UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 or 15D of the Securities Exchange Act of 1934 for the quarterly period ended SEPTEMBER 30, 20202021.
☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to ...
Commission file number: 0-30695
ARVANA INC.
(Exact name of registrant as specified in its charter)
| Nevada | |
(State or other jurisdiction of incorporation or organization) | 87-0618509 (I.R.S. Employer |
299 S. Main Street, 13th Floor, Salt Lake City, Utah84111
(Address of principal executive offices) (Zip Code)
(801)232-7395
(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 ☒ 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 (§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 ☐ No ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company ☒ | ||
| Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☒ 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 November 19, 2020,2021, was 2,005,070..
| 1 |
TABLE OF CONTENTS
| PART IFINANCIAL INFORMATION | ||
| Item 1. Financial Statements | 3 | |
| 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 IIOTHER INFORMATION | ||
| Item 1. Legal Proceedings | ||
| Item 1A. Risk Factors | ||
| 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 | ||
| 2 |
ITEM 1. FINANCIAL STATEMENTS
As used herein, the terms “Company,” “we,” “our,” “us,” “it,” and “its” refer to Arvana Inc., a Nevada corporation, unless otherwise indicated. In the opinion of management, the accompanying unaudited condensed financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.
| 3 |
Arvana Inc.
Condensed Interim Balance Sheets
(Unaudited)
| September 30 | December 31 | September 30 | December 31 | |||||||||||||
| 2020 | 2019 | 2021 | 2020 | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash | $ | 911 | $ | 2,346 | $ | 19 | $ | 4,994 | ||||||||
| Total assets | $ | 911 | $ | 2,346 | $ | 19 | $ | 4,994 | ||||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||||||||||||||||
| Current liabilities | ||||||||||||||||
| Accounts payable and accrued liabilities | $ | 1,001,141 | $ | 974,013 | ||||||||||||
| Accounts payable and accrued liabilities (Note 5) | $ | 39,176 | $ | 867,710 | ||||||||||||
| Convertible loan (Note 8) | 107,800 | 107,800 | 0 | 107,800 | ||||||||||||
| Loans payable to stockholders (Note 3) | 565,988 | 581,379 | 0 | 522,552 | ||||||||||||
| Loans payable to related party (Note 3) | 129,692 | 130,249 | 200 | 130,677 | ||||||||||||
| Loans payable (Note 3) | 79,307 | 84,509 | 0 | 74,664 | ||||||||||||
| Amounts due to related parties (Note 7) | 343,032 | 338,109 | 35,298 | 352,651 | ||||||||||||
| Total current liabilities | 2,226,960 | 2,216,059 | 74,674 | 2,056,054 | ||||||||||||
| Stockholders' deficiency | ||||||||||||||||
| Common stock, $0.001 par value 5,000,000 authorized,2,005,070 and 1,034,030 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 2,005 | 1,034 | ||||||||||||||
| Common stock, $par value authorized, and shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 34,149 | 4,611 | ||||||||||||||
| Additional paid-in capital | 21,379,650 | 21,283,517 | 35,956,574 | 21,290,189 | ||||||||||||
| Deficit | (23,604,368 | ) | (23,494,928 | ) | (36,062,042 | ) | (23,972,524 | ) | ||||||||
| (2,222,713 | ) | (2,210,377 | ) | |||||||||||||
| Less: Treasury stock – 2,085 common shares at September 30, 2020 and December 31, 2019, respectively | (3,336 | ) | (3,336 | ) | ||||||||||||
| Total Stockholders' deficiency before treasury stock | (71,319 | ) | (2,047,724 | ) | ||||||||||||
Less: Treasury stock – common shares at September 30, 2021 and December 31, 2020, respectively | (3,336 | ) | (3,336 | ) | ||||||||||||
| Total stockholders’ deficiency | (2,226,049 | ) | (2,213,713 | ) | (74,655 | ) | (2,051,060 | ) | ||||||||
| $ | 911 | $ | 2,346 | |||||||||||||
| Total liabilities and stockholders’ deficit | $ | 19 | $ | 4,994 | ||||||||||||
The accompanying notes are an integral part of these condensed interim financial statements.
| 4 |
Arvana Inc.
Condensed Interim Statements of Operations and COmprehensiveComprehensive Loss
(Unaudited)
| Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||
| General and administrative | 12,224 | 3,155 | 35,382 | 8,351 | 4,740 | 12,224 | 11,854 | 35,382 | ||||||||||||||||||||||||
| Professional fees | 5,149 | 3,250 | 23,105 | 12,844 | 42,798 | 5,149 | 64,005 | 23,105 | ||||||||||||||||||||||||
| Total operating expenses | $ | 17,373 | $ | 6,405 | $ | 58,487 | $ | 21,195 | $ | 47,538 | $ | 17,373 | $ | 75,859 | $ | 58,487 | ||||||||||||||||
| Loss from operations | (17,373 | ) | (6,405 | ) | (58,487 | ) | (21,195 | ) | (47,538 | ) | (17,373 | ) | (75,859 | ) | (58,487 | ) | ||||||||||||||||
| Interest expense | (13,318 | ) | (28,401 | ) | (39,441 | ) | (86,749 | ) | 0 | (13,318 | ) | (19,122 | ) | (39,441 | ) | |||||||||||||||||
| Foreign exchange gain (loss) | (36,900 | ) | 31,572 | (11,512 | ) | 9,041 | 250 | (36,900 | ) | 6,709 | (11,512 | ) | ||||||||||||||||||||
| Other income (Note 9) | 0 | 0 | 458,833 | 0 | ||||||||||||||||||||||||||||
| Loss on debt settlements (Note 5) | (12,460,079 | ) | 0 | (12,460,079 | ) | 0 | ||||||||||||||||||||||||||
| Net loss and comprehensive loss | $ | (67,591 | ) | $ | (3,234 | ) | $ | (109,440 | ) | $ | (98,903 | ) | $ | (12,507,367 | ) | $ | (67,591 | ) | $ | (12,089,518 | ) | $ | (109,440 | ) | ||||||||
| Per common share information - basic and diluted: | ||||||||||||||||||||||||||||||||
| Weighted average shares outstanding | 2,005,070 | 1,034,030 | 1,700,291 | 1,034,030 | 27,085,120 | 2,005,070 | 12,103,727 | 1,700,291 | ||||||||||||||||||||||||
| Net loss per common shares – basic and diluted | $ | (0.03 | ) | $ | (0.00 | ) | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.46 | ) | $ | (0.03 | ) | $ | (1.00 | ) | $ | (0.06 | ) | ||||||||
The accompanying notes are an integral part of these condensed interim financial statements.
| 5 |
Arvana Inc.
Condensed Interim Statements of Cash Flows
(Unaudited)
| Nine Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2020 | 2019 | 2021 | 2020 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||||
| Net loss | $ | (109,440 | ) | $ | (98,903 | ) | ||||||||||
Net loss for the period | $ | (12,089,518 | ) | $ | (109,440 | ) | ||||||||||
| Items not involving cash: | ||||||||||||||||
| Amortization of discount on convertible loan | — | 43,350 | ||||||||||||||
| Other income | (458,833 | ) | 0 | |||||||||||||
| Loss on debt settlements | 12,460,079 | 0 | ||||||||||||||
| Interest expense | 39,441 | 43,399 | 19,122 | 39,441 | ||||||||||||
| Unrealized foreign exchange | 11,512 | (9,041 | ) | |||||||||||||
| Foreign exchange | (12,050 | ) | 11,512 | |||||||||||||
| Changes in non-cash working capital: | ||||||||||||||||
| Accounts payable and accrued liabilities | 18,904 | (15,142 | ) | 24,960 | 18,904 | |||||||||||
| Amounts due to related parties | 8,148 | 5,476 | 34,940 | 8,148 | ||||||||||||
| Net cash used in operations | (31,435 | ) | (30,861 | ) | (21,300 | ) | (31,435 | ) | ||||||||
| Cash flows from investing activities | ||||||||||||||||
| Net cash used in investing activities | — | — | 0 | 0 | ||||||||||||
| Cash flows from financing activities | ||||||||||||||||
| Proceeds of loans payable | 30,000 | 36,810 | 16,325 | 30,000 | ||||||||||||
| Net cash provided by financing activities | 30,000 | 36,810 | 16,325 | 30,000 | ||||||||||||
| Change in cash | (1,435 | ) | 5,949 | (4,975 | ) | (1,435 | ) | |||||||||
| Cash, beginning of period | 2,346 | 815 | 4,994 | 2,346 | ||||||||||||
| Cash, end of period | $ | 911 | $ | 6,764 | $ | 19 | $ | 911 | ||||||||
| Supplementary information | ||||||||||||||||
| Cash paid for interest | $ | — | $ | — | $ | 0 | $ | 0 | ||||||||
| Cash paid for income taxes | $ | — | $ | — | $ | 0 | $ | 0 | ||||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||||||||||
| Non-cash operating activities (Note 3) | $ | 37,104 | $ | — | ||||||||||||
| Non-cash financing activities (Note 3) | $ | 60,000 | $ | — | ||||||||||||
The accompanying notes are an integral part of these condensed interim financial statements.
| 6 |
Arvana Inc,Inc.
StatementsSupplemental Disclosure of Stockholders’ DeficiencyCash Flow Information
(Unaudited)
| Common Shares | Treasury | |||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-in Capital | Deficit | Shares | Amount | Total Stockholders’ Deficiency | ||||||||||||||||||||||
| Balance, December 31, 2018 | 1,034,030 | 1,034 | 21,283,517 | (23,607,180 | ) | (2,085 | ) | (3,336 | ) | (2,325,965 | ) | |||||||||||||||||
| Net income for the period ended March 31, 2019 | (38,870 | ) | (38,870 | ) | ||||||||||||||||||||||||
| Balance, March 31, 2019 | 1,034,030 | 1,034 | 21,283,517 | (23,646,050 | ) | (2,085 | ) | (3,336 | ) | (2,364,835 | ) | |||||||||||||||||
| Net income for the period ended June 30, 2019 | (56,799 | ) | (56,799 | ) | ||||||||||||||||||||||||
| Balance, June 30, 2019 | 1,034,030 | 1,034 | 21,283,517 | (23,702,849 | ) | (2,085 | ) | (3,336 | ) | (2,421,634 | ) | |||||||||||||||||
| Net income for the period ended September 30, 2019 | (3,234 | ) | ||||||||||||||||||||||||||
| Balance, September 30, 2019 | 1,034,030 | 1,034 | 21,283,517 | (23,706,083 | ) | (2,085 | ) | (3,336 | ) | (2,424,868 | ) | |||||||||||||||||
| Net income for the period ended December 31, 2019 | 211,155 | 211,155 | ||||||||||||||||||||||||||
| Balance, December 31, 2019 | 1,034,030 | 1,034 | 21,283,517 | (23,494,928 | ) | (2,085 | ) | (3,336 | ) | (2,213,713 | ) | |||||||||||||||||
| Debt settlement | 971,040 | 971 | 96,133 | 97,104 | ||||||||||||||||||||||||
| Net income for the period ended March 31, 2020 | 22,456 | 22,456 | ||||||||||||||||||||||||||
| Balance, March 31, 2020 | 2,005,070 | 2,005 | 21,379,650 | (23,472,472 | ) | (2,085 | ) | (3,336 | ) | (2,094,153 | ) | |||||||||||||||||
| Net income for the period ended June 30, 2020 | (64,305 | ) | (64,305 | ) | ||||||||||||||||||||||||
| Balance, June 30, 2020 | 2,005,070 | 2,005 | 21,379,650 | (23,536,777 | ) | (2,085 | ) | (3,336 | ) | (2,158,458 | ) | |||||||||||||||||
| Net income for the period ended September 30, 2020 | (67,591 | ) | (67,591 | ) | ||||||||||||||||||||||||
| Balance, September 30, 2020 | 2,005,070 | $ | 2,005 | $ | 21,379,650 | $ | (23,604,368 | ) | (2,085 | ) | $ | (3,336 | ) | $ | (2,226,049 | ) | ||||||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2021 | 2020 | |||||||
| Debt forgiveness included in amounts due to related parties, accounts payable and accrued liabilities (Note 9) | $ | 458,833 | $ | 0 | ||||
| Shares issued for debt settlement (Note 5) | $ | 14,065,923 | $ | 97,104 | ||||
The accompanying notes are an integral part of these condensed interim financial statements.
| 7 |
Arvana Inc.
Statements of Stockholders' Deficiency
(Unaudited)
| Common Shares | Treasury | |||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-in Capital | Deficit | Shares | Amount | Total Stockholders’ Deficiency | ||||||||||||||||||||||
| Balance, December 31, 2019 | 1,034,030 | 1,034 | 21,283,517 | (23,494,928 | ) | (2,085 | ) | (3,336 | ) | (2,213,713 | ) | |||||||||||||||||
| Debt settlement | 971,040 | 971 | 96,133 | 97,104 | ||||||||||||||||||||||||
| Net income for the period ended March 31, 2020 | — | 22,456 | — | 22,456 | ||||||||||||||||||||||||
| Balance, March 31, 2020 | 2,005,070 | 2,005 | 21,379,650 | (23,472,472 | ) | (2,085 | ) | (3,336 | ) | (2,094,153 | ) | |||||||||||||||||
| Net income for the period ended June 30, 2020 | — | — | (64,305 | ) | — | (64,305 | ) | |||||||||||||||||||||
| Balance, June 30, 2020 | 2,005,070 | 2,005 | 21,379,650 | (23,536,777 | ) | (2,085 | ) | (3,336 | ) | (2,158,458 | ) | |||||||||||||||||
| Net income for the period ended September 30, 2020 | — | — | (67,591 | ) | — | (67,591 | ) | |||||||||||||||||||||
| Balance, September 30, 2020 | 2,005,070 | 2,005 | 21,379,650 | (23,604,368 | ) | (2,085 | ) | (3,336 | ) | (2,226,049 | ) | |||||||||||||||||
| Debt settlement | 2,605,600 | 2,606 | 540,539 | 543,145 | ||||||||||||||||||||||||
| Net income for the period ended December 31, 2020 | — | (368,156 | ) | — | (368,156 | ) | ||||||||||||||||||||||
| Balance, December 31, 2020 | 4,610,670 | 4,611 | 21,920,189 | (23,972,524 | ) | (2,085 | ) | (3,336 | ) | (2,051,060 | ) | |||||||||||||||||
| Net income for the period ended March 31, 2021 | — | — | (2,259 | ) | — | (2,259 | ) | |||||||||||||||||||||
| Balance, March 31, 2021 | 4,610,670 | 4,611 | 21,920,189 | (23,974,783 | ) | (2,085 | ) | (3,336 | ) | (2,053,319 | ) | |||||||||||||||||
| Net income for the period ended June 30, 2021 | — | — | 420,108 | — | 420,108 | |||||||||||||||||||||||
| Balance, June 30, 2021 | 4,610,670 | 4,611 | 21,920,189 | (23,554,675 | ) | (2,085 | ) | (3,336 | ) | (1,633,211 | ) | |||||||||||||||||
| Debt settlement | 29,537,848 | 29,538 | 14,036,385 | 14,065,923 | ||||||||||||||||||||||||
| Net income for the period ended September 30, 2021 | — | (12,507,367 | ) | — | (12,507,367 | ) | ||||||||||||||||||||||
| Balance, September 30, 2021 | 34,148,518 | $ | 34,149 | $ | 35,956,574 | $ | (36,062,042 | ) | (2,085 | ) | $ | (3,336 | ) | $ | (74,655 | ) | ||||||||||||
The accompanying notes are an integral part of these condensed interim financial statements.
Arvana Inc.
Notes to Condensed Interim Financial Statements
September 30, 2021
(Unaudited)
1. Nature of Business and Ability to Continue as a Going Concern
Arvana Inc. (“our”, “we”, “us” and the “Company”)The Company was incorporated under the laws ofin the State of Nevada on June 16, 1977, as Turinco,“Turinco, Inc.”, and on September 16, 1977. On July 24, 2006, our shareholders approved achanged its name change to Arvana Inc. to reflect the acquisition of a telecommunications business. We discontinued efforts related to our telecommunications business as of December 31, 2009. The reporting currencyCompany is presently focused on evaluating business opportunities for merger or acquisition sufficient to support operations and functional currencyincrease stockholder value.
We entered into a non-binding memorandum of understanding on March 17, 2016, with the intent of acquiring a fresh food manufacturer and distributor. On November 11, 2020, we notified the acquisition target that the Company iswas no longer interested in pursuing the United States dollar (“US Dollar”) andacquisition of its business given the accompanying financial statements have been expressed in US Dollars.delays attendant to the prospective transaction.
On March 17, 2016,May 21, 2021, the Company entered into a non-binding Memorandum of Understanding (“MOU”)term sheet with CaiE Food Partnership Ltd. (“CaiE”) for the purposeintention of acquiring ita multi-media platform and prospectively other businesses. The term sheet required that the owner of the acquisition target first secure voting control of the Company as pre-condition to his facilitating a wholly-owned subsidiary. CaiE is intransaction. The owner effectively secured voting control on June 30, 2021. On October 26, 2021, the business of manufacturing and distributing fresh Dim Sum food products from a facility based in Sparks, Nevada. The MOU required CaiE to provide audited financial statements and a business plan as conditions precedent to enteringCompany entered into a binding agreement. CaiE has not satisfiedrecission agreement and mutual release with the conditions necessary for usowner of the intended acquisition due to move forward. On November 11, 2020,being unable to agree on the Company notified CaiE that it was no longer interested in acquiring its business. Our present intention is to identify and evaluate business opportunities that are ready to create value for Company’s shareholders.structure of the prospective transaction.
These condensed interim financial statements have been prepared on a going concern basis, which assumes the realization of assets and the settlement of liabilities in the normal course of business.
For the nine-month period ended September 30, 2020,2021, the Company recognized a net loss of $109,440 as a result of general administrative expenses, professional fees and interest expenses. The Company hadrealized a working capital deficiency, of $2,226,049 as of September 30, 2020. These conditions raisewhich deficiency raises substantial doubt about the Company’sits ability to continue as a going concern.
The World Health Organization declared coronavirus COVID-19 a global pandemic in March 2020. COVID-19 is a contagious disease that continues to spread adversely affecting workforces, economies, and financial markets globally, which affects will likely result in an economic downturn. The Company cannot predict the duration or magnitude of the adverse results connectedwill continue to COVID-19, nor can it predict the effect, if any, COVID-19 will have on the Company’s search to identify a business opportunity or its ability to attract sufficient capital to sustain operations.
Our present intention is to identify and evaluate business opportunities that could create value for Company shareholders. During this search the Company will require continued financial support from shareholdersstockholders and creditors until it is able to generate its own cash flow from operations. While we are confident that a business opportunity will be identified, the insufficiency of our financial resources casts substantial doubt on whether we will be able to fulfill this objective.
Failure to obtain the ongoing support of shareholdersstockholders and creditors may indicate that the preparation of these financial statements on a going concern basis is inappropriate, in which case the Company’s assets and liabilities would need to be recognized at their liquidation values. TheseThe Company’s financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and liabilities that might arise from this uncertainty.
Arvana Inc.
Notes to Condensed Interim Financial Statements
September 30, 2021
(Unaudited)
2. Summary of Significant Accounting Policies
a)Basis of presentation
The Company’sCompany is in the process of evaluating business opportunities and has minimal operating expenses. Our fiscal year end is December 31. The accompanying condensed interim financial statements of the CompanyArvana Inc. for the three and nine months ended September 30, 20202021 and 2019,2020, 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. The condensed interim financial statements and notes appearing in this report should be read in conjunction with our 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, 2019,2020, as filed with the Securities and Exchange Commission (“SEC”Commission”) on April 1, 2020.9, 2021. Results are not necessarily indicative of those which may be achieved in future periods.
b)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 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.
c)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, convertible loan, loans payable and amounts due to related parties - the carrying amount approximates fair value due to the short-term nature of the obligations.
The estimated fair values of the Company's financial instruments as of September 30, 20202021 and December 31, 20192020 are as follows:
| Estimated fair values | ||||||||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||||
| Cash | $ | 911 | $ | 911 | $ | 2,346 | $ | 2,346 | $ | 19 | $ | 19 | $4,994 | $ | 4,994 | |||||||||||||||
| Accounts payable and accrued liabilities | 1,001,141 | 1,001,141 | 974,013 | 974,013 | 39,176 | 39,176 | 867,710 | 867,710 | ||||||||||||||||||||||
| Convertible loan | 107,800 | 107,800 | 107,800 | 107,800 | 0 | 0 | 107,800 | 107,800 | ||||||||||||||||||||||
| Loans payable to stockholders | 565,988 | 565,988 | 581,379 | 581,379 | ||||||||||||||||||||||||||
Loans payable to stockholders Loans payable to related party | 0 | 0 | 522,522 | 522,522 | ||||||||||||||||||||||||||
| Loans payable to related party | 129,692 | 129,692 | 130,249 | 130,249 | 0 | 0 | 130,677 | 130,677 | ||||||||||||||||||||||
| Loans payable | 79,307 | 79,307 | 84,509 | 84,509 | 0 | 0 | 74,664 | 74,664 | ||||||||||||||||||||||
| Amounts due to related parties | 343,032 | 343,032 | 338,109 | 338,109 | 35,498 | 35,498 | 352,651 | 352,651 | ||||||||||||||||||||||
Arvana Inc.
Notes to Condensed Interim Financial Statements
September 30, 2021
(Unaudited)
2. Summary of Significant Accounting Policies (continued)
c)Financial instruments (continued)
The following table presents information about the assets that are measured at fair value on a recurring basis as of September 30, 2020,2021, 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:
September 30, 2020 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Cash | $ | 911 | $ | 911 | $ | — | $ | — | ||||||||
| Fair Value, Assets Measured on Recurring Basis | |||||||||||||||||
September 30, 2021 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
| Assets: | |||||||||||||||||
| Cash | $ | 19 | $ | 19 | $ | 0 | $ | 0 | |||||||||
The fair value of cash is determined through market, observable and corroborated sources.
d)Recent accounting pronouncements
New and amended standards adopted by the Company
The following new and amended standards were adopted by the Company for the first time in this reporting period.
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, requiring certain changes to the recognition and measurement as well as disclosure of incurred and expected credit losses. In November 2018, the FASB issued ASU 2018-19 to clarify certain aspects of the new current expected credit losses impairment model in ASU 2016-13. ASU 2018-19 points out that operating lease receivables are within the scope of ASC 842 rather than ASC 326. The standard became effective for the Company beginning January 1, 2020. The adoption of this standard did not have a material impact on the Company’s results of operations, financial condition, cash flows, and financial statement disclosures.
In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates ASU 2018-13, which changes the fair value measurement disclosure requirements of ASC 820. The standard became effective for the Company beginning January 1, 2020. The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements. The adoption of this standard did not have a material impact on the Company’s results of operations, financial condition, cash flows, and financial statement disclosures.
Arvana Inc.
Notes to Condensed Interim Financial Statements
September 30, 2021
(Unaudited)
3. Loans Payable
As of September 30, 2020,2021, the Company had received loans outstanding of $565,988 (€225,000; CAD$ 72,300; $248,107)$nil 0 (December 31, 20192020 - $581,379:$522,552: €225,000; CAD$ 72,300; $273,107)60,000; $199,600) from stockholders; loans of $129,692 (CAD$ 27,600; $109,000)$200 (December 31, 20192020 – $130,249:$130,677: CAD$ 27,600; $109,000) from a related party and loans of $79,307 (CAD$ 10,000; $71,810)$nil (December 31, 20192020 – $84,509:$: CAD$ 10,000; $76,810)$66,810) from unrelated third parties. AllThe majority of the historical loans bore interest at 6% per annum while $92,935 of the loans bear interest at 6% per annum.were non-interest bearing. The historical 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 $530,992$nil 0 and $521,156 $515,263 is included in accounts payable and accrued expenses at September 30, 20202021 and December 31, 2019,2020, respectively. Interest expense recognized on these loans was $10,623 $nil 0 for the three months ended September 30, 2021, compared to $10,623 for the three months ended September 30, 2020, compared to $11,256 for the three months ended September 30, 2019, respectively. Interest expense recognized on these loans was $31,356$16,427 for the nine months ended September 30, 2021, compared to $31,356 for the nine months ended September 30, 2020, compared to $35,314 for the nine months ended September 30, 2019, respectively.
On March 30, 2020, loans of $60,000$ and corresponding accrued interest of $37,104$ were settled by the issuance of common shares pursuant to three debt settlement agreements dated March 3, 2020, March 4, 2020 and March 4, 2020.2020, respectively.
Between March 17, 2016, and August 17, 2020, CaiE provided an aggregate of $174,610During the period ended September 30, 2021, the Company extinguished $ in loans payable to stockholders and corresponding accrued interest of $.
On July 23, 2021, loans payable to stockholders of $480,960, and $74,762, respectively, loans payable to a related party of $130,947, accrued interest of $361,283 on loans payable to stockholders, and accrued interest of $89,124 on loans payable to a related party were settled by the Company,issuance of which $107,800 is documented in common shares pursuant to three debt settlement agreements dated April 1, 2021, and five debt settlement agreements dated June 30, 2021.
On July 23, 2021, accounts payable and accrued liabilities of $262,056 were settled by the issuance of common shares pursuant to two convertible promissory notes for $50,000 and $57,800debt settlement agreements dated May 18, 2016, and October 12, 2018, respectively (Note 8). The amounts that remain undocumented will likely be treated in a manner similar to those contracted for the convertible promissory notes.June 30, 2021.
4. Stock Options
At September 30, 2020,2021, and December 31, 2019,2020, there were no stock options outstanding. No options were granted, exercised or expired during the period ended September 30, 20202021 and during the year ended December 31, 2019.2020.
5. Common stock
During the nine months ended September 30, 2021, the Company issued shares of its restricted common stock with a fair value of $14,065,923 to settle $662,251 in accounts payable and accrued liabilities, $107,800 in convertible loans, $480,960 in loans payable to stockholders, $130,947 in loans payable to related party, $74,762 in loans payable, and $149,124 in amounts due to related parties (Notes 3, 7, 8, 10).
During the nine months ended September 30, 2020, the Company issued shares of its common stock valued at $0.10$ a share to settle $60,000$ in loans and $37,104$ in interest (Note 3). During the year ended December 31, 2019,2020, the Company had issued nil0 common shares.
6. Segmented Information
The Company has no reportable segments.
Arvana Inc.
Notes to Condensed Interim Financial Statements
September 30, 2021
(Unaudited)
6. Segmented Information
The Company has no reportable segments.
7. Related Party Transactions and Amounts Due to Related Parties
At September 30, 2020,2021, and December 31, 2019,2020, the Company had amounts due to related parties of $343,032$35,298 and $338,109,$352,651, respectively. This amount includes $60,000 at September 30, 2020, and December 31, 2019, payable to a current director for services rendered during 2007. The amounts owing bear no interest, are unsecured with no fixed terms of repayment, and are due on demand.
The Company incurred consulting fees of $11,888 (2019 - $7,144) paid to aA company controlled by our chief executive officer was owed $35,298 at September 30, 2021, and $3,487 at December 31, 2020. The amount due bears no interest, is unsecured, and hs no fixed terms for repayment. The Company incurred consulting fees of $55,461 (2020 - $11,888) to that company during the nine months ended September 30, 2020. As 2021.
A former director was owed $nil 0 at September 30, 2020, the Company owed our chief executive officer $3,275.
A former chief executive officer2021, and director entered into a consulting arrangement that provided for a monthly fee of CAD $5,000, which amounts were accrued through the termination date on May 24, 2013. As of September 30, 2020, and$60,000 at December 31, 2019, our former chief executive officer2020, for services rendered during 2007, that was owed $279,757 and $278,109, respectively. The amounts owing bear no interest, are unsecuredsettled on July 23, 2021 by the issuance of common shares with no fixed termsa fair value of repayment, and are due$714,300 resulting in a loss on demand.
A former chief executive officer and director assigned unpaid amounts due asdebt settlement of September 30, 2020, and December 31, 2019, of $152,008 and $156,104 respectively,$654,300, pursuant to a related corporation, as provided in a debt assignmentsettlement agreement dated effective January 1, 2012.June 30, 2021.
A former chief executive officerdirector and director isrelated entities were owed $129,692 (includes$nil 0 at September 30, 2021, and $579,088 at December 31, 2020 for loans, services rendered, accrued interest, of $84,526) and $130,249 (includes interest of $78,962) as ofaccounts payable and accrued liabilities.
During the period ended September 30, 20202021, $220,071 ($130,947 in loans payable to related party and December 31, 2019, respectively for unpaid amounts bearing 6%$89,124 in accrued interest on unsecuredloans) was settled on July 23, 2021 by the issuance of shares with a fair value of $207,857 resulting in a gain on debt settlement of $12,213, pursuant to a debt settlement agreement dated April 1, 2021
During the period ended September 30, 2021, amounts with no fixed termsdue to the the former director and related entities of repayment,$369,888 (2020 - $Nil 0) were forgiven pursuant to two debt forgiveness agreements dated June 30, 2021, that are due on demand.forgave $206,302 (Note 9) and $163,586 (Note 9) respectively recorded as other income.
| 13 |
Arvana Inc.
Notes to Condensed Interim Financial Statements
September 30, 2021
(Unaudited)
8. Convertible Loans
On May 18, 2016, the Company issued a convertible promissory note to CaiE that accrues 10%accrued 10% per annum, in exchange for $50,000,$50,000, initially due on November 17, 2017. The note iswas convertible into the Company’s common stock, in whole or in part, at any time prior to maturity at the option of the holder, at $0.20$0.20 per share. Due toSince the conversion price beingwas lower than the closing share price on the issuance date, a beneficial conversion feature was recognized as a discount against the debt. The maturity date of the note was extended by amendment, to March 31, 2021, while all other terms of the note remainremained unchanged. The Company and CaiE agreed to a debt settlement agreement to extinguish these loans and accrued interest by the issuance of common shares. During the three and nine months ended September 30, 2021 and 2020, and 2019, no0 discount was amortized as interest expense. Interest expense recognized on this loan was $1,250$nil 0 for the three months ended September 30, 2020,2021, compared to $1,250$1,250 for the three months ended September 30, 2019.2020. Interest expense recognized on this loan was $3,750$1,250 for the nine months ended September 30, 2020,2021, compared to $3,750$3,750 for the nine months ended September 30, 2019.2020. As at September 30, 2020,2021, and December 31, 2019,2020, the balance of the note was $50,000.$nil 0 and $50,000, respectively.
8. Convertible Loans (continued)
On October 12, 2018, the Company issued a convertible note to CaiE that accrues 10%accrued 10% per annum, in exchange for a series of loans that totaled $57,800$57,800 initially due on October 11, 2019. The note iswas convertible into the Company’s common stock, in whole or in part, at any time prior to maturity at the option of the holder at $0.20$0.20 per share. Due toSince the conversion price beingwas lower than the closing share price on the issuance date, a beneficial conversion feature was recognized as a discount against the debt. The maturity date of the note was extended by amendment, to March 31, 2021, while all other terms of the note remainremained unchanged. The Company and CaiE agreed to a debt settlement agreement to extinguish these loans and accrued interest by the issuance of common shares. During the three months ended September 30, 2021 and 2020, $nil 0and 2019, $nil and $14,450$14,450 of the discount was amortized as interest expense and during the nine months ended September 30, 2021 and 2020, $nil 0and 2019, $nil and $43,350$43,350 of the discount was amortized as interest expense. Interest expense recognized on this loan was $1,445$nil 0 for the three months ended September 30, 2020,2021, compared to $nil$1,445 for the three months ended September 30, 2019.2020. Interest expense recognized on this loan was $4,335$1,445 for the nine months ended September 30, 2020,2021, compared to $4,335$4,335 for the nine months ended September 30, 2019.2020. As at September 30, 20202021 and December 31, 2019,2020, the balance of the note was $57,800.$nil 0 and $57,800, respectively.
9. Subsequent Events
On November 11, 2020, the Company provided written notificationJuly 23, 2021, CaiE settled a total of $ corresponding to CaiE that it no longer intended to move forward as anticipated in the MOU, to acquire it as an operating subsidiary.
On November 10, 2020, the Company entered into a settlement agreementconvertible loans of $, and release with a shareholder and authorizedaccrued interest on convertible loans of $38,912 by the issuance of 1,112,910 common shares of its restricted common stockpursuant to extinguish $111,291 in liabilities effectivea debt settlement agreement dated April 1, 2021.
9. Other Income
During the period ended September 30, 2020.
On November 10, 2020,2021, the Company entered into a settlement agreement and release with a shareholder and authorized the issuance of 1,132,690 shares of its restricted common stock to extinguished $113,269 in liabilities effective September 30, 2020.
On November 10, 2020, the Company authorized the issuance of 360,000 shares of its restricted common stock to a shareholder for services rendered pursuant to the terms and conditions of a consulting agreement that expired on September 30, 2020.
On November 10, 2020, and November 19, 2020, the Company received a loanrecognized other income in the aggregate amount of $10,000 from a shareholder that bears no$458,833 corresponding to: (1) debt forgiveness of $206,302 included in amounts due to related parties (Note 7); (2) debt forgiveness of $163,586 included in accounts payable and accrued liabilities (Note 7); and (3) extinguishment of $88,945 (Note 3) in loans and accrued interest and is unsecured with no fixed terms of repayment.expense.
Item2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD LOOKING STATEMENTS
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 Conditionbelow. The following discussion should be read in conjunction with our financial statements and notes thereto included in this report. Our fiscal year end is December 31. All information presented herein is based on the three and nine months ended September 30, 20202021 and September 30, 2019.2020.
Overview
The Company was incorporated in the State of Nevada on June 16, 1977, as “Turinco, Inc.” to engage in any legal undertaking. On July 24, 2006, the Company’s changed its name was changedfrom Turinco, Inc. to Arvana Inc. to reflect theon acquisition of Arvana Networks, Inc., a telecommunications business. We discontinued efforts related to our telecommunicationsthat business as of December 31, 2009. We have since been in the process of seeking otherOur present activities are focused on evaluating business opportunities.opportunities that are sufficient to support operations and increase stockholder value.
Our office is located at 299 S. Main Street, 13th Floor, Salt Lake City, Utah 84111, and our telephone number is (801) 232-7395. Our registered agent is AA Registered Agents, 4869 Nightwood Court, Las Vegas, Nevada 89149.89149, is our registered agent in the State of Nevada.
The Company is registered with the Commission and traded on the OTC Markets Group, Inc.’s Pink Sheets Current Information over the counter market platform under the symbol “AVNI.”
Company
The Company entered into a non-binding term sheet on May 21, 2021, with Mr. Alkiviades David and our controlling stockholder with the intention of acquiring a multi-media platform and prospectively other businesses owned or controlled by Mr. David. The term sheet required that our controlling stockholder grant voting control over the Company to Mr. David as a pre-condition to his facilitating a transaction. On June 30, 2021, Mr. David effectively secured voting control over the Company. Due to a disgreement over the structure of the intended transaction, the Company entered into a recission agreement and mutual release with Mr. David on October 26, 2021. The agreement to abandon the intentions of the term sheet included Mr. David’s revocation of the proxies granted to him, which action returned control of the Company to our controlling stockholder, and led to the resignation of two of our directors.
On March 17, 2016, we entered into a non-binding Memorandummemorandum of Understanding (“MOU”)understanding with CaiE Food Partnership Ltd. (“CaiE”) for the purpose of acquiring it 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. While CaiE loaned the Company $174,610 over more than fournearly five years to sustain operations, it was unable to deliver audited financial statements. The constant delaythe information necessary to moving forward has negatively affected our business prospects and has placed an untenable burden on our shareholders.complete the transaction. On November 11, 2020, CaiE was notified that the Company notified CaiE in writing that it waswould no longer interestedpursue the acquisition of its business. Effective April 1, 2021, the Company entered into a debt settlement agreement pursuant to which all amounts due to CaiE were extinguished in acquiring its business.exchange for shares of the Company’s restricted common stock.
Our present intention is to identify and evaluate other business opportunities. We will not be able to develop any business opportunity without additional financing. Management will look to its shareholders and creditors for sufficient support to sustain operations. Assurance as to whether our shareholders and creditors will respond sufficiently to funding requests is uncertain.
Plan of Operation
Our plan of operation ispresent activities are focused on evaluating business opportunities that are sufficient to identify a business opportunitysupport operations and increase stockholder value. While this process remains in the discovery phase, the Company will continue to look to its stockholders and creditors for which purpose it will require a minimum of $25,000 in funding over the next 12 monthssufficient financial support to sustain operations through that process. Should a business opportunity be identified, we will need additional funding to complete any definitive transaction. We anticipate that funding in this instance will be in the form of unsecured debt or equity financing from stockholders, creditors and third parties. Despite our confidence that funding will be available for a suitable business opportunity,though we have no such financing arranged. Therefore, we will require financial support fromassurance that our stockholders and creditors.or creditors will respond positively to the Company’s efforts.
Results of Operations
During the three and nine months ended September 30, 2020,2021, the Company satisfied periodic public disclosure requirements, continued its search for a suitable business enterprise that might enhance stockholder value and maintained limited operations from debt financing provided by CaiE.executed a non-binding term sheet with Mr. David.
Operations for the three and nine months ended September 30, 20202021 and 2019,2020, are summarized in the following table.
| Three months Ended September 30, 2020 | Three months Ended September 30, 2019 | Nine months Ended September 30, 2020 | Nine months Ended September 30, 2019 | |||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | $ | (12,224 | ) | $ | (3,155 | ) | $ | (35,382 | ) | $ | (8,351 | ) | ||||
| Professional fees | (5,149 | ) | (3,250 | ) | (23,105 | ) | (12,844 | ) | ||||||||
| Loss from Operations | (17,373 | ) | (6,405 | ) | (58,487 | ) | (21,195 | ) | ||||||||
| Interest expense | (13,318 | ) | (28,401 | ) | (39,441 | ) | (86,749 | ) | ||||||||
| Foreign exchange gain (loss) | (36,900 | ) | 31,572 | (11,512 | ) | 9,041 | ||||||||||
| Net loss for the period | $ | (67,591 | ) | $ | (3,234 | ) | $ | (109,440 | ) | $ | (98,903 | ) | ||||
| Three months Ended September 30, 2021 | Three months Ended September 30, 2020 | Nine months Ended September 30, 2021 | Nine months 2020 | |||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | $ | (4,740 | ) | $ | (12,224 | ) | $ | (11,854 | ) | $ | (35,382 | ) | ||||
| Professional fees | (42,798 | ) | (5,149 | ) | (64,005 | ) | (23,105 | ) | ||||||||
| Loss from Operations | (47,538 | ) | (17,373 | ) | (75,859 | ) | (58,487 | ) | ||||||||
| Interest expense | — | (13,318 | ) | (19,122 | ) | (39,441 | ) | |||||||||
| Foreign exchange gain (loss) | 249 | (36,900 | ) | 6,708 | (11,512 | ) | ||||||||||
| Other income | — | — | 458,833 | — | ||||||||||||
| Loss on debt settlements | (12,460,079 | ) | — | (12,460,079 | ) | — | ||||||||||
| Net loss for the period | $ | (12,507,367 | ) | $ | (67,591 | ) | $ | (12,089,518 | ) | $ | (109,440 | ) | ||||
Net Losses
Net loss for the three monthsthree-month period ended September 30, 2020,2021, was $67,591$12,507,367 as compared to a net loss of $3,234$67,591 for the three monthsthree-month prior period ended September 30, 2019.2020. The increase in net loss over the comparative three-month periods can be attributed to the increase in general administrative expenses,loss on debt settlements, and professional fees, and the transition to foreign exchange loss from the prior gain, offset by a decrease in general administrative expenses, the elimination of interest expense and a foreign exchange gain over the prior comparable three month periods.three-month period. The loss on debt settlements is due to the settlement values for stock issued that were less than the market value of the stock on the settlement dates, while the increase in professional fees is the result of amounts accrued in the preparation of coincident settlement documentation and general administrative expenses is attributedin the conduct of requisite due diligence in relation to costs related to thea prospective acquisition. The elimination and settlement of existing debt for shares, while the decrease in interest expense is the result of the debt settlements, and the transition from foreign exchange loss to foreign exchange gain is due to newly adopted accounting standards that no longer require book accretion interest on convertible loans, anda decrease in the foreign exchange transition to loss in response to the volatilityvalue of foreign currencies against the US dollar which lossthat impacts the cost of expenses payablepaid in foreign currencies.
| 16 |
Net loss for the nine monthsnine-month period ended September 30, 2020,2021, was $109,440$12,089,518 as compared to net loss of $98,903$109,440 for the nine monthsnine-month period ended September 30, 2019.2020. The increase in net loss over the comparative nine-month periods can be attributed to an increaseloss on debt settlements, professional fees, and interest expense, offset by other income, a decrease in general administrative expenses, professional fees, and the transition toa foreign exchange gain over the comparable prior nine-month period. The loss fromon debt settlements is due to the prior gain, offset by a decrease in interest expenses. Thesettlement values for stock issued that were less than the market value of the stock on the settlement dates, the increase in professional fees is the result of amounts accrued in the preparation of coincident settlement documentation and general administrative expenses is attributedin the conduct of requisite due diligence in relation to costs related to the elimination and settlement of existing debt for shares,a prospective acquisition, while the decrease in interest expense reflects the expense of debt obligations prior to settlement. Other income is the result of debt forgiveness agreements, and the transition from foreign exchange loss to foreign exchange gain is due to newly adopted accounting standards that no longer require book accretion interest on convertible loans, anda decrease in the foreign exchange transition to loss in response to the volatilityvalue of foreign currencies against the US dollar which lossthat impacts the cost of expenses payablepaid in foreign currencies.
WeThe Company did not generate revenue during this periodeither of these periods and expectexpects to continue to incur losses over the next twelve months until such time as we areit is able to secure a business opportunity that generates income.
Capital Expenditures
The Company expended no amounts on capital expenditures for the nine-month period ended September 30, 2020.2021.
Liquidity and Capital Resources
Since inception, we have experienced significant changes in liquidity, capital resources, and stockholders’ deficiency.
The Company had assets of $911$19 in cash as of September 30, 2020, and2021, with a working capital deficit of $2,226,049,$74,655, as compared to assets of $2,346, and$4,994 in cash as of December 31, 2020, with a working capital deficit of $2,213,713 as of December 31, 2019. Net stockholders'$2,051,060. Stockholders' deficit in the Company was $2,226,049$74,655 at September 30, 2020,2021, as compared to a net stockholder’s deficit of $2,213,713$2,051,060 at December 31, 2019.2020.
Cash Used in Operating Activities
Net cashCash flow used in operating activities for the nine-month period ended September 30, 2020,2021 was $31,435$21,100 as compared to net cash flow used in operating activities of $30,861$31,435 for the nine-month period ended September 30, 2019.2020. Changes in net cash used in operating activities in the current nine-month period over the prior nine-month period can be attributed to a number of book expense items that do not affect the total amount relative to actual cash used, such as unrealized foreign exchange, other income, loss on debt settlements and interest expense and the amortization of a discount on convertible debt.expense. Balance sheet accounts that actually affect cash, but are not income statement related that are added or deducted to arrive at net cash used in operating activities, include accounts payable accrued liabilities, 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 sufficient revenue to offset the cost of operating activities.
Cash Used in Investing Activities
Net cashCash used in investing activities forover the nine-month periods ended September 30, 2020,2021, and September 30, 2019,2020, was $nil.
We do not expect to use net cash in investing activities until we are able to conclude a definitive agreement onwith a suitableviable business opportunity.
| 17 |
Cash Flows from Financing Activities
Cash flow provided by financing activities for the nine-months ended September 30, 2020,2021, was $30,000$16,325 as compared to $36,810$30,000 for the nine-months ended September 30, 2019.2020. Cash flows provided from financing activities over the comparative nine-month periods was provided by CaiE as convertible loans.are considered loans from CaiE.
We expect to continue to use net cash provided by financing activities to maintain operations.
The Company’s current assets are insufficient to conduct its plan of operation over the next twelve (12) months as it will need at least $25,000$50,000 to sustainmaintain operations while seeking to identifyand conclude a suitable business opportunity. While the Company will look to its shareholders and creditors to provide debt or equity financing to secure those amounts necessary, it hasdefinitive transaction. Until such time, we have no definitive commitments or arrangements for continued financial support. Despite the Company’s predicament, existing stockholders remain the most likely prospective sources of funding. The Company’s inability to secure funding willwould have a material adverse effect on its ability to sustain operations.
The Company does not intend to pay cash dividends in the foreseeable future.
The Company hadhas no lines of credit or other bank financing arrangements as of September 30, 2020.arrangements.
The Company hadhas no commitments for future material capital expenditures that were material at September 30, 2020.expenditures.
The Company has no defined benefit plan or contractual commitment with any of its officers or directors.
The Company has no current plans for the purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
Off-Balance Sheet Arrangements
As of September 30, 2020,2021, 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
The Company will continue to rely on debt or equity financing from our shareholders and creditors to maintain operations and secure a suitable business transaction though weit cannot provide any assurance that sufficient financing will be forthcoming.
Critical Accounting Policies
In Note 2 to the audited financial statements for the years ended December 31, 20192020 and 2018,2019, included in ourthe Company’s Form 10-K for the Companyrespective periods, discusses those accounting policies that are considered to be significant in determining the results of operations and the currency of its financial position. The Company believes that the accounting principles utilized by it conform to accounting principles generally acceptedAccounting Principles Generally Accepted in the United States.States (GAAP).
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 very. nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate estimates. We base ourthe Company evaluates its estimates based on historical experience and other facts and circumstances that are believed to be reasonable. The resultresults of our estimateseach evaluation form the basis for makingupon which management makes judgments about the carrying value of assets and liabilities. ActualThe actual results may differ from these estimates recorded here under different assumptions or conditions.
Going Concern
Management has expressed itsan opinion thatas to the Company willCompany’s ability to continue as a going concern despite itsgiven an accumulated deficit of $23,604,368 $36,062,042 and negative cash flows from operating activities as of September 30, 2020. The2021. Our ability to continue as a going concern requires that the Companywe procure funding from outside sources. Management’s plan to address the Company’s ability to continue as a going concern includes securing capitalobtaining funding from the private placement of equity or debt financing, converting existing debt intoto equity, and otherwise settling outstanding or extinguishing amounts due toin agreement with its creditors. Management believes that its reliance onit will remain a going concern through the financing options detailedmethods discussed above will prove sufficient as it seeks to identify and transactpending closure with an income producinggenerating business opportunity though it providethere can be no assurances that such reliance will prove successful.
Whether the Company will continuecontinuation as a going concern is further challenged by additional urgency in light of the COVID-19 pandemic that continues to adversely affect workforces, economies, and financial markets around the world that will likely result in an economic downturn. Mangement cannot predict the duration or magnitude of the virus, nor can it predict which adverse effects, if any, will impact the Company’s plan of operation or its ability to remain in business.prove successful.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
In connection with the preparation of this quarterly report, an evaluation was carried out by the Company’s management, with the participation of the chief executive officer and the acting chief financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of September 30, 2020.2021. 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 its 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 effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was accumulated and communicated to management, including its 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 period ended September 30, 2020,2021, 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
On November 10, 2020, our board of directors approved the issuance of 2,605,600 restricted shares of its common stock par value $0.001 to Altaf Nazerali, and two related companies to extinguish debt in the amount of $224,560 dueNone, other than as previously reported on loans or payables, including accrued interest, and in payment for services rendered in the amount of $36,000, pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities and Exchange Act of 1933, as amended.Form 8-K.
When the shares of restricted common stock are issued, the Company will have increased its issued and outstanding shares from 2,005,070 to 4,610,670.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
ChangeBoard of ControlDirectors
Effective November 15, 2021, the Company’s board of directors (“Board”) appointed Sir John Baring to serve on the Board until the next annual meeting of its stockholders for the election of directors. Sir John Baring has previously served as chief executive officer (May 26, 2005 - October 17, 2005), director (May 26, 2005 – June 30, 2021) and chairman of the Board (October 17, 2005 – June 30, 2021). He brings more than 30 years of banking and investing experience to the Board. Since June 2002, Sir John has acted as a managing member of Mercator Management LLC, a leading fund management company.
The sharesCompany has determined that Sir John Baring will serve as head of restricted common stock approved byits audit committee and has not entered into, nor does it expect to enter into, any transaction with Sir John Baring in which he had or will have a direct or indirect material interest, except a debt settlement agreement dated effective June 30, 2021.
Sir John is neither a party to, nor a participant in, any material plan, contract or arrangement whose appointment to the Board could act as a triggering event, modification, grant, or award under any existing plan, contract or arrangement.
Effective November 18, 2021, the Board appointed Shawn Teigen to serve as a director until the next annual meeting of its stockholders for the election of directors. Teigen has previously served as a Company director (June 25, 2013 – June 30, 2021). He has been providing consulting services to early-stage businesses for the past 15 years. He currently serves as the Vice President and Research Director of Utah Foundation, a non-profit, non-partisan, public policy research organization. Mr. Teigen has also taught a policy research desgin course for the past five years as a faculty member in the University of Utah's Master of Public Policy program. He spent two years in Kazakhstan as a U.S. Peace Corps volunteer. Mr. Teigen holds a Master of Public Policy and a BS in Management from the University of Utah. He also serves on the board of directors on November 10, 2020, for issuanceof certain public-sector and non-profit organizations.
The Company has determined that Mr. Teigen will serve as a member of its audit committee and has not entered into, nor does it expect to Altaf Nazerali, and related companies constitutesenter into, any transaction with Mr. Teigen in which he had or will have a changedirect or indirect material interest.
Mr. Teigen is neither a party to, nor a participant in, control of the registrant. Priorany material plan, contract or arrangement whose appointment to the control change, the Company was controlled by its stockholders rather thanBoard could act as a triggering event, modification, grant, or award under any singular stockholderexisting plan, contract or group of stockholders, and there are no arrangements or understandings in place between the board of directors and Mr. Nazerali with respect to the election of directors or other materal matters. Each share of our common stock entitles the holder to one vote. Mr. Nazarali directly or indirectly exercises control over 2,628,190 Company shares or 57% of our the voting shares on any matter that is brought before our stockholders.arrangement.
COVID-19
Covid 19
The World Health Organization declared coronavirus COVID-19 a global pandemic in March 2020. COVID-19 is a contagious disease that continues to spread adverselydespite the introduction of effective vacines, affecting workforces, economies, and financial markets, globally, which effects will likelycontagion may result in an economic downturn. We cannotNone can predict the duration or magnitude of the adverse results connected to COVID-19, nor can weanyone predict the effect, if any, COVID-19 will have on ourthe Company’s ability to sustain our business.operations.
Item 6. Exhibits
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page 2223 of this Form 10-Q, and are incorporated herein by this reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ARVANA INC.
By: | |||
Ruairidh | |||
| Campbell, Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer | |||
| Date: | November 19, | 2021 |
INDEX TO EXHIBITS
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| 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. |