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| EX-31 - ARVANA CERTIFICATION - ARVANA INC | exhibit31.htm |
| EX-32 - ARVANA CERTIFICATION - ARVANA INC | exhibit32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
quarterly period ended June 30, 2015.
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: 0-30695
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.)
299 S. Main Street, 13th Floor, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
(801) 232-7395
Registrant’s telephone number, including area code
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 ¨ No 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
-acceAlecrcaetleedraftieledrfiler Non
þ Smaller reporting
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 registrant’s classes of common stock, as of the
latest practicable date. The number of shares outstanding of the registrant’s common stock, $0.001 par
value (the only class of voting stock), at August 14, 2015, was 885,130.
1
TABLE OF CONTENTS
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Financial Statements
3
Management’s Discussion and Analysis of Financial Condition and
12
Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
16
Controls and Procedures
17
PART II OTHER INFORMATION
Legal Proceedings
18
Unregistered Sales of Equity Securities and Use of Proceeds
18
Management's Discussion and Analysis of Financial Condition and
18
Results of Operations
Mine Safety Disclosures
18
Other Information
18
Exhibit
18
19
2
ITEM 1.
FINANCIAL STATEMENTS
As used herein, the terms “Company,” “we,” “our,” “us,” “it,” and “its” refer to Arvana, Inc., a Nevada
corporation and its wholly owned subsidiaries, unless otherwise indicated. In the opinion of management,
the accompanying unaudited condensed consolidated financial statements included in this Form 10-Q
reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of
the results of operations for the periods presented. The results of operations for the periods presented are
not necessarily indicative of the results to be expected for the full year.
3
Arvana Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Expressed in US Dollars)
June 30,
December 31,
2015
2014
ASSETS
Current assets:
Cash
$
4,165
$
1,876
Total assets
$
4,165
$
1,876
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities
$
1,020,132
$
1,041,503
Loans payable to stockholders (Note 3)
631,910
647,702
Loans payable to a related party (Note 3)
31,097
32,791
Loans payable (Note 3)
148,006
148,620
Amounts due to related parties (Note 3)
456,141
472,987
Total current liabilities
2,287,286
2,343,603
Stockholders' deficiency
Common stock, $0.001 par value 5,000,000 authorized,
885,130 shares issued and outstanding at
June 30, 2015 and December 31, 2014 (Note 4)
885
885
Additional paid-in capital
21,166,619
21,166,619
Deficit
(23,447,289)
(23,505,895)
(2,279,785)
(2,338,391)
Less: Treasury stock – 2,085 common shares at
June 30, 2015 and December 31, 2014
(3,336)
(3,336)
Total stockholders’ deficiency
(2,283,121)
(2,341,727)
$
4,165
$
1,876
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Arvana Inc.
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2015 and 2014
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2015
2014
2015
2014
Operating expenses
General and administrative
$
5,230 $
6,429
$
11,132
9,453
Professional fees
1,730
4,500
3,230
7,368
Total operating expenses
6,960
10,929
14,362
16,821
Loss from operations
(6,960)
(10,929)
(14,362)
(16,821)
Interest expense
(12,165)
(12,826)
(24,067)
(25,468)
Foreign exchange gain (loss)
(31,661)
(20,282)
97,035
7,235
Net income (loss) and
comprehensive income (loss)
$
(50,786) $
(44,037)
$
58,606 $
(35,054)
Per common share information – basic
and diluted:
Weighted average shares outstanding
885,130
885,130
885,130
885,130
Net income (loss) per
common share – basic and
diluted
$
(0.06) $
(0.05)
$
0.07 $
(0.04)
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Arvana Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in US Dollars)
Six Months Ended
June 30,
2015
2014
Cash flows from (used in) operating activities
Net income (loss)
$
58,606
$
(35,054)
Item not involving cash:
Unrealized foreign exchange gain
(97,195)
(4,898)
Changes in non-cash working capital:
Accounts payable and accrued liabilities
29,945
20,825
Amounts due to related parties
933
1,046
Net cash used in operations
(7,711)
(18,081)
Cash flows from investing activities
Net cash used in investing activities
-
-
Cash flows from financing activities
Proceeds of loans payable to stockholders
10,000
19,400
Net cash provided by financing activities
10,000
19,400
Increase in cash
2,289
1,319
Cash , beginning of period
1,876
321
Cash, end of period
$
4,165
$
1,640
There were no non-cash investing and financing transactions for the six month periods ended June 30,
2015 and 2014.
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Arvana Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2015
(Unaudited)
(Expressed in U.S. Dollars)
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 common
shares with a par value of $0.001 and a forward common stock split of eight shares for each outstanding
share. In 2005, we completed another forward common stock split of nine shares for each outstanding
share. 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 and effected a reverse split of one share for every twenty shares
outstanding.
These condensed consolidated financial statements for the six month period ended June 30, 2015 include
the accounts of the Company and its subsidiary Arvana Networks Inc. (including its wholly-owned
subsidiaries, Arvana Participaçōes S.A. (“Arvana Par”) and Arvana Comunicações do Brasil S. A.
(“Arvana Com”)). The Company has ceased all operations in its 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.
Our reporting currency and functional currency is the United States dollar (“US Dollar”) and the
accompanying condensed consolidated financial statements have been expressed in US Dollars.
These condensed 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 six
month period ended June 30, 2015, the Company recognized net income of $58,606 as a result of foreign
exchange gains. At June 30, 2015, the Company had a working capital deficiency of $2,283,121. These
conditions raise substantial doubt about the Company’s ability to continue as a going concern.
Accordingly, the Company will require continued financial support from its shareholders and creditors
until it is able to generate sufficient cash flow from operations on a sustained basis. There is substantial
doubt that the Company will be successful at achieving these results. Failure to obtain the ongoing
support of its shareholders and creditors may make the going concern basis of accounting inappropriate,
in which case the Company’s 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.
7
Arvana Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2015
(Unaudited)
(Expressed in U.S. Dollars)
2. Summary of Significant Accounting Policies
Basis of presentation
The Company is in the process of evaluating business opportunities and has minimal operating levels.
The Company’s fiscal year end is December 31. The accompanying condensed interim consolidated
financial statements of Arvana, Inc. for the six months ended June 30, 2015 and 2014, 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. Results are not necessarily
indicative of results which may be achieved in the future. 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
condensed 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
our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as filed with the
Securities and Exchange Commission (the “SEC”) on April 10, 2015.
Use of 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. These
estimates include the recognition of deferred tax assets based on the change in unrecognized deductible
temporary tax differences.
Financial instruments
The Company uses the following methods and assumptions to estimate the fair value of each class of
financial instruments for which it is practicable to estimate such values:
Cash - the carrying amount approximates fair value because the amounts consist of cash held at a bank.
Accounts payable and accrued liabilities and loans payable - the carrying amount approximates fair value
due to the short-term nature of the obligations.
8
Arvana Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2015
(Unaudited)
(Expressed in U.S. Dollars)
2. Summary of Significant Accounting Policies (continued)
Financial instruments (continued)
The estimated fair values of the Company's financial instruments as of June 30, 2015 and December 31,
2014 are as follows:
June 30,
December 31,
2015
2014
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
Cash
$4,165
$4,165
$1,876
$1,876
Accounts payable and accrued liabilities
1,020,132
1,020,132
1,041,503
1,041,503
Loans payable to stockholders
631,910
631,910
647,702
647,702
Loans payable to a related party
31,097
31,097
32,791
32,791
Loans payable
148,006
148,006
148,620
148,620
Amounts due to related parties
456,141
456,141
472,987
472,987
The following table presents information about the assets that are measured at fair value on a recurring
basis as of June 30, 2015, and indicates the fair value hierarchy of the valuation techniques the Company
utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted
prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize
data points that are observable such as quoted prices, interest rates and yield curves. Fair values
determined by Level 3 inputs are unobservable data points for the asset or liability, and included
situations where there is little, if any, market activity for the asset:
Quoted
Significant
Prices
Other
Significant
in Active
Observable
Unobservable
June 30,
Markets
Inputs
Inputs
2015
(Level 1)
(Level 2)
(Level 3)
Assets:
Cash
$
4,165
$
4,165
$
-
$
-
The fair value of cash is determined through market, observable and corroborated sources.
Recent accounting pronouncements
In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates
(ASU) 2014-15 requiring an entity’s management to evaluate whether there are conditions or events,
considered in aggregate, that raise substantial doubt about entity’s ability to continue as a going concern
within one year after the date that the financial statements are issued (or within one year after the date that
the financial statements are available to be issued when applicable). The amendments to (ASU) 2014-15
are effective for the annual period ending after December 15, 2016, and for annual periods and interim
periods thereafter. Early application is permitted.
9
Arvana Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2015
(Unaudited)
(Expressed in U.S. Dollars)
3. Amounts Due to Related Parties and Loans Payable to Stockholders
From February, 2007, until June 30, 2015, the Company received a number of loans from stockholders,
related parties and unrelated third parties. As of June 30, 2015, the Company had received loans of
$631,910 (Euro 225,000; CAD$ 72,300; $323,107) (December 31, 2014 - $647,702: Euro 225,000;
CAD$ 72,300; $313,107) from stockholders, loans of $31,097 (CAD$ 27,600; $9,000) (December 31,
2014 – $32,791: CAD$ 27,600; $9,000) from a related party and loans of $148,006 (CAD$ 10,000; $
140,000) (December 31, 2014 – $ 148,620: CAD$ 10,000; $140,000) 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 condensed consolidated 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 $312,718 and $317,295 is included in accounts
payable and accrued liabilities at June 30, 2015, and December 31, 2014, respectively. Interest expense
recognized on these loans was $12,165 and $24,067 for the three and six months ended June 30, 2015,
respectively, compared to $12,826 and $25,468 for the three and six months ended June 30, 2014,
respectively.
At June 30, 2015, and December 31, 2014, the Company had amounts due to related parties of $456,141
and $472,987 respectively. This amount includes $136,100 at June 30, 2015, and December 31, 2014,
payable to two former directors and a current director 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 June 30, 2015 and December 31, 2014, there were no stock options outstanding. No options were
granted, exercised or expired during the six month period ended June 30, 2015 or the year ended
December 31, 2014.
5. Segmented Information
The Company has no reportable segments.
10
Arvana Inc.
Notes to Condensed Consolidated Financial Statements
June 30, 2015
(Unaudited)
(Expressed in U.S. Dollars)
6. Related Party Transactions
Other than amounts payable to related parties as disclosed below and in Note 3, the Company also
incurred consulting fees of $4,756 (2014 - $4,138) paid to a company controlled by our chief executive
officer during the six month period ended June 30, 2015.
Our former chief executive officer and former director entered into a consulting arrangement on a month
to month basis that provided for a monthly fee of CAD$ 5,000. These amounts have been accrued and are
currently unpaid. This consulting arrangement ended on May 24, 2013. As of June 30, 2015 our former
chief executive officer was owed $67,018 (CAD$ 83,710) for services rendered as an officer, compared to
$72,158 (CAD$ 83,710) as at December 31, 2014. The amounts owing for past services have been
included in the total payable of $174,722 detailed below.
Our former chief financial officer and former director had entered into a consulting agreement on a month
to month basis that provides for a monthly fee of $2,000. These amounts have been accrued and are
currently unpaid. This consulting arrangement ended on June 14, 2013. As of June 30, 2015 and
December 31, 2014 our former chief financial officer was owed $58,870 for services rendered as an
officer.
Our former chief executive officer and former director entered into a debt assignment agreement effective
January 1, 2012, with a corporation with a former director in common and thereby assigned $162,329
(CAD$ 202,759) of unpaid amounts payable.
Our former chief executive officer and former director entered into a debt assignment agreement effective
January 1, 2012, with an unrelated third party and thereby assigned $53,357 of unpaid amounts payable
and $100,000 of unpaid loans.
Our former chief executive officer and former director is owed $174,722 for unsecured non-interest
bearing amounts due on demand loaned to the Company as of June 30, 2015, compared to $186,011 as of
December 31, 2014.
Our former chief executive officer and former director is owed $31,097 for unsecured amounts bearing
6% interest due on demand loaned to the Company as of June 30, 2015, compared to $32,791 as of
December 31, 2014.
Our other former officers are owed a total of $86,449 for their prior services rendered as officers as at
June 30, 2015, compared to $92,006 as of December 31, 2014.
A director of the Company is owed $60,000 as of June 30, 2015 and December 31, 2014 for services
rendered as a director during 2007. Two former directors of the Company are owed $76,100 as of June
30, 2015 and December 31, 2014 for services rendered as directors during 2007.
7. Subsequent Events
The Company evaluated its June 30, 2015, financial statements for subsequent events through the date
the financial statements were issued. The Company is not aware of any subsequent events which would
require recognition or disclosure in the financial statements.
11
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other
parts of this quarterly report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as “anticipates,” “expects,” “believes,”
“plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future
performance and our actual results may differ significantly from the results discussed in the forward-
looking statements. Factors that might cause such differences include but are not limited to those
discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future
Results and Financial Condition below. The following discussion should be read in conjunction with our
financial statements and notes thereto included in this report. Our fiscal year end is December 31. All
information presented herein is based on the three and six months ended June 30, 2015 and June 30, 2014.
Overview
The Company is currently in the process of evaluating business opportunities and has minimal operating
levels. We can provide no assurance 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 Operation
The Company’s plan of operation over the next twelve months is to identify and acquire a suitable
business opportunity. However, we will not be able to pursue any new business opportunities that we
might identify without additional financing to provide for ongoing operations. Management is actively
seeking new financing to this end while we evaluate potential businesses.
We anticipate that in order to maintain operations while we evaluate new businesses the Company will
need debt or equity funding of at least $50,000 over the next twelve months. Should we be successful in
identifying a new business opportunity the Company will require additional funding to evaluate and
prospectively acquire any given opportunity. The amount of such additional funding will depend on the
business and is not determinable at this time.
Other than shareholder loans, we do not believe that debt financing will be an attractive means of funding
our business development as we do not have tangible assets to secure debt financing. Rather, we
anticipate that future funding will be in the form of shareholder loans and equity financing from the sale
of our common stock. However, we do not currently have any financing arrangements in place and cannot
provide prospective investors with any assurance that we will be able to procure sufficient funding to fund
our plan of operation. Accordingly, we will require continued financial support from our shareholders and
creditors until we are able to generate sufficient net cash flow from active operations on a sustained basis.
Results of Operations
During the six months ended June 30, 2015, the Company (i) sought out prospective business
opportunities; and (ii) satisfied continuous public disclosure requirements.
12
Our operations for the three and six months ended June 30, 2015 and 2014 are summarized below.
Three months
Three months
Six months
Six months
Ended
Ended
Ended
Ended
June 30, 2015
June 30, 2014
June 30, 2015
June 30, 2014
Expenses:
General and administration
($5,230)
($6,429)
($11,132)
($9,453)
Professional fees
(1,730)
(4,500)
(3,230)
(7,368)
Interest
(12,165)
(12,826)
(24,067)
(25,468)
Foreign exchange gain (loss)
(31,661)
(20,282)
97,035
7,235
Net income (loss) and
comprehensive income (loss) for
the period
($50,786)
($44,037)
$58,606
($35,054)
Net Income (loss)
Net loss for the three months ended June 30, 2015 was $50,786 as compared to net loss of $44,037 for the
three months ended June 30, 2014. The recognition of net loss over the three month periods ended June
30, 2015, and June 30, 2014, can be attributed to general and administrative expenses, professional fees,
interest expense and foreign exchange loss.
Net income for the six months ended June 30, 2015 was $58,606 as compared to net loss of $35,054 for
the six months ended June 30, 2014. The recognition of net income over the six month period ended June
30, 2015, can be attributed to the gain on unrealized foreign exchange. The gain on unrealized foreign
exchange is due to a drop in the value of foreign currencies against the US dollar, which decrease has
positively impacted the cost of those expenses that are payable in foreign currencies.
We did not generate revenue during this period and expect to continue to incur losses over the next twelve
months at a rate comparable to the current annual period presented here or until such time as we are able
to conclude the acquisition or development of a new business opportunity that produces net income.
Capital Expenditures
The Company expended no amounts on capital expenditures for the six month period ended June 30,
2015.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry-forward and
start up costs that will offset any future operating profit.
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations over the past three years.
13
Liquidity and Capital Resources
Since inception, the Company has experienced significant changes in liquidity, capital resources, and
stockholders’ deficiency.
The Company had current and total assets of $4,165 as of June 30, 2015, consisting solely of cash and a
working capital deficit of $2,283,121, as compared to current and total assets of $1,876, consisting solely
of cash and a working capital deficit of $2,341,727 as of December 31, 2014. Net stockholders' deficiency
in the Company was $2,283,121 at June 30, 2015, as compared to a net stockholder’s deficiency in the
Company of $2,341,727 at December 31, 2014.
Cash Used in Operating Activities
Net cash flow used in operating activities for the six month period ended June 30, 2015 was $7,711 as
compared to $18,081 for the six month period ended June 30, 2014, which differences reflect the
comparative changes in unrealized foreign exchange and changes in working capital in the current period.
Net cash flow used in operating activities in the prior period can also be primarily attributed to general
and administrative expenses, and changes in working capital. General and administrative expenses
include but are not limited to, personnel costs, accounting fees and consulting expenses while changes in
working capital include accounts payable and amounts due to related parties.
We expect to continue to use net cash flow in operating activities over the next twelve months or until
such time as the Company can generate revenue to offset expenses in order to transition to providing net
cash flow from operations.
Cash Used in Investing Activities
We do expect to use net cash flow in investing activities in connection with the development or
acquisition of a suitable business opportunity. However, until such time as such unidentified opportunity
is concluded, we do not expect to use net cash flows in investing activities.
Cash Flows from Financing Activities
Cash flow provided by financing activities for the six months ended June 30, 2015, decreased to
$10,000 as compared to $19,400 for the six months ended June 30, 2014. The decrease in cash flow
provided from financing activities over the comparative six month periods can be attributed to the
decrease in unsecured loan amounts procured from stockholders.
We expect to continue to use cash flows provided by financing activities to procure sufficient funds to
maintain operations in order to seek out suitable business opportunities.
The Company’s current assets are insufficient to conduct its plan of operation over the next twelve (12)
months. We will have to seek at least $50,000 in debt or equity financing over the next twelve months to
maintain operations. The Company has no current commitments or arrangements with respect to, or
immediate sources of this funding. Further, no assurances can be given that funding is available. The
Company’s shareholders are the most likely source of new funding in the form of loans or equity
placements though none have made any commitment for future investment and the Company has no
agreement formal or otherwise. The Company’s inability to obtain sufficient funding to maintain
operations will have a material adverse affect on its ability to fulfill its current plan of operation.
The Company does not intend to pay cash dividends in the foreseeable future.
14
The Company had no lines of credit or other bank financing arrangements as of June 30, 2015.
The Company had no commitments for future capital expenditures that were material at June 30, 2015.
The Company has no defined benefit plan or contractual commitment with any of its officers or directors.
The Company has no current plans for the purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
Off-Balance Sheet Arrangements
As of June 30, 2015, 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.
Future Financings
We anticipate continuing to rely on debt or 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.
Critical Accounting Policies
In Note 2 to the audited consolidated financial statements for the years ended December 31, 2014 and
2013, included in our Form 10-K, the Company discusses those accounting policies that are considered to
be significant in determining the results of operations and its financial position. The Company believes
that the accounting principles utilized by it conform to US GAAP.
The preparation of consolidated financial statements requires Company management to make significant
estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By
their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, the
Company evaluates estimates. The Company bases its estimates on historical experience and other facts
and circumstances that are believed to be reasonable, and the results form the basis for making judgments
about the carrying value of assets and liabilities. The actual results may differ from these estimates under
different assumptions or conditions.
Going Concern
The Company’s auditors have expressed an opinion as to the Company’s ability to continue as a going
concern as a result of an accumulated deficit of $23,447,289 since inception and negative cash flows
from operating activities as of June 30, 2015. The Company’s ability to continue as a going concern is
subject to the ability of the Company to obtain funding from outside sources. Management’s plan to
address the Company’s ability to continue as a going concern includes obtaining funding from the private
placement of equity or through debt financing. Management believes that it will be able to obtain funding
to allow the Company to remain a going concern through the methods discussed above, though there can
be no assurances that such methods will prove successful.
15
Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition
The statements contained in the section titled Management’s Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this current report, with the exception of historical
facts, are forward-looking statements. Forward-looking statements reflect our current expectations and
beliefs regarding our future results of operations, performance, and achievements. These statements are
subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not
materialize. These statements include, but are not limited to, statements concerning:
§ our anticipated financial performance and business plan;
§ the sufficiency of existing capital resources;
§ our ability to raise capital to fund cash requirements for future operations;
§ uncertainties related to the Company’s future business prospects;
§ the volatility of the stock market and;
§ general economic conditions.
We wish to caution readers that our operating results are subject to various risks and uncertainties that
could cause our actual results to differ materially from those discussed or anticipated. We also wish to
advise readers not to place any undue reliance on the forward-looking statements contained in this report,
which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to
update or revise these forward-looking statements to reflect new events or circumstances or any changes
in our beliefs or expectations, other than as required by law.
Stock-Based Compensation
We have adopted Accounting Standards Codification Topic (“ASC”) 718, Share-Based Payment, which
addresses the accounting for stock-based payment transactions in which an enterprise receives employee
services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair
value of the enterprise’s equity instruments or that may be settled by the issuance of such equity
instruments.
We account for equity instruments issued in exchange for the receipt of goods or services from other than
employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments issued, whichever is more
reliably measurable. The value of equity instruments issued for consideration other than employee
services is determined on the earliest of a performance commitment or completion of performance by the
provider of goods or services.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
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Item 4.
Controls and Procedures
Disclosure Controls and Procedures
In connection with the preparation of this quarterly report, an evaluation was carried out by the
Company’s management, with the participation of the chief executive officer and the acting chief
financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of June
30, 2015. Disclosure controls and procedures are designed to ensure that information required to be
disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in the Commission’s rules and forms, and that such information
is accumulated and communicated to management, including the chief executive officer and the chief
financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by
this report, that the Company’s disclosure controls and procedures were ineffective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commission’s rules and forms, and such information was not accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act) during the quarter ended June 30, 2015, that materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial reporting.
17
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.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
None.
Item 6.
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page
20 of this Form 10-Q, and are incorporated herein by this reference.
18
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/ Ruairidh Campbell
Ruairidh Campbell, Chief Executive Officer,
Chief Financial Officer and Principal
Accounting Officer
Date: August 14, 2015
19
INDEX TO EXHIBITS
Regulation
S-K
Exhibit
Number
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)
14.1
Code of Ethics (5)
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-
14(a) of the Exchange Act (6)
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-
14(d) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 (6)
101.INS
XBRL Instance Document(7)
101.PRE
XBRL Taxonomy Extension Presentation Linkbase(7)
101.LAB
XBRL Taxonomy Extension Label Linkbase(7)
101.DEF
XBRL Taxonomy Extension Label Linkbase(7)
101.CAL
XBRL Taxonomy Extension Label Linkbase(7)
101.SCH
XB RL Taxonomy Extension Label Linkbase(7)
(1) Previously filed with the SEC as an exhibit to the Company’s Current Report on Form 8-K filed
with the SEC on August 19, 2005.
(2) Previously filed with the SEC as an exhibit to the Company’s registration statement on Form 10- SB
filed with the SEC on May 24, 2000.
(3) Previously filed with the SEC as an exhibit to the Company’s registration statement on Form 8-K
filed with the SEC on October 12, 2010.
(4) Previously filed with the SEC as an exhibit to the Company’s Quarterly Report on Form 8-K filed
with the SEC on June 7, 2006.
(5) Previously filed with the SEC as an exhibit to the Company’s Annual Report on Form 10-KSB filed
with the SEC on April 16, 2007.
(6) Filed as an exhibit to this Annual Report on Form 10-K.
(7) Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not
“filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the
Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the
Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.
20