Arvana
Inc.
Statements
of Stockholders’ Deficiency
(Unaudited)
|
|
Common
Shares
|
|
|
|
|
|
Treasury
|
|
|
|
|
Shares
|
|
Amount
|
|
Additional
Paid-in Capital
|
|
Deficit
|
|
Shares
|
|
Amount
|
|
Deficiency
|
Balance,
December 31, 2015
|
|
|
885,130
|
|
|
$
|
885
|
|
|
$
|
21,166,619
|
|
|
$
|
(23,413,245
|
)
|
|
|
(2,085
|
)
|
|
$
|
(3,336
|
)
|
|
$
|
(2,249,077
|
)
|
Debt
settlement
|
|
|
148,900
|
|
|
|
149
|
|
|
|
34,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,247
|
|
Discount
on convertible notes from beneficial conversion feature
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
Net
loss for the year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(62,531
|
)
|
|
|
|
|
|
|
|
|
|
|
(62,531
|
)
|
Balance, December
31, 2016
|
|
|
1,034,030
|
|
|
|
1,034
|
|
|
|
21,225,717
|
|
|
|
(23,475,776
|
)
|
|
|
(2,085
|
)
|
|
|
(3,336
|
)
|
|
|
(2,252,361
|
)
|
Net
loss for the year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(224,914
|
)
|
|
|
|
|
|
|
|
|
|
|
(224,914
|
)
|
Balance, December
31, 2017
|
|
|
1,034,030
|
|
|
|
1,034
|
|
|
|
21,225,717
|
|
|
|
(23,700,690
|
)
|
|
|
(2,085
|
)
|
|
|
(3,336
|
)
|
|
|
(2,477,275
|
)
|
Discount
on convertible notes from beneficial conversion feature
|
|
|
|
|
|
|
|
|
|
|
57,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,800
|
|
Net
income for the year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,510
|
|
|
|
|
|
|
|
|
|
|
|
93,510
|
|
Balance, December
31, 2018
|
|
|
1,034,030
|
|
|
|
1,034
|
|
|
|
21,283,517
|
|
|
|
(23,607,180
|
)
|
|
|
(2,085
|
)
|
|
|
(3,336
|
)
|
|
|
(2,325,965
|
)
|
Net
income for the year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,252
|
|
|
|
|
|
|
|
|
|
|
|
112,252
|
|
Balance, December
31, 2019
|
|
|
1,034,030
|
|
|
|
1,034
|
|
|
|
21,283,517
|
|
|
|
(23,494,928
|
)
|
|
|
(2,085
|
)
|
|
|
(3,336
|
)
|
|
|
(2,213,713
|
)
|
Net income for the
period ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,456
|
|
|
|
|
|
|
|
|
|
|
|
22,456
|
|
Balance, March 31,
2020
|
|
|
2,005,070
|
|
|
|
2,005
|
|
|
|
21,379,650
|
|
|
|
(23,472,472
|
)
|
|
|
(2,085
|
)
|
|
|
(3,336
|
)
|
|
|
(2,094,153
|
)
|
Net income for the
period ended December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,456
|
|
|
|
|
|
|
|
|
|
|
|
22,456
|
|
Balance, December
31, 2020
|
|
|
4,610,670
|
|
|
|
4,611
|
|
|
|
21,920,189
|
|
|
|
(23,972,524
|
)
|
|
|
(2,085
|
)
|
|
|
(3,336
|
)
|
|
|
(2,051,060
|
)
|
Net loss for the
period ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,259
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,259
|
)
|
Balance, March 31, 2021
|
|
|
4,610,670
|
|
|
$
|
4,611
|
|
|
$
|
21,920,189
|
|
|
$
|
(23,974,783
|
)
|
|
|
(2,085
|
)
|
|
$
|
(3,336
|
)
|
|
$
|
(2,053,319
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these condensed interim financial statements.
|
Arvana
Inc,
|
Notes
to Condensed Interim Financial Statements
|
March
31, 2021
|
(Unaudited)
|
1.
Nature of Business and Ability to Continue as a Going Concern
The
Company was incorporated in the State of Nevada as Turinco, Inc. on September 16, 1977, with authorized common stock of 2,500
shares par value $0.25. In 1998, authorized common stock was increased to 100,000,000 shares par value $0.001 followed by a forward
common stock split of eight shares for each outstanding share. In 2005, the Company completed another forward common stock split
of nine shares for each outstanding share. On July 24, 2006, stockholders approved a name change from Turinco, Inc. to Arvana
Inc. On September 30, 2010, a reverse split of one share for twenty shares decreased authorized capital stock to 5,000,000 common
shares par value $0.001. On March 15, 2021, the Company increased its authorized share capital to 500,000,000 common shares par
value $0.001.
On
March 17, 2016, the Company entered into a non-binding Memorandum of Understanding (“MOU”) with CaiE Food Partnership
Ltd. (“CaiE”) for the purpose of acquiring it as a wholly-owned subsidiary. CaiE is in the business of manufacturing
and distributing fresh Dim Sum food products from a facility based in Sparks, Nevada. The MOU required CaiE to provide audited
financial statements and a business plan as conditions precedent to entering into a binding agreement. CaiE has not satisfied
the conditions necessary for us to move forward. On November 11, 2020, the Company notified CaiE that it was no longer interested
in acquiring its business given the delays in obtaining its audited financial statements.
These
condensed interim financial statements have been prepared on a going concern basis, which assumes the realization of assets and
the settlement of liabilities in the normal course of business.
For
the three-month period ended March 31, 2021, the Company recognized net loss of $2,259 as a result of general administrative expenses,
professional fees and interest expenses offset by a foreign exchange gain. The Company had a working capital deficiency of $2,053,319
as of March 31, 2021. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The
World Health Organization declared coronavirus COVID-19 a global pandemic in March 2020. COVID-19 is a contagious disease that
continues to spread adversely affecting workforces, economies, and financial markets globally, which affects will likely result
in an economic downturn. The Company cannot predict the duration or magnitude of the adverse results connected to COVID-19, nor
can it predict the effect, if any, COVID-19 will have on the Company’s search to identify a business opportunity or its
ability to attract sufficient capital to sustain operations.
The
Company’s present intention is to identify, evaluate and secure a business opportunity to create value for its stockholders.
During this search the Company will require continued financial support from stockholders and creditors until it is able to generate
net cash flow from operations. While the Company is confident that a business opportunity will be identified, the insufficiency
of our financial resources casts substantial doubt on whether it will be able to fulfill this objective.
Failure
to obtain the ongoing support of stockholders and creditors may indicate that the preparation of these financial statements on
a going concern basis is inappropriate, in which case the Company’s assets and liabilities would need to be recognized at
their liquidation values. The Company’s financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts and liabilities that might arise from this uncertainty.
Arvana
Inc,
|
Notes
to Condensed Interim Financial Statements
|
March
31, 2021
|
(Unaudited)
|
2.
Summary of Significant Accounting Policies
a)
Basis of presentation
The
Company is in the process of evaluating business opportunities and has minimal operating expenses. The Company’s fiscal
year end is December 31. The accompanying condensed interim financial statements of Arvana Inc. for the three months ended March
31, 2021 and 2020, have been prepared in accordance with accounting principles generally accepted in the United States (“US
GAAP”) for financial information with the instructions to Form 10-Q and Regulation S-X. The condensed interim financial
statements and notes appearing in this report should be read in conjunction with our audited financial statements and related
notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission
(“SEC”) on April 9, 2021. Results are not necessarily indicative of those which may be achieved in future periods.
b)
Estimates
The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates. These estimates include the recognition of deferred tax assets based on the change in unrecognized deductible temporary
tax differences.
c)
Financial instruments
The
Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments for which
it is practicable to estimate such values:
Cash
- the carrying amount approximates fair value because the amounts consist of cash held at a bank.
Accounts
payable and accrued liabilities, convertible loan, loans payable and amounts due to related parties - the carrying amount approximates
fair value due to the short-term nature of the obligations.
The
estimated fair values of the Company's financial instruments as of March 31, 2021 and December 31, 2020 are as follows:
|
|
March
31, 2021
|
|
December
31, 2020
|
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
Cash
|
|
$
|
907
|
|
|
$
|
907
|
|
|
$
|
4,994
|
|
|
$
|
4,994
|
|
Accounts payable and accrued liabilities
|
|
|
871,361
|
|
|
|
871,361
|
|
|
|
867,710
|
|
|
|
867,710
|
|
Convertible loan
|
|
|
107,800
|
|
|
|
107,800
|
|
|
|
107,800
|
|
|
|
107,800
|
|
Loans payable to stockholders
|
|
|
511,372
|
|
|
|
511,372
|
|
|
|
522,522
|
|
|
|
522,522
|
|
Loans payable to related party
|
|
|
130,948
|
|
|
|
130,948
|
|
|
|
130,677
|
|
|
|
130,677
|
|
Loans payable
|
|
|
74,762
|
|
|
|
74,762
|
|
|
|
74,664
|
|
|
|
74,664
|
|
Amounts due to related parties
|
|
|
357,983
|
|
|
|
357,983
|
|
|
|
352,651
|
|
|
|
352,651
|
|
Arvana
Inc,
|
Notes
to Condensed Interim Financial Statements
|
March
31, 2021
|
(Unaudited)
|
2.
Summary of Significant Accounting Policies (continued)
c)
Financial instruments (continued)
The
following table presents information about the assets that are measured at fair value on a recurring basis as of March 31, 2021,
and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general,
fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values
determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair
values determined by Level 3 inputs are unobservable data points for the asset or liability, and included situations where there
is little, if any, market activity for the asset:
|
|
March
31,
2021
|
|
Quoted
Prices
in Active
Markets
(Level
1)
|
|
Significant
Other
Observable
Inputs
(Level
2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
$
|
907
|
|
|
$
|
907
|
|
|
$
|
—
|
|
|
$
|
—
|
|
The
fair value of cash is determined through market, observable and corroborated sources.
d)
Recent accounting pronouncements
New
and amended standards adopted by the Company
The
following new and amended standards were adopted by the Company for the first time in this reporting period.
In
June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates ASU 2016-13, Financial Instruments—Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, requiring certain changes to the recognition and measurement
as well as disclosure of incurred and expected credit losses. In November 2018, the FASB issued ASU 2018-19 to clarify certain
aspects of the new current expected credit losses impairment model in ASU 2016-13. ASU 2018-19 points out that operating lease
receivables are within the scope of ASC 842 rather than ASC 326. The standard became effective for the Company beginning January
1, 2020. The adoption of this standard did not have a material impact on the Company’s results of operations, financial
condition, cash flows, and financial statement disclosures.
In
August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates ASU 2018-13, which changes the
fair value measurement disclosure requirements of ASC 820. The standard became effective for the Company beginning January 1,
2020. The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework
for Financial Reporting — Chapter 8: Notes to Financial Statements. The adoption of this standard did not have a material
impact on the Company’s results of operations, financial condition, cash flows, and financial statement disclosures.
Arvana
Inc,
|
Notes
to Condensed Interim Financial Statements
|
March
31, 2021
|
(Unaudited)
|
3.
Loans Payable
As
of March 31, 2021, the Company had received loans of $511,372 (€225,000; CAD$ 60,000; $199,600) (December 31, 2020 - $522,552:
€225,000; CAD$ 60,000; $199,600) from stockholders; loans of $130,948 (CAD$ 27,600; $109,000) (December 31, 2020 –
$130,677: CAD$ 27,600; $109,000) from a related party and loans of $74,762 (CAD$ 10,000; $66,810) (December 31, 2020 – $74,664:
CAD$ 10,000; $66,810) from unrelated third parties. Loans of $76,810 are non-interest bearing. All other loans bear interest at
6% per annum. The loans were made in 3 different currencies, Euros, Canadian Dollars and US Dollars. All amounts reflected on
these financial statements are expressed in US Dollars. Repayment of the loans is due on closing of any future financing arrangement
by the Company. The balance of accrued interest of $518,634 and $515,263 is included in accounts payable and accrued expenses
at March 31, 2021 and December 31, 2020, respectively. Interest expense recognized on these loans was $9,604 for the three months
ended March 31, 2021, compared to $10,301 for the three months ended March 31, 2020, respectively.
On
March 30, 2020, loans of $60,000 and corresponding interest of $37,104 were settled by the issuance of 971,040 common shares pursuant
to three debt settlement agreements dated March 3, 2020, March 4, 2020 and March 4, 2020. The Company recorded a loss on settlement
of debt of $19,421.
4.
Stock Options
At
March 31, 2021 and December 31, 2020, there were no stock options outstanding. No options were granted, exercised or expired during
the period ended March 31, 2021 and during the year ended December 31, 2020.
5.
Common stock
During
the three months ended March 31, 2021, the Company issued nil shares. During the three months ended March 31, 2020, the Company
issued 971,040 shares of its common stock valued at $0.10 a share to settle $60,000 in loans and $37,104 in interest (Note 3).
During the year ended December 31, 2020, the Company had issued 3,576,640 shares.
6.
Segmented Information
The
Company has no reportable segments.
Arvana
Inc,
|
Notes
to Condensed Interim Financial Statements
|
March
31, 2021
|
(Unaudited)
|
7.
Related Party Transactions and Amounts Due to Related Parties
At
March 31, 2021, and December 31, 2020, the Company had amounts due to related parties of $357,983 and $352,651, respectively.
This amount includes $60,000 at March 31, 2021, and December 31, 2020, payable to a current director for services rendered during
2007. This amount is to be paid part in cash and part in stock at a future date with the number of common shares determined by
the fair value of the shares on the settlement date. The amounts owing bear no interest, are unsecured, and have no fixed terms
of repayment.
The
Company incurred consulting fees of $4,569 (March 21, 2020 - $6,913) paid to a company controlled by our chief executive officer
during the three months ended March 31, 2021.
A
former chief executive officer and director entered into a consulting arrangement that provided for a monthly fee of CAD $5,000,
which amounts were accrued and are unpaid through the termination date on May 24, 2013. As of March 31, 2021, and December 31,
2020, our former chief executive officer was owed $293,176 and $289,164, respectively. The amounts due are unsecured and non-interest
bearing, due on demand.
A
former chief executive officer and director assigned to a related corporation unpaid amounts of $161,234 (CAD $202,759) as of
March 31, 2021 as per a debt assignment agreement effective January 1, 2012.
A
former chief executive officer and director is owed for unsecured amounts bearing 6% interest due on demand along with corresponding
accrued interest payable that remains outstanding as of March 31, 2021 and December 31, 2020 as indicated below.
A
former chief executive officer and director is owed $130,948 for unsecured loans bearing 6% interest due on demand as of March
31, 2021, compared to $130,677 as of December 31, 2020. Total interest expense of $89,124 (2020 - $80,013) is included in accounts
payable and accrued liabilities as at March 31, 2021.
Arvana
Inc,
|
Notes
to Condensed Interim Financial Statements
|
March
31, 2021
|
(Unaudited)
|
8.
Convertible Loans
On
May 18, 2016, the Company issued a convertible promissory note to CaiE that accrues 10% per annum, in exchange for $50,000, initially
due on November 17, 2017. The note is convertible into the Company’s common stock, in whole or in part, at any time prior
to maturity at the option of the holder, at $0.20 per share. Since the conversion price was lower than the closing share price
on the issuance date, a beneficial conversion feature was recognized as a discount against the debt. The maturity date of the
note was extended by amendment, to March 31, 2021, while all other terms of the note remain unchanged. The Company reached out
to CaiE to extend the maturity date of the convertible promissory note but no action to do so was agreed. During the three months
ended March 31, 2021 and 2020, no discount was amortized as interest expense, while the interest expense on the note was $1,250
for the period ended March 31, 2021, and $1,250 for the period ended March 31, 2020. As at March 31, 2021 and December 31, 2020,
the balance of the note was $50,000.
On
October 12, 2018, the Company issued a convertible note to CaiE that accrues 10% per annum, in exchange for a series of loans
that totaled $57,800 initially due on October 11, 2019. The note is convertible into the Company’s common stock, in whole
or in part, at any time prior to maturity at the option of the holder at $0.20 per share. Since the conversion price was lower
than the closing share price on the issuance date, a beneficial conversion feature was recognized as a discount against the debt.
The maturity date of the note has been extended by amendment, to March 31, 2021, while all other terms of the note remain unchanged.
The Company reached out to CaiE to extend the maturity date of the convertible promissory note but no action to do so was agreed.
During the three months ended March 31, 2021 and 2020, $nil and $nil of the discount was amortized as interest expense, while
the interest expense on the note was $1,445 for the period ended March 31, 2021, and $1,445 for the period ended March 31, 2020.
As at March 31, 2021 and December 31, 2020, the balance of the note was $57,800.
9.
Subsequent Events
The
Company evaluated its March 31, 2021, financial statements for subsequent events through the date the financial statements were
issued and is aware of subsequent events that would require recognition or disclosure in its financial statements as provided
below:
On
April 14, 2021, an entity owned and controlled by our chief executive officer, received payment from a stockholder of the Company
in the amount of $5,750, for services rendered by that entity for the Company.
On
April 1, 2021, the Company entered into a credit agreement with one of its stockholders to secure funds to maintain operations.
A loan of $10,360 was received pursuant to this agreement on April 7, 2021, and a credit note in even amount was provided to the
lender.
On
April 1, 2021, convertible promissory notes issued by the Company to CaiE Foods in exchange for the aggregate principal amount
of $107,800 were in default given that amounts due were not paid or converted into equity, at the option of CaiE Foods, on maturity.
The Company intends to settle all amounts due to CaiE Foods as part of a comprehensive settlement.
On
April 1, 2021, the amendment to the Company’s articles of incorporation in order to increase authorized share capital, filed
on March 15, 2021, with the Nevada Secretary of State, was made effective.