ARVANA INC - Quarter Report: 2012 March (Form 10-Q)
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 March 31, 2012
o
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from
to
.
000-30695
(Commission file number)
ARVANA INC.
(Exact name of registrant as specified in its charter)
NEVADA
87-0618509
State or other jurisdiction of
(I.R.S. Employer
incorporation or organization
Identification No.)
90 Madison Street, Suite 701, Denver, Colorado 80206
(Address of principal executive offices) (Zip Code)
(303) 329-3008
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes þ No ¨
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 issuer’s classes of common stock, as of the latest
practicable date: The number of shares outstanding of the issuer’s common stock, $0.001 par value (the only class of
voting stock), at May 13, 2012 was 885,130.
1
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Item 4. Controls and Procedures
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. (Removed and Reserved)
Item 5. Other Information
Item 6. Exhibits
Signatures
2
ITEM 1.
As used herein, the terms “Company,” “we,” “our,” “us,” “it,” and “its” refer to Arvana Inc., a Nevada
corporation and it’s wholly owned subsidiaries, unless otherwise indicated. In the opinion of
management, the accompanying unaudited 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.
(A Development Stage Company)
Condensed Consolidated Balance Sheets
March 31,
December 31,
2012
2011
(Unaudited)
ASSETS
Current assets:
Cash
$
1,707
$
1,734
Total assets
$
1,707
$
1,734
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities
$ 725,759
$ 695,550
Loans payable stockholders (Note 3)
614,271
604,930
Loans payable related party (Note 3)
119,025
118,833
Loans payable (Note 3)
45,025
44,833
Amounts due to related parties (Note 3)
591,729
516,719
Total current liabilities
2,095,809
1,980,865
Stockholders' deficiency
Common stock, $.001 par value 5,000,000 shares authorized
885,130 shares issued and outstanding at
March 31, 2012 and at December 31, 2011 (Note 4)
885
885
Additional paid-in capital
21,166,619
21,166,619
Deficit
(22,705,422)
(22,705,422)
Deficit accumulated during the development stage
(552,848)
(437,877)
(2,090,766)
(1,975,795)
Less: Treasury stock - 2,085 common shares at
March 31, 2012 and at December 31, 2011
(3,336)
(3,336)
Total stockholders’ deficiency
(2,094,102)
(1,979,131)
Total liabilities and deficiency
$
1,707
$
1,734
The accompanying notes are an integral part of these consolidated financial statements.
4
Arvana Inc.
(A Development Stage Company)
Condensed Consolidated Statement of Operations
For the Three Months Ended March 31, 2012 and 2011
(Unaudited)
Cumulative
Amounts from the
Beginning of the
Development
Three Months Ended
Stage on
March 31,
January 1, 2010 to
2012
2011
March 31, 2012
Operating expenses
General and administrative
$
77,120 $
53,793 $
481,272
Depreciation
-
-
103
Total operating expenses
77,120
53,793
481,375
Loss from operations
(77,120)
(53,793)
(481,375)
Interest expense
(11,675)
(11,233)
(100,377)
Foreign exchange gain (loss)
(26,176)
(41,889)
28,904
Net loss and Comprehensive
loss
$
(114,971) $ (106,915) $
(552,848)
Per share information - basic and diluted:
Weighted average shares outstanding
885,130
1,060,130
Net loss per share
$
(0.13) $
(0.10)
The accompanying notes are an integral part of these consolidated financial statements.
5
Arvana Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Cumulative
amounts from the
beginning of the
For the three months ended
development stage
on
March 31,
January 1, 2010 to
2012
2011
March 31, 2012
Cash flows from operating activities
Net loss for the period
$ (114,971)
$ (106,915)
$
(552,848)
Adjustments to reconcile net loss to net cash
used
in operating activities:
Depreciation and amortization
-
-
103
Unrealized foreign exchange
26,001
41,268
(24,811)
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities
19,564
31,428
125,886
Amounts due to related parties
69,379
34,192
368,115
Net cash used in operations
$
(27)
$
(27)
$
(83,555)
Cash flows from financing activities
Proceeds of loans payable stockholder
-
10,000
21,062
Proceeds of loans payable related parties
-
-
18,833
Proceeds of loans payable
-
-
44,833
Net cash provided by financing activities
-
10,000
84,728
Increase (decrease) in cash
(27)
9,973
1,173
Cash, beginning of period
1,734
2,074
534
Cash, end of period
$
1,707
$
12,047
$
1,707
Supplementary information
Cash paid for interest
$
-
$
-
Cash paid for income taxes
$
-
$
-
The accompanying notes are an integral part of these consolidated financial statements.
6
Arvana Inc.
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1.
Nature of Business and Ability to Continue as a Going Concern
Arvana Inc. (“our”, “we”, ”us” and the “Company”) was incorporated under the laws of the State of
Nevada as Turinco, Inc. on September 16, 1977, with authorized common stock of 2,500 shares with a par
value of $0.25. On October 16, 1998, the authorized capital stock was increased to 100,000,000 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 consolidated financial statements for the three month period ended March 31, 2012 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. As a result of this inactivity, the Company entered into a new development stage as
of January 1, 2010.
Our functional currency and reporting currency is the United States dollar (“US Dollar”) and the
accompanying consolidated financial statements have been expressed in US Dollars.
These consolidated financial statements have been prepared on a going concern basis, which assumes the
realization of assets and settlement of liabilities in the normal course of business. For the three month
period ended March 31, 2012, we incurred a loss from operations of $114,971. At March 31, 2012, we
had a working capital deficiency of $2,094,102. These conditions raise substantial doubt about our 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.
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
2.
Summary of Significant Accounting Policies
Basis of presentation
We are in the process of evaluating business opportunities and have entered a new development stage as
of January 1, 2010 and present our financial statements in accordance with the Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”) Topic 915.
Our fiscal year end is December 31. The accompanying consolidated interim financial statements of
Arvana Inc. for the three month periods ended March 31, 2012 and 2011, and for the cumulative amounts
from the beginning of the development stage on January 1, 2010, through March 31, 2012, have been
prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”)
for financial information with the instructions to Form 10-Q and Regulation S-X. Although they are
unaudited, in the opinion of management, they include all adjustments, consisting only of normal
recurring items, necessary for a fair presentation. Results are not necessarily indicative of results which
may be achieved in the future. The consolidated interim financial statements and notes appearing in this
report should be read in conjunction with our consolidated audited financial statements and related notes
thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of
Operations, contained in the our Annual Report on Form 10-K for the fiscal year ended December 31,
2011, as filed with the Securities and Exchange Commission (the “SEC”) on April 13, 2012.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and the reported revenues and
expenses during the reporting periods. Actual results could differ from those estimates.
Recent accounting pronouncements
We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not
believe the future adoption of any such pronouncements may be expected to cause a material impact on
our financial condition or the results of our operations.
8
Arvana Inc.
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
3.
Amounts Due to Related Parties and Loans Payable to Stockholders
From February, 2007 until March 31, 2012 the Company received a number of loans from stockholders,
related parties and unrelated third parties. As of March 31, 2012 the Company had received loans of
$614,271 (Euro 225,000; CAD 62,300; $251,800) (December 31, 2011 - $604,930: Euro 225,000; CAD
62,300; $251,800) from stockholders, loans of $119,025 (CAD 10,000; $109,000) (December 31, 2011 –
$118,833: CAD 10,000; $109,000) from a related party and loans of $45,025 (CAD 10,000; $ 35,000)
(December 31, 2011 – $ 44,833: CAD 10,000; $35,000) 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 $179,849 and $156,015 is included in accounts payable and accrued expenses at
March 31, 2012 and December 31, 2011, respectively. Interest expense recognized on these loans was
$11,675 for the three months ended March 31, 2012, compared to $11,233 for the three months ended
March 31, 2011.
At March 31, 2012 and December 31, 2011 the Company had amounts due to related parties of $591,729
and $516,719, respectively. This amount includes $136,100 at March 31, 2012 and December 31, 2011,
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 March 31, 2012 and December 31, 2011, there were no stock options outstanding. No options were
granted, exercised or expired during the three months ended March 31, 2012 and the year ended
December 31, 2011.
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.
9
Arvana Inc.
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
5.
Segmented Information
The Company has no reportable segments.
6.
Related Party Transactions
Other than amounts payable to related parties as disclosed below and in Note 3, the Company did not
have any other related party transactions for the periods ended March 31, 2012 and December 31, 2011.
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 CAD 5,000. These amounts have been accrued and are currently
unpaid. As of March 31, 2012 our chief executive officer was owed $100,250 (CAD 100,000) for services
rendered as an officer.
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. These amounts have been accrued and are currently unpaid. As
of March 31, 2012 our chief financial officer was owed $30,000 for services rendered as an officer.
Our chief executive officer and director is owed $220,658 for unsecured non-interest bearing amounts due
on demand loaned to the Company as of March 31, 2012.
Our chief executive officer and a director is owed $119,025 for unsecured amounts bearing 6% interest
due on demand loaned to the Company as of March 31, 2012.
Our former officers are owed a total of $104,721 for their prior services rendered as officers.
A director of the Company is owed $60,000 as of March 31, 2012 for services rendered as a director
during 2007. Two former directors of the Company are owed $76,100 as of March 31, 2012 for services
rendered as directors during 2007.
7.
Subsequent Events
The Company evaluated its March 31, 2012 financial statements for subsequent events through the date
the financial statements were issued. Except for the event discussed below, the Company is not aware of
any subsequent events which would require recognition or disclosure in the financial statements.
Subsequent to March 31, 2012, the Company received loans totaling $15,000. These loans are unsecured,
payable on demand and bear interest at the rate of 6% per annum.
10
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 month periods ended March 31, 2012.
Overview
The Company is currently in the process of evaluating business opportunities having entered a new
development stage as of January 1, 2010. 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 Operations
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 additional debt or equity funding of $50,000 over the next twelve months since we had cash of
$1,707 and a working capital deficit of $2,094,102 as at March 31, 2012. 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
additional phases of our business development as we do not have tangible assets to secure any debt
financing. Rather, we anticipate that additional funding will be in the form of equity financing from the
sale of our common stock. However, we do not have any financing arranged and we cannot provide
investors with any assurance that we will be able to obtain sufficient funding from the sale of our
common stock to fund our plan of operations. Accordingly, we will require continued financial support
from our shareholders and creditors until we are able to generate sufficient cash flow from operations on a
sustained basis.
Results of Operations
During the three months ended March 31, 2012, the Company (i) sought out prospective business
opportunities; and (ii) satisfied continuous public disclosure requirements.
11
Our operations for the three months ended March 31, 2012 and 2011 are summarized below.
Three months
Three months
ended
ended
March 31, 2012
March 31, 2011
Expenses:
General and administration
$77,120
$53,793
Interest
11,675
11,233
Foreign exchange loss
26,176
41,889
Comprehensive Loss for the Period
114,971
106,915
Comprehensive Loss for the Period
For the period from January 1, 2010, to March 31, 2012, the Company recorded a net loss of $552,848.
We realized a comprehensive loss for the three months ended March 31, 2012 of $114,971 compared with
a comprehensive loss of $106,915 for the three months ended March 31, 2011. Our comprehensive losses
rose due to a significant increase in general and administrative expenses due primarily to increased costs
associated with travel which increased to $46,697 in the three months ended March 31, 2012 as compared
to $16,822 in the three months ended March 31, 2011. The Company also had unrealized foreign
exchange losses in the period ended March 31, 2012 of $26,176 as compared to $41,889 in the period
ended March 31, 2011 due to a portion of our liabilities payable in foreign currencies and the
corresponding changes in the value of those 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 period or until such time as a
new business opportunity is concluded.
Capital Expenditures
The Company expended no amounts on capital expenditures for the period from January 1, 2010, to
March 31, 2012.
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.
12
Liquidity and Capital Resources
The Company is in the development stage and, since inception, has experienced significant changes in
liquidity, capital resources, and stockholders’ deficit. The Company had current and total assets of $1,707
as of March 31, 2012, consisting solely of cash and a working capital deficit of $2,094,102 as compared
to current and total assets of $1,734, consisting solely of cash and a working capital deficit of $1,979,131
as of December 31, 2011. Net stockholders' deficit in the Company was $2,094,102 at March 31, 2012 as
compared to a net stockholder’s deficit in the Company of $1,979,131 at December 31, 2011.
Cash Used in Operating Activities
Cash flow used in operating activities was $83,555 for the period from January 1, 2010, to March 31,
2012. We used cash in operations in the amount of $27 during the three months ended March 31, 2012
and during the three months ended March 31, 2011. Cash used in operations during the three months
ended March 31, 2012 was attributable primarily to payments for administration expenses. Our
cumulative cash flow used in operating activities was used on accounting, administration, consulting,
legal expenses and filing fees. We expect to continue to use cash flow in operating activities over the next
twelve months or until such time as the Company can generate sufficient revenue to transition away from
net losses from operations.
Cash Used in Investing Activities
Cash flow used in investing activities was $0 for the period from January 1, 2010, to March 31, 2012. We
do expect to use cash flow in investing activities in connection with the development or acquisition of a
suitable business opportunity. Until such time as such unidentified opportunity is concluded, we do not
expect to use cash flows in investing activities.
Cash Flows from Financing Activities
Cash flow provided from financing activities was $84,728 for the period from January 1, 2010, to March
31, 2012. Cash flow provided by financing activities for the three months ended March 31, 2012
decreased to $0 as compared to $10,000 for the three months ended March 31, 2011. The decrease in cash
flow provided from financing activities over the comparative three month periods can be attributed to the
timing differences involved with the procurement of unsecured shareholder loans bearing interest at 6%
per annum. We expect to continue to use cash flow provided by financing activities to raise addition
funds to maintain operations and 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 to search
for suitable business opportunities.
The Company does not intend to pay cash dividends in the foreseeable future.
13
The Company had no lines of credit or other bank financing arrangements as of March 31, 2012.
The Company had no commitments for future capital expenditures that were material at March 31, 2012.
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 March 31, 2012, 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.
Critical Accounting Policies
In Note 2 to the audited financial statements for the years ended December 31, 2011 and 2010, 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 accounting principles generally accepted in the United
States.
The preparation of 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.
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.
14
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 $23,258,270 and negative cash flows from operating
activities as of March 31, 2012. The Company’s ability to continue as a going concern is subject to the
ability of the Company to realize a profit and /or obtain funding from outside sources. Management’s
plan to address the Company’s ability to continue as a going concern includes: (i) obtaining funding from
the private placement of debt or equity; and (ii) realizing revenues from its prospective development or
acquisition of a suitable business opportunity. 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 additional capital to fund cash requirements for future operations;
• uncertainties related to the Company’s future business prospects;
• our ability to generate revenues from future operations;
• 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.
15
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
Not required.
Item 4.
Controls and Procedures
Disclosure Controls and Procedures
In connection with the preparation of this report on Form 10-Q, an evaluation was carried out by the
Company’s management, with the participation of the chief executive officer and 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”)). 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 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.
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 period ended March 31, 2012, that materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial reporting.
16
PART II
Item 1.
None
Item 1A.
Risk Factors
Not required.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
(Removed and Reserved)
Item 5.
Other Information
None.
Item 6.
Exhibits
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page
19 of this Form 10-Q, and are incorporated herein by this reference.
17
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
ARVANA INC.
By: /s/ Zahir Dhanani
Zahir Dhanani, Chief Executive Officer
Date: May 13, 2012
By: /s/ Arnold Tinter
Arnold Tinter, Chief Financial Officer,
Principal Accounting Officer
Date: May 13, 2012
18
INDEX TO EXHIBITS
Exhibit
Number
Description of Exhibit
2.1
Agreement and Plan of Reorganization between the Company, Arvana Networks, Inc.
and the Shareholders of Arvana Networks, Inc. dated August 18, 2005(1)
3.1
Articles of Incorporation(2)
3.2
Bylaws, as amended(2)
3.3
Amendment to Articles of Incorporation(3)
10.1
2006 Stock Option Plan, dated June 5, 2006(4)
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange
Act(5)
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act(5)
32.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act
and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002(5)
32.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act
and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002(5)
101. INS
XBRL Instance Document†
101. PRE
XBRL Taxonomy Extension Presentation Linkbase†
101. LAB
XBRL Taxonomy Extension Label Linkbase†
101. DEF
XBRL Taxonomy Extension Label Linkbase†
101. CAL
XBRL Taxonomy Extension Label Linkbase†
101. SCH
XBRL Taxonomy Extension Schema†
(1)
Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K
filed with the SEC on August 19, 2005.
(2)
Incorporated by reference to the exhibits to the Company’s registration statement on
Form 10-SB filed with the SEC on May 24, 2000.
(3)
Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K
filed with the SEC on October 12, 2010.
(4)
Incorporated by reference to the exhibits to the Company’s Current Report on Form 8-K
filed with the SEC on June 7, 2006.
(5)
Filed as an exhibit to this Quarterly Report on Form 10-Q.
†
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.
19