ARVANA INC. FORWARD LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results of Operations and other parts of this quarterly report contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as "anticipates," "expects," "believes," "plans," "predicts," and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include but are not limited to those discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition below. The following discussion should be read in conjunction with our financial statements and notes thereto included in this report. Our fiscal year end isDecember 31 . All information presented herein is based on the three and nine months endedSeptember 30, 2022 , andSeptember 30, 2021 . Overview The Company was incorporated in theState of Nevada onJune 16, 1977 , as "Turinco, Inc. " OnJuly 24, 2006 , the Company's changed its name toArvana Inc. on closing the acquisition ofArvana Networks, Inc. , a telecommunications business. We discontinued efforts related to that business as ofDecember 31, 2009 . OnNovember 15, 2022 , the Company entered into a business purchase agreement to acquire a fishing charter business. The Company's present activities are focused on the completion of the intended acquisition of a fishing charter business, and the continuation of its search to identify, evaluate and secure additional business opportunities sufficient to increase stockholder value. Our office is located at299 Main Street , 13th Floor,Salt Lake City, Utah 84111, and our telephone number is (801) 232-7395. AA Registered Agents,4869 Nightwood Court ,Las Vegas, Nevada 89149, is our registered agent in theState of Nevada . The Company is registered with the Commission and traded on the OTC Markets Group, Inc.'s Pink Sheets Current Information over the counter market platform under the symbol "AVNI."
The Company is a shell company as that term is defined in Rule 12b-2 of the Exchange Act.
Company
On November 16, 2022 , the Company entered into a business purchase agreement
with LCF Salons, LLC to acquire its wholly owned subsidiary Down 2 Fish
Charters, LLC . ("Down2Fish") in a cash transaction that includes a $50,000
payment on closing and a two-year secured promissory note for $700,000 .
Down2Fish operates a licensed fishing charter business that offers a range of
curated maritime adventures. Down2Fish offers inshore, offshore, and custom
charters for fishing enthusiasts, nature lovers, snorkeling devotees, and dive
masters wrapped in fun filled getaways. Customers can be individuals, families,
parties, and companies. Down2Fish operates from a private dock located in
Palmetto, Florida that services the Tampa area including St Petersburg , Venice ,
Sarasota , and Clearwater . The business is managed by a St Petersburg, Florida
native who literally grew up on the water as a deckhand on flat bottomed shrimp
boats and Jon boats. Down2Fish generates most of its revenue from the sale and
provision of charter boat services to a wide range of customers with a very
limited generation of revenue from the sale of fishing related products or
tools. The parties intend to close the transaction in January of 2023 subject to
the completion of due diligence and the provision of audited financial
statements.
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The Company remains interested in forming an energy brokerage division to match
sellers in the Middle East and Africa , with purchase orders and letters of
credit with buyers in Asia to facilitate the procurement, payment, and delivery
of crude oil. Our representatives travelled in September to establish business
contacts, identify key government agencies, and to formulate strategies to
identify opportunities in the energy sector. Further, our representatives were
also tasked to evaluate prospects in other natural resources that might be
available to us. Discussions with representatives in Dubai, United Arab Emirates
and Juba, South Sudan focused on the delivery of oil to China . Negotiations
intended to secure delivery contracts are ongoing as the Company works to agree
on delivery and brokerage fees. The Company's representatives were also
introduced to other resource-based opportunities that included prospects within
the mineral and forestry industries. No contracts have been agreed.
The Company continues to identify real estate opportunities for purchase,
including vacant shopping malls, big box stores and otherwise underused
commercial real estate at a fraction of replacement cost. The intention being to
remediate such properties for specific targeted industries that offer goods or
services not otherwise available online. Our interest in real estate includes
development opportunities in this sector though we have no commitments in this
sector to date.
Plan of Operation
Our present activities are focused on realizing the Company's business development strategy and closing the acquisition of Down2Fish.
Results of Operations
During the three and nine-months ended
Operations for the three and nine-months ended
Three months
ended Three months Nine months
September 30, ended ended September Nine months ended
2022 September 30, 2021 30, 2022 September 30, 2021
Operating Expenses
General and administrative $ 41,989 $ 4,740 $ 58,845 $ 11,854
Professional fees 5,182 42,798 12,744 64,005
Loss from Operations (47,172 ) (47,538 ) (71,589 ) (75,859 )
Interest expense - - (587 ) (19,122 )
Foreign exchange gain - 250 - 6,709
Other income - - 15,000 458,833
Loss on debt settlements - (12,460,079 ) - (12,460,079 )
Net (loss) for the period $ (47,171 ) $ (12,507,367 ) $ (57,175 ) ) $ (12,013,659 )
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Net Losses
Net loss for the three months ended September 30, 2022 , was $47,171 as compared
to a net loss $12,507,367 for the three months ended September 30, 2021 . Net
loss for the nine months ended September 30, 2022 , was $57,175 compared to a net
loss of $12,013,659 for the nine months ended September 30, 2021 . The deceases
in net losses over the comparative three and nine-month periods ended September
30, 2022 , and September 30, 2021 , can be primarily attributed to the losses on
debt settlements concluded in the third quarter of 2021, and increases in
general and administrative expenses, offset by decreases in professional fees.
The increase in general and administrative expenses in the three and nine-month
periods ended September 30, 2022 , is due to share issuance costs associated with
the conduct of the private placement while the decrease in professional fees is
due to the resolution of professional services rendered in connection with debt
settlements in the three and nine-month periods ended September 30, 2021 .
We did not generate revenue from operations during this period and expect to
continue to incur losses until such time as our business development strategy is
implemented.
Capital Expenditures
The Company expended no amounts on capital expenditures for the three and
nine-month periods ended
Liquidity and Capital Resources
Since inception, we have experienced significant changes in liquidity, capital resources, and stockholders' deficiency.
The Company had assets of$214,014 in cash as ofSeptember 30, 2022 , and a working capital surplus of$169,240 as compared to assets of$3,340 in cash as ofDecember 31, 2021 , and a working capital deficit of$101,585 . Net stockholders' equity was$169,240 as ofSeptember 30, 2022 , as compared to a net stockholder's deficit of$101,585 as ofDecember 31, 2021 .
Cash Used in Operating Activities
Net cash flow used in operating activities for the nine-month period endedSeptember 30, 2022 , was$61,826 as compared to net cash flow used in operating activities of$21,300 for the nine-month period endedSeptember 30, 2021 . Net cash used in operating activities can be attributed to book expense items that do not affect the total amount relative to actual cash used, such as unrealized foreign exchange loss, interest expense and other income. Balance sheet accounts that affect cash but are not income statement related items that are added or deducted to arrive at net cash used in operating activities, include accounts payable, accrued liabilities and amounts due to related parties. We expect to continue to use net cash flow in operating activities over the next twelve months or until such time as the Company generates sufficient income to offset the cost of operating activities.
Cash Used in Investing Activities
Net cash used in investing activities for the nine-month periods ended
We do not expect to use net cash in investing activities until such time as our business development strategy is implemented.
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Cash Flows from Financing Activities
Net cash provided by financing activities for the nine-month period endedSeptember 30, 2022 , was$272,500 as compared to net cash provided by financing activities of$16,325 for the nine-month period endedSeptember 30, 2021 . Net cash provided by financing activities in the nine-month period endedSeptember 30, 2022 , is attributed to private placement proceeds offset by the repayment of amounts due to stockholders, and stock issuance costs. Net cash provided by financing activities in the nine-month period endedSeptember 30, 2021 , consisted of proceeds from stockholder loans.
We expect to continue to rely on net cash provided by financing activities in future periods to support operations and implement our business development strategy.
The Company's assets are sufficient as ofSeptember 30, 2022 , to close on the transaction to acquire Down2Fish and otherwise conduct its plan of operation. However, management believes that the Company will need an additional round of financing within the next twelve months to sustain operations and implement its business development strategy. We anticipate conducting another private equity offering to meet our objectives and will look to third parties to secure financing. Management is confident that its efforts to realize additional funding will be successful and looks forward to taking its first steps to build the Company's business.
The Company does not intend to pay cash dividends in the foreseeable future.
The Company had no lines of credit or other bank financing arrangements as of
The Company had no commitments for future capital expenditures as of
The Company has no defined benefit plan or contractual commitment with any of its officers or directors except theArvana 2022 Stock Incentive Plan, pursuant to which its directors were granted stock options subsequent to period end, and an employment agreement with its chief executive officer datedSeptember 1, 2022 .
The Company has no current plans for the purchase or sale of any plant or equipment.
The Company has no current plans to make any changes in the number of employees.
Off-Balance Sheet Arrangements
As ofSeptember 30, 2022 , we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to stockholders.
Critical Accounting Policies
In Note 2 to the audited financial statements for the years endedDecember 31, 2021 , and 2020, included in our Form 10-K, the Company discusses those accounting policies that are considered to be significant in determining the results of operations and its financial position. The Company believes that accounting principles utilized by it conform to accounting principles generally accepted inthe United States . 17
The preparation of financial statements requires Company management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, the Company evaluates estimates. The Company bases its estimates on historical experience and other facts and circumstances that are believed to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions.
Going Concern
Management has expressed an opinion as to the Company's ability to continue as a going concern despite an accumulated deficit of$36,146,147 and negative cash flows from operating activities as ofSeptember 30, 2022 . The aggregation of these factors raises substantial doubt about the Company's ability to continue as a going concern. Management's plan to address the Company's ability to continue as a going concern includes obtaining funding from the private placement of equity and building value through its business development strategy. Management believes that the Company will remain a going concern through implementing its plan, though it can provide no assurances that such plan will prove successful.
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