SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File No. 0-9297
CRONUS CORPORATION
(Formerly Thunderstone Group, Inc.)
NEVADA 36-3880744
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7660 E. BROADWAY #210, TUCSON, ARIZONA 85710
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (520)
885-1220
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.[X] Yes[ ] No
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
_____Class_____ Outstanding as of March 31, 1997
$.001 PAR VALUE 11,453,106 SHARES
COMMON STOCK
DOCUMENTS INCORPORATED BY REFERENCE:
1. Reorganization Stock Exchange Agreement with
Perimeter Bicycling Association of America, Inc. 8-K
November 30, 1995.
2. Reorganization Stock Exchange Agreement with Amateur
Golf Association of America, Inc. 8-K November 30,
1995.
3. Reorganization Stock Exchange Agreement with TGI
Inc. 8-K December 13, 1995.
4. Purchase Agreement with Black Diamond Mining
Corporation. 8-K May 23, 1996.
5. Reorganization Agreement with Black Diamond Mining
Corporation. 8-K July 31, 1996.
6. Asset Purchase Agreement with El Tour de Tucson,
Inc. 8-K July 31, 1996.
7. Termination of Reorganization Agreement with Black
Diamond Mining Corporation. 8-K December 20, 1996.
8. Audited Financial Statements for the years ended
December 31, 1995 and 1994, dated March 28, 1997. 10-
KSB April 2, 1997.
PART 1
ITEM 1. Financial Statements
J. Dennis Bartlett, P.C.
Certified Public Accountant
2421 E. 6th Street
Tucson, Arizona 85716
Cronus Corporation
Tucson, Arizona
I have compiled the accompanying balance sheet of
Cronus Corporation as of March 31, 1996 and the related
Profit and Loss statement for the three months then
ended, in accordance with standards established by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form
of financial statements information that is the
representation of management. I have not audited or
reviewed the accompanying financial statements and,
accordingly, do not express an opinion or any other
form of assurance on them.
Management has elected to omit substantially all
of the disclosures and the statement of cash flows
required by generally accepted accounting principles.
If the omitted disclosures and statement of cash flows
were included with the financial statements, they might
influence the user's conclusions about the Company's
financial position, results of operations, and cash
flows. Accordingly, these financial statements are not
designed for those who are not informed about such
matters.
/s/
J. Dennis Bartlett, P.C.
March 31, 1996
J. Dennis Bartlett, P.C.
Certified Public Accountant
2421 E. 6th Street
Tucson, Arizona 85716
We hereby consent to the inclusion of our report dated
March 31, 1996, in the quarter report of Cronus
Corporation on Form 10-QSB for the period ended March
31, 1996.
/s/
J. Dennis Bartlett, P.C.
Tucson, Arizona
March 31, 1996
CRONUS CORPORATION
Balance Sheet
As of March 31, 1996
ASSETS
Current Assets
Checking/Savings
Cash
Bank of America 630.00
Checking-JR 10.13
Total Cash 640.13
Total Checking/Savings 640.13
Other Current Assets
Prepaid comp 2,000.00
Total Other Current Assets 2,000.00
Total Current Assets 2,640.13
Other Assets
Investments
PBAA 28,500.00
Total Investments 28,500.00
Security deposits 700.00
Total Other Assets 29,200.00
TOTAL ASSETS 31,840.13
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Other Current Liabilities
Accrued expenses
Accrued comp 29,166.00
Total Accrued expenses 29,166.00
Liab not discharged ... 2,930,134.00
Total Other Current Li.. 2,959,300.00
Total Current Liabilities 2,959,300.00
Long Term Liabilities
Loans payable
JR LOAN 3,200.00
Kalav Loan 112,400.00
Total Loans payable 115,600.00
Total Long Term Liabilities 115,600.00
Total Liabilities 3,074,900.00
Equity
Net Income -154,325.87
Stockholders' Equity(Def)
Capital Stock 11,390.00
Paid in capital(deficit) 156,215.00
Retained Earnings -3,053,225.00
Total Stockholders' Equity -2,885,620.00
Treasure Stock -3,114.00
Total Equity -3,043,059.87
TOTAL LIABILITIES & EQUITY 31,840.13
CRONUS CORPORATION
Profit and Loss
January through March 1996
Ordinary Income/Expense
Expense
Bank Service 18.00
Fees 1,895.00
Marketing 85.98
Professional Fees
Consultants 155,250.00
Promotion 13.90
Supplies
Office 76.99
Total Supplies 76.99
Total Expense 157,339.87
Net Ordinary Income -157,339.87
Other Income/Expense
Other Income
Gain on Sale 3,114.00
Total Other Income 3,114.00
Other Expense
Other Expenses 100.00
Total Other Expenses 100.00
Net Other Income 3,014.00
Net Income -154,325.87
Please see Audited Financial Statements and Notes for
the years ended December 31, 1995 and 1994, dated March
28, 1997, filed as an exhibit to the Company's 1995 10-
KSB on April 2, 1997.
ITEM 2. Management's Discussion and Analysis or Plan
of Operation.
The Company had no operational history from 1988, and
from December 1995 has had limited operations,
consisting primarily of acquiring assets via mergers.
All risks inherent in new and inexperienced enterprises
are inherent in the Company's business. Based on
current economic and regulatory conditions, management
believed that it is possible, if not probable, for a
company like the Company, without significant assets
and liabilities, to negotiate a merger or acquisition
with a viable private company. The opportunity arises
principally because of the high legal and accounting
fees and the length of time associated with the
registration process of "going public".
The Company was incorporated as TR-3 Industries, Inc.
in 1979. Together with its subsidiary, TR-3 Chemical
Corporation, TR-3 Industries was involved in the
manufacture and sale of TR-3 Resin Glaze, a cleanser
and polisher for automobiles. The products were sold
internationally through mass marketing distributors.
TR-3 Industries, Inc. filed a registration statement on
Form 10 with the Securities and Exchange Commission for
the purpose of registering its common stock under
Section 12(g) of the Securities Exchange Act of 1934,
as amended (the "Act"). Such registration was filed on
June 23, 1980.
In 1982, TR-3 Industries, Inc. and its wholly owned
subsidiary TR-3 Chemical Corporation, filed a Chapter
11 proceeding in the U.S. Bankruptcy Court, Central
District of California, Docket Number SA82-3767. The
case was converted to a proceeding under Chapter 7 of
the Bankruptcy Code in January, 1986. The proceedings
were concluded and the bankruptcy case was closed
pursuant to an order issued by the U.S. Bankruptcy
Court on June 11, 1992. In connection therewith, the
assets of TR-3 Industries and TR-3 Chemical Corporation
were liquidated and applied to satisfy liabilities to
the extent of available assets. Because liabilities of
a corporation cannot be discharged pursuant to a
Chapter 7 proceeding, the unsatisfied liabilities of
TR-3 Industries, Inc. and TR-3 Chemical Corporation
remained outstanding after the closing of the Chapter 7
bankruptcy case.
The unsatisfied liabilities of TR-3 Industries, Inc.
and TR-3 Chemical Corporation may have been assumed by
the Company, as successor to TR-3 Industries, Inc.
Current management of the Company only has limited
information regarding the amount and nature of
unsatisfied liabilities of TR-3 Industries Inc. and TR-
3 Chemical Corporation, and is unable to quantify the
amount of such unsatisfied liabilities that may now
constitute liabilities of the Company. However,
management of the Company notes that the liabilities of
TR-3 Industries, Inc. and TR-3 Chemical Corporation, as
scheduled in their Chapter 11 reorganization petition,
amounted to approximately $4,500,000 of secured and
unsecured debt, held by 248 holders, and various
unquantified contingent liabilities, including ten
pending lawsuits, and that, as set forth in the final
accounting of the Chapter 7 case, the assets of TR-3
Industries, Inc. and TR-3 Chemical Corporation were
applied to satisfy approximately $30,000 of such debt.
TR-3 Chemical Corporation was suspended under
California law on July 2, 1984.
On June 14, 1995, the Company changed its name to
Diversified American Industries, Inc. On November 13,
1995 the Company changed its name to Thunderstone Group
Inc.
On November 30, 1995 all of the outstanding stock of
the Amateur Golf Association of America, Inc. ("AGAA"),
a company involved in promoting and staging amateur
golf tournaments, was acquired by the Company through a
reorganization stock exchange agreement. The assets of
AGAA included franchise rights, trademarks, tournament
rights, capital assets and membership list. The
Shareholders of AGAA were issued 614,000 shares of the
Company's Common Stock in exchange for 100% of AGAA's
outstanding stock.
On December 5, 1995 all of the outstanding stock of the
Perimeter Bicycling Association of America, Inc.
("PBAA"), a company involved in international bicycle
event promoting, staging and publications, was acquired
by the Company through a reorganization stock exchange
agreement. The assets of PBAA included the rights to
four bicycling events, a monthly and annual
publication, capital assets and membership list. The
principal shareholders of PBAA were issued 750,000
shares of the Company's Common Stock in exchange for
100% of PBAA's outstanding stock.
On December 13, 1995 all of the outstanding stock of
TGI Inc. ("TGII"), a niche marketing company providing
goods and services in the entertainment industry, was
acquired through a reorganization stock exchange
agreement. TGII held various video, radio and
recording assets. The shareholders of TGII were issued
a total of 2,000,000 shares of the Company's Common
Stock in exchange for 100% of TGII's outstanding stock.
On February 27, 1996 the Company sold all of the stock
of both AGAA and TGII, to Applied Logic Inc., pursuant
to an Assignment and Release Agreement, in exchange for
3,114,000 shares of the Company's Common Stock. Such
3,114,000 shares of Common stock consisted of (i) the
614,000 shares previously issued to the former
shareholders of AGAA, (ii) 2,000,000 shares previously
issued to the former shareholders of TGII, and (iii)
500,000 shares previously issued in payment of
consulting fees in connection with the original
acquisition of TGII, all of which were transferred by
the holders thereof to Applied Logic, Inc., and then by
Applied Logic, Inc. to the Company, pursuant to the
Assignment and Release Agreement. Also pursuant to the
agreement, Applied Logic, Inc. issued shares of its
common stock to the former shareholders of AGAA and
TGII. In addition, AGAA, TGII and their former
shareholders agreed to release the Company from all
liabilities the Company might have to any of them in
connection with the matters arising prior to the date
of the Assignment and Release Agreement, and the
Company agreed to release AGAA, TGII and their former
shareholders from all liability any of them might have
to the Company in connection with matters arising prior
to the date of such agreement. Pursuant to such
agreement, the Company received a note for $500,000.00
and 500,000 shares of Applied Logic, Inc. common stock
for those assets.
On March 4, 1996, the Company changed its name to
Cronus Corporation.
On March 31, 1996 the Company entered into an agreement
with the Black Diamond Mining Corporation to purchase
the Lelan-Dividend Mine Group assets. The Company
agreed to issue 2,250,000 shares of its Common Stock
for the purchase of the Lelan-Dividend Mine Group
assets owned by Black Diamond Mining Corporation.
Subsequently, while waiting for the appraisal and
audited financial statements, a new agreement was
negotiated. The new agreement consisted of a
Reorganization and Stock Exchange Agreement between
Cronus Corporation and Black Diamond Mining Corporation
which was signed May 23, 1996. While this agreement
was in effect, the parties formulated a second
reorganization agreement on July 8, 1996 in the form of
a reverse triangular merger for tax purposes. Pursuant
to the merger agreement, the shareholders of Black
Diamond Mining Corporation's sole shareholder were to
have acquired shares of the Company's Common Stock
constituting 80% of the outstanding Common Stock of the
Company..
On July 19, 1996 PBAA, then a wholly owned subsidiary
of Cronus Corporation, sold substantially all of its
assets, other than shares of the Company's Common Stock
held by PBAA, to EI Tour De Tucson, Inc., a Arizona
non-profit corporation, as provided for in an Asset
Purchase Agreement. As consideration for such sale, El
Tour de Tucson, Inc. assumed PBAA's outstanding
obligations. On August 7, 1996, Perimeter Bicycling
Association of America, Inc. changed its name to
Sunorc, Inc.
On December 11, 1996, the Company and Black Diamond
Mining Corporation agreed to terminate the
reorganization Agreement, due to questions that had
arisen regarding the appraisals of the Leland-Dividend
Mine Group assets. Subsequently, share certificates
previously delivered to Black Diamond Mining
Corporation's shareholders pending closing of the
merger were returned to the Company and certain
affiliates of Black Diamond Mining Corporation
transferred their interests in certain mining claims to
the Company as consideration for certain testing and
development expenditures made by the Company in
connection with the Leland-Dividend mine Group assets.
The mining claims transferred to the Company consist
of the Black Diamond Lode Mining Claims and Gila Gold
Placer Claims.
TITLE TO MINING PROPERTIES
Cronus Corporation's only significant assets as of
March 15, 1997, consists of its possessory interest in
the Black Diamond group of mining claims and the Gila
Gold Placer mining claims, all of which consist of
unpatented mining claims. The validity of all
unpatented mining claims is dependent upon various
inherent uncertainties and conditions that may prevent
a fee title in the usual sense from existing or
vesting.
Unpatented mining claims, when properly is located,
staked and posted according to regulation, give the
claimant possessory right only. Possessory title to an
unpatented claim, when validly initiated, endures
unless lost through abandonment or through a forfeiture
which results from an adverse location made while the
prior location is in default with respect to the
performance of annual assessment work. Because many of
these factors involve findings of fact, title validity
cannot be determined solely from an examination of the
record.
The continued validity of the Black Diamond and Gila
unpatended mining claims is subject to many
contingencies, including the available of land for the
location at the time location is made, the making of
valid mineral discoveries within the boundary of each
claim, the compliance with all regulations, both state
and federal, for locating claims, and the performance
of annual assessment work which is currently in the
amount of $100.00 per claim. Failing satisfaction of
the requirements, the claims are subject to
cancellation by the United States upon finding of no
valid discovery and, perhaps, upon failure to perform
annual assessment work. Failure to perform annual
assessment work subjects the claimant to the risk of
forfeiture of rights through valid subsequent locations
by others or through cancellation by the government
agency involved.
In addition, the Company acquired its possessory
interests in the Black Diamond and Gila Gold Placer
claims through quit-claim deeds. Pursuant to a quit-
claim deed, the transfer of an interest in property
transfers whatever right, title and interest it may
have in and to the property without representation or
warranty as the extent of such right, title and
interest or as to the absence of adverse claims. Thus,
the Company's claims is dependent upon the validity,
extent and quality of the transferor's right, title and
interest in and to such claims. The Company does not
have any information regarding the nature of its
transferor's right, title and interest in and to the
Black Diamond and Gila Gold Placer claims, nor has the
Company received any warranties of title, title
opinions or policies of title insurance. As a result,
the legal status of the Company's right, title and
interest, if any, in and to these claims is currently
uncertain.
Plan of Operation.
In 1997, Cronus Corporation intends to asses the
feasibility of potential future mining projects,
involving (1) its Gila Gold Placer mining claims, (2)
its Black Diamond group of claims, and (3) other
possible projects. The steps the Company intends to
take to assess the feasibility of these projects is
described below.
1. Gila Association Placer Mine Project.
Gila Gold Placer Project:
The Company plans to verify and confirm the existence,
extend and grade of placer gold located at the Gila
Gold Placer claims. First, it intends to asses the
presence and tenor of placer gold as described in
engineering reports of past exploration efforts. Next,
the Company will analyze the economic viability of such
deposit by determining optimal production rate and
stripping-sorting ratios, defining a mining and
reclamation technique, generating a flow sheet, and
isolating processing, mining, capital, reclamation and
general overhead cost factors.
The Company plans to conduct a seismic survey
consisting of a 5-line, 25 feet spacing, 9000 lineal foot,
segmented survey. This survey will be complimented
with computer enhanced calculations, storage, retrieval
and printout capabilities. This survey will provide
definitions of the alluvial-bedrock contact. From this
information, cross-sectional views will be generated to
define ore reserve volume, assist in mine planning and
describe mining technique.
The Company also plans to conduct a bulk sampling,
intended to ascertain the following: value recoverable
per cubic yard, concentrating ratio, concentrating
technique, and general ground conditions and boulder
contact, nature of interbeds, slope stability, reject
swell and nature of backfill material. The
accumulation of data from this sampling project will
provide the baseline to confirm ore reserves and
feasibility of the mining project.
2. Black Diamond Mining Project.
Black Diamond Project:
The Company intends to evaluate the Black Diamond
mining claims as follows.
First, the Company plans to gather data from Exxon
Corporation regarding past exploration work performed
by Humble Oil. Next, it intends to assess other
geological, geophysical and geochemical data gathered
on the subject property. Finally, it will formulate a
development plan and seek a possible joint venture
partner.
There is considerable competition for mining prospects
on federal lands. Costs of exploration, testing and
mining, milling, transportation, labor and other costs
have risen dramatically. These costs would be a factor
in determining whether the discovery of minerals, if
any, would be commercial or not, and could render a
discovery unprofitable, even if made.
Commencing in 1972, various federal, state and local
environmental laws and regulations began to have a
significant impact on the mining industry in Arizona,
where the Black Diamond and Gila Gold Placer properties
are located, and elsewhere in the Western States.
In addition to the uncertainty surrounding the eventual
development of commercial mineralization on the
Company's properties, the success of any mining
operation which might be conducted is dependent upon
the price of minerals on the domestic and world
markets, which is subject to fluctuations, in part as a
result of actions by central banks and government
policies.
PART II
ITEM 1. Legal Proceedings.
Cronus, d.b.a. TR-3 Industries, Inc. was in Chapter 7
bankruptcy from 1982 through 1991. The Company had no
operations and substantially no assets or liabilities
through November 1995. During 1997, legal counsel
informed management that liabilities previously
believed to be discharged in bankruptcy had not been
discharged. These liabilities relate to the operations
of the Company prior to 1982. The Company has recorded
a correction of an error in the accompanying financial
statements and, accordingly has restated retained
earnings (accumulated deficit) at December 31, 1993.
The adjustment had no effect on net income, net income
after taxes, or earnings per share for the years ended
December 31, 1995, 1994 or 1993. Management is
currently investigating the possibility of the
expiration of the statute of limitations relating to
these liabilities; however, the full amount of the
undischarged debts have been included in current
liabilities in the accompanying balance sheet.
The Company is subject to a number of lawsuits and
claims (some of which involve substantial amounts)
arising out of the conduct of its business prior to
1982. Although the Company does not currently possess
sufficient information to reasonably estimate the
amounts of liabilities to be recorded, they may be
significant to the results of operations.
ITEM 2. Changes in Securities.
None
ITEM 3. Defaults Upon Senior Securities.
None
ITEM 4. Submission of Matters to a Vote of Security
Holders.
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K.
During the first quarter of 1996 ending on March 31,
1996, two reports of form 8-K were filed, February 12,
1996 and March 7, 1996.
The 8-K report filed of February 12, 1996 contained
Item 7. The 8-K report filed on March 7, 1996 contained
the following Items:
Item 2. Acquisition or Disposition of Assets.
Item 5. Other Events.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned,
thereunto duly authorized.
CRONUS CORPORATION
DATE: April 15, 1997 By:
__/s/_________________
Jonathan Roberts,
President and Director
