ARVANA INC - FORM 10-Q - November 13, 2015

Attached files

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EX-32 - ARVANA CERTIFICATION - ARVANA INC	exhibit32.htm
EX-31 - ARVANA CERTIFICATION - ARVANA INC	exhibit31.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 September 30, 2015.

 Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the

transition period from

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 ¨Accelerated filer ¨Non-accelerated filer ¨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 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 November 13, 2015, was 885,130.

TABLE OF CONTENTS

PART I

Item1.

Financial Statements

Item 2.

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

Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II

Item 1.

Legal Proceedings

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

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

Operations

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibit

Signatures

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.

Arvana Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Expressed in US Dollars)

September 30,

December 31,

2015

2014

ASSETS

Current assets:

Cash

2,165

1,876

Total assets

2,165

1,876

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities

Accounts payable and accrued liabilities

1,010,492

1,041,503

Loans payable to stockholders (Note 3)

628,427

647,702

Loans payable to a related party (Note 3)

29,680

32,791

Loans payable (Note 3)

147,493

148,620

Amounts due to related parties (Note 3)

441,689

472,987

Total current liabilities

2,257,781

2,343,603

Stockholders' deficiency

Common stock, $0.001 par value 5,000,000 authorized,

885,130 shares issued and outstanding at

September 30, 2015 and December 31, 2014 (Note 4)

885

Additional paid-in capital

21,166,619

Deficit

(23,419,784)

(23,505,895)

(2,252,280)

(2,338,391)

Less: Treasury stock – 2,085 common shares at

September 30, 2015 and December 31, 2014

(3,336)

Total stockholders’ deficiency

(2,255,616)

(2,341,727)

2,165

1,876

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

Arvana Inc.

Condensed Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2015 and 2014

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

2015

2014

2015

2014

Operating expenses

General and administrative

2,926 $

4,050

9,302 $

13,503

Professional fees

5,066

4,960

13,052

12,328

Total operating expenses

7,991

9,010

22,353

25,831

Loss from operations

(7,991)

(9,010)

(22,353)

(25,831)

Interest expense

(12,084)

(12,536)

(36,151)

(38,004)

Foreign exchange gain

47,581

86,944

144,616

94,179

Net income and

comprehensive income

27,505

65,398

86,111 $

30,344

Per common share information – basic

and diluted:

Weighted average shares outstanding

885,130

Net income per common

share – basic and diluted

0.03 $

0.07

0.10 $

0.03

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

Arvana Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Expressed in US Dollars)

Nine Months Ended

September 30,

2015

2014

Cash flows from (used in) operating activities

Net income

86,111

30,344

Item not involving cash:

Unrealized foreign exchange gain

(142,062)

(90,671)

Changes in non-cash working capital:

Accounts payable and accrued liabilities

44,904

34,594

Amounts due to related parties

1,336

1,514

Net cash used in operations

(9,711)

(24,219)

Cash flows from investing activities

Net cash used in investing activities

Cash flows from financing activities

Proceeds of loans payable to stockholders

10,000

24,600

Net cash provided by financing activities

10,000

24,600

Increase in cash

289

381

Cash , beginning of period

1,876

321

Cash, end of period

2,165

702

There were no non-cash investing and financing transactions for the nine month periods ended September

30, 2015 and 2014.

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

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

September 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 nine month period ended September 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 nine

month period ended September 30, 2015, the Company recognized net income of $86,111 as a result of

foreign exchange gains. At September 30, 2015, the Company had a working capital deficiency of

$2,255,616. 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.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

September 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 nine months ended September 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.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

September 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 September 30, 2015 and December

31, 2014 are as follows:

September 30,

December 31,

2015

2014

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

Cash

$2,165

$1,876

Accounts payable and accrued liabilities

1,010,492

1,041,503

Loans payable to stockholders

628,427

647,702

Loans payable to a related party

29,680

32,791

Loans payable

147,493

148,620

Amounts due to related parties

441,689

472,987

The following table presents information about the assets that are measured at fair value on a recurring

basis as of September 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

September 30,

Markets

Inputs

2015

(Level 1)

(Level 2)

(Level 3)

Assets:

Cash

2,165

The fair value of cash is determined through market, observable and corroborated sources.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2015

(Unaudited)

(Expressed in U.S. Dollars)

2. Summary of Significant Accounting Policies (continued)

Recent accounting pronouncements

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates

(ASU) 2015-03 which requires that debt issuance costs be reported in the balance sheet as a direct

deduction from the face amount of the related liability, consistent with the presentation of debt discounts.

Prior to the amendments, debt issuance costs were presented as a deferred charge (i.e., an asset) on the

balance sheet. The ASU provides examples illustrating the balance sheet presentation of notes net of their

related discounts and debt issuance costs. Further, the amendments require the amortization of debt

issuance costs to be reported as interest expense. Similarly, debt issuance costs and any discount or

premium are considered in the aggregate when determining the effective interest rate on the debt. The

amendments to (ASU) 2015-03 are effective for the annual period ending after December 15, 2015, and

for annual periods and interim periods thereafter. The amendments must be applied retrospectively. Early

application is permitted.

In August 2014, the 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.

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

From February, 2007, until September 30, 2015, the Company received a number of loans from

stockholders, related parties and unrelated third parties. As of September 30, 2015, the Company had

received loans of $628,427 (Euro 225,000; CAD$ 72,300; $323,107) (December 31, 2014 - $647,702:

Euro 225,000; CAD$ 72,300; $313,107) from stockholders, loans of $29,680 (CAD$ 27,600; $9,000)

(December 31, 2014 – $32,791: CAD$ 27,600; $9,000) from a related party and loans of $147,493

(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 $323,021 and

$317,295 is included in accounts payable and accrued liabilities at September 30, 2015, and December

31, 2014, respectively. Interest expense recognized on these loans was $12,084 and $36,151 for the three

and nine months ended September 30, 2015, respectively, compared to $12,536 and $38,004 for the three

and nine months ended September 30, 2014, respectively.

At September 30, 2015, and December 31, 2014, the Company had amounts due to related parties of

$441,689 and $472,987 respectively. This amount includes $136,100 at September 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.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2015

(Unaudited)

(Expressed in U.S. Dollars)

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 September 30, 2015 and December 31, 2014, there were no stock options outstanding. No options

were granted, exercised or expired during the nine month period ended September 30, 2015 or the year

ended December 31, 2014.

5. Segmented Information

The Company has no reportable segments.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

September 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 $6,394 (2014 - $5,638) paid to a company controlled by our chief executive

officer during the nine month period ended September 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 September 30, 2015 our

former chief executive officer was owed $62,724 (CAD$ 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 $164,913 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 September 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 $151,927

(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 $164,913 for unsecured non-interest

bearing amounts due on demand loaned to the Company as of September 30, 2015, compared to $186,011

as of December 31, 2014.

Our former chief executive officer and former director is owed $29,680 for unsecured amounts bearing

6% interest due on demand loaned to the Company as of September 30, 2015, compared to $32,791 as of

December 31, 2014.

Our other former officers are owed a total of $81,807 for their prior services rendered as officers as at

September 30, 2015, compared to $92,006 as of December 31, 2014.

A director of the Company is owed $60,000 as of September 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

September 30, 2015 and December 31, 2014 for services rendered as directors during 2007.

7. Subsequent Events

The Company evaluated its September 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.

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 nine months ended September 30, 2015 and

September 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 nine months ended September 30, 2015, the Company (i) sought out prospective business

opportunities; and (ii) satisfied continuous public disclosure requirements.

Our operations for the three and nine months ended September 30, 2015 and 2014 are summarized below.

Three months

Nine months

Ended

September 30,

2015

2014

2015

2014

Expenses:

General and administration

($2,926)

($4,050)

($9,302)

($13,503)

Professional fees

(5,066)

(4,960)

(13,052)

(12,328)

Interest

(12,084)

(12,536)

(36,151)

(38,004)

Foreign exchange gain

47,581

86,944

144,616

94,179

Net income and comprehensive

income for the period

$27,505

$65,398

$86,111

$30,344

Net Income (Loss)

Net income for the three months ended September 30, 2015, was $27,505 as compared to net income of

$65,398 for the three months ended September 30, 2014. The recognition of net income over the three

month periods ended September 30, 2015, and September 30, 2014, 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.

Net income for the nine months ended September 30, 2015 was $86,111 as compared to net income of

$30,344 for the nine months ended September 30, 2014. The recognition of net income over the nine

month periods ended September 30, 2015 and September 30, 2014, 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 nine month period ended September

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.

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 $2,165 as of September 30, 2015, consisting solely of cash

and a working capital deficit of $2,255,616, 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 $2,255,616 at September 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 nine month period ended September 30, 2015 was

$9,711 as compared to $24,219 for the nine month period ended September 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 nine months ended September 30, 2015, decreased to

$10,000 as compared to $24,600 for the nine months ended September 30, 2014. The decrease in cash

flow provided from financing activities over the comparative nine 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.

The Company had no lines of credit or other bank financing arrangements as of September 30, 2015.

The Company had no commitments for future capital expenditures that were material at September 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 September 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 $23,419,784 since inception and negative cash flows

from operating activities as of December 31, 2014. 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.

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.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

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

September 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 September 30, 2015, that materially affected, or are

reasonably likely to materially affect, the Company’s internal control over financial reporting.

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

Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page

21 of this Form 10-Q, and are incorporated herein by this reference.

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/ Ruairidh Campbell

Ruairidh Campbell, Chief Executive Officer,

Chief Financial Officer and Principal

Accounting Officer

Date: November 13, 2015

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.

ARVANA INC - FORM 10-Q - November 13, 2015

Attached files

ARVANA INC Reports