Company: AVNI
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0001713282-25-000654
Chunk: 4

Company: ARVANA INC
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 1
Chunk 4
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 which those temporary differences are expected to reverse.
 
 12

Note 2 – Summary of Significant Accounting Policies – (continued)
 
Stock-Based Compensation
 
The Company accounts for all share-based payments to employees and non-employees under ASC 718, Compensation—Stock Compensation, which requires that the value of the award be established at the date of grant and then expensed over the vesting period of the grant. The method of determining the fair value of share-based payments depends on the type of award. Stock-based compensation expense is included in general and administrative expenses on the statement of operations.
 
For share-based awards which are fully vested and non-forfeitable at the grant date, the cost is measured and recognized at that date.
 
For share-based awards vesting over a certain service period with no market conditions, the cost is valued using the Black-Scholes option pricing model based on inputs determined for the grant date. Once the per-share fair value on the grant date is established, the award is expensed over a weighted-average service period for the entire award using the straight-line method.
 
In accordance with the provisions of ASC 718, the Company has elected to account for forfeitures of options when such forfeitures occur rather than estimating forfeitures at the grant date. Therefore, the Company records stock-based compensation expense assuming all option holders will complete the requisite service period for the options to fully vest, and then an adjustment is recorded in the period during which forfeitures occur. Compensation cost is not reversed for stock options that have vested.
 
Earnings Per Share
 
Basic earnings per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of common shares and potentially dilutive common stock equivalents, including stock options and warrants. The Company had 6,150,000 outstanding stock options at June 30, 2025 and 7,950,000 outstanding at June 30, 2024, which have been excluded from the calculation of diluted loss per share because their effects would be anti-dilutive due to net losses in both periods.
Segment Reporting
 
The Company operates as a single operating segment, focusing on fishing charters and boat leases. The accounting policies of the operating segment are the same as those described in the summary of significant accounting policies. The Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), reviews consolidated financial information to allocate resources and assess performance based on net income (loss) that is reported on the