UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended March 31, 2011





or





o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from ______________________ to ______________________





Commission file number: 333-159300





CELLDONATE INC.


(Exact name of registrant as specified in its charter)





Nevada

06-1791524(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)





228 Hamilton Avenue
 Palo Alto, California 94301


(Address of principal executive offices, including zip code)





(650) 701-3325


(Registrant’s telephone number, including area code)





Securities registered pursuant to Section 12(b) of the Exchange Act: None





Securities registered pursuant to Section 12(g) of the Exchange Act:Common Stock





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes oNo þ





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes oNo þ





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was require to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (of for such shorter period that the registrant was required to submit and post such files).  Yes þ   No o





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer o  Accelerated filer o  Non-accelerated filer o  Smaller reporting company þ





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No þ





As of September 30, 2010 the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, was $479,250.





As of June 27, 2011 the registrant’s outstanding common stock consisted of 22,910,000 shares.










Table of Contents




PART I
2Item 1.  Business
2Item 1A.  Risk Factors
6Item 1B.  Unresolved Staff Comments
6Item 2.  Properties
6Item 3.  Legal Proceedings
6Item 4.  (Removed and Reserved)
6PART II
7Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
7Item 6.  Selected Financial Data
7Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations
8Item 7A.  Quantitative and Qualitative Disclosures about Market Risk
10Item 8.  Financial Statements and Supplementary Data
10Item 9.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
13Item 9A.  Controls and Procedures
13Item 9B.  Other Information
13PART III
14Item 10.  Directors, Executive Officers and Corporate Governance
14Item 11.  Executive Compensation
17Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
17Item 13.  Certain Relationships and Related Transactions, and Director Independence
19Item 14.  Principal Accountant Fees and Services
19PART IV
20Item 15.  Exhibits, Financial Statement Schedules
20




1




PART I





Item 1.  Business





Forward Looking Statements





This annual report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions.





While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.





Our audited financial statements are expressed in U.S. dollars and are prepared in accordance with generally accepted accounting principles in the United States. They reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of our annual financial information.





The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report.





As used in this annual report, the terms "we", "us" and "our" mean Celldonate Inc., unless otherwise indicated.





Business Overview





We are a development stage company in the business of creating and marketing entertainment-based mobile applications designed to generate donation revenue for charitable and non-profit organizations. We have only recently begun operations and we rely upon the sale of our securities to fund those operations. We were incorporated as a Nevada company on August 15, 2006. We have no subsidiaries.





Our plan of operations for the next 12 months is to develop and promote programs and software solutions that are socially responsible and uniquely captivating, in that they assist organizations that support philanthropic causes, provide an alternative to conventional forms of fundraising, and permit individuals to play fun, interactive games on their mobile devices and receive prizes or information for doing so. In addition, we plan to acquire companies that operate in the on-line and mobile deal and performance based advertising space. However, there can be no assurance that we will acquire any such companies.





We are currently completing the development of a suite of applications aimed at individuals with Internet-enabled mobile devices (such as smartphones and personal data organizers) known as the Celldonate mobile games suite. This suite includes a number of games of chance as well as skills-based games which individuals will be able to play to earn points towards redeeming products and services from participating retailers and service providers. So far, we have not yet entered into any commitments or agreements related to the sale or marketing of the Celldonate mobile games suite, although we plan to concentrate our efforts on doing so in Canada and the United States. Such agreements will determine the specific manner in which we are able to generate revenues from our business.





In order to play the games in the suite, individuals will have to purchase a charity donations game card over the Internet or from a bricks-and-mortar retailer that will allow them to download the suite to their mobile device of choice. Our plan is to preload each charity donations game card with a certain number of reward points that correlate to the value of the purchase. After purchasing a game card, each individual will be required to register the card using the Internet or by calling a 1-800 number listed on the card to specify the number of the device to which their copy of the Celldonate mobile games suite should be sent and select the charitable or non-profit organization(s) that will receive a percentage of the charity donations game card purchase amount. We will then send the suite directly to the individual’s designated mobile device.





The Celldonate mobile games suite we have developed consists of five independent applications and a platform for transferring funds through mobile devices. We have completed the testing of the suite on a number of mobile devices; however, because the makes and models of mobile devices change so rapidly, we must test the suite on each new device in order to troubleshoot any problems that may arise. Such testing usually takes between three hours and three days depending on a number of factors such as the experience of the programmer performing the testing, the complexity of the mobile device and whether the mobile device is an entirely new product or a new version of an existing product.




2





The five applications that currently comprise the Celldonate mobile games suite include:





●
a lottery game;





●
a Bingo game;





●
a slot machine game;





●
a trivia game; and





●
a memory game.





Each of these applications will give individuals the opportunity to win valuable prizes by gambling successfully or by correctly answering questions randomly generated by the Celldonate prize pool server, which is a supply of trivia questions which we intend to use to test individuals’ knowledge.





We have also conceived of additional applications to include in the Celldonate mobile games suite, but until marketing, sales and partnership agreements have been secured for the initial suite we do not intend to develop these applications any further.





The additional mobile applications that we have begun to develop include:





●
an auction that gives individuals the opportunity to bid on goods and services that charities have received as donations and wish to sell to raise funds for various causes;





●
a tentatively-titled “back stage pass” that gives individuals interested in downloading music the opportunity to access new music that has yet to be released in stores;





●
a tentatively-titled “concert alert” that provides individuals with concert updates pertaining to their area of residence and also gives them the opportunity to access tickets prior to their release to the general public; and





●
a tentatively-titled “mobile blessing” that gives individuals the opportunity to receive daily or weekly blessings directly from their church or parish of choice.





We intend to permit individuals to use the applications in the Celldonate mobile games suite only if they have a positive balance in their reward points account. After exhausting the initial allocation of reward points they receive by purchasing the charity donations game card, an individual will have to make additional charitable donations though the mobile device on which their card is registered in order to earn more reward points. We plan to make it possible to make these donations via Paypal using a number of payment methods, including Visa, Mastercard, American Express and debit.





We only plan to permit individuals to make donations to specific charitable and non-profit organizations with whom we have entered into agreements, all of which we anticipate will be qualified organizations for tax deduction purposes. As a result, any agreements we enter into with charitable or non-profit organizations will be conditional upon the organizations issuing tax receipts to the donating individuals in accordance with applicable tax laws either via email or direct mail.





We expect that the receipt of prizes will reduce the amount of an individual’s charitable tax deduction in the United States since charitable contributions are deductible only to the extent that the value of the donation exceeds the value of any benefit received by the donating individual, calculated according to the fair market value of the benefit. However, since we will not be able to determine in advance the value of any prizes that an individual may win by using reward points to play the games in the Celldonate mobile games suite, we anticipate that the charitable and non-profit organizations with whom we enter into agreements will issue tax receipts for the full amount of each donation, leaving the onus on the individual to make the appropriate adjustments to the value of the deduction claimed on his or her tax returns. Given the similarity of the situation in Canada, where the benefit to the individual must be below 80% of the value of the donation to qualify the excess as a charitable donation for tax purposes, we anticipate adhering to the same process. In both countries, we do not expect that the receipt of reward points alone will reduce the amount of an individual’s charitable tax deduction, as a positive reward points account balance will only provide the individual with the opportunity to use the applications in the Celldonate mobile games suite and does not guarantee that they will actually win any prizes.




3





Any prizes that are won by playing the games in the Celldonate mobile games suite will be stored as a credit on the account of the games card holder. Any individual will then be able to bring the games card into a participating retail location to redeem the prize at a point-of-sale terminal. We anticipate that the allure of the prizes and the benefit of supporting any number of charitable causes will be sufficient to induce potential and existing game card holders to begin or continue to donate money to their charity of choice.





Currently, we plan to earn revenues by collecting a percentage of every charity donations game card purchased and reloaded, charging a percentage fee for all transactions associated with the games suite such as prize redemptions, and charging a fee to retailers for advertising their products and services alongside the applications in the games suite. Since our applications permit transactions to occur directly through various mobile devices, we intend to build these fees into our products and collect them unobtrusively. This technology will also allow individuals to donate money directly on a seamless basis.





Because we have not yet entered into any commitments or agreements to sell or market the Celldonate mobile games suite or our charity donations games cards, we have not yet established any benchmark percentage fees or standard advertising rates. However, we expect that the purchase price of every charity donations game card will be split between us, the retailer of the card and one or more specific organizations selected by the purchaser with whom we have agreements. We also plan to collect a percentage of every additional donation made to earn more reward points, again allowing the individual making the donation to select the recipient organization(s) and the desired percentage allocations. We plan to allow individuals to allocate percentages of their donations rather than specific amounts as the former does not take into account the percentage fees of each transaction that we will use to generate revenues.





The versatility of the Celldonate mobile games suite will permit retailers and advertisers to promote their products and services by placing them alongside the applications included in the suite and marketing them as prizes for which game-playing individuals can redeem points. The suite will also act as a physical driver of business, in that each individual that wins a prize will be required to patronize a bricks-and-mortar retail location in order to collect that prize. As a result, the Celldonate mobile games suite will allow individuals to generate funds for charitable and non-profit organizations by simply playing games and redeeming their winnings at participating retail outlets, and will provide retailers and advertisers with the opportunity to market and promote their products and services to a broad segment of the population while simultaneously emphasizing their social responsibility.





Markets





The focus of our marketing strategy is to enter into strategic partnerships with various retailers, service providers and charitable and non-profit organizations in Canada and the United States regarding the sale, distribution and redemption of our charity donations games cards and rewards. We do not expect that any of the charitable and non-profit organizations will be affiliated with us or any of our affiliates in any other capacity.





We plan to work with these organizations to leverage the marketing power and word-of-mouth of their networks, and we also intend to develop partnerships with various companies to market and promote their products and services alongside the applications as well as major social networks to include their games and other mobile applications in subsequent versions of the Celldonate mobile games suite. In the future, we would also like to enter into distribution deals with telecommunications companies.





We have not yet entered into any commitments or agreements with any organizations, retailers, service providers, companies or social networks to sell or market our products and services, and we have not yet adopted any specific sales and marketing plans apart from those described above. However, as the size and scope of our business increases, we plan to address any issues that arise as well as the need for us to hire additional marketing personnel.





Competition





We have yet to encounter any other companies that are currently involved in, or seeking to become involved in, developing and marketing charity-focused mobile applications. Still, we face potential threats from developers of other mobile applications and payment-processing companies who may wish to participate in mobile philanthropy.





We are seeking to acquire a customer and retailer base by forming relationships with several large charitable organizations. We expect the effects of entering into contracts with such organizations while we are a development stage company to assist us in becoming a partner of choice for other organizations with similar goals.





Nevertheless, the mobile applications industry is highly competitive, and as a development stage company we have a weak competitive position. We may compete with junior and senior companies who are actively seeking to develop and market applications that are similar to ours, and we may lack the technological information or expertise available to these competitors. Further, we may compete with other companies in the mobile applications industry for financing and such companies may have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on hiring consultants to promote their applications or entering into strategic partnerships to sell and distribute their products. Such competition could adversely impact our ability to obtain the financing necessary for us to carry out our business plan.





4





We also compete with other development stage technology-focused companies for financing from a limited number of investors that are prepared to invest in such companies. The presence of such competing junior companies may impact our ability to raise additional capital in order to fund our planned operations and activities if investors perceive that investments in our competitors are more attractive based on the merits of their technology or the price of the investment opportunity.





General competitive conditions may be substantially affected by various forms of communications legislation and/or regulation introduced from time to time by the governments of the United States and other countries, as well as factors beyond our control, including international and domestic economic conditions, the market for mobile applications, and the willingness of individuals to make donations to charitable or non-profit organizations.





In the face of competition, we may not be successful in carrying out our business plan and we cannot provide any assurance that suitable partners will exist for our applications in the retail, or service provider sectors. Despite this, we hope to compete successfully in the mobile applications industry by:





●
keeping our costs low;





●
relying on the strength of our management’s contacts; and





●
using our size and experience to our advantage by adapting quickly to changing market conditions or responding swiftly to potential opportunities.





Intellectual Property





We currently own the intellectual property rights associated with the Celldonate mobile games suite and the other mobile applications we have developed, although we have not obtained and do not plan to obtain patent protection for either. We also own the copyright in the contents of our website and the rights to a number of Internet domain names that could be associated with the concept of mobile donations. Other than that, we do not have any other intellectual property and we have not filed for any protection of our trademark.





Employees and Consultants





As of March 31, 2011 we did not have any full-time or part-time employees. Jon Sofield, our President, Chief Executive Officer, Secretary and director, works as a part-time consultant in the areas of business development and management.  Michael Palethorpe, our Chief Financial Officer, Principal Accounting Officer, Treasurer and director, also works as a part-time consultant in the areas of business development and management.





We currently engage independent contractors in the areas of consulting and development, accounting and legal services. We intend to retain two business development consultants on a part-time basis over the next 12 months and eventually, we plan to engage independent contractors in the areas of marketing, sales and other services.





Government Regulations





Our current and future operations are or will be subject to various laws and regulations in the United States and Canada, the countries in which we conduct or plan to conduct our activities. These laws and regulations govern communications, the Internet, gambling, taxes, labor standards, occupational health and safety and other matters relating to the mobile applications industry. Permits, registrations or other authorizations may also be required to maintain our operations and to carry out our future activities, and these permits, registrations or authorizations will be subject to revocation, modification and renewal.





Governmental authorities have the power to enforce compliance with regulatory requirements and the provisions of required permits, registrations or other authorizations, and violators may be subject to civil and criminal penalties including fines, injunctions, or both. The failure to obtain or maintain a required permit may also result in the imposition of civil and criminal penalties, and third parties may have the right to sue to enforce compliance.





We expect to be able to comply with all applicable laws and regulations and do not believe that such compliance will have a material adverse effect on our competitive position. We intend to obtain all permits, licenses and approvals required by all applicable regulatory agencies to maintain our current operations and to carry out our future activities. We are not aware of any material violations of permits, licenses or approvals issued with respect to our operations, and we believe that we have complied with all applicable laws and regulations to date. We intend to continue complying with all laws and regulations, and at this time we do not anticipate incurring any material capital expenditures to do so.





Compliance with any unanticipated requirements could have a material adverse effect on our capital expenditures, earnings or competitive position. Our failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief, or both. Legislation affecting the mobile applications industry, online gambling and the Internet in general is subject to constant review, and the regulatory burden frequently increases. Changes in any of these laws and regulations could have a material adverse effect on our business, and in view of the many uncertainties surrounding current and future laws and regulations, including their applicability to our operations, we cannot predict their overall effect on our business.





5





Gambling Laws





Although the U.S. government has long been of the view that gambling that crosses state boundaries is unlawful, we do not expect that the purchase and sale of our charity donations games cards will contravene any laws because this act does not, strictly speaking, involve gambling of any kind. The purchase of the card only permits an individual to download the Celldonate mobile games suite, after which he or she may choose to play either games of skill or games of chance. Such game-playing will occur off-line and we will not derive any profit or generate any revenues from this activity; instead, our plan is to collect a percentage of every charity donations game card purchase and reload, charge a percentage fee for all transactions associated with the games suite (including prize redemptions) and charge a fee to retailers for advertising their products and services alongside the applications in the games suite.





We do not believe that the relationship between our products and services and the revenue stream we plan to generate will give rise to any gambling-related legal issues, as the Celldonate mobile games suite will simply act as the inducement to facilitate donations to charitable and non-profit organizations while at the same time permitting individuals to receive prizes or information for playing fun, interactive games on their mobile devices. In the event that the Celldonate mobile games suite is determined to violate any federal, state or local gambling laws or constitute unlawful gambling activities, we are prepared to modify our business plan accordingly by, for example, restricting the distribution of certain games in the suite to certain areas, eliminating those games from the suite entirely, or completely revising the suite to include a different set of games that do not violate any gambling laws.





Regardless, there is some uncertainty regarding the state of online gambling laws in the United States, as the anti-gambling laws in the country were not written with online activities in mind. A prime example of this is the failure of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) regulations that came into force on January 19, 2009 to specifically define what constitutes an unlawful Internet gambling transaction under the Act. In general, the UIGEA prohibits the use of communication facilities and financial transactions in connection with Internet gambling; however, the lack of clarity concerning, among other things, what constitutes such transactions has severely lessened the potential impact of the Act. Samples of other recent U.S. legal developments regarding online gambling include:





●
the unveiling of a bill designed to allow U.S.-based companies to obtain licenses and operate federally-regulated online gambling sites by Congressman Barney Frank on May 6, 2009. The bill, titled the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 (H.R. 2267), would also allow such sites to accept bets from U.S. customers. The bill has not yet been signed into law; and





●
the introduction of the Skill Game Protection Act (H.R. 2610), which would legalize Internet poker, bridge, chess and other games of skill, by Congressman Robert Wexler on June 7, 2007. On the same day, Congressman Jim McDermott also introduced the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2607), which proposed to legislate Internet gambling tax collection requirements, but this bill has not yet been signed into law.





In Canada, Internet gambling is also not a legally sanctioned activity; however, as discussed above, we do not anticipate that the purchase and sale of our charity donations games cards can appropriately be characterized as violating any existing law.





Our expected compliance with gambling laws in both the United States and Canada is not based upon an opinion of counsel.





Item 1A.  Risk Factors





Not required.





Item 1B.  Unresolved Staff Comments





None.





Item 2.  Properties





Our executive office is located at 228 Hamilton Avenue, Palo Alto, California 94301. This office is approximately 750 square feet in size and is provided to us free of charge by Jon Sofield, our President, Chief Executive Officer, Secretary and Director. As of June 27, 2011 we had not entered into any lease agreement for this office, and we do not plan to recognize any rent expenses for it. We believe that this office is suitable for our current operations and we do not anticipate requiring any additional property in the foreseeable future.





Item 3.  Legal Proceedings





We are not aware of any legal proceedings to which we are a party. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.





Item 4.  (Removed and Reserved)




6





PART II





Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities





Market Information





Our common stock is not traded on any exchange. Our common stock is quoted on the OTC Bulletin Board under the trading symbol “CEAC”. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company's operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.





OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.





Our common stock became eligible for quotation on the OTC Bulletin Board on November 16, 2009. The following quotations reflect the high and low bids for our common stock based on inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.





OTC Bulletin Board / OTCQBQuarter Ended
High ($)
Low ($)March 31, 2011
0.075
0.075December 31, 2010
0.075
0.75September 30, 2010
0.075
0.051June 30, 2010
-
-March 31, 2010
-
-December 31, 2009
-
-





Holders





As of June 27, 2011 there were approximately 42 holders of record of our common stock. We do not believe that a significant number of beneficial owners hold their shares of our common stock in street name.





Dividends





As of June 27, 2011 we had not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock for the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our Board of Directors and will depend upon our future earnings, if any, our financial condition, our capital requirements, general business conditions and other factors.





Equity Compensation Plans





As of June 27, 2011 we did not have any equity compensation plans.





Recent Sales of Unregistered Securities





We did not make any unregistered sales of our equity securities during the period covered by this annual report.





Item 6.  Selected Financial Data





Not required.




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 financial statements, including the notes thereto, appearing elsewhere in this annual report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.





Results of Operations





Revenues





We have limited operational history. From our inception on August 15, 2006 to March 31, 2011 we did not generate any revenues. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.





Expenses





From our inception on August 15, 2006 to March 31, 2011 we incurred total expenses of $268,858, including $158,708 in accounting and legal fees, $63,728 in consulting and development fees, $38,947 in licenses and fees, $5,457 in office expenses, $528 in amortization and $1,490 in bank charges.





For the fiscal year ended March 31, 2011 we incurred total expenses of $59,922, including $39,882 in accounting and legal fees, $19,441 in licenses and fees and $599 in bank charges. For the fiscal year ended March 31, 2010 we incurred total expenses of $63,204, including $44,980 in accounting and legal fees, $17,556 in licenses and fees, $11 in office expenses and $569 in bank charges. The decrease in our total expenses for the fiscal year ended March 31, 2011 was primarily due to a decrease in our accounting and legal fees.





Net Loss





From our inception on August 15, 2006 to March 31, 2011 we incurred a net loss of $268,858. For the fiscal year ended March 31, 2011 we incurred a net loss of $59,922 and a net loss per share of $0.01. For the fiscal year ended March 31, 2010 we incurred a net loss of $63,204 and a net loss per share of $0.01.





Liquidity and Capital Resources





As of March 31, 2011 we had $1,115 in cash, $2,195 in total assets, $212,853 in total liabilities and a working capital deficit of $210,658. As of March 31, 2011 we had an accumulated deficit of $268,858. We are dependent on funds raised through equity financing and related parties. Our cumulative net loss of $268,858 from our inception on August 15, 2006 to March 31, 2011was funded by equity financing and advances from related parties. Since our inception on August 15, 2006, we have raised gross proceeds of $57,050 in cash from the sale of our securities.





From our inception on August 15, 2006 to March 31, 2011 we spent $239,145 in cash on operating activities. During the fiscal year ended March 31, 2011 we spent $58,349 in cash on operating activities, compared to cash spending of $61,367 on operating activities during the fiscal year ended March 31, 2010. Our decrease in cash spending on operating activities during the fiscal ended March 31, 2011 was primarily due to an increase in our expenses for the period as described above.





From our inception on August 15, 2006 to March 31, 2011 we spent $528 in cash on investing activities, all of which was in the form of equipment purchases. We did not engage in any investing activities during the fiscal years ended March 31, 2011 or 2010.





From our inception on August 15, 2006 to March 31, 2011 we received $240,788 in cash from financing activities, including $183,738 in advances from related parties, and $57,050 in net proceeds from the issuance of our common stock. During the fiscal year ended March 31, 2011 we received $57,066 in cash from financing activities, compared to cash receipts of $42,662 from financing activities during the fiscal year ended March 31, 2010. All of our cash receipts from financing activities during these periods occurred in the form of advances from related parties.





Our decrease in cash for the fiscal year ended March 31, 2011 was $1,283 due to a combination of our operating and financing activities.





During the fiscal year ended March 31, 2011 our monthly cash requirements to fund our operating activities, was approximately $4,862, compared to approximately $5,114 during the fiscal year ended March 31, 2010. In the absence of the continued sale of our common stock or advances from related parties, our cash of $1,115 as of March 31, 2011 is sufficient to cover our current monthly burn rate for less than one month. Until we are able to complete private and/or public financing as described below, we anticipate that we will rely on advances from related parties to proceed with our plan of operations.




8





For the next 12 months (beginning July 2011) we intend to:





●
enter into strategic partnerships with various retailers, service providers and charitable and non-profit organizations regarding the sale, distribution and redemption of our charity donations game cards and reward points;





●
complete the testing of the Celldonate mobile games suite on new mobile devices as required;





●
retain two business development consultants on a part-time basis to provide us with technical services regarding our operations and planned activities;





●
complete private and/or public financing to cover the costs of marketing the initial version of the Celldonate mobile games suite as well as any other proprietary mobile applications we may create.


Currently, we only own the copyright in the Celldonate mobile games suite, in a number of proprietary mobile applications associated with the suite and in a variety of Internet domain names. We expect to require approximately $570,000 to continue our planned operations over the next 12 months.





Our planned expenditures for the next 12 months (beginning July 2011) are summarized as follows:





Description
Potential Completion Date
Estimated Expenses

($)Enter into strategic partnerships with retailers, service providers and charitable and non-profit organizations
12 months
115,000Complete the testing of our applications as required
12 months
15,000Retain two business development consultants on a part-time basis
12 months
60,000Professional fees (legal, accounting and auditing fees)
12 months
80,000Business and technology development expenses
12 months
180,000Marketing expenses
12 months
100,000Other general and administrative expenses
12 months
20,000Total

570,000





In addition, we plan to acquire companies that operate in the on-line and mobile deal and performance based advertising space. However, there can be no assurance that we will acquire any such companies.





Our general and administrative expenses for the year will consist primarily of transfer agent fees, investor relations expenses and general office expenses. The professional fees are related to our regulatory filings throughout the year.





Based on our planned expenditures, we will require additional funds of approximately $568,900 (a total of $570,000 less our cash of approximately $1,100 as of March 31, 2011)to proceed with our business plan over the next 12 months. If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.





9





Future Financings





We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our securities and advances from related parties to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon obtaining outside financing to carry out our operations. Our financial statements for the fiscal year ended March 31, 2011 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.





We will require approximately $570,000 over the next 12 months in order to enable us to proceed with our plan of operations, including paying our ongoing expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we intend to raise the balance of our cash requirements for the next 12 months (approximately $568,900) from private placements, advances from related parties or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us with financing, and there is no guarantee that any financing will be available to us or if available, on terms that will be acceptable to us.





If we are unable to obtain the necessary additional financing, then we plan to reduce the amounts that we spend on our operations, including our accounting and legal fees, so as not to exceed the amount of capital resources that are available to us. If we do not secure additional financing our current cash reserves and working capital will be not be sufficient to enable us to sustain our operations for the next 12 months, even if we do decide to scale back our operations.





Off-Balance Sheet Arrangements





We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.





Critical Accounting Policies





Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.





Foreign Currency Translation





Our financial statements are presented in United States dollars. Transactions in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, except amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net loss.





Research and Development





Research and development expenditures are charged to operations as incurred.





Recent Accounting Guidance Not Yet Adopted





The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows.





Inflation





The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.





Item 7A.  Quantitative and Qualitative Disclosures about Market Risk





Not required.





Item 8.  Financial Statements and Supplementary Data




10




CELLDONATE INC.


(A Development Stage Company)


Financial Statements as of March 31, 2011




Financial Statement Index




Report of Independent Registered Public Accounting Firm
F-1Balance Sheet
F-2Statements of Operations
F-3Statements of Cash Flows
F-4Statements of Stockholders’ Deficiency
F-5Notes to Financial Statements
F-6





11




CELLDONATE INC.
 (A Development Stage Company)
 March 31, 2011 and 2010
  Financial Statements
 (Expressed in US dollars)
  12
 
 
 
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  The Board of Directors and Stockholders of
 CELLDONATE INC.
  We have audited the balance sheets of CELLDONATE INC. (a Development Stage Company) as at March 31, 2011 and 2010, and the statements of operations, stockholders’ deficiency and cash flows for the years ended March 31, 2011 and 2010, and for the period from August 15, 2006 (inception) to March 31, 2011.  These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
  In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at March 31, 2011 and 2010 and the results of its operations and its cash flows for the years ended March 31, 2011 and 2010, and for the period from August 15, 2006 (inception) to March 31, 2011 in conformity with accounting principles generally accepted in the United States of America.
  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in note 1 to the financial statements, the Company has no operations, a stockholders’ deficiency and a deficit accumulated during the development stage, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans regarding those matters are also described in note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
  /s/ Smythe Ratcliffe LLP
 Smythe Ratcliffe LLP
 Chartered Accountants
 
 Vancouver, Canada
  June 23, 2011
  F-1
 CELLDONATE INC.

(A Development Stage Company)

Balance Sheets

(Expressed in US dollars)
 March 31, 2011


March 31, 2010AssetsCurrentCash

$
1,115


$
2,398Other receivable


1,080



-$
2,195


$
2,398LiabilitiesCurrentAccounts payable

$
23,115


$
19,962Accrued liabilities (note 5)


6,000



6,500Due to related parties (note 7)


183,738



126,672212,853



153,134Stockholders’ DeficiencyCommon stock (note 6)Authorized:100,000,000 common shares, $0.001 par value400,000 common shares, without par valueIssued and outstanding:22,910,000 common shares, $0.001 par value


22,910



2,291Additional paid-in capital


35,290



55,909Deficit accumulated during the development stage


(268,858
)


(208,936
)(210,658
)


(150,736
)$
2,195


$
2,398
 
 Nature of operations and going concern (note 1)
  See accompanying notes to financial statements.
  F-2
  CELLDONATE INC.

(A Development Stage Company)

Statements of Operations

(Expressed in US dollars)
  For the

year ended

March 31, 2011


For the

year ended

March 31, 2010


Period from August 15, 2006 (inception) to March 31, 2011ExpensesAccounting and legal

$
39,882


$
44,980


$
158,708Licenses and fees


19,441



17,556



38,947Bank charges


599



569



1,490Office


-



11



5,457Consulting and development fees


-



-



63,728Amortization


-



88



528Net loss and comprehensive loss for period

$
(59,922
)

$
(63,204
)

$
(268,858
)Basic and diluted loss per share

$
(0.01
)


(0.01
)Weighted average number of common shares outstanding


22,910,000



22,910,000
 
 See accompanying notes to financial statements.
  F-3
  CELLDONATE INC.

(A Development Stage Company)

Statements of Cash Flows

(Expressed in US dollars)
 
 For the year ended March 31, 2011


For the year ended March 31, 2010


Period from August 15, 2006 (inception) to March 31, 2011Cash Flow from Operating ActivitiesNet loss for the period

$
(59,922
)

$
(63,204
)

$
(268,858
)Amortization of equipment


-



88



528Shares issued for services


-



-



1,150Changes in assets and liabilitiesHST recoverable


(1,080
)


-



(1,080
)Accounts payable


3,153



12,849



23,115Accrued liabilities


(500
)


(11,100
)


6,000Cash Used in Operating Activities


(58,349
)


(61,367
)


(239,145
)Cash Flow from Investing ActivityPurchase of equipment


-



-



(528
)Cash Flow from Financing ActivitiesNet proceeds from issuance of common stock


-



-



57,050Advances from related parties


57,066



42,662



183,738Cash Provided by Financing Activities


57,066



42,662



240,788Increase (Decrease) in Cash


(1,283
)


(18,705
)


1,115Cash, Beginning of Period


2,398



21,103



-Cash, End of Period

$
1,115


$
2,398


$
1,115Supplemental informationStock dividend issued for no consideration

$
20,619


$
-


$
20,619Shares issued for services

$
-


$
-


$
1,150Tax paid

$
-


$
-


$
-Interest paid

$
-


$
-


$
-
  See accompanying notes to financial statements.
  F-4
  CELLDONATE INC.

(A Development Stage Company)

Statements of Stockholders’ Deficiency

(Expressed in US dollars)
 
 Shares of Common

Stock Issued


Common

Stock


Share

Subscriptions


Additional

Paid-in Capital


Deficit Accumulated

During the

Development

Stage


TotalBalance, August 15, 2006 (inception)


-


$
-


$
-


$
-


$
-


$
-Shares issued to founders for services


11,500,000



1,150



-



-



-



1,150Shares issued for cash


1,600,000



160



-



7,840



-



8,000Net loss for period


-



-



-



-



(55,294
)


(55,294
)Balance, March 31, 2007


13,100,000



1,310



-



7,840



(55,294
)


(46,144
)Shares issued for cash


1,140,000



114



-



5,586



-



5,700Share subscriptions received


-



-



43,350



-



-



43,350Net loss for year


-



-



-



-



(37,962
)


(37,962
)Balance, March 31, 2008


14,240,000



1,424



43,350



13,426



(93,256
)


(35,056
)Shares issued


8,670,000



867



(43,350
)


42,483



-



-Net loss for year


-



-



-



-



(52,476
)


(52,476
)Balance, March 31, 2009


22,910,000



2,291



-



55,909



(145,732
)


(87,532
)Net loss for year


-



-



-



-



(63,204
)


(63,204
)Balance, March 31, 2010


22,910,000



2,291



-



55,909



(208,936
)


(150,736
)Stock dividend (note 6(a))


-



20,619



-



(20,619
)


-



-Net loss for year


-



-



-



-



(59,922
)


(59,922
)Balance, March 31, 2011


22,910,000


$
22,910


$
-


$
35,290


$
(268,858
)

$
(210,658
)
 
 See accompanying notes to financial statements.
  F-5
  CELLDONATE INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended March 31, 2011 and 2010

(Expressed in US dollars)
  1.  Nature of Operations and Going Concern
  CELLDONATE INC. (the “Company”) was incorporated under Chapter 78 of theNevada Revised Statutes of the State of Nevada on August 15, 2006, and has its head office in Palo Alto, California.  The Company is a development stage company in the business of developing and commercializing entertainment-based mobile solutions for charity fundraising businesses.  The Company has only recently begun operations and will be required to raise additional financing to complete the development of its anticipated products and to market them to customers.  The Company has not generated any sales revenue since inception.
  The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business. Several adverse conditions cast substantial doubt on the validity of this assumption.  The Company has incurred losses since inception and has an accumulated deficit of $268,858 as of March 31, 2011, limited resources and no source of operating cash flows.
  The Company’s continuance as a going concern is dependent on the success of the efforts of its directors and principal stockholders in providing financial support in the short term, raising additional equity or debt financing either from its own resources or from third parties, and achieving profitable operations.  In the event that such resources are not secured, the assets may not be realized or liabilities discharged at their carrying amounts, and the difference from the carrying amounts reported in these financial statements could be material.
  The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of the assets or the amounts and classifications of the liabilities that may result from the inability of the Company to continue as a going concern.
 
 2. Significant Accounting Policies
  (a) Basis of presentation
  These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP). The Company’s functional and reporting currency is the US dollar.
  (b)  Use of estimates
  The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to accounts payable and accrued liabilities, the fair value of warrants attached to common shares issued and the recoverability of income tax assets.  While management believes the estimates used are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.
  F-6
  CELLDONATE INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended March 31, 2011 and 2010

(Expressed in US dollars)
 2.  Significant Accounting Policies (continued)
 
 (c)  Basic and diluted loss per share
  Basic loss per share is computed using the weighted average number of common shares outstanding during the period. The Company uses the treasury stock method to calculate diluted earnings per share.  Diluted earnings per share assumes the exercise of common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants.  However, the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that would be anti-dilutive.
  (d)  Foreign currency translation
  Transactions in currencies other than the US dollar are translated into US dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities.  Expenses are translated at the average rates for the period, except amortization, which is translated on the same basis as the related assets.  Resulting translation gains or losses are reflected in net loss.
  (e)  Research and development
  Research and development expenditures are charged to operations as incurred.
  (f) Equipment
  Equipment is stated at cost.  Amortization is provided on a straight-line basis over their estimated useful lives of 3 years.
  The Company periodically evaluates the recoverability of its in-use equipment based on expected undiscounted future cash flows and recognizes impairments, if any, when the undiscounted future cash flows are expected to be less than the carrying value of the asset as a current charge to operations.
  F-7
  CELLDONATE INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended March 31, 2011 and 2010

(Expressed in US dollars)
 2.  Significant Accounting Policies (continued)
 
 (g)  Financial instruments
 
 All financial instruments are classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for-trading are measured at fair value with gains and losses recognized in net income. Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income and reported in shareholders’ equity.
  A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  The Company prioritizes the inputs into three levels that may be used to measure fair value:
  a)
Level1 –Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
  b)
Level 2 –Applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly, such as quoted prices for similar assets or liabilities in active markets, or indirectly, such as quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions.
  c)
Level 3 –Applies to assets or liabilities for which there are unobservable market data.
  Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as held-to-maturity, loans and receivables, or other financial liabilities are included in the initial carrying value of such instruments and amortized using the effective interest method. Transaction costs classified as held-for-trading are expensed when incurred, while those classified as available-for-sale are included in the initial carrying value.
  (h) Income taxes
  The Company uses the asset and liability approach in its method of accounting for income taxes that requires the recognition of deferred tax liabilities and assets for expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities.  The Company recognizes the effect of uncertain tax positions where it is more likely than not based on technical merits that the position could be sustained where the tax benefit has a greater than 50% likelihood of being realized upon settlement.A valuation allowance against deferred tax assets is recorded if based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
  (i) Recent accounting guidance not yet adopted
  The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows.
  F-8
  CELLDONATE INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended March 31, 2011 and 2010

(Expressed in US dollars)
  3.  Equipment
 
 Cost


Accumulated

Amortization


Net Book

ValueAt March 31, 2011

$
528


$
528


$
-At March 31, 2010

$
528


$
528


$
-
  4.  Financial Instruments
  The Company has designated its cash as held-for-trading and accounts payable and amounts due to related parties as other financial liabilities.
  (a) Fair value
  The fair values of the Company’s cash and accounts payable approximate their carrying values because of the short-term maturity of these instruments. The fair value of amounts due to related parties cannot be determined as there is no external market for such instruments.
  (b) Credit risk
  Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company’s financial asset that is exposed to credit risk is cash, which is minimized to the extent that it is placed with a major financial institution.  Concentration of credit risk exists with respect to the Company’s cash as all amounts are held at a single major American financial institution.
  (c) Translation risk
  This risk is considered minimal as the Company does not incur any significant transactions in currencies other than US dollars.
  (d) Interest rate risk
  The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and liabilities.
  (e) Liquidity risk
  Liquidity risk is the risk that the Company will encounter difficulty in satisfying its financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. At March 31, 2011, the Company had accounts payable of $23,115 (2010 - $19,962) which are due within 30 days or less.
 
 5.  Accrued Liabilities
  As at March 31, 2011, accrued liabilities consist of accrued accounting and legal fees of $6,000 (2010 - $6,500).
  F-9
  CELLDONATE INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended March 31, 2011 and 2010

(Expressed in US dollars)
 
 6.  Common Stock
  (a)
In October 2010, the Company declared a stock dividend of nine shares of the Company’s common stock on each one issued and outstanding share of common stock. This dividend increased the number of issued and outstanding common shares from 2,291,000 to 22,910,000. The stock dividend is in substance a stock split and the effects have been reflected in the accompanying financial statements from inception, except as otherwise disclosed.
  (b)
The Company issued common stock as follows:
  ●
During the period ended March 31, 2007, 11,500,000 common shares with a par value of $0.001 were issued for a total value of $1,150 for services rendered by founders of the Company and 1,600,000 common shares with a par value of $0.001 were issued for gross proceeds of $8,000.
  ●
During the year ended March 31, 2008, 1,140,000 common shares with par value of $0.001 were issued pursuant to private placements for gross proceeds of $5,700.
  ●
During the year ended March 31, 2009, 8,670,000 units, each unit consisting of one share of common stock and one-half of one warrant to purchase one share of common stock at an exercise price of $0.15 on or before September 28, 2009 were issued for gross proceeds of $43,350.  The Company received these share subscription proceeds before March 31, 2008.
  (c)
During the year ended March 31, 2009, the Company issued 433,500 warrants (pre stock split) to purchase common shares at a price of $0.15 per share.  These warrants expired unexercised on September 28, 2009.  As at March 31, 2011, no warrants to purchase common shares were outstanding.
 
 7.  Related Party Transactions
  (a)
Due to related parties as at March 31, 2011 includes the following:
  (i)
$172,899 (2010 - $115,833) due to a company controlled by a director of the Company.
  (ii)
$7,851 (2010 - $7,851) due to a company controlled by a shareholder of the Company for payment of legal services made on behalf of the Company.
  (iii)
$2,988 (2010 - $2,988) due to directors of the Company for advances made to the Company.
 
 F-10
  CELLDONATE INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended March 31, 2011 and 2010

(Expressed in US dollars)
 7.  Related Party Transactions (continued)
  (b)
The Company entered into an agreement with a company controlled by a director of the Company for the facilitation of its business and technology development dated August 15, 2006, as amended May 8, 2009.  The agreement requires the Company to pay a monthly fee of $1,500 for services provided by the related party and to reimburse the related party for expenses incurred on its behalf.  The monthly fee can be waived at the discretion of the related company. The Company incurred charges of $nil (year ended March 31, 2010 - $nil, period from August 15, 2006 to March 31, 2011 - $63,728) for the year ended March 31, 2011 pursuant to this agreement, which has been expensed as consulting and development fees.  In addition, for the year ended March 31, 2011, the Company was charged fees of $12,000 (year ended March 31, 2010 - $9,500, period from August 15, 2006 to March 31, 2011 - $28,600) by the related company for administrative costs related to the Company’s filing of its regulatory documents.
 
 Related party transactions are recorded at the exchange amount, representing the amount agreed upon by the parties, are non-interest bearing and have no specific terms of repayment.
 
 8.  Income Taxes
 
 Deferred income taxes reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts.
  The provision for income taxes differs from the result that would be obtained by applying the statutory tax rate of 35% (2010 - 34%) to income before income taxes as follows:
 
 March 31,

2011


March 31,

2010Computed expected income tax benefit

$
(20,973
)

$
(21,489
)Change in valuation allowance


23,062



21,489Effect on change in tax rate


(2,089
)


-Income tax provision

$
-


$
-
  The potential benefit of net operating loss carry-forwards has not been recognized in these financial statements since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years. The components of deferred income tax assets and the amount of the valuation allowance are as follows:
 
 March 31,

2011


March 31,

2010Net operating loss carried forward

$
94,100


$
71,038Valuation allowance


(94,100
)


(71,038
)Net deferred income tax assets

$
-


$
-
 
 F-11
  CELLDONATE INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended March 31, 2011 and 2010

(Expressed in US dollars)
  8.  Income Taxes (continued)
  The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred income tax assets such that a full valuation allowance has been recorded. These factors include the Company's current history of net losses and the expected near-term future losses. The operating losses amounting to $208,936 will expire between 2027 and 2030 if they are not utilized. The following table lists the fiscal year in which the loss was incurred and the expiration date of the operating loss carry-forwards:
 
 Fiscal Year

Amount


Expiry Date2007

$
55,294



20272008


37,962



20282009


52,476



20292010


63,204



20302011


59,922



2031$
268,858
 
 For the years ended March 31, 2011 and 2010, the Company did not have any unrecognized tax benefits and thus no interest and penalties relating to unrecognized tax benefits were recognized.  The Company records interest and penalties on unrecognized tax benefits, if any, as a component of income tax expense. In addition, the Company does not expect that the amount of unrecognized tax benefits will change substantially within the next 12 months.
  The Company’s US federal income tax returns are open to examination by the Internal Revenue Service for the 2007, 2008, 2009, 2010 and 2011 taxation years.
 
 9.  Segmented Information
  The Company operates primarily in one business segment being development of mobile technology with substantially all of its assets and operations located in Canada.


F-12





Item 9.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure





None.





Item 9A.  Controls and Procedures





Disclosure Controls





We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) designed to provide reasonable assurance the information required to be reported in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified and pursuant to the SEC’s rules and forms, including controls and procedures designed to ensure that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.





As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, and the material weaknesses outlined below, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.





Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining effective internal control over financial reporting.  Under the supervision of our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2011 using the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).





A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of March 31, 2011, the Company determined that there were significant deficiencies that constituted material weaknesses, as described below.





1.
Certain entity level controls establishing a “tone at the top” were considered material weaknesses. The Company does not have a majority of independent directors on its board or audit committee. The Company has no policy on fraud and no code of ethics at this time.2.
All cash management is conducted by our two officers, which may result in misappropriation of funds.3.
The lack of independent directors exercising an oversight role increases the risk of management override and potential fraud.4.
The Company is in the development stage with limited resources and limited monitoring of internal control and assessment of risk is conducted.





Management is currently evaluating remediation plans for the above control deficiencies.





In light of the existence of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.





As a result, management has concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2011 based on criteria established in Internal Control—Integrated Frameworkissued by COSO.





Changes in Internal Control





There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the fiscal year ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





Item 9B.  Other Information





None.




13





PART III





Item 10.  Directors, Executive Officers and Corporate Governance





The following table sets forth the name, age and position of our executive officers and directors as of June 27, 2011.





Name
Age
PositionJon Sofield
46
President, Chief Executive Officer, Secretary, DirectorMichael Palethorpe
38
Chief Financial Officer, Principal Accounting Officer, Treasurer, DirectorRay Bell
59
Director





Our current directors will serve as such until our next annual shareholder meeting or until their successors are elected who accept the position. Officers hold their positions at the pleasure of our Board of Directors. There are no arrangements, agreements or understandings between non-management security holders and our management under which non-management security holders may directly or indirectly participate in or influence the management of our affairs.





Jon Sofield – President, Chief Executive Officer, Secretary, Director





Jon Sofield has been our President, Chief Executive Officer, Secretary and director since May 9, 2011. His education includes Business & Economics at Boston Tech College, UK and an Honors Degree Civil from Coventry University, UK.





Since May 2009, Mr. Sofield has worked as a consultant for various companies in local media, strategy & business development. He was the Vice President of Business Development for Center’d Corporation & The Dealmap from March 2010 to April 2011, and was focused on assisting the company to build a solid foundation of distribution and content acquisition. From February 2007 to June 2009, he was the Vice President of Zvents, Inc., a provider of local search services. In that role, one of Mr. Sofield’s responsibilities was to built a mature and repeatable process for promoting and selling the Zvents platform. From June 2006 to February 2007, Mr. Sofield was the Vice President Sales & Business Development for Real Time Matrix Corp. and was responsible for establishing a marketing strategy and directing the company in terms of user adoption.





Mr. Sofield was a consultant of business development for Vayusphere Inc. from July 2006 to June 2007, during which time he assisted with strategy and business development. He was also the founder & CEO of Podloco from July 2005 to July 2007, where he set up and created a unique podcasting service for communities and regions. From February 2005 to June 2006, Mr. Sofield was a business development consultant for Akonix Systems, Inc., a company that provides a platform for instant messenger applications, and he was brought on board to create a strategy and plan for launching a new platform to develop IM applications. Mr. Sofield was also the Vice President of Business Development for Intalio, Inc. from November 2003 to January 2005, a role in which he was responsible for all indirect revenue, partner alliances and M&A activity.





From June 1998 to November 2003, Mr. Sofield worked as the Vice President of Sales at Commerce One Inc., a leading provider of enterprise B2B (business-to-business) solutions. He established many business development partnerships with content providers SI’s and technology companies; strategically managed Microsoft, SAP and IBM, globally; innovated and devised new methods of market development; and participated in the company’s strategic direction.





Mr. Sofield is not currently a director of any other public company or any company registered as an investment company.





Michael Palethorpe – Chief Financial Officer, Principal Accounting Officer, Treasurer, Director





Michael Palethorpe has been our Chief Financial Officer, Principal Accounting Officer and Treasurer since our inception on August 15, 2006. Mr. Palethorpe served as our director from our inception on August 15, 2006 to August 27, 2007, and was reappointed as our director on January 5, 2009.





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From January 2005 to August 2006, Mr. Palethorpe worked in a self-employed capacity providing services to non-profit and philanthropic organizations on a number of projects. From January 2003 to January 2005 Mr. Palethorpe served as the Western Canada Regional Manager for Landmark Education Inc. (“Landmark”), a global education enterprise with headquarters in San Francisco, California. From September 2001 to December 2002, Mr. Palethorpe acted as Landmark’s Western Canada Registration Manager, during which time he was responsible for managing 22 full-time employees and more than 150 part-time volunteers and overseeing the development and marketing of educational programs for Western Canada. From February 2000 to September 2001, he served as the President of North Shore Interactive Solutions Ltd., a company that operates one of the world’s largest mountain biking websites.





Mr. Palethorpe is not currently a director of any other public company or any company registered as an investment company.





Ray Bell – Director





Ray Bell served as our director from our inception on August 15, 2006 to August 27, 2007, and was reappointed as our director on January 5, 2009. He holds a Bachelor of Arts degree from Ohio State University.





Since January 2004, Mr. Bell has been involved in the real estate industry, as a property developer in the mountains of northeast Georgia, USA. For the past 35 years, he has also served as a Senior Captain/Instructor with Delta Airlines, Inc. At one time, Mr. Bell was also employed for seven years as the National Sales Director of Smith Barney and Primerica Financial Services. In that role, he personally recruited over 1200 people across the United States and Canada on the company’s behalf and acquired extensive business knowledge and experience.





Mr. Bell is not currently a director of any other public company or any company registered as an investment company.





Significant Employees





Other than as described above, we do not expect any other individuals to make a significant contribution to our business.





Family Relationships





There are no family relationships among our directors, executive officers or persons nominated or chosen by us to become directors or executive officers.





Legal Proceedings





None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:





●
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;





●
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);





●
being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;





●
being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated;





●
any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business activity;





●
and judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws and regulations, or any settlement to such actions; or





●
any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.




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Section 16(a) Beneficial Ownership Compliance Reporting





Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our common stock to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended March 31, 2011 our directors, executive officers and 10% stockholders complied with all applicable filing requirements.





Code of Ethics





We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because we have not yet finalized the content of such a code.





Audit Committee





On November 16, 2009 we established an audit committee and directed the audit committee to carry out its duties in accordance with a charter. A current copy of our audit committee charter is not yet available to our security holders on our website, but we plan to make the charter available on our website in the near future. Our entire Board of Directors carries out the functions of the audit committee.





Our audit committee has:





●
reviewed and discussed our audited financial statements with management;





●
recommended to our Board of Directors that the audited financial statements be included this annual report on Form 10-K;





●
discussed with our independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T; and





●
received the written disclosures and the letter from the independent accountant required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and discussed with the independent accountant the independent accountant's independence.





Our Board has determined that we do not have an audit committee financial expert on our Board carrying out the duties of the audit committee. The Board has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having an audit committee financial expert on the Board.





Director Nominees





We do not have a nominating committee. Our Board of Directors selects individuals to stand for election as members of the Board, and does not have a policy with regards to the consideration of any director candidates recommended by our security holders. Our Board has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when it considers a nominee for a position on our Board. If security holders wish to recommend candidates directly to our Board, they may do so by communicating directly with our President at the address specified on the cover of this annual report.





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Item 11.  Executive Compensation





None of our directors or executive officers received any compensation from us during our last two completed fiscal years. Pursuant to Item 402(a)(5) of Regulation S-K we have omitted all tables and columns since no compensation has been awarded to, earned by, or paid to these individuals.





Pension, Retirement or Similar Benefit Plans





There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.





Compensation Committee





We currently do not have a compensation committee of the Board of Directors or a committee performing similar functions. It is the view of the Board that it is appropriate for us not to have such a committee because of our size and because the Board as a whole participates in the consideration of executive compensation.





Compensation of Directors





Our directors have not received any compensation for their services as directors from our inception on August 15, 2006 to March 31, 2011. We have no formal plan for compensating our directors for their services in the future in their capacity as directors, although such directors are expected in the future to receive options to purchase shares of our common stock as awarded by our Board of Directors or any compensation committee that may be established.





Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters





We do not have any compensation plans or individual compensation arrangements under which our securities are authorized for issuance to either employees or non-employees.





The following table sets forth the ownership, as of June 27, 2011, of our common stock by each of our directors, by all of our executive officers and directors as a group and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of June 27, 2011, there were 22,910,000 shares of our common stock issued and outstanding. All persons named have sole or shared voting and investment control with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this annual report.




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Title of Class
Name and Address of

Beneficial Owner
Amount and

Nature of

Beneficial

Ownership
Percent of Class

(%)Common  Stock
Jon Sofield (1)

228 Hamilton Avenue

Palo Alto, CA 94301
-
-Common Stock
Michael Palethorpe (2)

1243 Homer Street

Vancouver, British Columbia

Canada V6B 2Y9
500,000
2.2Common Stock
Ray Bell (3)

3606 – 1111 Alberni Street

Vancouver, British Columbia

Canada V6E 4V2
-
-All Officers and Directors as a Group
500,000
2.2Common Stock
David Strebinger (4)

3606 – 1111 Alberni Street

Vancouver, British Columbia

Canada V6E 4V2
12,020,000 (5)
52.5Common  Stock
Chelsea Greene

3606 – 1111 Alberni Street

Vancouver, British Columbia

Canada V6E 4V2
7,020,000 (6)
30.6Common  Stock
John Greene

RR #1 C22

Bowen Island, British Columbia

Canada V0N 1G0
4,000,000 (7)
17.5Common  Stock
Bernadette Greene

RR #1 C22

Bowen Island, British Columbia

Canada V0N 1G0
4,000,000 (8)
17.5





(1)
Jon Sofield is our President, Chief Executive Officer, Secretary and director.





(2)
Michael Palethorpe is our Chief Financial Officer, Principal Accounting Officer, Treasurer and director.





(3)
Ray Bell is our director.





(4)
David Strebinger was our President, Chief Executive Officer, Secretary and director from August 15, 2006 until May 9, 2011.





(5)
Includes 5,000,000 shares owned by Caring Capital Corporation, a company controlled by David Strebinger, 5,000,000 shares owned by Mr. Strebinger directly, and 2,020,000 shares owned by Chelsea Greene, the spouse of Mr. Strebinger.





(6)
Includes 2,020,000 shares owned by Chelsea Greene and 5,000,000 shares owned by David Strebinger, the spouse of Ms. Greene.





(7)
Includes 2,000,000 shares owned by John Greene and 2,000,000 shares owned by Bernadette Greene, the spouse of Mr. Greene.





(8)
Includes 2,000,000 shares owned by Bernadette Greene and 2,000,000 shares owned by John Greene, the spouse of Ms. Greene.





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Change of Control





As of June 27, 2011 we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.





Item 13.  Certain Relationships and Related Transactions, and Director Independence





On May 8, 2009 we entered into an amendment agreement with Caring Capital Corporation (“Caring Capital”), a company controlled by David Strebinger, our former President, Chief Executive Officer, Secretary and director, to amend the terms of our agreement with Caring Capital dated August 15, 2006. Pursuant to the amendment agreement, we altered the payment terms of the original agreement to eliminate our obligation to issue notes convertible into shares of our common stock to Caring Capital at the conclusion of the facilitation.





As at March 31, 2011 we were indebted $172,899 to Caring Capital for consulting and development costs paid on our behalf. This amount is non-interest bearing and has no specific terms of repayment.





As at March 31, 2011 we were indebted $7,851 to Chelber Real Estate Inc., a company controlled by Chelsea Greene, our shareholder and the spouse of Mr. Strebinger, for legal fees paid on our behalf. This amount is non-interest bearing and has no specific terms of repayment.





As at March 31, 2011 we were indebted $2,938 to Mr. Strebinger for advances made to us for the purpose of working capital. This amount is non-interest bearing and has no specific terms of repayment.  As at March 31, 2011 we were also indebted $50 to Michael Palethorpe, our Chief Financial Officer, Principal Accounting Officer, Treasurer and director, for advances made to us for the same purpose.





Other than as described above, we have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of those persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last two fiscal years.





Director Independence





The OTC Bulletin Board on which our common stock is quoted on does not have any director independence requirements. We currently use NASDAQ’s general definition for determining director independence, which states that “independent director” means a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, that, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director. Only one of our current directors, Ray Bell, meets this definition of independence.





Item 14.  Principal Accountant Fees and Services





Audit and Non-Audit Fees





The following table sets forth the fees for professional audit services and the fees billed for other services rendered by our auditors, Smythe Ratcliffe LLP, in connection with the audit of our financial statements for the years ended March 31, 2011 and 2010, and any other fees billed for services rendered by our auditors during these periods.





Year Ended

March 31, 2011

($)


Year Ended

March 31, 2010

($)Audit fees


15,500



12,500Audit-related fees


-



-Tax fees


-



-All other fees


-



-Total


15,500



12,500





Since our inception, our Board of Directors, performing the duties of the audit committee, has reviewed all audit and non-audit related fees at least annually. The Board, acting as the audit committee, pre-approved all audit related services for the year ended March 31, 2011.





19





PART IV





Item 15.  Exhibits, Financial Statement Schedules





(a)(1)  Financial Statements





See the “Index to Financial Statements” set forth on page F-1.





(a)(2)  Financial Statement Schedules





None. The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or the notes related thereto.





ExhibitNumber
ExhibitDescription3.1
Articles of Incorporation (1)3.2
Bylaws (1)10.6
Agreement with Caring Capital Corporation dated August 15, 2006 (1)10.7
Amendment Agreement with Caring Capital Corporation dated May 8, 2009 (1)31.1
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





(1)  Included as exhibits to our registration statement on Form S-1 filed on May 18, 2009.




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SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





Date: June 27, 2011
Celldonate Inc.By:
/s/ Jon SofieldJon SofieldPresident, Chief Executive Officer, Secretary, Director





Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.





SIGNATURE

TITLE

DATE/s/ Jon Sofield

President, Chief Executive Officer, Secretary, Director

June 27, 2011Jon Sofield/s/ Michael Palethorpe

Chief Financial Officer, Principal Accounting Officer, Treasurer, Director

June 27, 2011Michael Palethorpe/s/ Ray Bell

Director

June 27, 2011Ray Bell





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