Arvana Inc. and Subsidiaries
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2011 and 2010
(Expressed in U.S. Dollars)
3. Amounts Due to Related Parties and Loans Payable to Stockholders
From February, 2007 until December 31, 2011 the Company received a number of loans from stockholders, related parties and unrelated third parties. As of December 31, 2011 the Company had received loans of $604,930 (Euro 225,000; CAD 62,300; $ 251,800) (December 31, 2010 - $604,653: Euro 225,000; CAD 47,300; $ 255,800) from stockholders, loans of $118,833 (CAD 10,000; $ 109,000) (December 31, 2010 - $100,000) from a related party and loans of $44,833 (CAD 10,000; $ 35,000) (December 31, 2010 $ 25,000) from unrelated third parties. 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 amounts reflected on these financial statements are expressed in US Dollars. Repayment of the loans is due on closing of any future financing arrangement by the Company. The balance of accrued interest of $156,015 and $123,104 is included in accounts payable and accrued expenses at December 31, 2011 and 2010, respectively. Interest expense recognized on these loans was $45,951 for the year ended December 31, 2011, compared to $42,751 for the year ended December 31, 2010.
At December 31, 2011 and 2010, the Company had amounts due to related parties of $516,719 and $282,500, respectively. This amount includes $136,100 at December 31, 2011 and 2010, payable to three former 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.
4. Common stock
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 December 31, 2011 and December 31, 2010, there were no stock options outstanding. No options were granted, exercised or expired during the year ended December 31, 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 shares of its treasury stock of which cancellation removed $175 from common stock and $279,825 from additional paid-in capital.
5. Segmented Information
The Company has no reportable segments.