UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended May 31, 2011.

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

For the transition period from                  _to                   .

Commission file number: 0-30695

ARVANA, INC.

(Exact name of registrant as specified in its charter)

90 Madison Street, Suite 701, Denver, Colorado 80206

 (Address of principal executive offices)    (Zip Code)

Registrant’s telephone number, including area code: (303) 329-3008

Securities registered under Section 12(b) of the Act: none.

Securities registered under Section 12(g) of the Act: common stock (title of class), $0.0001 par value.

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

Yes o No þ

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

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

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

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. Smaller reporting company þ

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

The aggregate market value of the registrant’s common stock, $0.001 par value (the only class of voting stock), held by non-affiliates (870,505 shares) was $322,087 based on the average of the bid and ask price ($0.37) for the common stock on April 13, 2012.

At April 13, 2012, the number of shares outstanding of the registrant’s common stock, $0.001 par value (the only class of voting stock), was 885,130.

Climate Change Legislation and Greenhouse Gas Regulation
 
Many studies over the past couple decades have indicated that emissions of certain gases contribute to warming of the Earth’s atmosphere. In response to these studies, many nations have agreed to limit emissions of “greenhouse gases” or “GHGs” pursuant to the United Nations Framework Convention on Climate Change, and the “Kyoto Protocol.” The Dominican Republic is a signatory to the Kyoto Protocol.

Although the United States is not participating in the Kyoto Protocol, several states have adopted legislation and regulations to reduce emissions of greenhouse gases. Additionally, the United States Supreme Court has ruled, in Massachusetts , et al. v. EPA, that the EPA abused its discretion under the Clean Air Act by refusing to regulate carbon dioxide emissions from mobile sources. As a result of the Supreme Court decision the EPA issued a finding that serves as the foundation under the Clean Air Act to issue other rules that would result in federal greenhouse gas regulations and emissions limits under the Clean Air Act, even without Congressional action. Finally, acts of Congress, particularly those such as the “American Clean Energy and Security Act of 2009” approved by the United States House of Representatives, as well as the decisions of lower courts, large numbers of states, and foreign governments could widely affect climate change regulation. Greenhouse gas legislation and regulation could have a material adverse effect on our business, financial condition, and results of operations.

Research and Development

During the years ended December 31, 2011 and 2010, the Company spent no amounts on research and development activities.

Reports to Security Holders

The Company’s annual report contains audited financial statements. We are not required to deliver an annual report to security holders and will not automatically deliver a copy of the annual report to our security holders unless a request is made for such delivery. We file all of our required reports and other information with the Securities and Exchange Commission (the “Commission”). The public may read and copy any materials that are filed by the Company with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The statements and forms filed by us with the Commission have also been filed electronically and are available for viewing or copy on the Commission maintained Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The Internet address for this site can be found at www.sec.gov.

ITEM 1A.       RISK FACTORS

Not required for smaller reporting companies.

ITEM 1B.        UNRESOLVED STAFF COMMENTS

Not required for smaller reporting companies.

ITEM 2.          PROPERTIES

The Company maintains its offices at 90 Madison Street, Suite 701, Denver, Colorado 80206. We pay no rent for the use of this office. We do not believe that we will need to maintain a larger office at any time in the foreseeable future in order to carry out its operations.

Section 15(g) of the Securities Exchange Act of 1934

Our Company’s shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser’s written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as “bid” and “offer” quotes, a dealers “spread” and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASD’s toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

The application of the penny stock rules may affect your ability to resell your shares.

ITEM  6.         SELECTED FINANCIAL DATA

Not required for smaller reporting companies.

ITEM  7.         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 annual 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.

Discussion and Analysis

The Company’s plan of operation over the next twelve months is to identify and acquire a suitable business opportunity. We will require a minimum of $50,000 in funding over the next 12 months to maintain current operations and seek out a suitable business opportunity. Should we identify a new opportunity within this time frame, for acquisition or development, the Company will most likely need additional funding to complete any given transaction. The amount of funding required will depend on the opportunity and is not determinable at this time.

We anticipate that the required prospective funding will be in the form of equity financing from the sale of our common stock since we have no assets with which to secure debt financing other than that procured in small unsecured advances from shareholders. However, the Company does not have any financing arranged and cannot provide any assurance that it will be able to realize sufficient funding from the sale of our common stock to maintain operations. Management is currently considering all avenues available to obtain the financing required to maintain operations while seeking out a suitable business opportunity.

Accordingly, we will require continued financial support from our shareholders and creditors until we are able to generate sufficient cash flow from operations to maintain operations on a sustained basis. There is substantial doubt that we will be successful at achieving these results.

Results of Operations

During the year ended December 31, 2011, the Company (i) sought out prospective business opportunities; and (ii) satisfied continuous public disclosure requirements.

Our operations for the years ended December 31, 2011 and 2010 are summarized below.

Comprehensive Losses for the Periods Presented

For the period from January 1, 2010, to December 31, 2011, the Company recorded a net loss of $437,877. We realized a comprehensive loss for the year ended December 31, 2011 of $311,449 compared with a comprehensive loss of $126,428 for the year ended December 31, 2010. Our comprehensive losses rose due to a significant increase in general and administrative expenses due primarily to increased costs associated with travel with increased to $156,165 in the period ended December 31, 2011 as compared to $8,565 in the period ended December 31, 2010, increased costs associated with management compensation which increased to $84,704 in the period ended December 31, 2011 as compared to $53,988 in the period ended December 31, 2010 offset by unrealized foreign exchange gains in period ended December 31, 2011 of $35,266 as compared to $19,814 in the period ended December 31, 2010 due to the relative increase in the value of the Canadian currency used to pay liabilities accrued in foreign currencies.

We did not generate revenue during this period and expect to continue to incur losses though expenses over the next twelve months are expected to be comparable to the current year or until such time as a new business opportunity is concluded. 

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)

2. Summary of Significant Accounting Policies (continued)

g) Financial instruments
Financial instruments of the Company are comprised of cash, accounts payable and accrued liabilities,  amounts due to related parties, loans payable – stockholders, loans payable – related parties, and loans payable. The estimated fair values of financial instruments were considered by management to be not materially different from their carrying values due to their short term to maturity or capacity for prompt liquidation.

The Company measures the fair value of financial assets and liabilities based on US GAAP guidance which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition, except for those arising from certain related party transactions which are accounted for at the transferor’s carrying amount or exchange amount.

Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income.  Financial assets classified as held-to-maturity, loans and receivables and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest rate method of amortization.  Financial assets classified as available-for-sale are measured at fair value, with unrealized gains and losses being recognized as other comprehensive income until realized, or if an unrealized loss is considered other than temporary, the unrealized loss is recorded in income.

The following indicates the fair value hierarchy of the valuation techniques the Company utilizes to determine the fair value of financial assets that are measured at fair value on a recurring basis.

Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

Financial instruments, including accounts payable and accrued liabilities, amounts due to related parties, loans payable – stockholders, loans payable-related parties, and loans payable are classified as other financial liabilities and carried at cost, which management believes approximates fair value due to the short term nature of these instruments.  Cash is classified as held-for-trading, with unrealized gains and losses being recognized in income, is based on level one quoted prices in active markets for identical assets and liabilities.

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. 

ITEM 9.          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.       CONTROLS AND PROCEDURES

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 December 31, 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.

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.

The Company’s management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which assessment identified material weaknesses in internal control over financial reporting. A material weakness is a control deficiency, or a combination of deficiencies in internal control over financial reporting that creates a reasonable possibility that a material misstatement in annual or interim financial statements will not be prevented or detected on a timely basis. Since the assessment of the effectiveness of our internal control over financial reporting did identify material weaknesses, management considers its internal control over financial reporting to be ineffective.

The matters involving internal control over financial reporting that our management considered to be material weaknesses were:

• lack of segregation of duties as we have an inadequate number of personnel to properly implement control procedures.

The aforementioned material weaknesses were identified by our chief executive officer and chief financial officer in connection with the review of our financial statements as of December 31, 2011.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee, the inadequate accounting personnel results in ineffective oversight in the monitoring of required internal controls over financial reporting, which weaknesses could result in a material misstatement in our financial statements in future periods.

Management’s Remediation Initiatives

In an effort to remediate the identified material weaknesses and enhance our internal controls over financial reporting, the Company plans to initiate, the following measures:

• appoint an independent director or qualified person to the audit committee when such person is made available to the Company in order to the Audit Committee to provide proper oversight in the monitoring of required internal controls over financial reporting such as reviewing estimates and assumptions made by management.
• engage additional accounting personnel to ensure that the Company is able to properly implement internal control procedures at such time as funds become available for this purpose.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.  We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Commission that permit us to provide only management’s report in this annual report.

Changes in internal control over financial reporting

During the period ended December 31, 2011, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

9B.                   OTHER INFORMATION

Not applicable.

PART III

ITEM 10.        DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Officers and Directors

The following table sets forth the name, age and position of each director and executive officer of the Company:

(1)               Member of our Audit Commitee

Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years:

Sir John Baring was appointed Chief Executive Officer and director to the board of directors (“the Board”) on May 26, 2005. Following the appointment of Mr. Jervis as Chief Executive Officer on October 17, 2005, Sir John was appointed Chairman of the board.

Business Experience:

Sir John brings more than 30 years of banking and investing experience to the board. Since June 2002, Sir John has acted as a managing and founding member of Mercator Management LLC, a leading fund management company. We have concluded that Sir John should serve as a director because of his business experience.

Officer and Director Responsibilities and Qualifications:

Sir John is responsible for the overall management of the Company. Sir John is also a member of our Audit Committee.

Other Public Company Directorships in the Last Five Years:

Sir John has not been a director of any other public companies over the past five years.

We have concluded that Sir John should serve as a director because of his business experience.

Zahir Dhanani was appointed director on August 17, 2009 and Chief Executive Officer on July 27, 2010. He estimates that he spends approximately 15 percent of his time, approximately 6 hours per week, on the Company’s business.  He also has significant responsibilities with other companies, as detailed in the following paragraph.  He will serve until an annual meeting of the Company’s shareholders and his successor is elected and qualified. 

Business Experience:

Mr. Dhanani is currently the President and CEO of Bread Garden Franchising Inc. He has been with Bread Garden since April 2004. Over the past 11 years Mr. Dhanani has also acted as a self-employed consultant providing financial consulting and advisory services to publicly traded companies listed on Canadian Stock Exchanges. 

Officer and Director Responsibilities and Qualifications:

Mr Dhanani is responsible for the overall management of the Company and is involved in many of its day-to-day operations, finance and administration. Mr. Dhanani is also a member of our Audit Committee.

Other Public Company Directorships in the Last Five Years:

Over the past five years Mr. Dhanani has been a director of the following public companies: Terraco Gold Corp., a mineral exploration company from January 2011 to present; Jinhua Capital Corporation, a capital pool company from March 2012 to the present; Wangton Capital Corp., a capital pool company from March 2012 to the present.

We have concluded that Mr. Dahani should serve as a director as a result of his background and experience in business administration and corporate strategy.

Arnold Tinter was appointed director and Chief Financial Officer on July 27, 2010. He estimates that he spends approximately 15 percent of his time, approximately 6 hours per week, on the Company’s business.  He also has significant responsibilities with other companies, as detailed in the following paragraph.  He will serve until an annual meeting of the Company’s shareholders and his successor is elected and qualified. 

Business Experience:

Mr. Tinter founded Corporate Finance Group, Inc., a consulting firm located in Denver, Colorado, in 1992, and is its President. Corporate Finance Group, Inc. is involved in financial consulting in the areas of strategic planning, mergers and acquisitions and capital formation.  He has provided CFO services to Spicy Pickle Franchising, Inc., a publically held company, from 2006 to October 2010, where his responsibilities included oversight of all accounting functions including SEC reporting, strategic planning and capital formation. Mr. Tinter has also provided CFO services to a number of public companies.  From April 2010 to the present he provides CFO services to Agrisolar Solutions, Inc., from January 17, 2012 to the present, to Barfresh Food Group, Inc., and from January 3, 2012 to the present to T.O Entertainment.

From May 2001 to May 2003, he served as Chief Financial Officer of Bayview Technology Group, LLC, a privately held company that manufactured and distributed energy-efficient products. From May 2003 to October 2004, he served as that company’s Chief Executive Officer. Prior to 1990 Mr. Tinter was Chief Executive Officer of Source Venture Capital, a holding company with investments in the gaming, printing, retail industries. 

Officer and Director Responsibilities and Qualifications:

Mr. Tinter is responsible for many of the Company’s day-to-day operations, finance and administration. His responsibilities include oversight of all accounting functions including SEC reporting, strategic planning and capital formation.   

Mr. Tinter received a B.S. degree in Accounting in 1967 from C.W. Post College, Long Island University, and is licensed as a Certified Public Accountant in Colorado and New York.  We have concluded that Mr. Tinter should serve as a director as a result of his background and experience in financial consulting.

Other Public Company Directorships in the Last Five Years:

Over the past five years Mr. Tinter has been a director of one other public company: Barfresh Food Group Inc, a food manufacturing and distribution company from January 2012 to present.

We have concluded that Mr. Tinter should serve as a director as a result of his background and experience in business administration and corporate strategy.

Robert Naso was appointed director on August 17, 2009. He also has significant responsibilities with other companies, as detailed in the following paragraph.  He will serve until an annual meeting of the Company’s shareholders and his successor is elected and qualified. 

Business Experience:

Mr. Naso is currently a consultant with Salamat International Investments Corporation and was the General Manager of Bread Garden Franchising Inc., from April 2005 to December 2010. Prior to joining Bread Garden he was employed in the construction, hospitality and security industries in a variety of management positions.  We have concluded that Mr. Naso should serve as a director because of his business experience.

Officer and Director Responsibilities and Qualifications:

Mr. Naso is responsible for the overall management of the Company. Mr. Naso is also a member of our Audit Committee.

Mr. Naso graduated from the University of British Columbia with an MBA. 

Other Public Company Directorships in the Last Five Years:

Mr. Naso has not been a director of any other public companies over the past five years.

We have concluded that Mr. Naso should serve as a director because of his business experience.

Audit Committee and Audit Committee Financial Expert

Our board of directors has established an Audit Committee that is comprised of Sir John Baring, Zahir Dhanani and Robert Naso.

Our board of directors has determined that Zahir Dhanani qualifies as an “audit committee financial expert”, as defined by the rules of the SEC though it has further determined that he should not be considered “independent” as that term is defined in Rule 121 of the American Stock Exchange (“AMEX”) listing standards.

The audit committee recommends independent accountants to audit its financial statements, discusses the scope and results of the audit with the independent accountants, considers the adequacy of the internal accounting controls, considers the audit procedures of the Company and reviews the non-audit services to be performed by the independent accountants.

Code of Ethics

We have adopted a Code of Ethics that applies to all the Company’s directors, officers and employees. A copy of our Code of Ethics was incorporated by reference in our previously filed on Form 10-KSB for fiscal 2006 as an exhibit.

Significant Employees

We do not have any other significant employees, other than our directors and executive officers named above.

Term of Office

The Company’s directors are appointed for a one (1) year term to hold office until the next annual shareholders meeting or until removed from office in accordance with the Company’s bylaws. The Company’s executive officers are appointed by the board of directors and hold office until removed by the board.

Involvement in Certain Legal Proceedings

During the past ten years there are no events that occurred related to an involvement in legal proceedings that are material to an evaluation of the ability or integrity of the Company directors, or persons nominated to become directors or executive officers.

Compliance with Section 16(a) of the Securities Exchange Act

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than ten percent of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms received by us, we believe that during the fiscal year ended December 31, 2011 all such filing requirements applicable to our officers and directors were complied with, except that Messrs. Dhanani and Tinter should have filed Forms 3 when they became officers and directors of the Company. 

ITEM 11.        EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The objective of the Company’s compensation program is to incentivize our chief executive officer and chief financial officer for services rendered. The compensation program is comprised solely of a consulting fee. We utilize this form of compensation because we feel that this compensatory element is adequate to retain and motivate our executive officer. The amounts we have deemed appropriate to compensate our executive officer were determined in accordance with compensatory packages for other development stage companies though we have no specific formula to determine compensation. While we have deemed that our current compensatory program is appropriately suited for accomplishing our current objectives, in the future we may expand our compensation program to include additional benefits as the Company realizes those objectives.

Executive compensation for our chief executive officer for the periods ended December 31, 2011, and December 31, 2010 were $60,704 and $24,346 respectively. An amount of $28,789 was also paid for the period ended December 31, 2010 to our former chief executive officer and chief financial officer. Executive compensation for our chief financial officer for the periods ended December 31, 2011 and December 31, 2010 were $24,000 and $0 respectively.

The increase in executive compensation for services rendered in the current annual period over the prior annual period can be attributed to the appointment of a new chief executive officer and new chief financial officer in 2010. Executive compensation is expected to expand in future periods to include salaries, stock awards and stock options in the event the Company is successful in the development of a suitable business opportunity.

Table

The following table provides summary information for 2011 and 2010 concerning cash and non-cash compensation paid or accrued by the Company to or on behalf of (i) the chief executive officer and the chief financial officer and (ii) any other employee to receive compensation in excess of $100,000.

(1)           Mr. Dhanani was appointed director on August 17, 2009 and chief executive officer on July 27,         2010.

(2)           Mr. Tinter was appointed as our chief financial officer and director on July 27, 2010.

(3)           Mr. Smith was appointed as our chief financial officer on May 8, 2007 and our chief executive officer on December 7, 2007 and held these positions until July 27, 2010.

Outstanding Equity Awards as of December 31, 2011

There were no outstanding equity awards as of December 31, 2011 for any of our named executive officers.

No share purchase options were granted to or exercised by our named executive officers during our fiscal year ended December 31, 2011.

Long-Term Incentive Plans

We do not have any long-term incentive plans, pension plans, or similar compensatory plans for our directors or executive officers.

Change of Control Agreements

We are not party to any change of control agreements with any of our directors or executive officers.

Compensation of Directors

The following table summarizes the compensation of our company’s directors for the year ended December 31, 2011:

(1)               Zahir Dhanani and Arnold Tinter are not included in this table as they are reported as officers of the Company and did not receive additional compensation for service as directors.

Employment Agreements

There are no employment agreements with any of the named executive officers.

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially (1) as at April 13, 2012 by: (i) each of our directors, (ii) each of our executive officers, (iii) our executive officers and directors as a group, and (iv) each beneficial shareholder known to us to own more than 5% of our outstanding common stock. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.

(1)                 Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on April 13, 2012. The percentage calculations are based on the aggregate of 885,130 shares issued and outstanding as at April 13, 2012.

Change of Control

We are not aware of any arrangement that might result in a change in control in the future.

Equity Compensation Plan Information as at December 31, 2011

ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

None of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in−laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction since the beginning of our last fiscal year or in any presently proposed transaction which, in either case, has or will materially affect us except the following consulting agreement, for the rendition of consulting services:

·         Zahir Dhanani, our chief executive officer and director has entered into a consulting arrangement on a month to month basis that provides for a monthly fee of $5,000.  

• Arnold Tinter, our chief financial officer and director has entered into a consulting agreement on a month to month basis that provides for a monthly fee of $2,000.
• Sir John Baring, a director of the Company is due $60,000 for services rendered as a director as of December 31, 2011.
• Zahir Dhanani, our chief executive officer and director is owed $253,635 for unsecured non-interest bearing amounts due on demand loaned to the Company as of December 31, 2011.
• Zahir Dhanani, our chief executive officer and a director is owed $118,833 for unsecured amounts bearing 6% interest due on demand loaned to the Company as of December 31, 2011.
• Arnold Tinter, our chief financial officer was owed $24,000 for services rendered as an officer as of December 31, 2011.

Director Independence

Our common stock trades in the OTCQB.  As such, we are not currently subject to corporate governance standards of listed companies, which require, among other things, that the majority of the board of directors be independent.

Since we are not currently subject to corporate governance standards relating to the independence of our directors, we choose to define an “independent” director in accordance with the NASDAQ Capital Market’s requirements for independent directors (NASDAQ Marketplace Rule 5605(a)(2)).  The NASDAQ independence definition includes a series of objective tests, such as that the director is not an employee of the company and has not engaged in various types of business dealings with the company.

We do not have any independent directors under the above definition.  We do not list that definition on our Internet website.

ITEM 14.        PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth information regarding the amount billed to us by our independent auditor, Davidson & Company, LLP, for our fiscal years ended December 31, 2011 and 2010:

Audit Fees

Audit Fees are the aggregate fees billed by our independent auditor for the audit of our consolidated annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees

Audit-Related Fees are fees charged by our independent auditor for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit Fees." This category comprises fees billed for independent accountant review of our interim financial statements and management discussion and analysis, as well as advisory services associated with our financial reporting.

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

Our Audit Committee pre-approves all audit services to be provided to us by our independent auditors. Our Audit Committee’s policy regarding the pre-approval of non-audit services to be provided to us by our independent auditors is that all such services shall be pre-approved by the Audit Committee. Non-audit services that are prohibited to be provided by our independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, our Audit Committee must be satisfied that the performance of the services in question will not compromise the independence of the auditors.

PART IV

ITEM 15.        EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements

The following documents are filed under “Item 8. Financial Statements and Supplementary Data,” pages F-1 through F-13, and are included as part of this Form 10-K:

Consolidated financial Statements of the Company for the years ended December 31, 2011 and 2010:

Report of Independent Registered Public Accounting Firm               

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statement of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements                                                                                  

(b) Exhibits

The exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page 31 of this Form 10-K, and are incorporated herein by this reference.

(c) Financial Statement Schedules

We are not filing any financial statement schedules as part of this Form 10-K because such schedules are either not applicable or the required information is included in the financial statements or notes thereto.

The following exhibits are included with this Annual Report on Form 10-K:

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

EXHIBIT INDEX