ARVANA INC - Quarter Report: 2016 June (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



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

quarterly period ended June 30, 2016.

o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 o Accelerated filer o Non-accelerated filer o 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 o

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the

latest practicable date. The number of shares outstanding of the registrant’s common stock, $0.001 par

value (the only class of voting stock), at August 15, 2016, was 885,130.

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. Mine Safety Disclosures

Item 5. Other Information

Item 6. Exhibits

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)

June 30,

December 31,

2016

2015

ASSETS

Current assets:

Cash

24,706

Total assets

24,706

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities

Accounts payable and accrued liabilities

$ 1,064,421

1,018,963

Convertible loan (Note 7)

50,000

Loans payable to stockholders (Note 3)

627,347

619,671

Loans payable to related party (Note 3)

30,368

28,941

Loans payable (Note 3)

147,742

147,225

Amounts due to related parties (Note 3)

450,297

434,330

Total current liabilities

2,370,175

2,249,130

Stockholders' deficiency

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

885,130 shares issued and outstanding at

June 30, 2016 and December 31, 2015, respectively (Note 4)

885

Additional paid-in capital

21,166,619

Deficit

(23,509,637)

(23,413,245)

(2,342,133)

(2,245,741)

Less: Treasury stock – 2,085 common shares at

June 30, 2016 and December 31, 2015, respectively

(3,336)

Total stockholders’ deficiency

(2,345,469)

(2,249,077)

24,706

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

Arvana Inc.

Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2016 and 2015

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

2016

2015

2016

2015

Operating expenses

General and administrative

5,965 $

5,230

8,534 $

11,132

Professional fees

7,102

1,730

8,877

3,230

Total operating expenses

13,067

6,960

17,411

14,362

Loss from operations

(13,067)

(6,960)

(17,411)

(14,362)

Interest expense

(12,082)

(12,165)

(24,277)

(24,067)

Foreign exchange gain (loss)

12,199

(31,661)

(54,704)

97,035

Net income (loss) and

comprehensive income (loss)

(12,950) $

(50,786)

(96,392) $

58,606

Per common share information – basic

and diluted:

Weighted average shares outstanding

885,130

Net income (loss) per

common share – basic and

diluted

(0.01) $

(0.06)

(0.11) $

0.07

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)

Six Months Ended

June 30,

2016

2015

Cash flows from operating activities

Net income (loss)

(96,392)

58,606

Item not involving cash:

Unrealized foreign exchange

54,361

(97,195)

Changes in non-cash working capital:

Accounts payable and accrued liabilities

15,773

29,945

Amounts due to related parties

911

933

Net cash used in operations

(25,347)

(7,711)

Cash flows from investing activities

Net cash used in investing activities

Cash flows from financing activities

Proceeds of loans payable stockholders

10,000

Loans corresponding to MOU (Note 7)

50,000

Net cash provided by financing activities

50,000

10,000

Increase in cash

24,653

2,289

Cash , beginning of period

1,876

Cash, end of period

24,706

4,165

Supplementary information

Cash paid for interest

Cash paid for income taxes

There were no non-cash investing or financing transactions for the six month periods ended June 30, 2016

and 2015.

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

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2016

(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. On July 24, 2006, the shareholders approved a change of

the Company’s name from Turinco, Inc. to Arvana Inc.

These condensed consolidated financial statements for the six month period ended June 30, 2016, include

the accounts of the Company and its subsidiary Arvana Networks Inc. (including its wholly-owned

subsidiaries, Arvana Participaçōes S.A. and Arvana Comunicações do Brasil S. A. The Company has

ceased all operations in its subsidiary companies, and has written-off or disposed of all assets in the

subsidiary companies, consequently they are now all considered to be inactive subsidiaries.

Our reporting currency and functional currency is the United States dollar (“US Dollar”) and the

accompanying condensed consolidated financial statements have been expressed in US Dollars.

These condensed consolidated financial statements have been prepared on a going concern basis, which

assumes the realization of assets and settlement of liabilities in the normal course of business. For the six

month period ended June 30, 2016, the Company recognized a net loss of $96,392 as a result of general

administrative expenses and foreign exchange losses. At June 30, 2016, the Company had a working

capital deficiency of $2,345,469. 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

June 30, 2016

(Unaudited)

(Expressed in U.S. Dollars)

2. Summary of Significant Accounting Policies

Basis of presentation

The Company is in the process of transacting a business opportunity and has minimal operating levels.

The Company’s fiscal year end is December 31. The accompanying condensed interim consolidated

financial statements of Arvana Inc. for the six months ended June 30, 2016 and 2015, 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, 2015, as filed with the

Securities and Exchange Commission (“SEC”) on April 14, 2016.

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

June 30, 2016

(Unaudited)

(Expressed in U.S. Dollars)

2. Summary of Significant Accounting Policies (continued)

Financial instruments (continued)

The estimated fair values of the Company's financial instruments as of June 30, 2016 and December 31,

2015 follows:

June 30,

December 31,

2016

2015

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

Cash

$24,706

$53

Accounts payable and accrued liabilities

1,064,421

1,018,963

Convertible loan

50,000

Loans payable to stockholders

627,347

619,671

Loans payable to related party

30,368

28,941

Loans payable

147,742

197,742

147,225

Amounts due to related parties

450,297

434,330

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

basis as of June 30, 2016, and indicates the fair value hierarchy of the valuation techniques the Company

utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted

prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize

data points that are observable such as quoted prices, interest rates and yield curves. Fair values

determined by Level 3 inputs are unobservable data points for the asset or liability, and included

situations where there is little, if any, market activity for the asset:

Quoted

Significant

Prices

Other

Significant

in Active

Observable

Unobservable

June 30,

Markets

Inputs

2016

(Level 1)

(Level 2)

(Level 3)

Assets:

Cash

24,706

—

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

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2016

(Unaudited)

(Expressed in U.S. Dollars)

2. Summary of Significant Accounting Policies (continued)

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards

Update 2016-02, Leases (Topic 842). The standard requires the recognition of lease assets and lease

liabilities by lessees for those leases classified as operating leases. Leases will be classified as either

finance or operating, with classification affecting the pattern of expense recognition. The standard

requires lessors to classify leases as either sales-type, finance or operating. A sales-type lease occurs if the

lessor transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If

risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If

the lessor does not convey risks and rewards or control, an operating lease results. The standard will

become effective for the Company beginning January 1, 2019. The Company is currently assessing the

impact adoption of this standard will have on its consolidated results of operations, financial condition,

cash flows, and financial statement disclosures.

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates

(ASU) 2014-15 requiring an entity’s management to evaluate whether there are conditions or events,

considered in aggregate, that raise substantial doubt about entity’s ability to continue as a going concern

within one year after the date that the financial statements are issued (or within one year after the date that

the financial statements are available to be issued when applicable). The amendments to (ASU) 2014-15

are effective for the annual period ending after December 15, 2016, and for annual periods and interim

periods thereafter. Early application is permitted. The Company is in the process of evaluating the

prospective impact that (ASU) 2014-15 will have on its balance sheet.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2016

(Unaudited)

(Expressed in U.S. Dollars)

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

From February, 2007, until June 30, 2016, the Company received a number of loans from stockholders,

related parties and unrelated third parties. As of June 30, 2016, the Company had received loans of

$627,347 (Euro 225,000; CAD$ 72,300; $323,107) (December 31, 2015 - $619,671: Euro 225,000;

CAD$ 72,300; $323,107) from stockholders, loans of $30,368 (CAD$ 27,600; $9,000) (December 31,

2015 – $28,941: CAD$ 27,600; $9,000) from a related party and loans of $197,742 (CAD$ 10,000;

$140,000) (December 31, 2015 – $147,225: 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 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 $358,792 and $330,536 is included in accounts payable and

accrued expenses at June 30, 2016, and December 31, 2015, respectively. Interest expense recognized on

these loans was $12,082 and $24,277 for the three and six months ended June 30, 2016, respectively,

compared to $12,165 and $24,067 for the three and six months ended June 30, 2015, respectively. The

Company also received a convertible loan of $50,000 from CaiE Food Partnership Ltd. as per Note 7

below.

At June 30, 2016, and December 31, 2015, the Company had amounts due to related parties of $450,297

and $434,330, respectively. This amount includes $136,100 at June 30, 2016, and December 31, 2015,

payable to two former directors and a current director for services rendered during 2007. This amount is

to be paid part in cash and part in stock at a future date with the number of common shares determined by

the fair value of the shares on the settlement date. The amounts owing bear no interest, are unsecured, and

have no fixed terms of repayment.

4. Common stock

We have a stock option plan in place under which we are authorized to grant options to executive officers

and directors, employees and consultants enabling them to acquire up to 10% of our issued and

outstanding common stock. Under the plan, the exercise price of each option equals the market price of

our stock as calculated on the date of grant. The options can be granted for a maximum term of 10 years.

Vesting terms are determined at the time of grant.

At June 30, 2016 and December 31, 2015, there were no stock options outstanding. No options were

granted, exercised or expired during the period ended June 30, 2016 or the year ended December 31,

2015.

5. Segmented Information

The Company has no reportable segments.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2016

(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 $5,588 (2015 - $4,756) paid to a company controlled by our chief executive

officer during the six months ended June 30, 2016.

Our former chief executive officer and former director entered into a consulting arrangement on a month

to month basis that provided for a monthly fee of CAD$5,000. These amounts have been accrued and are

currently unpaid. This consulting arrangement ended on May 24, 2013. As of June 30, 2016, our former

chief executive officer was owed $64,808 (CAD$83,710) for services rendered as an officer, compared to

$60,480 (CAD$83,710) as at December 31, 2015. The amounts owing for past services have been

included in the total payable of $171,267 as of June 30, 2016 and $159,979 as of December 31, 2015

detailed below.

Our former chief financial officer and former director had entered into a consulting agreement on a month

to month basis that provides for a monthly fee of $2,000. These amounts have been accrued and are

currently unpaid. This consulting arrangement ended on June 14, 2013. As of June 30, 2016 and

December 31, 2015 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 $156,976

(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 $171,267 for unsecured non-interest

bearing amounts due on demand loaned to the Company as of June 30, 2016, compared to $159,979 as of

December 31, 2015.

Our former chief executive officer and former director is owed $30,368 for unsecured amounts bearing

6% interest due on demand loaned to the Company as of June 30, 2016, compared to $28,941 as of

December 31, 2015.

Our other former officers are owed a total of $84,060 for their prior services rendered as officers as at

June 30, 2016, compared to $79,381 as of December 31, 2015.

A director of the Company is owed $60,000 as of June 30, 2016 and December 31, 2015, for services

rendered as a director during 2007. Two former directors of the Company are owed $76,100 as of June

30, 2016 and December 31, 2015 for services rendered as directors during 2007.

Arvana Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2016

(Unaudited)

(Expressed in U.S. Dollars)

7. Memorandum of Understanding

On March 17, 2016, the Company entered into a non-binding Memorandum of Understanding (“MOU”) with CaiE Food Partnership Ltd. (“CaiE”) for the purpose of acquiring CaiE as a wholly owned subsidiary. The MOU anticipates that the Company will issue, subject to shareholder approval, a fully diluted 67% interest in its common stock in exchange for CaiE. The MOU also provides that the Company enter into Debt Settlement Agreements with certain of its existing creditors, whereby the Company will issue shares of its common stock in order to settle certain historical debt. It is anticipated that the shares will be issued at a deemed value of $0.50 per share pursuant to the Debt Settlement Agreements.

The MOU further provides that CaiE lend the Company $50,000 on a convertible basis prior to the consummation of the transaction. The terms and conditions of the conversion of this loan have not been agreed though the intention of each party is that the conversion be effected at the same price as that of Debt Settlement Agreements discussed above. CaiE has loaned the Company $50,000 as of the filing date of this report, which has been accounted for as a liability as at June 30, 2016, but will be reassessed for a beneficial conversion feature once the terms of the loan have been finalized.

8. Subsequent Events

The Company evaluated its June 30, 2016, 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 six months ended June 30, 2016 and June 30, 2015.

Overview

On March 17, 2016, the Company entered into a non-binding Memorandum of Understanding (“MOU”)

with CaiE Food Partnership Ltd. (“CaiE”) for the purpose of acquiring CaiE as a wholly owned

subsidiary. CaiE is in the business of manufacturing and distributing fresh Dim Sum food products from a

facility based in Sparks Nevada. The MOU anticipates that the Company will issue, subject to shareholder

approval, a fully diluted sixty-seven percent (67%) interest in its common stock in exchange for CaiE.

The MOU further provides that CaiE lend the Company fifty thousand dollars ($50,000) on a convertible

basis prior to the consummation of the transaction. The anticipated transaction will require the Company

to convert existing debt into shares of its common stock, increase the number of authorized common

shares, elect a new Board of Directors and change its name to reflect the new business. CaiE had loaned

the Company $50,000 as of the filing date of this report and the Company is working with CaiE to

finalize a definitive transaction.

In the event that the Company does not complete the acquisition of CaiE, its intention will be to identify

and evaluate alternative business opportunities that might be a good match for the Company. We will not

be able to develop any identified business opportunities without additional financing. Our board of

directors and management are actively pursuing financing in order to maintain operations but are not

currently evaluating potential businesses pending the anticipated transaction with CaiE.

Our Plan of Operation

The Company’s plan of operation over the next twelve months is to acquire CaiE as a wholly owned

subsidiary on those terms to be provided within definitive agreements based on the MOU and thereafter to

focus on CaiE’s business model. We will require a minimum of $50,000 in funding over the next 12

months to maintain operations and acquire CaiE. On completing the acquisition of CaiE the Company

may need additional capital to grow CaiE’s business. The amount of funding that may be required for this

purpose is not determinable at this time.

Should the Company not complete the anticipated transaction with CaiE then it will seek to identify an

alternative business opportunity for which purpose it will require a minimum of $25,000 in funding over

the next 12 months. The Company will most likely need additional funding to complete any alternative

transaction that might be identified within this time frame.

We anticipate that the required prospective funding in the near term will be in the form of convertible

debt financing from CaiE. Should the Company not complete the anticipated transaction with CaiE, then

requisite funding may come from the sale of our common shares or unsecured shareholder loans. The

Company does not have any alternative financing arranged and cannot be certain that it will be able to

realize funding from the sale of equity or that shareholders will continue to provide loans. Accordingly,

we will require continued financial support from our shareholders and creditors until the Company is able

to generate sufficient cash flow to maintain operations on a sustained basis. There is substantial doubt that

the Company will be successful in maintaining operations unless it completes the acquisition of CaiE.

Results of Operations

During the six months ended June 30, 2016, the Company (i) entered into a non-binding MOU with CaiE;

and (ii) satisfied continuous public disclosure requirements.

Our operations for the three and six months ended June 30, 2016 and 2015 are summarized below.

Three months

Six months

Ended

June 30, 2016

June 30, 2015

June 30, 2016

June 30, 2015

Expenses:

General and administration

($5,965)

($5,230)

($8,534)

($11,132)

Professional fees

(7,102)

(1,730)

(8,877)

(3,230)

Interest

(12,082)

(12,165)

(24,277)

(24,067)

Foreign exchange gain (loss)

12,199

(31,661)

(54,704)

97,035

Net income (loss) and

comprehensive income (loss) for

the period

($12,950)

($50,786)

($96,392)

$58,606

Net Income (Losses)

Net loss for the three months ended June 30, 2016 was $12,950 as compared to net loss of $50,786 for the

three months ended June 30, 2015. The recognition of a decrease in net losses over the three month

periods ended June 30, 2016, and June 30, 2015, can be attributed to a foreign exchange gain as compared

to a foreign exchange loss in the comparable three month period, relative consistency in general and

administrative expenses, and interest expense over the comparable three month periods, offset by an

increase in professional fees in the current three month period.

Net loss for the six months ended June 30, 2016 was $96,392 as compared to net income of $58,606 for

the six months ended June 30, 2015. The transition to net losses over the six month period ended June 30,

2016, can be primarily attributed to the loss on foreign exchange in the current six month period as

compared to a foreign exchange gain in the comparable six month period. The loss on foreign exchange in

the current six month period is due to an increase in the value of foreign currencies against the US dollar,

which increase has negatively 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 prior annual period presented here or until such time as we are able to

conclude the acquisition or development of a new business opportunity that produces net income.

Capital Expenditures

The Company expended no amounts on capital expenditures for the six month period ended June 30,

2016.

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 $24,706 as of June 30, 2016, consisting solely of cash and a

working capital deficit of $2,345,469, as compared to current and total assets of $53, consisting solely of

cash and a working capital deficit of $2,249,077 as of December 31, 2015. Net stockholders' deficiency in

the Company was $2,345,469 at June 30, 2016, as compared to a net stockholder’s deficiency in the

Company of $2,249,077 at December 31, 2015.

Cash Used in Operating Activities

Net cash flow used in operating activities for the six month period ended June 30, 2016 was $25,347 as

compared to $7,711 for the six month period ended June 30, 2015, 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 prospective acquisition of

CaiE. However, until such time as such transaction 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 three months ended June 30, 2016, increased to

$50,000 as compared to $10,000 for the six months ended June 30, 2016. The increase in cash flow

provided from financing activities over the comparative six month periods can be attributed to a

convertible loan received from CaiE.

We expect to continue to use cash flow provided by financing activities to procure sufficient funds to

maintain operations, acquire CaiE and alternatively, in the event that our shareholders do not approve the

acquisition of CaiE, 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 as we will need at least $50,000 to maintain operations. The Company has secured a non-binding

commitment from CaiE in the form of a convertible loan of $50,000 to maintain operations and undertake

the acquisition detailed in the MOU. The Company has no alternative commitments or arrangements with

respect to, or immediate sources of funding. The Company’s shareholders remain 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 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 June 30, 2016.

The Company had no commitments for future capital expenditures that were material at June 30, 2016.

The Company has no defined benefit plan or contractual commitment with any of its officers or directors.

The Company has no current plans for the purchase or sale of any plant or equipment.

The Company has no current plans to make any changes in the number of employees.

Off-Balance Sheet Arrangements

As of June 30, 2016, 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, 2015 and

2014, 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 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

Management of the Company has expressed an opinion as to the Company’s ability to continue as a going

concern as a result of an accumulated deficit of $23,509,637 since inception and negative cash flows

from operating activities as of June 30, 2016. 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.

Stock-Based Compensation

We have adopted Accounting Standards Codification Topic (“ASC”) 718, Share-Based Payment, which

addresses the accounting for stock-based payment transactions in which an enterprise receives employee

services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair

value of the enterprise’s equity instruments or that may be settled by the issuance of such equity

instruments.

We account for equity instruments issued in exchange for the receipt of goods or services from other than

employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the

consideration received or the estimated fair value of the equity instruments issued, whichever is more

reliably measurable. The value of equity instruments issued for consideration other than employee

services is determined on the earliest of a performance commitment or completion of performance by the

provider of goods or services.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

In connection with the preparation of this quarterly report, an evaluation was carried out by the

Company’s management, with the participation of the chief executive officer and the acting chief

financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in

Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of June

30, 2016. Disclosure controls and procedures are designed to ensure that information required to be

disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and

reported within the time periods specified in the Commission’s rules and forms, and that such information

is accumulated and communicated to management, including the chief executive officer and the chief

financial officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company’s management concluded, as of the end of the period covered by

this report, that the Company’s disclosure controls and procedures were ineffective in recording,

processing, summarizing, and reporting information required to be disclosed, within the time periods

specified in the Commission’s rules and forms, and such information was not accumulated and

communicated to management, including the chief executive officer and the chief financial officer, to

allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of

the Exchange Act) during the quarter ended June 30, 2016, 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

22 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.

/s/ Ruairidh Campbell

By: _______________________________

Ruairidh Campbell, Chief Executive Officer,

Chief Financial Officer and Principal

Accounting Officer

Date: August 15, 2016

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.