ARVANA INC - FORM 10-Q - November 14, 2011

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EX-31.1 - EX-31.1 - ARVANA INC	v239080_ex31-1.htm
EX-32.2 - EX-32.2 - ARVANA INC	v239080_ex32-2.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2011

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

For the transition period from ________________ to _______________

000-30695

(Commission file number)

ARVANA INC.

(Exact name of registrant as specified in its charter)

NEVADA	87-0618509
State or other jurisdiction of	(I.R.S. Employer
incorporation or organization	Identification No.)

90 Madison Street, Suite 701, Denver, CO 80206

(Address of principal executive offices) (Zip Code)

303 329-3008

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No ¨ (Not required)

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 ¨		Accelerated filer ¨
Non-accelerated filer o	(Do not check if a smaller reporting company)	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 þ No ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of November 7, 2011 there were 885,130 shares of common stock outstanding.

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	12

Item 4.	Controls and Procedures	12

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	15

Item 4.	(Removed and Reserved)	15

Item 5.	Other Information	15

Item 6.	Exhibits	15

Signatures		16

Item 1.

Financial Statements

Arvana Inc.

(A Development Stage Company)

Condensed Consolidated Balance Sheets

	September 30, 2011			December 31, 2010
	(Unaudited)
ASSETS
Current assets:
Cash	$	3,916		$	2,074

Total assets	$	3,916		$	2,074

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued liabilities	$	695,425		$	657,603
Loans payable stockholders (Note 3)		613,814			604,653
Loans payable related party (Note 3)		118,540			100,000
Loans payable (Note 3)		34,540			25,000
Amounts due to related parties (Note 3)		438,533			282,500
Total current liabilities		1,900,852			1,669,756

Stockholders' deficit
Common stock, $.001 par value 5,000,000 shares authorized,885,130 and 1,060,130 , shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively (Note 4)		885			1,060
Additional paid-in capital		21,166,619			21,446,444
Deficit		(22,705,422	)		(22,705,422	)
Deficit accumulated during the development stage		(355,682	)		(126,428	)
		(1,893,600	)		(1,384,346	)
Less: Treasury stock, 2,085 and 177,085common shares at September 30, 2011 and December 31, 2010, respectively		(3,336	)		(283,336	)
Total stockholders’ deficit		(1,896,936	)		(1,667,682	)

Total liabilities and stockholders’ deficit	$	3,916		$	2,074

The accompanying notes are an integral part of these consolidated financial statements.

Arvana Inc.

(A Development Stage Company)

Condensed Consolidated Statement of Operations and Comprehensive (Loss)

(Unaudited)

													Cumulative
													Amounts from the
													Beginning of the
	Three Months Ended						Nine Months Ended						Development Stage on
	September 30,						September 30,						January 1, 2010 to
	2011			2010			2011			2010			September 30, 2011
Operating expenses
General and administrative	$	82,119		$	20,626		$	224,391		$	74,890		$	327,779
Depreciation		-			-			-			103			103
Total operating expenses		82,119			20,626			224,391			74,993			327,882

Loss from operations		(82,119	)		(20,626	)		(224,391	)		(74,993	)		(327,882	)

Interest expense		(11,504	)		(10,946	)		(34,489	)		(31,794	)		(77,240	)
Foreign exchange gain (loss)		89,920			(64,347	)		29,626			22,059			49,440

Net loss and comprehensive loss for the period	$	(3,703	)	$	(95,919	)	$	(229,254	)	$	(84,728	)	$	(355,682	)

Per share information - basic and fully diluted:
Weighted average shares outstanding		1,012,576			1,049,172			1,044,104			1,056,430			1,053,273

Net loss per share	$	(0.01	)	$	(0.18	)	$	(0.22	)	$	(0.08	)	$	(0.34	)

The accompanying notes are an integral part of these consolidated financial statements.

Arvana Inc.

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

							Cumulative
							amounts from the beginning of the
	For the nine months ended						development stage on
	September 30,						January 1, 2010 to
	2011			2010			September 30, 2011

Cash flows from operating activities
Net loss for the period	$	(229,254	)	$	(84,728	)	$	(355,682	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		-			103			103
Unrealized foreign exchange		(16,499	)		(23,684	)		(39,887	)
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		46,906			33,921			101,023
Amounts due to related parties		162,299			43,439			224,122
Net cash used in operations	$	(36,548	)	$	(30,949	)	$	(70,321	)

Cash flows from financing activities
Proceeds of loans payable		38,390			35,236			73,703
Net cash provided by financing activities		38,390			35,236			73,703

Increase in cash		1,842			4,287			3,382
Cash, beginning of period		2,074			534			534
Cash, end of period	$	3,916		$	4,821		$	3,916

Supplementary information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of these consolidated financial statements.

Arvana Inc.

(A Development Stage Company)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.	Nature of Business and Ability to Continue as a Going Concern

Arvana Inc. (“our”, “we”, ”us” and the “Company”) was incorporated under the laws of the State of Nevada as Turinco, Inc. on September 16, 1977, with authorized common stock of 2,500 shares with a par value of $0.25. On October 16, 1998, the authorized capital stock was increased to 100,000,000 shares with a par value of $0.001. On July 24, 2006, the shareholders approved a change of the Company’s name from Turinco, Inc. to Arvana Inc. On September 30, 2010, the authorized capital stock was decreased to 5,000,000 common shares with a par value of $0.001.

In 1998, we completed a common stock split of eight shares for each outstanding share. In 2005, we completed another common stock split of nine shares for each outstanding share. On September 30, 2010, we completed a common stock reverse split of one share for each twenty shares outstanding. These consolidated financial statements have been prepared showing the after stock reverse split shares with a par value of $0.001.

These consolidated financial statements for the nine month period ended September 30, 2011 include the accounts of the Company and our subsidiary Arvana Networks (including its wholly-owned subsidiaries Arvana Par and Arvana Comunicações do Brasil S. A. (“Arvana Com”). We have ceased all operations in our subsidiary companies and has written-off or disposed of all assets in the subsidiary companies. Consequently they are now all considered to be inactive subsidiaries. As a result, we entered into a new development stage as of January 1, 2010.

Our reporting currency is the United States dollar (“US Dollar”) and the accompanying consolidated financial statements have been expressed in US Dollars.

These consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. For the nine month period ended September 30, 2011, we incurred a loss from operations of $229,254. At September 30, 2011, we had a working capital deficiency of $1,896,936. These conditions raise substantial doubt about our ability to continue as a going concern.

Accordingly, we will require continued financial support from our shareholders and creditors until we are able to generate sufficient cash flow from operations on a sustained basis. There is substantial doubt that we will be successful at achieving these results. Failure to obtain the ongoing support of our shareholders and creditors may make the going concern basis of accounting inappropriate, in which case our assets and liabilities would need to be recognized at their liquidation values. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might arise from this uncertainty.

2.	Summary of Significant Accounting Policies

Basis of presentation

We are in the process of evaluating business opportunities and have entered a new development stage as of January 1, 2010 and present our financial statements in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”) Topic 915. Our fiscal year end is December 31. The accompanying consolidated interim financial statements of Arvana Inc. for the three and nine month periods ended September 30, 2011 and 2010, and for the cumulative amounts from the beginning of the development stage on January 1, 2010, through September 30, 2011, have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for financial information with the instructions to Form 10-Q and Regulation S-X. Although they are unaudited, in the opinion of management, they include all adjustments, consisting only of normal recurring items, necessary for a fair presentation. Results are not necessarily indicative of results which may be achieved in the future. The consolidated interim financial statements and notes appearing in this report should be read in conjunction with our consolidated audited financial statements and related notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission (the “SEC”) on April 6, 2011.

Arvana Inc.

(A Development Stage Company)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Foreign currency translation and transactions

Our functional currency is the United States dollar.

The Company uses the temporal method when translating the Brazilian subsidiary operations. Long-term assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate in effect on the transaction date. Revenue and expenses are translated at the average rates of exchange prevailing during the periods.

Transactions conducted in foreign currencies are recorded using the exchange rate in effect on the transaction date. At the period end, monetary assets and liabilities are translated to the functional currency of each entity using the exchange rate in effect at the period end date. Transaction gains and losses are recorded in foreign exchange gain or loss.

Recent accounting pronouncements

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations.

3.	Amounts Due to Related Parties and Loans Payable to Stockholders

From February 2007 until September 30, 2011, we received a number of loans from shareholders and loans from an unrelated third party. As of September 30, 2011, we had received loans of $613,814 (Euro 225,000; CAD 62,300; USD 251,800) (December 31, 2010 - $604,653) from shareholders, loans of $118,540 (CAD 10,000; USD 109,000) (December 31, 2010 - $100,000) from a related party and loans of $34,540 (CAD 10,000; USD 25,000) (December 31, 2010 - $25,000) from an unrelated third party. All of the loans bear interest at 6% per annum. The loans were made in 3 different currencies, Euros, Canadian Dollars and US Dollars. All amount reflected on these financial statement are expressed in US Dollars. Repayment of the loans is due on closing of any future financing arrangement by us. The balance of accrued interest of $156,671 and $123,104 is included in accounts payable and accrued expenses at September 30, 2011 and December 31, 2010, respectively. Interest expense recognized on these loans was $11,504 and $34,489 for the three and nine months ended September 30, 2011, respectively and $10,946 and $31,794 for the three and nine months ended September 30, 2010, respectively.

At September 30, 2011 and December 31, 2010, we had amounts due to related parties of $438,533 and $282,500, respectively. These amounts include $136,100 at September 30, 2011 and December 31, 2010, payable to three directors for services rendered during 2007. This amount is to be paid part in cash and part in stock at a future date with the number of common shares determined by the fair value of the shares on the settlement date. The amounts owing bear no interest, are unsecured, and have no fixed terms of repayment.

Arvana Inc.

(A Development Stage Company)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

4.	Common Stock

We account for all stock-based payments to employees and non-employees under ASC 718 “Stock Compensation,” using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.

We have a stock option plan in place under which we are authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 10% of our issued and outstanding common stock. Under the plan, the exercise price of each option equals the market price of our stock as calculated on the date of grant. The options can be granted for a maximum term of 10 years. Vesting terms are determined at the time of grant.

At September 30, 2011 and December 31, 2010, there were no stock options outstanding. No options were granted, exercised or expired during the nine months ended September 30, 2011 or the year ended December 31, 2010.

On September 30, 2010, the Company completed a common stock reverse split of one share for each twenty shares outstanding. These consolidated financial statements have been prepared showing after reverse stock split shares with a par value of $0.001.

On September 6, 2011, the Company cancelled 175,000 of its treasury stock.

5.	Segmented Information

The Company has no reportable segments.

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

In this Quarterly Report:

(i)	references to “we”, “us”, “our”, or the “Company” refer to Arvana Inc. and our wholly-owned subsidiaries, namely:

Arvana Networks Inc. which wholly owns Arvana Participações (“Arvana Par”), a company which wholly owns Arvana Comunicações do Brazil S.A. (“Arvana Com”); and

(ii)	all dollar amounts are expressed in United States dollars, unless otherwise indicated.

You should read the following discussion and analysis of our financial condition, results of operations and plan of operations together with the interim consolidated financial statements and notes to the interim consolidated financial statements included in this Quarterly Report, as well as our most recent annual report Form 10-K for the year ended December 31, 2010 and current reports on Form 8-K.

Forward-Looking Statements

The information in this Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding our planned business, availability of funds, government regulations, common share prices, operating costs, capital costs, our ability to deploy our planned business and generate revenues and other factors. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. These statements are based on certain assumptions and analyses made by our management in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors they believe are appropriate in the circumstances. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Overview

We are currently in the process of evaluating business opportunities and have entered a new development stage as of January 1, 2010. There can be no guarantee that we will be successful in identifying suitable business opportunities, or if we are able to identify suitable business opportunities, that we will be able to find an adequate source of financing to acquire any business or business assets, and commence operations, or that those operations, if commenced, will be successful in generating profits.

Our Plan of Operations

Our present plan of operations for the next twelve months is to identify and evaluate industries and business opportunities in order to find a suitable business to enter into.

We will not be able to pursue any new business opportunities without additional financing. Our board of directors and management are actively pursuing obtaining financing in order to maintain operations while we evaluate potential businesses.

In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $50,000 during 2011. We had cash in the amount of $3,916 and a working capital deficit of $1,896,936 as at September 30, 2011. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.

Other than small advances from shareholders, we believe that debt financing will not be an alternative for funding additional phases of our business development as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock to fund our plan of operations. The board is currently considering all avenues available to obtain financing.

Critical Accounting Policies

Critical accounting policies are those that management believes are both most important to the portrayal of the Company’s financial condition and results of operations and that require difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that involve uncertainty.

We believe that the “critical” accounting policies that we use in the preparation of our financial statements are as follows:

a) Estimates

The preparation of consolidated 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. Actual results could differ from those estimates.

b) Foreign currency translation and transactions

Our functional currency is the United States dollar.

c) Stock-based compensation

We account for all stock-based payments to employees and non-employees under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification”or “ASC”) Topic 718 “Stock Compensation,” using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.

Presentation of Financial Information

Our financial statements for the quarter ended September 30, 2011 include the accounts of:

Arvana Networks;

Arvana Par; and

Arvana Com;

Results of Operations

Our operations for the three and nine months ended September 30, 2011 and 2010 are summarized below.

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Expenses:
General and administration	$	82,119		$	20,626		$	224,391		$	74,890
Depreciation	$	-		$	-		$	-		$	103
Interest	$	11,504		$	10,946		$	34,489		$	31,794
Foreign exchange (gain) loss	$	(89,920	)	$	64,347		$	( 29,626	)	$	( 22,059	)
Comprehensive income (loss) for the period	$	( 3,703	)	$	(95,919	)	$	(229,254	)	$	( 84,728	)

General and Administrative Expenses

General and administrative expenses are comprised of costs associated with management compensation, office overhead including rent, legal fees, and consulting services. The changes in our administrative expenses for the three and nine months ended September 30, 2011 compared to September 30, 2010 are due to increased activities related to investigating new business opportunities.

Comprehensive Income (Loss) for the Period

We had a comprehensive loss for the three and nine months ended September 30, 2011 of $3,703 and $229,254 compared with comprehensive losses of $95,919 and $84,728 for the three and nine months ended September 30, 2010. Our comprehensive income and loss fluctuate significantly due to unrealized foreign exchange gains and losses incurred due to the level of our liabilities payable in foreign currencies. Future quarterly expenses are expected to be comparable to the current quarter until such time as a new business is entered into, net losses if any due to any new business cannot be estimated at this time.

Liquidity and Capital Resources

As at September 30, 2011, we had cash of $3,916 and a working capital deficit of $1,896,936. This compares to cash of $2,074 and working capital deficit of $1,667,682 as at December 31, 2010.

Cash Used in Operating Activities

We used cash in operations in the amount of $36,548 during the nine months ended September 30, 2011, as compared to $30,949 during the nine months ended September 30, 2010. Cash used in operations during the nine months ended September 30, 2011 was attributable primarily to payments for administration expenses.

Cash Used in Investing Activities

We did not use cash in investing activities during the nine months ended September 30, 2011 or the nine months ended September 30, 2010.

Cash Flows from Financing Activities

We obtained $38,390 from unsecured loans bearing 6% interest per annum during the nine months ended September 30, 2011. During the nine months ended September 30, 2010, we obtained $35,236 from unsecured loans bearing 6% interest per annum.

Going Concern

For the nine months ended September 30, 2011, we had a comprehensive loss of $229,254. At September 30, 2011, we had a working capital deficiency of $1,896,937. These conditions raise substantial doubt about our ability to continue as a going concern. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operations. Our auditors stated in their report on our December 31, 2010 audited financial statements that they have substantial doubt we will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our shares of common stock in order to continue to fund our business operations. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our plan of operations.

Off-Balance Sheet Arrangements

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

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2011 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the period ended September 30, 2011 fairly present our financial condition, results of operations and cash flows in all material respects.

Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel.

Management, including our Chief Executive Officer and Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

Changes in internal control over financial reporting

As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the period ended September 30, 2011 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the effectiveness of controls and procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

PART II

Item 1.

Legal Proceedings.

None

Item 1A.

Risk Factors

Not required.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

(Removed and Reserved)

Item 5.

Other Information

None.

Item 6.

Exhibits

The following exhibits are included with this Quarterly Report on Form 10-Q:

Exhibit Number		Description of Exhibit
2.1		Agreement and Plan of Reorganization between the Company, Arvana Networks, Inc. and the Shareholders of Arvana Networks, Inc. dated August 18, 2005(1)
3.1		Articles of Incorporation(2)
3.2		Bylaws, as amended(2)
3.3		Amendment to Articles of Incorporation(3)
10.1		2006 Stock Option Plan, dated June 5, 2006(4)
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act(5)
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act(5)
32.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(5)
32.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(5)

(1)	Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2005.

(2)	Incorporated by reference to the exhibits to the Company’s registration statement on Form 10-SB filed with the SEC on May 24, 2000.

(3)	Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed with the SEC on October 12, 2010.

(4)	Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed with the SEC on June 7, 2006.

(5)	Filed as an exhibit to this Quarterly Report on Form 10-Q.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ARVANA INC.

By:	/s/ Zahir Dhanani
	Zahir Dhanani, Chief Executive Officer

Date:	November 14, 2011

By:	/s/ Arnold Tinter
	Arnold Tinter, Chief Financial Officer

Date:	November 14, 2011

EXHIBIT INDEX

Exhibit Number		Description of Exhibit
2.1		Agreement and Plan of Reorganization between the Company, Arvana Networks, Inc. and the Shareholders of Arvana Networks, Inc. dated August 18, 2005(1)
3.1		Articles of Incorporation(2)
3.2		Bylaws, as amended(2)
3.3		Amendment to Articles of Incorporation(3)
10.1		2006 Stock Option Plan, dated June 5, 2006(4)
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act(5)
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act(5)
32.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(5)
32.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(5)

(1)	Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2005.

(2)	Incorporated by reference to the exhibits to the Company’s registration statement on Form 10-SB filed with the SEC on May 24, 2000.

(3)	Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed with the SEC on October 12, 2010.

(4)	Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K filed with the SEC on June 7, 2006.

(5)	Filed as an exhibit to this Quarterly Report on Form 10-Q.

ARVANA INC - FORM 10-Q - November 14, 2011

Attached files

ARVANA INC Reports