the period ended December 31, 2010, management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our internal controls over financial reporting, pursuant to Rule 13a-15 under the Exchange Act based on the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our Chief Executive Officer and Chief Financial Officer have concluded that the design and operation of our internal controls and procedures were not effective as of December 31, 2010. There were no significant changes in our internal controls over financial reporting that occurred during the period covered in this report that have materially affected, or are reasonably likely to materially affect, our internal controls 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 Securities and Exchange Commission that permit the company to provide on management’s report on this quarterly report.
Changes in Internal Control Over Financial Reporting.
There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken.
Item 9B.
Item 9B. Other Information
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Donald Sharpe
Mr. Sharpe is a Professional Geophysicist with 30 years experience in the oil and gas business. Mr. Sharpe began his career with Suncor Inc. in Calgary and Dallas and during that time he gained wide experience in exploration, production, marketing, finance and management. He has been a founder and director of a number of successful oil and gas companies both in Canada and the United States. Mr. Sharpe currently serves as the president of Eden Energy Corp., a natural gas firm with operations in the Piceance Basin in Colorado, and is a director of Universal Power Corp., an oil and gas exploration firm with properties offshore Namibia, Africa.
Mr. Sharpe received a Bachelors of Science in Geophysics from the University of British Columbia in 1981, a Certificate in Business Management from the University of Calgary in 1989 and graduated from the Banff School of Advanced Management in 1991. Mr. Sharpe is member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta and the Canadian Society of Exploration Geophysicists.
Larry Kellison
Mr. Kellison is a Certified Petroleum Geologist with more than 30 years of varied oil and gas experience. From December 2001 to November 2005, he was Vice President and General Manager for Black Hills Corporation’s oil and gas subsidiary in Golden, Colorado where he led the company’s operations throughout the U.S. From March 1991 to March 2000 he served in a variety of positions with the unregulated oil and gas subsidiary of the Montana Power Company including Exploration Manager and District Manager for its Billings regional office. Mr. Kellison has been the Chief Operating Officer of Eden Energy Corp. from May of 2006 to present.
Mr. Kellison has a B. Sc. in geology from the University of Mississippi and a M. Sc in geology from the University of Nebraska.
Drew Bonnell
Mr. Bonnell graduated from the Richard Ivey School of Business at the University of Western Ontario with a Masters of Business Administration degree in 1998. For a period of 12 years prior to graduation, Mr. Bonnell served as President and director of multiple private companies engaged in tourism operations in key resort destinations in Western Canada. In these positions, Mr. Bonnell had the responsibility to manage the affairs of each of these companies; to ensure the operation of the business, and interact with all professional services and counsel as required. From 1997 to divestiture in 2006, Mr. Bonnell served as President and director of a private British Columbia based company with business interests in Whistler, Canada. From May 2004, Mr. Bonnell has served as the Chief Financial Officer, secretary, treasurer and director of Eden Energy Corp. Mr. Bonnell serves as President and Director of Pannonia Ventures Corp., which effective November 23, 2010 was accepted as a Capital Pool Company pursuant to provisions of the TSX Venture Exchange and the BCSC and ASC. (the common shares of which are quoted on the TSX Venture Exchange effective February 10, 2011). Mr. Bonnell is active as a businessman and a member of the worldwide Ivey alumni association.
Michael David
Michael David obtained the Chartered Accountant designation in 1991. In 2003, Mr. David obtained the Certified Public Accountant (CPA) designation from the State of Illinois. Since 1992, Mr. David has been a partner in an accounting firm and in 1998, founded the firm of Lancaster & David, Chartered Accountants. Mr. David's client base is mainly Canadian and US public companies for which he provides a full range of auditing and accounting services.
Employment Agreements
We have no formal employment agreements with any of our employees, directors or officers.
Family Relationships
There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past ten years:
1. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i.
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity
ii.
Engaging in any type of business practice; or
iii.
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i.
Any Federal or State securities or commodities law or regulation; or
ii.
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii.
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of our common stock to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
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 December 31, 2010, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with.
Code of Ethics
In 2007 we adopted a Code of Ethics that applies to all of our employees. Our Code of Ethics was filed with the Securities and Exchange Commission on June 29, 2007 as Exhibit 14 to our annual report. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to our President c/o Coronado Corp. at 518 17th Street, Suite 1000, Denver Colorado, USA..
Board and Committee Meetings
Our board of directors held no formal meetings during the year ended December 31, 2010. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
For the year ended December 31, 2010 our only standing committee of the board of directors was our audit committee.
Nomination Process
As of December 31, 2010, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual report.
Audit Committee
Currently our audit committee consists of our entire board of directors. We do not have a standing audit committee as we currently have limited working capital and no revenues. With our recent management change however, we have positioned ourselves with an audit committee financial expert and independent director should we be able to raise sufficient funding to execute our business plan. With success we will form an audit, compensation committee and other applicable committees utilizing our directors expertise.
Audit Committee Financial Expert
Our board of directors has determined that it does not have a member of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K.
Item 11.
Item 11. Executive Compensation
The particulars of the compensation paid to the following persons:
(a)
our principal executive officer;
(b)
each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended December 31, 2010 and 2009; and
(c)
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended December 31, 2010 and 2009,
who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:
(1)
Mr. Sharpe was appointed President of our company on December 17, 2009.
(2)
Mr. Bonnell was appointed the Chief Financial Officer of our company December 17, 2009.
(3)
Mr. Kellison was appointed President, Secretary, Treasurer and Chief Financial Officer our company on December 14, 2009 and resigned from those positions on December 17, 2009 on which date Mr. Kellison was appointed Chief Operating Officer.
(4)
Floricel Lieton was appointed President, Chief Executive and Financial Officer on March 30, 2009 and as Secretary, Treasurer from September8, 2008. Floricel Lieton resigned as a director and officer of our company on December 14, 2009.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any 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 share options may be granted at the discretion of our board of directors.
2010 Grants of Plan-Based Awards
There were no grants of plan based awards during the year ended December 31, 2010.
Outstanding Equity Awards at Fiscal Year End
There were no outstanding equity awards at the year ended December 31, 2010.
Option Exercises and Stock Vested
During our Fiscal year ended December 31, 2010 there were no options exercised by our named officers.
Compensation of Directors
We do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for 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.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of April 15, 2011, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
(1)
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on March 9, 2011. As of March 9, 2011 there were 5,000,000 shares of our company’s common stock issued and outstanding.
Changes in Control
We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our company.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended December 31, 2010, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year end for the last three completed fiscal years.
Director Independence
We currently act with four (4) directors, consisting of Donald Sharpe, Drew Bonnell, Larry Kellison and Michael David.
We have determined that Michael David is an independent director, as that term is used in Rule 4200(a)(15) of the Rules of National Association of Securities Dealers.
Currently our audit committee consists of our entire board of directors. We currently do not have nominating, compensation committees or committees performing similar functions. There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.
Our board of directors has determined that it does have a member of its audit committee who qualifies as an “audit committee financial expert” as defined in as defined in Item 407(d)(5)(ii) of Regulation S-K.
From inception to present date, we believe that the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.
Item 14.
Item 14. Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed fiscal year ended December 31, 2010 and for fiscal year ended December 31, 2009 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules
(a)
Financial Statements
(1)
Financial statements for our company are listed in the index under Item 8 of this document
(2)
All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
(b)
Exhibits
* Filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
CORONADO CORP.
(Registrant)
Dated: April 15, 2011 /s/ Donald Sharpe
Donald Sharpe
President and Director
(Principal Executive Officer)
Dated: April 15, 2011 /s/ Drew Bonnell
Drew Bonnell
Chief Financial Officer and Director
(Principal Financial Officer and Principal
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: April 15, 2011 /s/ Donald Sharpe
Donald Sharpe
President and Director
(Principal Executive Officer)
Dated: April 15, 2011 /s/ Drew Bonnell
Drew Bonnell
Chief Financial Officer and Director
(Principal Financial Officer and Principal
Accounting Officer)
Dated: April 15, 2011 /s/ Larry Kellison
Larry Kellison
Chief Operating Officer and Director
Dated: April 15, 2011 /s/ Michael David
Michael David
Director