UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D. C. 20549

FORM 10-K

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to________

Commission File No. 0-28181

ORANCO, INC .

(Name of Small Business Issuer in its Charter)

Nevada   87-0574491
(State or Other Jurisdiction of incorporation or organization)   (I.R.S. Employer I.D. No.)

One Liberty Plaza , Suite 2310 PMB# 21, New York, NY 10006

(Address of Principal Executive Offices)

Issuer's Telephone Number: (646)7593614

 

 

(Former Name or Former Address, if changed since last Report)

Securities Registered under Section 12(b) of the Exchange Act: None

Name of Each Exchange on Which Registered: None

Securities Registered under Section 12(g) of the Exchange Act: Common

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

Yes ☐ No ☒

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

Yes ☒ No ☐

Indicate by checkmark whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Company 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 checkmark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Se 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 ☐
Non-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 pursuant 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 ☐

The aggregate market value of the voting common equity held by non-affiliates based upon the price at which Common Stock was last sold as of June 30, 2017, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $854,689.

As of March 28, 2018, the number of shares of the registrant’s common stock outstanding was 42,191,480.

 

 

 

 

 

TABLE OF CONTENTS

 

PART I  
     
ITEM 1. BUSINESS 1
     
ITEM 1A. RISK FACTORS 4
     
ITEM 1B. UNRESOLVED STAFF COMMENTS 6
     
ITEM 2. PROPERTIES 6
     
ITEM 3. LEGAL PROCEEDINGS 6
     
ITEM 4 MINE SAFETY DISCLOSURES 6
     
PART II    
     
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 7
     
ITEM 6. SELECTED FINANCIAL DATA 9
     
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
     
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 12
     
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 12
     
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 12
     
ITEM 9A CONTROLS AND PROCEDURES 12
     
ITEM 9B. OTHER INFORMATION 13
     
PART III    
     
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 14
     
ITEM 11. EXECUTIVE COMPENSATION 15
     
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 16
     
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 17
     
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 17
     
PART IV    
     
ITEM 15. EXHIBITS 18

 

  i  

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This annual report on Form 10-K (the “Report”) and other reports (collectively the “Filings”) filed by the registrant from time to time with the Securities and Exchange Commission (the “SEC”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, the registrant’s management as well as estimates and assumptions made by the registrant’s management. When used in the filings the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan” or the negative of these terms and similar expressions as they relate to the registrant or the registrant’s management identify forward looking statements. Such statements reflect the current view of the registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this Report entitled “Risk Factors”) relating to the registrant’s industry, the registrant’s operations and results of operations and any businesses that may be acquired by the registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

 

Although the registrant believes that the expectations reflected in the forward looking statements are reasonable, the registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the registrant’s financial statements and the related notes thereto included in this Report.

 

As used herein and except as otherwise noted, the term “Company”, “it(s)”, “our”, “us”, “we”, “Oranco” or “ORNC” shall mean Oranco, Inc., a Nevada corporation.

 

  ii  

 

   

PART I

 

ITEM 1. BUSINESS

 

Introduction

 

Oranco, Inc., or the Company, was incorporated under the laws of the State of Nevada, on June 10, 1977. The purposes for which the corporation was organized were: (1) to engage in any lawful business from time to time authorized by the board of directors, (2) to act as principal, agent, partner or joint venturer or in any other capacity in any transaction, (3) to do business anywhere in the world, and (4) to have and exercise all rights and powers from time to time granted to the corporation by law.

 

From 1977 until 1981 the Company was dormant and undertook no activities. Beginning in 1982 the Company explored the option of entering into a joint venture to develop a mercury mining property at Mercury Mountain, Nevada. As a part of these activities the Company, through the sale of its common stock, raised funds to engage the services of an independent mining engineer to prepare a report on the feasibility of the project. By late 1983 it had been determined that the project did not warrant any further investment. From that time until 1997 the Company's activities concentrated on maintaining its corporate existence and looking for other opportunities for the Company. In May of 1997 new management was appointed, a shareholders' meeting was held, amendments to the Company's articles of incorporation were approved, and additional effort was made by new management to make the Company a viable merger candidate. These efforts included engaging the services of a certified Public Accounting firm to audit the Company's financial statements, obtaining an Opinion of Counsel as to the tradability of the Company's outstanding shares, preparation of the information required by Rule 15c2-11, and applying to the OTC Bulletin Board for trading on the medium.

 

By September of 1999, no viable acquisitions or merger candidates had been located for the Company and management became aware that the Company would be required to register its shares under the Securities Exchange Act of 1934 in order to maintain its stock on the OTC Bulletin Board. Management determined that the Company needed new management which might be better positioned to find a suitable acquisition or merger candidate and which would be in a position of funding the upcoming expenses of the Company. On September 1, 1999 management of the Company resigned and Claudio Gianascio was appointed as sole director and officer. On November 9, 1999 the Company sold 700,000 of its shares of common stock to Mr. Gianascio for $.05 per share, netting a total of $35,000. On November 18, 1999 the Company filed a registration statement on Form 10SB which became effective sixty days thereafter.

 

The Company had an initial authorized capital of $25,000 consisting of 100,000 shares of $.25 par value common stock. On June 10, 1997 the shareholders approved an amendment to the Articles of Incorporation of The Company changing the authorized capital to 100,000,000 shares at a par value of $.001 and providing for a 10 to 1 share forward split of the outstanding shares. The Articles of Amendment were filed with the State of Nevada on August 6, 1998.

 

In the summer of 2000, the Company completed a private placement of 2,500,000 units for which it received $250,000. Each unit consisted of one share of common stock; one “a” warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of common stock at $.10 per share within two years of the date of issuance; and one “b” warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of common stock at $.25 per share within two years of the date of issuance. Both “a” & “b” warrants expired without exercise.

 

On December 26, 2017, Million Success Business Limited, a British Virgin Islands corporation (“Buyer”) entered into a Share Purchase Agreement (“Purchase Agreement”) with the then largest shareholder of the Company, Mr. Claudio Gianascio, who owned 90.4% of the total outstanding shares of the Company (“Seller”). Pursuant to the terms of the Purchase Agreement, the Seller sold to the Buyer all of his shares of common stock of the Company, par value $0.001 per share (the “Common Stock”), or 38,121,530 shares of the Common Stock for $340,000 (such transaction, the “Share Purchase”). The Share Purchase closed on December 29, 2017.

 

At the closing of the Share Purchase, there was a change in our board and executive officers. Mr. Claudio Gianascio, sole director, President, Treasurer and Secretary of the Company appointed Mr. Peng Yang to serve as sole director, President, Treasurer and Secretary of the Company, with such appointment effective on January 5, 2018, being ten days from the date the Information Statement on Schedule 14F-1 (the “Schedule 14F-1”) reporting the change in control as a result of the Share Purchase was mailed to all the stockholders of the Company. Mr. Gianascio resigned from all his positions with the Company effective on January 5, 2018.

 

Business

 

We are a “blank check” company. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.

 

The Company has had no business operations since inception other than the above-referenced matters and seeking and investigating potential assets, properties or businesses to acquire.

 

  1  

 

 

To the extent that the Company intends to continue to seek the acquisition of assets, property or business that may benefit the Company and its stockholders, it is essentially a “blank check” company. Because the Company has limited assets and conducts no business, management anticipates that any such acquisition would require it to issue shares of its Common Stock as the sole consideration for the acquisition. This may result in substantial dilution of the shares of current stockholders. The Company's Board of Directors shall make the final determination whether to complete any such acquisition; the approval of stockholders will not be sought unless required by applicable laws, rules and regulations, its Articles of Incorporation or Bylaws, or contract. The Company makes no assurance that any future enterprise will be profitable or successful.

 

The Company is not currently engaging in any substantive business activity and has no plans to engage in any such activity in the foreseeable future. In its present form, the Company may be deemed to be a vehicle to acquire or merge with a business or company. The Company does not intend to restrict its search to any particular business or industry, and the areas in which it will seek out acquisitions, reorganizations or mergers may include, but will not be limited to, the fields of high technology, manufacturing, natural resources, service, research and development, communications, transportation, insurance, brokerage, finance, trading and all medically related fields, among others.      The Company recognizes that the number of suitable potential business ventures that may be available to it may be extremely limited, and may be restricted to entities who desire to avoid what these entities may deem to be the adverse factors related to an initial public offering (“IPO”). The most prevalent of these factors include substantial time requirements, legal and accounting costs, the inability to obtain an underwriter who is willing to publicly offer and sell shares, the lack of or the inability to obtain the required financial statements for such an undertaking, limitations on the amount of dilution to public investors in comparison to the stockholders of any such entities, along with other conditions or requirements imposed by various federal and state securities laws, rules and regulations. Any of these types of entities, regardless of their prospects, would require the Company to issue a substantial number of shares of its common stock to complete any such acquisition, reorganization or merger, usually amounting to between 80 and 95 percent of the outstanding shares of the Company following the completion of any such transaction; accordingly, investments in any such private entity, if available, would be much more favorable than any investment in the Company.

 

In the event that the Company engages in any transaction resulting in a change of control of the Company and/or the acquisition of a business, the Company will be required to file with the SEC a Current Report on Form 8-K within the time periods provided for. A filing on Form 8-K also requires the filing of audited financial statements of the business acquired, as well as pro forma financial information consisting of a pro forma condensed balance sheet, pro forma statements of income and accompanying explanatory notes.

 

Management intends to consider a number of factors prior to making any decision as to whether to participate in any specific business endeavor, none of which may be determinative or provide any assurance of success. These may include, but will not be limited to an analysis of the quality of the entity's management personnel; the anticipated acceptability of any new products or marketing concepts; the merit of technological changes; its present financial condition, projected growth potential and available technical, financial and managerial resources; its working capital, history of operations and future prospects; the nature of its present and expected competition; the quality and experience of its management services and the depth of its management; its potential for further research, development or exploration; risk factors specifically related to its business operations; its potential for growth, expansion and profit; the perceived public recognition or acceptance of its products, services, trademarks and name identification; and numerous other factors which are difficult, if not impossible, to properly or accurately analyze, let alone describe or identify, without referring to specific objective criteria.

 

Regardless, the results of operations of any specific entity may not necessarily be indicative of what may occur in the future, by reason of changing market strategies, plant or product expansion, changes in product emphasis, future management personnel and changes in innumerable other factors. Further, in the case of a new business venture or one that is in a research and development mode, the risks will be substantial, and there will be no objective criteria to examine the effectiveness or the abilities of its management or its business objectives. Also, a firm market for its products or services may yet need to be established, and with no past track record, the profitability of any such entity will be unproven and cannot be predicted with any certainty.

 

Management will attempt to meet personally with management and key personnel of the entity sponsoring any business opportunity afforded to the Company, visit and inspect material facilities, obtain independent analysis or verification of information provided and gathered, check references of management and key personnel and conduct other reasonably prudent measures calculated to ensure a reasonably thorough review of any particular business opportunity; however, due to time constraints of management, these activities may be limited.

 

The Company is unable to predict the time as to when and if, it will participate in any specific business endeavor. The Company anticipates that proposed business ventures will be made available to it through personal contacts of directors, executive officers and principal stockholders, professional advisors, broker dealers in securities, venture capital personnel, members of the financial community and others who may present unsolicited proposals. In certain cases, the Company may agree to pay a finder's fee or to otherwise compensate the persons who submit a potential business endeavor in which the Company eventually participates. Such persons may include the Company's directors, executive officers, beneficial owners or their affiliates. In this event, such fees may become a factor in negotiations regarding a potential acquisition and, accordingly, may present a conflict of interest for such individuals.

 

Although the Company has not identified any potential acquisition target, the possibility exists that the Company may acquire or merge with a business or company in which the Company's executive officers, directors, beneficial owners or their affiliates may have an ownership interest. Current Company policy does not prohibit such transactions. Because no such transaction is currently contemplated, it is impossible to estimate the potential pecuniary benefits to these persons.

 

  2  

 

 

Further, substantial fees are often paid in connection with the completion of these types of acquisitions, reorganizations or mergers. These fees are usually divided among promoters or founders, after deduction of legal, accounting and other related expenses, and it is not unusual for a portion of these fees to be paid to members of management or to principal stockholders as consideration for their agreement to retire a portion of the shares of common stock owned by them. In the event that such fees are paid, they may become a factor in negotiations regarding any potential acquisition by the Company and, accordingly, may present a conflict of interest for such individuals.

 

Principal Products and Services

 

The limited business operations of the Company, as now contemplated, involve those of a “blank check” company. The only activities to be conducted by the Company are to manage its current limited assets and to seek out and investigate the acquisition of any viable business opportunity by purchase and exchange for securities of the Company or pursuant to a reorganization or merger through which securities of the Company will be issued or exchanged.

 

Distribution Methods of the Products or Services

 

Management will seek out and investigate business opportunities through every reasonably available fashion, including personal contacts, professionals, securities broker dealers, venture capital personnel, members of the financial community and others who may present unsolicited proposals; the Company may also advertise its availability as a vehicle to bring a company to the public market through a “reverse” reorganization or merger.

 

Status of any Publicly Announced New Product or Service

 

None; not applicable.

 

Competitive Business Conditions

 

Management believes that there are literally thousands of “blank check” companies engaged in endeavors similar to those engaged in by the Company; many of these companies have substantial current assets and cash reserves. Competitors also include thousands of other publicly-held companies whose business operations have proven unsuccessful, and whose only viable business opportunity is that of providing a publicly-held vehicle through which a private entity may have access to the public capital markets. There is no reasonable way to predict the competitive position of the Company or any other entity in the strata of these endeavors; however, the Company, having limited assets and cash reserves, will no doubt be at a competitive disadvantage in competing with entities which have recently completed IPOs, have significant cash resources and have recent operating histories when compared with the complete lack of any substantive operations by the Company for the past several years.

 

Sources and Availability of Raw Materials and Names of Principal Suppliers

 

None; not applicable.

 

Dependence on One or a Few Major Customers

 

None; not applicable.

 

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts

 

None; not applicable.

 

Need for any Governmental Approval of Principal Products or Services

 

Because the Company currently produces no products or services, it is not presently subject to any governmental regulation in this regard. However, in the event that the Company engages in a merger or acquisition transaction with an entity that engages in such activities, it will become subject to all governmental approval requirements to which the merged or acquired entity is subject.

 

Research and Development

 

None; not applicable.

 

Cost and Effects of Compliance with Environmental Laws

 

This is not applicable to our current operations. However environmental laws, rules and regulations may have an adverse effect on any business venture viewed by the Company as an attractive acquisition, reorganization or merger candidate, and these factors may further limit the number of potential candidates available to the Company for acquisition, reorganization or merger.

 

Number of Employees.

 

None.

 

  3  

 

 

ITEM 1A. RISK FACTORS

 

The Company's business is subject to numerous risk factors, including the following.

 

The Company has had very limited operating history and no revenues or earnings from operations .

 

The Company has no significant assets or financial resources. The Company will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in the Company incurring a net operating loss which will increase continuously until the Company can consummate a business combination with a target company. There is no assurance that the Company can identify such a target company and consummate such a business combination.

 

Going Concern.

 

As shown in the accompanying financial statements, the Company incurred a net loss of $30,287 during year ended December 31, 2017 and accumulated losses of $389,352 since inception in 1977. The Company's current assets exceed its current liabilities by $2,738 at December 31, 2017. These factors create an uncertainty as to the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the success of raising additional capital through the issuance of common stock, borrowing from existing shareholders, and/or the ability to generate sufficient operating revenue.

 

Our proposed business plan is speculative in nature.

 

The success of the Company's proposed plan of operation will depend to a great extent on the operations, financial condition and management of the identified target company. While management will prefer business combinations with entities having established operating histories, there can be no assurance that the Company will be successful in locating candidates meeting such criteria. In the event the Company completes a business combination, of which there can be no assurance, the success of the Company's operations will be dependent upon management of the target company and numerous other factors beyond the Company's control.

 

The Company is and will continue to be an insignificant participant in the business of seeking mergers with and acquisitions of business entities .

 

A large number of established and well-financed entities, including venture capital firms, are active in mergers and acquisitions of companies which may be merger or acquisition target candidates for the Company. Nearly all such entities have significantly greater financial resources, technical expertise and managerial capabilities than the Company and, consequently, the Company will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. Moreover, the Company will also compete with numerous other small public companies in seeking merger or acquisition candidates.

 

The Company has no current agreement or understanding with respect to engaging in a merger with or acquisition of a specific business entity. However, it continues to evaluate various possibilities and have discussions with various parties.

 

There can be no assurance that the Company will be successful in identifying and evaluating suitable business opportunities or in concluding a business combination. Management has not identified any particular industry or specific business within an industry for evaluation by the Company. There is no assurance that the Company will be able to negotiate a business combination on terms favorable to the Company. The Company has not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which it will require a target company to have achieved, or without which the Company would not consider a business combination with such business entity. Accordingly, the Company may enter into a business combination with a business entity having no significant operating history, losses, limited or no potential for immediate earnings, limited assets, negative net worth or other negative characteristics.

 

Our management has limited time to devote to our business.

 

While seeking a business combination, management anticipates devoting only a limited amount of time per month to the business of the Company. The Company's sole officer has not entered into a written employment agreement with the Company but he is expected to do so in the near future. The Company has not obtained key man life insurance on its officer and director. Notwithstanding the combined limited experience and time commitment of management, loss of the services of this individual would adversely affect development of the Company's business and its likelihood of continuing operations.

 

The Company's sole officer and director participates in other business ventures which may compete directly with the Company.

 

Additional conflicts of interest and non-arm’s length transactions may also arise in the future. Management has adopted a policy that the Company will not seek a merger with, or acquisition of, any entity in which any member of management serves as an officer, director or partner, or in which they or their family members own or hold any ownership interest.

 

  4  

 

 

Reporting requirements may delay or preclude an acquisition.

 

Section 13 of the Securities Exchange Act of 1934, or the Exchange Act, requires companies subject thereto to provide certain information about significant acquisitions including certified financial statements for the company acquired covering one or two years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target companies to prepare such financial statements may significantly delay or essentially preclude consummation of an otherwise desirable acquisition by the Company. Acquisition prospects that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.

 

The Company has neither conducted, nor have others made available to it, market research indicating that demand exists for the transactions contemplated by the Company.

 

Even in the event demand exists for a merger or acquisition of the type contemplated by the Company, there is no assurance the Company will be successful in completing any such business combination.

 

The Company's proposed operations, even if successful, will in all likelihood result in the Company engaging in a business combination with only one business entity.

 

Consequently, the Company's activities will be limited to those engaged in by the business entity which the Company merges with or acquires. The Company's inability to diversify its activities into a number of areas may subject the Company to economic fluctuations within a particular business or industry and therefore increase the risks associated with the Company's operations.

 

Given that the Company is a considered a “blank check” company there is potential for being classified an Investment Company.

 

Although the Company will be subject to regulation under the Exchange Act, management believes the Company will not be subject to regulation under the Investment Company Act of 1940, insofar as the Company will not be engaged in the business of investing or trading in securities. In the event the Company engages in business combinations which result in the Company holding passive investment interests in a number of entities, the Company could be subject to regulation under the Investment Company Act of 1940. In such event, the Company would be required to register as an investment company and could be expected to incur significant registration and compliance costs. The Company has obtained no formal determination from the SEC as to the status of the Company under the Investment Company Act of 1940 and, consequently, any violation of such Act could subject the Company to material adverse consequences.

 

A business combination involving the issuance of the Company's common stock will, in all likelihood, result in shareholders of a target company obtaining a controlling interest in the Company.

 

Any such business combination may require shareholders of the Company to sell or transfer all or a portion of the Company's common stock held by them. The resulting change in control of the Company will likely result in removal of the present officer and director of the Company and a corresponding reduction in or elimination of his participation in the future affairs of the Company. Currently, there are no pending acquisitions, business combinations or mergers.

 

The Company's primary plan of operation is based upon a business combination with a business entity which, in all likelihood, will result in the Company issuing securities to shareholders of such business entity.

 

The issuance of previously authorized and unissued common stock of the Company would result in reduction in percentage of shares owned by the present shareholders of the Company and would most likely result in a change in control or management of the Company.

 

Federal and state tax consequences will, in all likelihood, be major considerations in any business combination the Company may undertake.

 

Currently, such transactions may be structured so as to result in tax-free treatment to both companies, pursuant to various federal and state tax provisions. The Company intends to structure any business combination so as to minimize the federal and state tax consequences to both the Company and the target company; however, there can be no assurance that such business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes which may have an adverse effect on both parties to the transaction.

 

Management of the Company will request that any potential business opportunity provide audited financial statements.

 

One or more attractive business opportunities may choose to forego the possibility of a business combination with the Company rather than incur the expenses associated with preparing audited financial statements. In such case, the Company may choose to obtain certain assurances as to the target company's assets, liabilities, revenues and expenses prior to consummating a business combination, with further assurances that audited financial statements would be provided after closing of such a transaction. Closing documents relative thereto may include representations that the audited financial statements will not materially differ from the representations included in such closing documents.

 

  5  

 

 

Our stock is subject to the Penny Stock rules, which impose significant restrictions on the Broker-Dealers and may affect the resale of our stock .

 

Our stock is subject to Penny Stock trading rules, and investors will experience resale restrictions and a lack of liquidity. A penny stock is generally a stock that:

  

  ● is not listed on a national securities exchange or Nasdaq;
  ● is listed in “pink sheets” or on the NASD OTC Bulletin Board;
  ● has a price per share of less than $5.00; and
  ● is issued by a company with net tangible assets less than $5 million.

 

The penny stock trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in common stock and other equity securities, including:

 

  ● determination of the purchaser's investment suitability;
  ● delivery of certain information and disclosures to the purchaser; and
  ● receipt of a specific purchase agreement from the purchaser prior to effecting the purchase transaction.

 

Due to the Penny Stock rules, many broker-dealers will not effect transactions in penny stocks except on an unsolicited basis. When our common stock becomes subject to the penny stock trading rules,

 

  ● such rules may materially limit or restrict the ability to resell our common stock, and
  ● the liquidity typically associated with other publicly traded equity securities may not exist.

 

It is possible that a liquid market for our stock will never develop and you will not be able to sell your stock.

 

There is no assurance a market will be made in our stock. If no market exists, you will not be able to sell your shares publicly, making your investment of little or no value.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

The Company is not required to provide the information required by this Item because the Company is a smaller reporting company.

 

ITEM 2. PROPERTIES

 

The Company’s office is located at One Liberty Plaza , Suite 2310 PMB# 21, New York, NY 10006. Because the Company has had no business, its activities will be limited to keeping itself in good standing in the State of Nevada, seeking out acquisitions, reorganizations or mergers and preparing and filing the appropriate reports with the SEC. These activities have consumed an insubstantial amount of management's time.

 

ITEM 3. LEGAL PROCEEDINGS

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None; not applicable.

 

  6  

 

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

 

Market Information

 

Our common stock is quoted on the Pink Sheets, under the symbol “ORNC”.

 

The following table sets forth the high and low bid prices for our common stock as reported each quarterly period within the last seven years on the OTC Bulletin Board, and as obtained from investopedia.com. The high and low prices reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

 

Fiscal Year 2017   High Bid     Low Bid  
First Quarter   $ 0.21     $ 0.21  
Second Quarter   $ 0.21     $ 0.21  
Third Quarter   $ 1     $ 1  
Fourth Quarter   $ 0.25     $ 0.25  

 

Fiscal Year 2016   High Bid     Low Bid  
First Quarter   $ 0.6015     $ 0.6015  
Second Quarter   $ 0.425     $ 0.425  
Third Quarter   $ 0.425     $ 0.425  
Fourth Quarter   $ 0.3     $ 0.3  

 

There is no “public market” for shares of common stock of the Company. Although the Company’s shares are quoted on the OTC Markets OTCQB, the Company is aware of only a few transactions that have taken place in the previous ten years. In any event, no assurance can be given that any market for the Company’s common stock will develop or be maintained.

 

Common Stock

 

Our authorized capital stock consists of 100,000,000 shares of common stock, with a par value of $0.001 per share. As dictated by our Articles of Incorporation, all shares of common stock have equal rights and privileges with respect to (i) one non-cumulative vote for each share held of record on all matters submitted to a vote of the stockholders; (ii) to participate equally and to receive any and all such dividends as may be declared by the Board of Directors out of funds legally available therefor; and (iii) to participate pro rata in any distribution of assets available for distribution upon liquidation of the Company. Stockholders of the Company have no pre-emptive rights to acquire additional shares of common stock or any other securities. The common stock is not subject to redemption and carries no subscription or conversion rights. All outstanding shares of common stock are fully paid and non-assessable. The Articles of Incorporation may only be amended by a majority vote of not less than 90% of the then issued and outstanding shares of the Company. A quorum of outstanding shares for voting on an Amendment to the Articles of Incorporation shall not be met unless 95% or more of the issued and outstanding shares are present at a properly called and noticed meeting of the Stockholders.

 

In the event of any merger or consolidation with or into another company in connection with which shares of our common stock are converted into or exchangeable for shares of stock, other securities or property (including cash) a general or special shareholder’s meeting should be called for such purpose, wherein all shareholder’s would be entitled to vote in person or by proxy. In the notice of such a shareholder’s meeting and proxy statement, the Company will provide shareholders complete disclosure documentation concerning a potential acquisition of merger candidate, including financial information about the target and all material terms of the acquisition or merger transaction.

 

As of the date of this report, there were 42,191,480 shares of common stock issued and outstanding.

 

Preferred Stock

 

The Company does not have any preferred stock, authorized or issued.

 

Warrants

 

There are currently no outstanding warrants.

 

  7  

 

 

Options

 

There are currently no outstanding options.

 

Penny Stock Regulations

 

The ability of an individual shareholder to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer’s securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, the Company has no plans to register its securities in any particular state. Further, most likely the Company’s shares will be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

 

The SEC generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be a penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the SEC; authorized for quotation on The NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the issuer’s net tangible assets; or exempted from the definition by the SEC. If the Company’s shares are deemed to be a penny stock, trading in the shares will be subject to additional sales practice requirements on broker- dealers who sell penny stocks to persons other than established customers and accredited investors, generally persons with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse.

 

For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and must have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker- dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in the Company’s Common stock and may affect the ability of shareholders to sell their shares.

 

Holders

 

The number of record holders of the Company’s common stock as of the date of this Report is approximately 18.

 

Dividends

 

The Company has not declared any cash dividends with respect to its common stock and does not intend to declared dividends in the foreseeable future. The future dividend policy of the Company cannot be ascertained with any certainty, and until the Company completes any acquisition, reorganization or merger, as to which no assurance may be given, no such policy will be formulated. There are no material restrictions limiting, or that are likely to limit, the Company’s ability to pay dividends on its common stock.

 

Securities authorized for issuance under equity compensation plans .

 

None; not applicable

 

Recent Sales of Unregistered Securities

 

Information regarding any equity securities we have sold during the period covered by this Report that were not registered under the Securities Act of 1933, as amended, is set forth below. Each such transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D promulgated by the SEC, unless otherwise noted. Unless stated otherwise: (i) the securities were offered and sold only to accredited investors; (ii) there was no general solicitation or general advertising related to the offerings; (iii) each of the persons who received these unregistered securities had knowledge and experience in financial and business matters which allowed them to evaluate the merits and risk of the receipt of these securities, and that they were knowledgeable about our operations and financial condition; (iv) no underwriter participated in, nor did we pay any commissions or fees to any underwriter in connection with the transactions; and, (v) each certificate issued for these unregistered securities contained a legend stating that the securities have not been registered under the Securities Act and setting forth the restrictions on the transferability and the sale of the securities.

 

The Company issued four notes to Claudio Gianascio, a former director and officer of the Company until December 26, 2017 on the following dates and in the following amounts, on August 5, 2016 in the amount of $10,000; on April 6, 2017 in the amount of $7,500; on April 27, 2017 in the amount of $10,000; and on November 2, 2017 in the amount of $9,500. All four notes were convertible into common stock at $0.001 per share.  Claudio Gianascio converted the four notes on November 9, 2017 and December 27, 2017 to 28,374,680 and 9,546,850 shares of common stock, respectively.

 

Purchase of Equity Securities By the Issuer and Affiliated Purchasers.

 

None.

 

  8  

 

 

Transfer Agent and Registrar  

 

Interwest Transfer Company, Inc. has been appointed as our Transfer Agent and Registrar for our common stock. Continental’s mailing address is 1981 Murray Holladay Road, Suite 100 Salt Lake City, UT 84117 and their phone number is 801-272-9294.

 

Item 6. Selected Financial Data

 

The Company is not required to provide the information required by this Item because the Company is a smaller reporting company.

 

Item 7. Management’s Discussion and Analysis or Plan of Operation.  

 

The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended December 31, 2017 and December 31, 2016 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled “Risk Factors” of this annual report.

 

Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

CASH REQUIREMENTS  

 

During the next 12 months, our only foreseeable cash requirements will relate to maintaining us in good standing or the payment of expenses associated with reviewing or investigating any potential business venture, which we expect to pay from its cash resources. As of December 31, 2017, it had $70 in cash. Management does not believe that these funds are sufficient to cover its cash needs for the next 12 months. If additional funds are required during this period, such funds may be advanced by management or stockholders as loans to us. As of the date of this Report, it is impossible to predict the amount of any such loan. As of the date of this Report, we do not currently have any definitive arrangements in place for the completion of any further financings and there is no assurance that we will be successful in completing any further financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.

 

PURCHASE OF SIGNIFICANT EQUIPMENT

 

We do not intend to purchase any significant equipment over the twelve months ending December 31, 2018.

 

RESEARCH AND DEVELOPMENT

 

We have not expended any funds on research and development since inception and we do not intend to allocate any funds to research and development over the twelve months ending December 31, 2018.

  

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016.

 

The following summary of our results of operations should be read in conjunction with our audited financial statements for the year ended December 31, 2017.

 

Interest income, for the year ended December 31, 2017 were $1 compared to $3 for the year ended December 31, 2016. This represents a decrease of $2 or 66.7%, which is attributable to a decrease in interest income. The Company had no other revenue.

 

Expenses, including interest expense, for the year ended December 31, 2017 were $30,288 compared to $28,155 for the year ended December 31, 2016. This represents an increase of $2,133 or 7.6%, which is mainly attributable to an increase in regulatory reporting and professional fees.

 

Net loss for the year ended December 31, 2017 was $30,287 compared to a net loss of $28,152 for the year ended December 31, 2016. This loss represents an increase of $2,135 or 7.6%. This increase in loss is mainly attributable to an increase in regulatory reporting and professional fees.

 

LIQUIDITY AND FINANCIAL CONDITION WORKING CAPITAL

 

   

At
December 31,

2017

   

At
December 31,

2016

   

Percentage

Increase/
(Decrease)

 
                   
Current assets   $ 3,403     $ 6,567       (48.2 %)
Current liabilities   $ 665     $ 11,464       (94.2 %)
Working capital surplus/(deficiency)   $ 2,738     $ (4,897 )     (155.9 %)

 

  9  

 

 

CASH FLOWS

 

    Year Ended  
   

December 31,

2017

   

December 31,

2016

 
             
Net cash (used in) operations   $ (30,164 )   $ (23,558 )
Net cash provided by investing activities   $ -       -  
Net cash provided by financing activities   $ 27,000     $ 10,000  
(Decrease) in Cash During The Period   $ (3,164 )   $ (13,558 )

 

We had cash in the amount of $70 as of December 31, 2017 as compared to $ 3,234 as of December 31, 2016. We had working capital surplus of $ 2,738 as of December 31, 2017 compared to a working capital deficiency of $ 4,897 as of December 31, 2016.

 

We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed, but there can be no assurance that we will be able to raise any further financing.

 

FUTURE FINANCINGS

 

We will require additional funds to implement our growth strategy for our new business. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.

 

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis should it be required, or generate significant material revenues from operations, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

 

CONTRACTUAL OBLIGATIONS

 

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

 

GOING CONCERN

 

We have suffered recurring losses from operations and are dependent on our ability to raise capital from stockholders or other sources to meet our obligations and repay our liabilities arising from normal business operations when they become due. In their report on our audited financial statements for the year ended December 31, 2017, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

We have no 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 is material to stockholders.

 

CRITICAL ACCOUNTING POLICIES

 

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

 

BASIS OF PRESENTATION

 

Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

 

ACCOUNTING BASIS

 

We use the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). We adopted a December 31 fiscal year end.

 

  10  

 

 

RISKS AND UNCERTAINTIES

 

The Company’s operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure.

 

CASH AND CASH EQUIVALENTS

 

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Our financial instruments consist of cash, prepaid expenses, accounts payable, accrued professional fees, and amount due to a related party. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

CONCENTRATIONS OF CREDIT RISK

 

Our company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. Our company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. Our company believes it is not exposed to any significant credit risk on cash and cash equivalents.

  

INCOME TAXES

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is our company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2017, there have been no interest or penalties incurred on income taxes.

 

USE OF ESTIMATES

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

REVENUE RECOGNITION

 

We have yet to realize revenues from operations. Once our company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

 

BASIC INCOME (LOSS) PER SHARE

 

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

 

DIVIDENDS

 

We have not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.

 

  11  

 

 

INFLATION

 

Our opinion is that inflation has not had, and is not expected to have, a material effect on our operations.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

Our company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flows.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

  

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Disclosure in response to this item is not required of a smaller reporting company.

 

ITEM 8. FINANCIAL STATEMENTS

 

The Company’s financial statements, together with the report of the independent registered public accounting firm thereon and the notes thereto, are presented beginning at page F-1. The Company’s balance sheets as of December 31, 2016 and 2017 and the related statements of operations, changes in stockholders’ deficit and cash flows for the year ended 2017 were audited by Burnham & Schumm, P.C., an independent registered public accounting firm. The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America., or US GAAP, and pursuant to Regulation S-K as promulgated by the SEC. The financial statements have been prepared assuming the Company will continue as a going concern.

 

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

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures

 

Under the supervision and with the participation of our management, including our principal executive officer/principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of December 16, 2016. Based on this evaluation, our principal executive officer/principal financial officers has concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Management’s Report on Internal Control over Financial Reporting

 

Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements in accordance with US GAAP, including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 

  12  

 

 

Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on this evaluation, Management concluded the Company maintained effective internal control over financial reporting as of December 31, 2017.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 

Attestation Report of Registered Public Accounting Firm

 

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm, regarding internal controls over financial reporting. Our internal control over financial reporting was not subject to such attestation as we are a smaller reporting company.

 

Changes in internal controls

 

As reported on the Form 8-K filed by the Company with the SEC on January 5, 2018, the Company’s president, secretary, treasurer and director, Claudio Gianascio, resigned and on the same date, the Company appointed Peng Yang to serve as president, secretary, treasurer and director. See—Item 1 Business, for more details.

 

Other than the foregoing, there was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting .

 

ITEM 9B. OTHER INFORMATION

 

None.

 

  13  

 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Identification of Directors and Executive Officers

 

The following table sets forth the names of all current directors and executive officers of the Company. These persons will serve until the next annual meeting of the stockholders or until their successors are elected or appointed and qualified, or their prior resignation or termination.

  

NAME   AGE   POSITION(S)   DATE ELECTED OR APPOINTED
             
Peng Yang (1)   26   Director, President, Secretary, and Treasurer   Appointed 01/05/2018
             
Claudio Gianascio (2)  

58

 

Director, President, Secretary, and Treasurer

  Resigned  01/05/2018

 

(1) Mr. Yang was appointed as Director, President, Secretary, and Treasurer on January 5, 2018 as a result of the Share Purchase.

 

(2) Mr. Gianascio resigned from his positions as Director, President, Secretary, and Treasurer on January 5, 2018 as a result of the Share Purchase.

 

Business Experience

 

Mr. Yang, age 26, has international business and management experience from his positions working with Huaxin Wines, a company engaged in wine trading and Sure Rich Investment (Group) Limited, an investment company. He has served as the general manager assistant and overseas affairs manager of Huaxin Wines since 2015 and as limited director of Sure Rich Investment (Group) Limited since 2016. Mr. Yang holds a bachelors of engineering degree, with honors, from the University of Auckland in New Zealand.

 

Significant Employees.

 

The Company has no employees who are not executive officers, but who are expected to make a significant contribution to the Company’s business.

 

Family Relationships

 

There are no family relationships between any current directors or executive officers of the Company, either by blood or by marriage.

 

Director Independence

 

Our securities are not listed on a national securities exchange or in an inter-dealer quotation system which has requirements that directors be independent. No member of the Company’s board of directors qualifies as an independent director pursuant to the definition of “independent director” under the Rules of NASDAQ, Marketplace Rule 5605(a)(2). We do not have majority of independent directors.

 

  14  

 

 

Committees of the Company’s Board of Directors

 

We do not have a standing nominating, compensation or audit committee. Rather, our board of directors performs the functions of these committees. We do not believe it is necessary for our board of directors to appoint such committees because the volume of matters that come before our board of directors for consideration permits the directors to give sufficient time and attention to such matters to be involved in all decision making. Additionally, because our Common Stock is not listed for trading or quotation on a national securities exchange, we are not required to have such committees.

 

Meetings of the Board of Directors

 

During its fiscal year ended December 31, 2017, the Board of Directors did not meet on any occasion, but rather transacted business by unanimous written consent. 

 

Code of Ethics

 

The Company has adopted a code of ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller which was attached as Exhibit 99.1 to the March 29, 2004 10KSB for the period of 12/31/2003.

 

Involvement in Certain Legal Proceedings

 

Except as stated above, during the past five years, no director, person nominated to become a director, executive officer, promoter or control person of the Company:

 

(1) was a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;

 

(2) was convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(3) was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

 

(4) was found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

 

Compliance with Section 16(a) of the Exchange Act

 

We do not yet have a class of equity securities registered under the Exchange Act. Hence, compliance with Section 16(a) thereof by our officers and directors is not required.

 

ITEM 11. EXECUTIVE COMPENSATION

 

No current or prior officer or director has received any remuneration or compensation from the Company in the past three years, nor has any member of the Company’s management been granted any option or stock appreciation right. Accordingly, no tables relating to such items have been included within this Item. None of our employees is subject to a written employment agreement nor has any officer received a cash salary since our founding. The Company has no agreement or understanding, express or implied, with any director, officer or principal stockholder, or their affiliates or associates, regarding compensation in the form of salary, bonuses, stocks, options, warrants or any other form of remuneration, for services performed on behalf of the Company. Nor are there compensatory plans or arrangements, including payments to any officer in relation to resignation, retirement, or other termination of employment, or any change in control of the Company, or a change in the officer’s responsibilities following a change in control of the Company. 

 

  15  

 

 

Compensation of Directors

 

There are no agreements to compensate any of the directors for their services.

 

Our officers and directors are reimbursed for expenses incurred on our behalf. Our officers and directors will not receive any finder’s fee as a result of their efforts to implement the business plan outlined herein. However, our officers and directors anticipate receiving benefits as beneficial shareholders of our common stock.

 

We have not adopted any retirement, pension, profit sharing, stock option or insurance programs or other similar programs for the benefit of our employees.

 

Termination of Employment and Change of Control Arrangement

 

On December 26, 2017, as a result of the Share Purchase Mr. Claudio Gianascio resigned as sole director, president, treasurer and secretary of the Company. Mr. Claudio Gianascio, sole director, president, treasurer and secretary of the Company appointed Mr. Peng Yang to serve as sole director, president, treasurer and secretary of the Company, with such appointment effective on January 5, 2018.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

Security Ownership of Certain Beneficial Owners

 

There are no persons who beneficially own more than five percent of the Company’s common stock as of the date of this Report, with the computations being based upon 42,191,480 shares of common stock being outstanding on March 28, 2018, unless otherwise noted.

 

Security Ownership of Management.

 

The following table sets forth the shareholdings of the Company’s directors and executive officers as of the date of this Report:

 

Name and Address   Number of
Shares
Beneficially
Owned 		    Percentage
of
Class (1) 		 
             

Peng Yang(2)

One Liberty Plaza , Suite 2310 PMB# 21, New York, NY 10006

    38,121,530       90.35 %
                 
All directors and executive officers as a group (1 person)     200,000       0.47 %

 

(1) Percentage is calculated upon the 42,191,480 shares outstanding.

(2) Includes 38,121,530 shares of common stock held in record by Million Success Business Limited, 100% controlled by Peng Yang.

 

Changes in Control.

 

On December 26, 2017, Million Success Business Limited, a British Virgin Islands corporation (“Buyer”) entered into a Share Purchase Agreement (the “Purchase Agreement”) with our then largest shareholder, Mr. Claudio Gianascio, who owned 90.4% of the total outstanding shares of the Company (the “Seller”). Pursuant to the terms of the Purchase Agreement, the Seller sold to the Buyer all of his shares of common stock of the Company, par value $0.001 per share (the “Common Stock”), or 38,121,530 shares of the Common Stock for $340,000 (such transaction, the “Share Purchase”). The Share Purchase closed on December 29, 2017.

 

At the closing of the Share Purchase, there was a change in our board and executive officers. Mr. Claudio Gianascio, sole director, President, Treasurer and Secretary of the Company appointed Mr. Peng Yang to serve as sole director, President, Treasurer and Secretary of the Company, with such appointment effective on January 5, 2018, being ten days from the date the Information Statement on Schedule 14F-1 (the “Schedule 14F-1”) reporting the change in control as a result of the Share Purchase was mailed to all the stockholders of the Company as of December 22, 2017. Mr. Gianascio resigned from all his positions with the Company effective on January 5, 2018.

 

  16  

 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Transactions with Management and Others.

 

The Company issued four notes to Claudio Gianascio, a former director and officer of the Company until December 26, 2017 on the following dates and in the following amounts, on August 5, 2016 in the amount of $10,000; on April 6, 2017 in the amount of $7,500; on April 27, 2017 in the amount of $10,000; and on November 2, 2017 in the amount of $9,500. All four notes were convertible into common stock at $0.001 per share.

 

Resolving conflicts of interest

 

Our directors must disclose all conflicts of interest and all corporate opportunities to the entire board of directors. Any transaction involving a conflict of interest will be conducted on terms not less favorable than that which could be obtained from an unrelated third party.

 

Director independence

 

We do not have any independent directors serving on our board of directors

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

The following table shows the fees that were billed for audit and other services provided by Burnham & Schumm P.C. our independent accountant for the fiscal year ended December 31, 2017 and 2016:

 

    Fiscal Year Ended
December 31, 		 
    2017     2016  
Audit Fees (1)   $ 5,950     $ 5,950  
Audit-related Fees (2)     -       -  
Tax Fees (3)   $ 150     $ 150  
All Other Fees (4)     -       -  
Total   $ 6,100     $ 6,100  

 

(1) Audit Fee : This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q, and services that are normally provided by independent auditors in connection with statutory and regulatory filings or the engagement for fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. 

 

(2) Audit-Related Fees : This category consists of assurance and related services by our independent auditor that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the SEC. 

 

(3) Tax Fees: This category consists of professional services rendered by our independent auditors for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

 

(4) All Other Fees : This category consists of fees for other miscellaneous items such as travel and out-of-pocket expenses.

 

Pre-Approval Policies and Procedures

 

As stated elsewhere in this Report, we do not have an independent audit committee and our entire board serves as the audit committee for all purposes relating to communication with our auditors and responsibility for our audit. All engagements for audit services, audit- related services and tax services are approved in advance by our Board of Directors. Our Board of Directors has considered whether the provision of the services described above for the fiscal year ended December 31, 2017, is compatible with maintaining the auditor’s independence.

 

All audit and non-audit services that may be provided by our principal accountant to us shall require pre-approval by the Board of Directors. Further, our auditor shall not provide those services to us specifically prohibited by the SEC, including bookkeeping or other services related to the accounting records or financial statements of the audit client; financial information systems design and implementation; appraisal or valuation services, fairness opinion, or contribution-in-kind reports; actuarial services; internal audit outsourcing services; management functions; human resources; broker-dealer, investment adviser, or investment banking services; legal services and expert services unrelated to the audit; and any other service that the Public Company Oversight Board determines, by regulation, is impermissible.

 

Prior to engaging its accountants to perform particular services, our Board of Directors obtains an estimate for the service to be performed.  All of the services described above were approved by the Board of Directors in accordance with its procedure.

 

  17  

 

 

Item 15. Exhibits

 

Exhibit Number   Description
     
3.1   Initial Articles of Incorporation (incorporated by reference to our Form 10-K  exhibit 3.1 filed with the SEC on November 18, 1999)  
     
3.2   Articles of Amendment to the Articles of Incorporation (incorporated by reference to our Form 10-K  exhibit 3.2 filed with the SEC on November 18, 1999)  
     
3.3   By-Laws (incorporated by reference to our Form 10-K  exhibit 3.2 filed with the SEC on November 18, 1999)    
     
4.1   2000 non-Qualified Key Man Stock Option Plan (incorporated by reference to our Form 10KSB exhibit 10.1 filed with the SEC on March 24, 2000)  
     
10.2   Form of Option Certificate delivered in connection with the grant of individual options. (incorporated by reference to our Form 10KSB exhibit 10.2 filed with the SEC on March 24, 2000)
     
10.3   Share Purchase Agreement, Dated December 26, 2017 between Million Success Business Limited and Claudio Gianascio (incorporated by reference to our SC 13D exhibit 99.1 filed with the SEC on January 8, 2018)  
     
31.1***   Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
31.2***   Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

     
32.1***   Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
32.2***   Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
99.1   Code of Ethics (incorporated by reference to our Form 10KSB exhibit 99.1 filed with the SEC on March 29, 2004)  
     
101 INS   XBRL Instance Document-
     
101 SCH   XBRL Schema Document-
     
101 CAL   XBRL Calculation Linkbase Document-  
     
101 DEF   XBRL Definition Linkbase Document-
     
101 LAB   XBRL Labels Linkbase Document-
     
101 PRE   XBRL Presentation Linkbase Document-

  

- The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

 

*** Filed herewith.

 

  18  

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ORANCO, INC.
   
Date: April 2, 2018 /S/ Peng Yang
  Peng Yang
  President, Secretary,
  Treasurer and Director

(Principal Executive Officer)

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:

 

  ORANCO, INC.
   
Date: April 2, 2018 /S/ Peng Yang
  Peng Yang
  President, Secretary,
  Treasurer and Director

(Principal Financial Officer)

 

  19  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ORANCO, INC.

 

FINANCIAL STATEMENTS

 

WITH

 

INDEPENDENT AUDITORS' REPORT

 

DECEMBER 31, 2017 AND 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ORANCO, INC.

 

TABLE OF CONTENTS

 

  Page
Report of Independent Registered Public Accounting Firm F-2
   
Financial Statements:  
   
Balance Sheets F-3
   
Statements of Operations F-4
   
Statements of Stockholders' Equity F-5
   
Statements of Cash Flows F-6
   
Notes to Financial Statements F-7 - F -9

 

  F- 1  

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

of Oranco, Inc.

 

We have audited the accompanying balance sheets of Oranco, Inc. (a Nevada corporation) as of December 31, 2017 and 2016, and the related statements of operations, stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2017. Oranco, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Oranco, Inc. as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years in the two-year period ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As disclosed in Note 7 to the financial statements, the Company incurred a net loss of $30,287, and $28,152, respectively, during the years ended December 31, 2017 and 2016, and of December 31, 2017, the Company’s current assets exceeded its current liabilities by $2,738. These factors create an uncertainty as to the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon additional capital contributions from the sale of stock and the ability to generate operating revenue. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 

/s/ Burnham & Schumm, P.C.    

Burnham & Schumm, P.C.

Salt Lake City, Utah

April 2, 2018

 

  F- 2  

 

 

ORANCO, INC.

 

BALANCE SHEETS

 

DECEMBER 31, 2017 AND 2016

 

    2017     2016  
Assets            
Current Assets:            
Cash   $ 70     $ 3,234  
Prepaid expenses     3,333       3,333  
                 
Total current assets     3,403       6,567  
                 
Total Assets   $ 3,403     $ 6,567  
                 
Liabilities and Stockholders’ Equity                
                 
Current Liabilities:                
Accounts payable   $ 665     $ 1,300  
Interest payable, stockholder     --       164  
Note payable, stockholder     --       10,000  
Total current liabilities     665       11,464  
                 
Stockholders' Equity:                
Common stock, $.001 par value 100,000,000 shares authorized, 42,191,480 and 4,269,950 issued and outstanding     42,192       4,270  
Additional paid-in capital     349,898       349,898  
Accumulated Deficit     (389,352 )     (359,065 )
                 
Total Stockholders' Equity     2,738       (4,897 )
                 
Total Liabilities and Stockholders' Equity   $ 3,403     $ 6,567  

 

The accompanying notes are an integral part of the financial statements.

 

  F- 3  

 

 

ORANCO, INC.

 

STATEMENTS OF OPERATIONS

 

YEARS ENEDED DECEMBER 31, 2017 AND 2016

 

   

Year Ended

December 31,
2017

   

Year Ended

December 31,
2016

 
             
Revenues   $ --     $ --  
                 
Expenses, general and administrative     29,530       27,991  
                 
Operating loss     (29,530 )     (27,991 )
                 
Other income (expense):                
Interest income     1       3  
Interest expense     (758 )     (164 )
                 
Loss before provision for income taxes     (30,287 )     (28,152 )
                 
Provision for income taxes     --       --  
                 
Net loss   $ (30,287 )   $ (28,152 )
                 
Net loss per share   $ --     $ (.01 )
                 
Weighted average shares                
Outstanding     9,041,089       4,269,950  

 

The accompanying notes are an integral part of the financial statements.

 

  F- 4  

 

 

ORANCO, INC.

 

STATEMENTS OF STOCKHOLDERS' EQUITY

 

YEARS ENDED DECEMBER 31, 2017 AND 2016

 

          Additional        
    Common Stock     Paid-In     Accumulated  
    Shares     Amount     Capital     Deficit  
                         
Balance, December 31, 2015     4,269,950     $ 4,270     $ 349,898     $ (330,913 )
                                 
Net loss for the year ended December 31, 2016     --       --       --       (28,152 )
                                 
Balance, December 31, 2016     4,269,950       4,270       349,898       (359,065 )
                                 
November 4 and December 18, 2017 note payable and accrued interest converted into Common Stock     37,921,530       37,922       --       --  
                                 
Net loss for the year ended December 31, 2017     --       --       --       (30,287 )
                                 
Balance, December 31, 2017     42,191,480     $ 42,192     $ 349,898     $ (389,352 )

 

The accompanying notes are an integral part of the financial statements.

 

  F- 5  

 

 

ORANCO, INC.

 

STATEMENTS OF CASH FLOWS

 

YEARS ENDED DECEMBER 31, 2017 and 2016

 

   

Year Ended

December 31,
2017

   

Year Ended

December 31,
2016

 
Cash flows from operating activities:            
Net loss   $ (30,287 )   $ (28,152 )
                 
Adjustments to reconcile net loss to cash provided by operating activities:                
Accrued interest converted into common stock     922       --  
(Increase) decrease in prepaid expenses     --       4,430  
Increase (decrease) in accounts payable     (635 )     --  
Increase (decrease) in interest payable     (164 )     164  
                 
Net cash used by operating activities:     (30,164 )     (23,558 )
                 
Cash flows from investing activities:     --       --  
                 
Cash flows from financing activities:                
Proceeds from note payable, related party     27,000       10,000  
                 
Net decrease in cash     (3,164 )     (13,558 )
Cash, beginning of period     3,234       16,792  
                 
Cash, end of period   $ 70     $ 3,234  
Supplemental disclosures of cash flow information:                
                 
Interest paid   $ --     $ --  
                 
Income taxes paid   $ --     $ --  
                 
Notes payable converted into 37,000,000 shares of common stock   $ 37,000     $ --  
                 
Accrued interest converted into 922,000 shares of common stock   $ 922     $ --  

 

The accompanying notes are an integral part of the financial statements.

 

  F- 6  

 

 

ORANCO, INC.

 

NOTES TO FINANCIAL STATEMENTS

 

1. Summary of Business and Significant Accounting Policies

 

a. Summary of Business

 

The Company was incorporated under the laws of the State of Nevada on June 16, 1977. The Company has been in the business of the development of mineral deposits. During 1983 all activities were abandoned and the Company has remained inactive since that time. The Company has not commenced principal operations. The Company is looking to pursue business opportunities.

 

b. Basis of Presentation

 

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.

 

c. Cash Flows

 

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents.

 

d. Net Loss per Share

 

The net loss per share calculation is based on the weighted average number of shares outstanding during the period.

 

e. Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

f. Fair Value of Financial Instruments

 

ASC 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of December 31, 2017 and 2016, the carrying value of certain financial instruments approximates fair value due to the

short-term nature of such instruments.

 

  F- 7  

 

 

Notes to Financial Statements – Continued:

 

2. Note Payable, Stockholder

 

Stockholder note payable consist of the following at December 31, 2017 and 2016:

 

      2017     2016  
  Note payable to an individual also a stockholder and director of the Company, interest is being charged at 4%, the note is unsecured and is due August 5, 2017. The note principal and accrued interest was converted into common stock at $.001 per share. See note 5.   $ --     $ 10,000  

 

3. Warrants and Stock Options

 

No options or warrants are outstanding to acquire the Company's common stock.

 

4. Income Taxes

 

At December 31, 2017, and 2016, the Company had net deferred tax assets of $132,380, and $122,082, respectively. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets, a full valuation has been established to offset the net deferred tax asset.

 

The provision for income tax consists of the following components at December 31, 2017 and 2016:

 

      2017     2016  
  Current                
  Federal income taxes   $ --     $ --  
  State income taxes     --       --  
  Deferred     --       --  
      $ --     $ --  

 

The following reconciles income taxes reported in the financial statements to taxes that would be obtained by applying regular rates to income before taxes:

 

      2017     2016  
  Expected tax benefits using regular rates            
  Regular rates   $ (10,298 )   $ (9,572 )
  State minimum taxes     --       --  
  Valuation allowance     10,298       9,572  
      $ --     $ --  

 

  F- 8  

 

 

Notes to Financial Statements - Continued

 

The Company has loss carry forwards totaling $389,352 that may be offset against future federal income taxes. If not used, the carry forwards will expire 20 years after they are incurred.

 

As a result of the implementation of certain provisions of ASC 740, Income Taxes, the Company performed an analysis of its previous tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there was no provision for uncertain tax positions for the years ended December 31, 2017 and 2016. Future changes in uncertain tax positions are not expected to have an impact on the effective tax rate due to the existence of the valuation allowance. The Company will continue to classify income tax penalties and interest, if any, as part of interest and other expenses in its statements of operations. The Company has incurred no interest or penalties as of December 31, 2017 and 2016.

 

The federal income tax returns of the Company for 2016, 2015 and 2014 are subject to examination by the IRS, generally for three years after they were filed.

 

5. Note Payable and Accrued Interest Converted into Common Stock

 

On November 4, 2017 and December 18, 2017, a stockholder and board member converted notes payable totaling $37,000 and accrued interest totaling $922 into common shares at $.001 per share. A total of 37,921,530 common shares were issued.

 

6. Going Concern

 

As shown in the accompanying financial statements, the Company incurred a net loss of $30,287 during year ended December 31, 2017 and accumulated losses of $389,352 since inception at June 15, 1977. The Company’s current assets exceed its current liabilities by $2,738 at December 31, 2017. These factors create an uncertainty as to the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the success of raising additional capital through the issuance of common stock and the ability to generate sufficient operating revenue. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 

7. Subsequent Events - Date of Management Evaluation

 

Management has evaluated subsequent events through March 15, 2018 the date on which the financial statements were available to be issued.

 

F-9