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EX-31.1 - ORANCO, INC. 10Q 3-31-2011 EXHIBIT 31.1 - ORANCO INCoranco10qexhibit311.htm
EX-32.1 - ORANCO, INC. 10Q 3-31-2011 EXHIBIT 32.1 - ORANCO INCoranco10qexhibit321.htm


 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q


(x )QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended        March 31, 2011

(  )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from                            to                         
Commission File number              000-28181            

ORANCO,  INC.
(Exact name of registrant as specified in charter)
   
Nevada
87-0574491
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
1981 E. Murray Holladay Rd, Suite 100,  Salt Lake City, Utah
84117
(Address of principal executive offices)
(Zip Code)
   
702-583-7248
Registrant’s telephone number, including area code

_____________________________________________________________________________
(Former name, former address, and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [x ]   No  [  ]

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”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act

 
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Large Accelerated Filer [  ]
Accelerated Filer [  ]
   
Non-Accelerated filer [  ]
Smaller Reporting Company [ x ]
   
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)           Yes [X]      No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date

                  Class  
                        Outstanding as of May 1, 2011
           Common  Stock, $0.001
                                  4,269,950
   


 
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INDEX
   
Page
   
Number
PART I.
   
     
ITEM 1.
Financial Statements (unaudited)
4
     
 
Balance Sheets
5
 
March 31, 2011 and December 31, 2010
 
     
 
Statements of Operations
 
 
For the three months ended March 31, 2011 and 2010 and the period June 16, 1977 to March 31, 2011
6
 
   
 
Statements of Cash Flows
 
 
For the three months ended March 31, 2011 and 2010 and the period June 16, 1977 to March 31, 2011
7
 
   
 
Notes to Financial Statements
8
     
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
11
     
ITEM 3.
Quantitative and Qualtitative Disclosures About Market Risk
12
     
ITEM 4T.
Controls and Procedures
12
     
PART II.
   
     
ITEM 6.
Exhibits
13
     
Signatures
 
13

 
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PART I - FINANCIAL INFORMATION
 

 
ITEM 1. FINANCIAL STATEMENTS
 

 
The accompanying balance sheets of Oranco, Inc.  (a development stage company) at March 31, 2011 and December 31, 2010, and the related  statement of operations for the three months and the statement of cash flows for the three months,  ended March 31, 2011 and 2010 and the period June 16, 1977 to March 31, 2011 have been prepared by the Company=s management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating  results for the three months ended March 31, 2011, are not necessarily indicative of the results that can be expected for the year ending December 31, 2011.
 
 
 
 
 

 
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ORANCO, INC.
(Development Stage Company)
BALANCE SHEETS

   
(Unaudited)
       
   
March 31, 2011
   
December 31,
 2010
 
ASSETS
       
Current Assets:
           
   Cash
  $ 211,422     $ 267,758  
                 
Total Current Assets
    211,422       267,758  
                 
TOTAL ASSETS
  $ 211,422     $ 267,758  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
         
                 
Current Liabilities:
               
Accounts payable
  $ -     $ -  
 
               
TOTAL CURRENT LIABILITIES
    -       -  
                 
Commitments and contingencies
    -       -  
                 
Stockholders’ Equity:
               
Common stock, $0.001 par value, 1,000,000 shares authorized, 4,269,950 shares issued and outstanding at December, 31 2010 and 2009
    4,270       4,270  
Additional paid in capital
    349,898       349,898  
Deficit accumulated during the Development Stage
    (142,746 )     (86,410 )
TOTAL STOCKHOLDERS’ EQUITY
    211,422       267,758  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 211,422     $ 267,758  
                 
                 
The accompanying notes are an integral part of these financial statements
 

 
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ORANCO, INC.
(Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)

   
For the three
 months ended
   
For the three
months ended
 
From Inception
(June 16, 1977) to
   
March 31, 2011
   
March 31, 2010
 
March 31, 2011
               
Revenues
  $ -     $ -   $ -
                       
  General and administrative
    56,707       9,111     312,605
  Valuation adjustment - available-for-sale securities
    -       -     30,401
  Total operating expenses
    56,707       9,111     343,006
                       
Net loss from operations
    (56,707 )     (9,111 )   (343,006
                       
  Interest and contract income
    371       2,450     200,260
                       
Net loss
    (56,336 )     (6,661 )   (142,746
                       
Weighted average number of shares outstanding - basic and diluted
    4,269,950       4,269,950        
                       
Net loss per share - basic and diluted
  $ (0.01 )   $ (0.00 )      
                       
                       
The accompanying notes are an integral part of these financial statements
 


 
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ORANCO, INC.
 
(Development Stage Company)
 
STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
   
   
For the three
months ended
   
For the three
months ended
   
From Inception
 (June 16, 1977) to
 
   
March 31, 2011
   
March 31, 2010
   
March 31, 2011
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net loss
  $ (56,336 )   $ (6,661 )   $ (142,746 )
Changes in operating assets and liabilities:
                       
Net change in accounts payable
    -       7,399       -  
Net cash (used in) provided by operating activities
    (56,336 )     738       (142,746 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
   Changes in note receivable
    -       -       -  
Net cash provided by investing activities
    -       -       -  
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Proceeds from the issuance of common stock
    -       -       354,168  
Net cash provided by financing activities
    -       -       354,168  
                      -  
INCREASE (DECREASE) IN CASH
    (56,336 )     738       211,422  
                         
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    267,758       88,719       -  
                      -  
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 211,422     $ 89,457     $ 211,422  
                      -  
Supplemental disclosures of cash flow information:
                    -  
Cash paid for income taxes
  $ -     $ -     $ -  
Cash paid for interest expense
  $ -     $ -     $ -  
                         
                         
The accompanying notes are an integral part of these financial statements
 


 
7

 

ORANCO, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2011


1.        ORGANIZATION AND BASIS OF PRESENTATION

The Company was incorporated under the laws of the state of Nevada on June 16, 1977 with authorized common stock of 100,000 shares at a par value of $.25.   On June 10, 1997 the authorized common stock was increased to 100,000,000 shares with a par value of $.001.

The Company was in the business of developing mineral deposits until 1983, when it abandoned all related activities. The Company has remained inactive since that time.

The Company is in the development stage.

Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that can be expected for the year ending December 31, 2011.

In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Income Taxes

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse.  An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

On December 31, 2010, the Company had a net operating loss available for carryforward of $136,985.  The tax benefit of approximately $41,100 from the carryforward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful.  The net operating losses expire 20 years after they are incurred.

Financial and Concentrations Risk

The Company does not have any concentration or related financial credit risk except that the Company maintains cash in banks over the insured amounts of $250,000, however they are considered to be in banks of high quality.

 
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ORANCO, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011



2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basic and Diluted Net Income (Loss) Per Share

Loss per share is computed based on the weighted average number of shares outstanding during the year. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares and potential common shares during the specified periods. The Company has no outstanding options, warrants or other convertible instruments that could affect the calculated number of shares.

Statement of Cash Flows

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

Revenue Recognition

Revenue will be recognized on the sale and delivery of a product or the completion of a service provided.

Advertising and Market Development

The company will expense advertising and market development costs as incurred.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could vary from the estimates that were assumed in preparing these financial statements.

Financial Instruments

The carrying amounts of the Company’s financial instruments are considered by management to be their estimated fair values due to their short term maturities.

Recent Accounting Pronouncements

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.


 
9

 

ORANCO, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 2011



3. RELATED PARTY TRANSACTIONS

Officers-directors have acquired 19% of the Company’s outstanding common stock.






 
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ITEM 2.   Management’s Discussion and Analysis of Financial Condition
and Results of Operations



Plan of Operations.
 
The Company has not engaged in any material operations or had any revenues from operations  since inception.  The  Company's  plan of operation  for the next 12  months is to  continue  to seek the  acquisition  of assets,  properties  or  businesses  that  may  benefit  the  Company  and  its stockholders. Management intends to focus is efforts in Europe, Africa, and South America both because management is located Europe and because management believes that the Company can locate superior acquisition opportunities in these geographical areas.  Management anticipates that to achieve any such acquisition, the Company will issue shares of its common stock as the sole consideration for such acquisition.

During the next 12 months, the Company's only foreseeable cash requirements will relate to maintaining  the  Company in good  standing  or the  payment of expenses  associated  with  reviewing or  investigating  any potential  business venture,  which  the  Company  expects  to pay from its  cash  resources Management believes 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 the Company. Because the Company has not identified any such venture as of the date of this Report, it is impossible to predict the amount of any such loan.  However, any such loan will be on terms no less favorable to the Company than would be available from a commercial lender in an arm's length transaction. As of the date of this Report, the Company is not engaged in any negotiations  with any person  regarding  any venture.

Results of Operations.

Other than restoring and maintaining its good  corporate  standing in the State  of  Nevada,  obtaining an audit of the Company’s financial statements, submitting the Company’s common stock for quotation on the NASD OTC Bulleting Board, the filing of  a Form 10 Registration, the completion of a private placement, and a loan and funding of a claim by Air Packaging Technologies, Inc. against 3M corporation, the Company has had no material business operations in the two most recent calendar years.

Three Month Period Ended March 31, 2011 and 2010

The Company did not generate any revenue during the three months ended March 31, 2011 and 2010. It has interest income, both paid and accrued of $371 and $2,450 for the three months ended March 31, 2011 and 2011.

 
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General and administrative expenses were $56,707 for the three months ended March 31, 2011, compared to general and administrative expenses of $9,111 for the same period in 2010. The increase in expenses were largely due to increased travel expenses  and increases in accounting, legal, other professional costs, and timing issues. As a result of the foregoing, the Company realized net losses of $56,336 for the three months ended March 31, 2011 compared to a net loss of $6,661 for the same period in 2010 .  The Company’s increased net loss is attributable to a lack of business, to increased travel expenses, and ongoing professional costs associated with preparing the Company’s public reports, together with in timing differences from year to year.

Liquidity and Capital Resources

At March 31, 2011, assets consisted of $211,422 in cash compared to $267,758 on December 31, 2010. As of that date the Company had no outstanding Liabilities.

Currently, the Company has no material commitments for capital expenditures.  Management anticipates that operating expenses for the next twelve months will be approximately $20,000 to $25,000, which it will fund from its cash assets.
 
 


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Not Required by smaller reporting companies.




ITEM 4T. CONTROLS AND PROCEDURES
 


Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our president/chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of our last fiscal quarter, March 31, 2011, (the "Evaluation Date"). Based upon that evaluation, our president/chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our president and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter (ended March 31, 2011) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
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PART 2 - OTHER  INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit 31.1    Rule 13a-14(a)/15d-14(a) Certification.
Exhibit 32.1    Certification by the Chief Executive Officer/Acting Chief Financial Officer Relating to a Periodic Report Containing Financial Statements.*

* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.


 
SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized.

ORANCO, Inc.
 [Registrant]
 
 
 S/ Juan S. Zabala
President & Treasurer
May 11, 2011
 
 
 
 
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