Attached files
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 September 30, 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
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
|
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 October 27, 2011
|
|
Common Stock, $0.001
|
4,269,950
|
2
INDEX
|
Page
|
||
|
Number
|
||
|
PART I.
|
||
|
ITEM 1.
|
Financial Statements (unaudited)
|
4
|
|
Balance Sheets September 30, 2011 and December 31, 2010
|
5
|
|
|
Statements of Operations For the three and nine months ended September 30, 2011 and 2010 and the period June 16, 1977 to September 30, 2011
|
6
|
|
|
Statements of Cash Flows For the nine months ended September 30, 2011 and 2010 and the period June 16, 1977 to September 30, 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 Qualitative Disclosures About Market Risk
|
12
|
|
ITEM 4T.
|
Controls and Procedures
|
12
|
|
PART II.
|
||
|
ITEM 1
|
Legal Proceedings
|
13
|
|
ITEM 6.
|
Exhibits
|
13
|
|
Signatures
|
14
|
3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of Oranco, Inc. (a development stage company) at September 30, 2011 and December 31, 2010, and the related statement of operations for the three and nine months and the statement of cash flows for the nine months, ended September 30, 2011 and 2010 and the period June 16, 1977 to September 30, 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 and nine months ended September 30, 2011, are not necessarily indicative of the results that can be expected for the year ending December 31, 2011.
4
|
ORANCO, INC.
|
||||||||
|
(Development Stage Company)
|
||||||||
|
BALANCE SHEETS
|
||||||||
|
(Unaudited)
|
||||||||
|
September 30, 2011
|
December 31, 2010
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets:
|
||||||||
|
Cash
|
$ | 194,700 | $ | 267,758 | ||||
|
Total Current Assets
|
194,700 | 267,758 | ||||||
|
TOTAL ASSETS
|
$ | 194,700 | $ | 267,758 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current Liabilities:
|
||||||||
|
Accounts payable
|
$ | - | $ | - | ||||
|
|
||||||||
|
TOTAL CURRENT LIABILITIES
|
- | - | ||||||
|
Commitments and contingencies
|
- | - | ||||||
|
Stockholders’ Equity:
|
||||||||
|
Common stock, $0.001 par value, 100,000,000 shares authorized, 4,269,950 shares issued and outstanding at September 30, 2011 and December 31, 2010
|
4,270 | 4,270 | ||||||
|
Additional paid in capital
|
349,898 | 349,898 | ||||||
|
Deficit accumulated during the Development Stage
|
(159,468 | ) | (86,410 | ) | ||||
|
TOTAL STOCKHOLDERS’ EQUITY
|
194,700 | 267,758 | ||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 194,700 | $ | 267,758 | ||||
The accompanying notes are an integral part of these financial statements
5
|
ORANCO, INC.
|
||||||||||||||||||||
|
(Development Stage Company)
|
||||||||||||||||||||
|
STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||
|
For the three
months ended
|
For the three
months ended
|
For the nine months
ended
|
For the nine months
ended
|
From Inception
(June 16, 1977) to
|
||||||||||||||||
|
September 30, 2011
|
September 30, 2010
|
September 30, 2011
|
September 30, 2010
|
September 30, 2011
|
||||||||||||||||
|
Revenues
|
$ | - | $ | - | $ | $ | $ | - | ||||||||||||
|
General and administrative
|
1,892 | 6,030 | 74,017 | 23,305 | 329,915 | |||||||||||||||
|
Valuation adjustment - available-for-sale securities
|
- | - | 30,401 | |||||||||||||||||
|
Total operating expenses
|
1,892 | 6,030 | 74,017 | 23,305 | 360,316 | |||||||||||||||
|
Net loss from operations
|
(1,892 | ) | (6,030 | ) | (74,017 | ) | (23,305 | ) | (360,316 | ) | ||||||||||
|
Interest and contract income
|
282 | 2,690 | 959 | 7,590 | 200,848 | |||||||||||||||
|
Net loss
|
(1,610 | ) | (3,340 | ) | (73,058 | ) | (15,715 | ) | (159,468 | ) | ||||||||||
|
Weighted average number of shares outstanding - basic and diluted
|
4,269,950 | 4,269,950 | 4,269,950 | 4,269,950 | ||||||||||||||||
|
Net loss per share - basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.00 | ) | ||||||||
The accompanying notes are an integral part of these financial statements
6
|
ORANCO, INC.
|
||||||||||||
|
(Development Stage Company)
|
||||||||||||
|
STATEMENTS OF CASH FLOWS
|
||||||||||||
|
(Unaudited)
|
||||||||||||
|
For the nine months
ended
|
For the nine months
ended
|
From Inception
(June 16, 1977) to
|
||||||||||
|
September 30, 2011
|
September 30, 2010
|
September 30, 2011
|
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net loss
|
$ | (73,058 | ) | $ | (15,715 | ) | $ | (159,468 | ) | |||
|
Changes in operating assets and liabilities:
|
||||||||||||
|
Net change in interest receivable
|
- | (2,629 | ) | - | ||||||||
|
Net change in accounts payable
|
- | (1,194 | ) | - | ||||||||
|
Net cash (used in) operating activities
|
(73,058 | ) | (19,538 | ) | (159,468 | ) | ||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Changes in note receivable
|
- | (37,500 | ) | - | ||||||||
|
Net cash (used in) investing activities
|
- | (37,500 | ) | - | ||||||||
|
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
|
(73,058 | ) | (57,038 | ) | 194,700 | |||||||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
267,758 | 88,719 | - | |||||||||
| - | ||||||||||||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 194,700 | $ | 31,681 | $ | 194,700 | ||||||
| - | ||||||||||||
|
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
September 30, 2011
(Unaudited)
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 and nine months ended September 30, 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 September 30, 2011, the Company had a net operating loss available for carryforward of $153,707. The tax benefit of approximately $52,000 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
8
.
ORANCO, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
September 30, 2011
(Unaudited)
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)
September 30, 2011
(Unaudited)
3. RELATED PARTY TRANSACTIONS
Officers-directors own 4.9% of the Company’s outstanding common stock.
10
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 maintaining its good corporate standing in the State of Nevada, preparation and filing of reports with the Securities and Exchange Commission, searching for an investment opportunity or merger candidate, the Company has had no material business operations in the two most recent calendar years.
Three and Nine Month Periods Ended September 30, 2011 and 2010
The Company did not generate any revenue during the three and nine months ended September 30, 2011 and 2010. It had interest income of $282 and $959 for the three and nine month, respectively, ended September 30, 2011 versus $2,690 and $7,590, respectively, for the three and nine month period ended September 30, 2010. This reduction is directly attributable to the repayment of outstanding promissory notes in 2010 and the reinvestment of such funds in lower interest bank accounts.
General and administrative expenses were $1,892 for the three months ended September 30, 2011, compared to general and administrative expenses of $6,030 for the same period in 2010 and $74,017 for the nine months ended September 30, 2011 compared with $23,305 for the same period in 2010. The increase in expenses were largely due to increased travel expenses during the nine months ended September 30, 2010, costs of transition to new management, increases in accounting, legal, other professional costs, and timing issues. As a result of the foregoing, the Company realized net losses of $1,610 for the
three months ended September 30, 2011 compared to a net loss of $3,340 for the same period in 2010 and realized net losses of $73,058 for the nine months ended September 30, 2011 compared to a net loss of $15,715 for the same period in 2010. The Company’s increased net loss is attributable to a lack of business, to increased travel expenses during the nine months ended September 30, 2011, costs of transition to new management and ongoing professional costs associated with preparing the Company’s public reports, together with in timing differences from year to year.
11
Liquidity and Capital Resources
At September 30, 2011, assets consisted of $194,7000 in cash compared to $267,758 on December 31, 2010. As of September 30, 2011 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, September 30, 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 September 30, 2011) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
12
PART 2 - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On or about April 12, 2011 Kurt J Wagner filed an action against Claudio Gianascio and Oranco, Inc. in the Third District Court of Salt Lake County, Utah. Although not clear from the complaint, it appears that Mr. Wagner is alleging that he invested certain of his funds with an unnamed foreign investment advisor, which he believes invested part of his funds with a non-US corporation, which then loaned some of Mr. Wagner’s funds to a US company called Air Packaging Technologies, Inc. (AIRP), secured by a secured debenture equal to other debenture holders in priority. He also appears to allege that Oranco, Inc. loaned funds to AIRP during the same period, secured by a secured debenture on
equal priority with the debenture owed by the non-US corporation. His claim is further based upon his allegations that Claudio Gianascio owed him a fiduciary responsibility because he was an officer of the unnamed foreign investment advisor, that Mr. Gianascio breached his fiduciary obligation to Mr. Wagner by Oranco receiving an amount larger than it was entitled to from the sale of certain equipment of AIRP while Claudio Gianascio was an officer, director, and major stockholder of Oranco. He further alleges that Oranco then took part of the funds that it received from the sale of the AIRP machine and loaned them to AIRP to finance a litigation against 3M Corp, which was settled and resulted in Oranco receiving funds from such settlement that were partially his funds because Oranco had received a disproportionate share of the funds from the sale of the AIRP machine. Mr. Wagner alleges
that he was damaged in the amount of $134,000 plus interest.
Oranco believes and has asserted many defenses to the claim and believes it is without merit. Presently the matter is in the discovery phase.
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 Office Relating to a Periodic Report Containing Financial Statements.*
|
|
|
101.INS
|
XBRL Instance*
|
|
|
101.SCH
|
XBRL Schema*
|
|
|
101.CAL
|
XBRL Calculation*
|
|
|
101.DEF
|
XBRL Definition*
|
|
|
101.LAB
|
XBRL Label*
|
|
|
101.PRE
|
XBRL Presentation*
|
* 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.
13
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
|
|
|
Juan S. Zabala, President & Treasurer
|
|
|
November 1, 2011
|
14