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, 2015
( )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
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ORANCO, INC.
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(Exact name of registrant as specified in charter)
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Nevada
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87-0574491
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(State or other jurisdiction ofincorporation or organization)
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(I.R.S. Employer Identification No.) |
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1981 E. Murray Holladay Rd, Suite 100, Salt Lake City, Utah
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84117
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(Address of principal executive offices)
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(Zip Code)
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702-834-9810
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 [ ]
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Accelerated Filer [ ]
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Non-Accelerated filer [ ]
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Smaller Reporting Company [ x ]
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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
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Class
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Outstanding as of October 20, 2015
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Common Stock, $0.001
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4,269,950
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INDEX
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Page
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Number
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PART I.
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ITEM 1. Financial Statements (unaudited)
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2 |
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Balance Sheets
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3
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September 30, 2015 and December 31, 2014
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Statements of Operations
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4 |
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For the three and nine months ended September 30, 2015 and 2014 and the period June 16, 1977 to September 30, 2015
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Statements of Cash Flows
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5 |
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For the nine months ended September 30, 2015 and 2014 and the period June 16, 1977 to September 30, 2015
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Notes to Financial Statements
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6
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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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8 |
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ITEM 3. Quantitative and Qualtitative Disclosures About Market Risk
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9 |
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ITEM 4T. Controls and Procedures
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9 |
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PART II.
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ITEM 6. Exhibits
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9
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Signatures
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10 |
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of Oranco, Inc. (a development stage company) at September 30, 2015 and December 31, 2014, and the related statement of operations for the three and nine months and the period June 16, 1977 to September 30, 2015, and the statement of cash flows for the nine months, ended September 30, 2015 and 2014 and the period June 16, 1977 to September 30, 2015 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, 2015, are not necessarily indicative of the results that can be expected for the year ending December 31, 2015.
2
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ORANCO, INC.
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(A Development Stage Company)
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BALANCE SHEETS
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SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
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September 30,
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December 31,
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2015
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2014
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Assets
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Current Assets:
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Cash
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$
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22,645
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$
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63,807
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Prepaid expenses
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10,263
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4,430
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Total current assets
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32,908
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68,237
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Total Assets
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$
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32,908
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$
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68,237
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Liabilities and Stockholders' Equity
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Current Liabilities:
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Accounts payable
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$
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5,490
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$
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1,000
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Total current liabilities
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$
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5,490
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1,000
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Stockholders' Equity:
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Common stock, $.001 par value 100,000,000 shares authorized, 4,269,950 issued and outstanding
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4,270
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4,270
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Additional paid-in capital
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349,898
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349,898
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Deficit accumulated during the development stage
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(326,750
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)
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(286,931
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)
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Total Stockholders' Equity
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27,418
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67,237
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Total Liabilities and Stockholders' Equity
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$
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32,908
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$
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68,237
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The accompanying notes are an integral part of the financial statements.
3
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ORANCO, INC.
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(A Development Stage Company)
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STATEMENTS OF OPERATIONS
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For the
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Period
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For the
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For the
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For the
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For the
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June 16, 1977
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Three Months
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Three Months
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Nine Months
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Nine Months
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(Inception)
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Ended
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Ended
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Ended
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Ended
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Through
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September 30,
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September 30,
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September 30,
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September 30,
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September 30,
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2015
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2014
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2015
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2014
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2015
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Revenues
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$
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--
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$
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--
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$
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--
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$
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--
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$
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--
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Expenses, general and administrative
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9,026
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3,450
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39,833
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17,831
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489,777
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Valuation adjustment - available for sale securities
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--
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--
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--
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--
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30,401
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Operating loss
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(9,026
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)
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(3,450
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)
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(39,833
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)
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(17,831
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)
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(520,178
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)
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Other income (expense):
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Litigation settlement
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--
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--
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--
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--
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(12,500
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)
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Interest and contract income
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3
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8
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14
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28
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205,928
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Loss before provision for income taxes
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(9,023
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)
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(3,442
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)
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(39,819
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)
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(17,803
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)
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(326,750
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)
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Provision for income taxes
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--
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--
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--
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--
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--
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Net loss
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$
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(9,023
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)
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$
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(3,442
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)
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$
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(39,819
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)
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$
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(17,803
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)
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$
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(326,750
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)
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Net loss per share
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$
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--
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$
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--
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$
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(0.01
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)
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$
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--
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Weighted average shares outstanding
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4,269,950
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4,269,950
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4,269,950
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4,269,950
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The accompanying notes are an integral part of the financial statements.
4
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ORANCO, INC.
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(A Development Stage Company)
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STATEMENTS OF CASH FLOWS
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For the
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Period
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For the
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For the
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June 16, 1977
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Nine Months
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Nine Months
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(Inception)
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Ended
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Ended
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Through
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September 30,
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September 30,
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September 30,
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2015
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2014
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2015
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Cash flows from operating activities:
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Net loss
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$
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(39,819
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$
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(17,803
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)
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$
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(326,750
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)
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Adjustments to reconcile net loss to cash provided by operating activities:
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(Increase) decrease in prepaid expenses
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(5,833
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450
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(10,263
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)
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Increase (decrease) in accounts payable
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4,490
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(1,050
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)
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5,490
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Net cash used by operating activities
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(41,162
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)
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(18,403
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)
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(331,523
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)
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| Cash flows from investing activities: |
--
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--
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--
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Cash flows from financing activities:
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Issuance of common stock
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--
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--
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354,168
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Net increase (decrease) in cash
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(41,162
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)
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(18,403
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)
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22,645
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Cash, beginning of period
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63,807
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86,337
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--
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Cash, end of period
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$
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22,645
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$
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67,934
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$
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22,645
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Interest paid
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$
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--
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$
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--
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$
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--
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Income taxes paid
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$
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--
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$
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--
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$
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--
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The accompanying notes are an integral part of the financial statements.
5
ORANCO, INC.
(A Development Stage Company)
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 and is considered a "Development Stage Company" as defined by FASB ASC 915 (formerly Statement of Financial Accounting Standards (SFAS) No. 7).
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.
In July 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification ("ASC") 105-10, formerly Statement of Financial Accounting Standards ("SFAS") No. 168, The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles, which became the single source of authoritative GAAP recognized by the FASB. ASC 105-10 does not change current U.S. GAAP, but on the effective date, the FASB ASC superseded all then existing non-SEC accounting and reporting standards.
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.
6
Notes to Financial Statements – Continued
f. Fair Value of Financial Instruments
ASC 820-10 (formerly SFAS No. 157, Fair Value Measurements) 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 September 30, 2015 and December 31, 2014, the carrying value of certain financial instruments approximates fair value due to the short-term nature of such instruments.
2. Warrants and Stock Options
No options or warrants are outstanding to acquire the Company's common stock.
3. Income Taxes
The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling $286,931 that may be offset against future federal income taxes. If not used, the carryforwards will expire 20 years after they are incurred. Due to the Company being in the development stage and incurring net operating losses, a valuation allowance has been provided to reduce the deferred tax assets from the net operating losses to zero. Therefore, there are no tax benefits recognized in the accompanying statement of operations.
4. Office Rent
The Company's board of directors approved an office rent to a former director of the Company. The amount expensed for the nine-months ended September 30, 2015 and 2014 amounted to $2,850 and $1,425, respectively.
5. Travel Expense, Related Party
In March 2015, the board of directors approved to reimburse its current board member $15,000 for travel expenses incurred related to merger and acquisition activities.
7
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 has recently focused 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 has held talk with various parties regarding a merger or acquisition. However, no definitive agreement as to any such has been reached, at this time. 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.
On July 15, 2015, the Company announced that it had entered into a non-binding letter of intent for the acquisition of or merger with Capcom Limited. Since that time the Company has been completing its due diligence of Capcom. However no definitive agreement has been reached with Capcom and no assurance can be given that any will be.
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, and the completion of a private placement, the Company has had no material business operations and in the two most recent calendar years, it activities have been limited to evaluating possible merger or acquisition candidates..
Three and nine Month Period Ended June 30, 2015 and 2014
The Company did not generate any revenue during the three and nine months ended September 30, 2015 and 2014, respectively. It had interest income of $3 and $8 for the three months and $14 and $28 for the nine months ended September 30, 2015 and 2014, respectively, the decrease of which is attributable to decreased interest income.
8
General and administrative expenses were $9,026 and $3,450 for the three months and $39,833 and $17,831 for the nine months ended September 30, 2015 and 2014, respectively . The changes in expenses for the three and nine months ended September 30, 2015 were largely due to increases in accounting, legal, other professional costs As a result of the foregoing, the Company realized net losses of $9,023 and $3,442 for the three months and $ 39,819 and $17,803 for the nine months ended September 30, 2015 and 2014, respectively. The Company's increased net loss is attributable to increase in ongoing professional costs associated with preparing the Company's public reports.
Liquidity and Capital Resources
At September 30, 2015, assets consisted of $22,645 in cash and $10,263 prepaid expenses compared to $63,807 in cash and $4,430 in prepaid expenses on December 31, 2014. As of September 30, 2015, the Company had $5,490 in accounts payable. 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, 2015, (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 not 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, 2015) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART 2 - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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Exhibit 31.1
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Rule 13a-14(a)/15d-14(a) Certification.
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Exhibit 32.1
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Certification by the Chief Executive Officer/Acting Chief Financial Officer Relating to a Periodic Report Containing Financial Statements.*
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101.INS
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XBRL Instance*
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101.SCH
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XBRL Schema*
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101.CAL
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XBRL Calculation*
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101.DEF
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XBRL Definition*
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101.LAB
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XBRL Label*
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101.PRE
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XBRL Presentation*
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* 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.
9
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.
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ORANCO, Inc.
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[Registrant]
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S/ Claudio Gianascio
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Claudio Gianascio
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President & Treasurer
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October 23, 2015
10