UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





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





For the fiscal year ended December 31, 2010





o
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: 0-30695





ARVANA INC.


(Exact name of registrant as specified in its charter)





NEVADA
87-0618509State or other jurisdiction of
(I.R.S. Employerincorporation or organization
Identification No.)





90 Madison Street, Suite 701, Denver, CO 80206


(Address of principal executive offices) (Zip Code)





(formerly Suite 145, 925 West Georgia Street, Vancouver, BC V6C 3L2





303 329-3008


(Registrant’s telephone number, including area code)





Securities registered pursuant to Section 12(b) of the Act: None





Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý





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 (the "Exchange Act") 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 ý    No o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


YesoNoo(not required)





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

(Do not check if a smaller reporting company)

Smaller reporting company ý





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ý    No o





The aggregate market value of the common stock held by nonaffiliates of the registrant (1,045,505 shares) based on the $0.32 closing price of the registrant's common stock as reported on the OTCBB on June 30, 2010, was approximately $334,562. For purposes of this computation, all officers, directors and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors or 10% beneficial owners are, in fact, affiliates of the registrant.




As of March 31, 2011, there were 1,060,130 outstanding shares of the registrant's common stock.




2


PART I




ITEM 1.
DESCRIPTION OF BUSINESS.





FORWARD-LOOKING STATEMENTS





The information in this Annual Report on Form 10-K contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding our planned business, availability of funds, government regulations, common share prices, operating costs, capital costs, our ability to deploy our planned business and generate revenues and other factors. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. These statements are based on certain assumptions and analyses made by our management in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors they believe are appropriate in the circumstances. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.





Overview





We entered into a new development stage as of January 1, 2010. We are currently in the process of evaluating business opportunities in order to determine the focus of our future business opportunities. There can be no guarantee that we will be successful in identifying suitable business opportunities, or if we are able to identify suitable business opportunities, that we will be able to find an adequate source of financing to acquire any business or business assets, and commence operations, or that those operations, if commenced, will be successful in generating profits.





Corporate Organization





We were incorporated under the laws of the State of Nevada on June 16, 1977. Our authorized capital is comprised of 5,000,000 shares of common stock, par value of $0.001.





Subsidiaries





We have the following wholly-owned inactive subsidiaries:





1.
Arvana Networks Inc., a company incorporated in Barbados in January 2005 (“Arvana Networks”).2.
Arvana Participações S.A., a company incorporated in Brazil in April 2005 (“Arvana Par”), and its subsidiary, Arvana Comunicações. S.A. (“Arvana Com”), both subsidiaries of Arvana Networks.


Our Plan of Operations





We entered into a new development stage as of January 1, 2010 and our present plan of operations for the next twelve months is to identify and evaluate industries and business opportunities in order to find a suitable business to enter into.




We will not be able to pursue any new business opportunities without additional financing. Our board of directors and management are actively pursuing financing in order to maintain operations while we evaluate potential businesses. Since December 31, 2010 we have obtained loans totaling $10,000 to provide operating capital. We estimate that this provides sufficient cash to operate through June 30, 2011.




3


In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $200,000 during 2011. We had cash in the amount of $2,074 and a working capital deficit of $1,667,682 as at December 31, 2010. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.





Other than small advances from shareholders, we believe that debt financing will not be an alternative for funding additional phases of our business development as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock to fund our plan of operations. The board is currently considering all avenues available to obtain financing.





Accordingly, we will require continued financial support from our shareholders and creditors until we are able to generate sufficient cash flow from operations on a sustained basis. There is substantial doubt that we will be successful at achieving these results.





Management Team





Zahir Dhanani was appointed director on August 17, 2009 and Chief Executive Officer on July 27, 2010. Mr. Dhanani is currently the President & CEO of Bread Garden Franchising Inc., which operates a chain of restaurants in British Columbia and Australia. He has been with the Bread Garden since April 2004. Over the past 12 years Mr. Dhanani has also acted as a self-employed consultant providing financial consulting and advisory services to publicly traded companies listed on Canadian Stock Exchanges, including serving on the advisory board of a publicly traded company that has a gold project in Nevada.





Arnold Tinter was appointed director and Chief Financial Officer on July 27, 2010. Mr. Tinter founded Corporate Finance Group, Inc., a consulting firm located in Denver, Colorado, in 1992, and is its President. Corporate Finance Group, Inc., is involved in financial consulting in the areas of strategic planning, mergers and acquisitions and capital formation.  He has provided CFO services to Spicy Pickle Franchising, Inc., of Denver, Colorado, from 2006 to October 2010, where his responsibilities included oversight of all accounting functions including SEC reporting, strategic planning and capital formation.  From April 2010 to the present he provides CFO services to Agrisolar Solutions, Inc., where his responsibilities included oversight of all accounting functions including SEC reporting, strategic planning and capital formation   From May 2001 to May 2003, he served as Chief Financial Officer of Bayview Technology Group, LLC, a privately held company that manufactured and distributed energy-efficient products. From May 2003 to October 2004, he served as that company’s Chief Executive Officer. Prior to 1990 Mr. Tinter was Chief Executive Officer of Source Venture Capital, a holding company with investments in the gaming, printing, retail industries. Mr. Tinter received a B.S. degree in Accounting in 1967 from C.W. Post College, Long Island University, and is licensed as a Certified Public Accountant in Colorado and New York.





ITEM 1A.
RISK FACTORS.





Not required for smaller reporting companies.





ITEM 1B.
UNRESOLVED STAFF COMMENTS.





Not required for smaller reporting companies.





ITEM 2.
PROPERTIES.





We use the office space of our Chief Financial Officer, Arnold Tinter, as our offices.  The imputed value of this space is nominal.




4





ITEM 3.
LEGAL PROCEEDINGS.





We currently are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.





ITEM 4.
(Removed and Reserved)















5


PART II





ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.





Market Information





Our common shares were quoted on the OTC Bulletin Board from April 6, 2009 to February 23, 2011, and are currently quoted on the OTCQB under the symbol AVNI and on the Frankfurt Stock Exchange under the symbol T5U.F. The following table indicates the high and low bid prices of our common shares during the periods indicated:





OTCBB:QUARTER

HIGH BID


LOW BIDENDEDDecember 31, 2010

$
1.00


$
0.20September 30, 2010

$
0.90


$
0.33June 30, 2010

$
0.50


$
0.32March 31, 2010

$
0.60


$
0.20December 31, 2009

$
0.80


$
0.00September 30, 2009

$
0.40


$
0.20June 30, 2009

$
0.20


$
0.00March 31, 2009

$
0.20


$
0.00FRANKFURT (in Euros):QUARTER

HIGH BID


LOW BIDENDEDDecember 31, 2010

€
0.64


€
0.11September 30, 2010

€
0.59


€
0.11June 30, 2010

€
0.35


€
0.02March 31, 2010

€
0.79


€
0.02December 31, 2009

€
0.02


€
0.02September 30, 2009

€
0.02


€
0.02June 30, 2009

€
0.02


€
0.02March 31, 2009

€
0.02


€
0.02


The market quotations provided reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.





Holders of Common Stock





As at March 31, 2011, we had 1,060,130 shares of common stock issued and outstanding and there were 55 registered holders based on the records of the Company’s transfer agent. The registered holders do not include beneficial owners of the Company's common shares whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.





Dividends





There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:




6




1.
We would not be able to pay our debts as they become due in the usual course of business; or2.
Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.





We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.





Recent Sales of Unregistered Securities





During the quarter ended December 31, 2010, there were no sales of securities.





Small Business Issuer Purchases of Equity Securities





During the quarter ended December 31, 2010, there were no purchases of equity securities effected by the Company or any affiliated purchasers.





ITEM 6.
SELECTED FINANCIAL DATA.





Not required for smaller reporting companies.





ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.





The following discussion of our financial condition, changes in financial condition and results of operations for the year ended December 31, 2010 should be read in conjunction with our audited consolidated financial statements and related notes for the year ended December 31, 2010.





Presentation of Financial Information





Our financial statements for the year ended December 31, 2010 include the accounts of:





·
Arvana Networks;


·
Arvana Par;


·
Arvana Com;





Basis of Presentation





We are currently in the development stage and present our financial statements in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205, “Presentation”.




Our financial statements include the accounts of the Company, its wholly-owned inactive subsidiaries Arvana Networks, Arvana Par, and Arvana Com. All significant inter-company transactions and balances have been eliminated.





Foreign currency translation and transactions





Our functional currency is the United States dollar.





The Company uses the temporal method when translating the Brazilian subsidiary operations. Long-term assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate in effect on the transaction date. Revenue and expenses are translated at the average rates of exchange prevailing during the periods.




Transactions conducted in foreign currencies are recorded using the exchange rate in effect on the transaction date. At the period end, monetary assets and liabilities are translated to the functional currency of each entity using the exchange rate in effect at the period end date. Transaction gains and losses are recorded in foreign exchange gain or loss.




7


Estimates





The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.





Stock-based Compensation Expense





The Company accounts for all stock-based payments to employees and non-employees under ASC 718 “Stock Compensation,” using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.





Recent Accounting Pronouncements





In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value measurements,” which amends ASC 820, “Fair Value Measures and Disclosures.” ASU 2010-06 requires disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The changes to the ASC as a result of this update are effective for annual and interim reporting periods beginning after December 15, 2009, except for requirements related to Level 3 disclosures, which are effective for annual and interim reporting periods beginning after December 15, 2010. This guidance requires new disclosures only, and had no impact on our financial statements. In February 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855).” This update provides amendments to Subtopic 855-10-50-4 and related guidance within U.S. GAAP to clarify that an SEC registrant is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC’s requirements. The Company has adopted this standard and it had no impact on our financial statements.





In December 2010, the FASB issued ASU 2010-29, which contains updated accounting guidance to clarify the acquisition date that should be used for reporting pro forma financial information when comparative financial statements are issued. This update requires that a company should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This update also requires disclosure of the nature and amount of material, nonrecurring pro forma adjustments. The provisions of this update, which are to be applied prospectively, are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. The impact of this update onthe Company’s financial statements will depend on the size and nature of future business combinations.





Results of Operations





References in the discussion below to 2010 are to our fiscal year ended December 31, 2010. Similarly, references to 2009 are to our fiscal year ended December 31, 2009. References to 2011 are to our current fiscal year that will end December 31, 2011.





8


Our operations for the years ended December 31, 2010 and 2009 are summarized below.





2010


2009Operating Expenses:General and Administration

$
103,388


$
148,153Depreciation

$
103


$
300Loss from operations

$
103,491


$
148,453Interest expense

$
42,751


$
41,866Foreign exchange (gain) loss

$
(19,814
)

$
53,604Comprehensive Loss for the Period

$
126,428


$
243,923





Administration Expenses





Administrative expenses are comprised of costs associated with management compensation, office overhead including rent, legal fees, and consulting services. The changes in our administrative expenses for the years ended December 31, 2010 compared to December 31, 2009 are due to period fluctuations in general and administrative expenses.





Comprehensive Loss for the Period





We had a comprehensive loss for the year ended December 31, 2010 of $126,428 compared with a comprehensive loss of $243,923 for the year ended December 31, 2009. Our comprehensive income and loss fluctuate significantly due to unrealized foreign exchange gains and losses incurred due to the level of our liabilities payable in foreign currencies. Future quarterly expenses are expected to be comparable to the current quarter until such time as a new business is entered into, net losses if any due to any new business cannot be estimated at this time.





Liquidity and Capital Resources





As at December 31, 2010, we had cash of $2,074 and a working capital deficit of $1,667,682. This compares to cash of $534 and working capital deficit of $1,541,357 as at December 31, 2009.





Plan of Operations





We entered into a new development stage as of January 1, 2010 and our present plan of operations for the next twelve months is to identify and evaluate industries and business opportunities in order to find a suitable business to enter into.





We will not be able to pursue any new business opportunities without additional financing. Our board of directors and management are actively pursuing financing in order to maintain operations while we evaluate potential businesses. Since December 31, 2010 we have obtained loans totaling $10,000 to provide operating capital. We estimate that this provides sufficient cash to operate through June 30, 2011.





In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $200,000 during 2011. We had cash in the amount of $2,074 and a working capital deficit of $1,667,682 as at December 31, 2010. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.





During the next twelve month period, we anticipate that our revenues will not exceed our operating expenses. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations. Other than small advances from shareholders, we believe that debt financing will not be an alternative for funding additional phases of our business development as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock.




9




However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock to fund our plan of operations. The board is currently considering all avenues available to obtain financing.





Cash Used in Operating Activities





We used cash in operations in the amount of $33,773 during fiscal 2010, as compared to $123,226 during fiscal 2009. Cash used in operations during the year ended December 31, 2010 was attributable primarily to payments for administrative expenses.





Cash Used in Investing Activities





We did not use cash in investing activities during the year ended December 31, 2010 or 2009.





Cash Flows from Financing Activities





The Company obtained $35,313 from unsecured loans bearing 6% interest per annum during fiscal 2010. In fiscal 2009 the Company received $126,800 from unsecured loans bearing 6% interest per annum and made a loan repayment of $3,778.





Going Concern





For the year ended December 31, 2010, the Company incurred a loss from operations of $126,428. At December 31, 2010, the Company had a working capital deficiency of $1,667,682. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operations. For these reasons our auditors stated in their report on our audited financial statements that they have substantial doubt we will be able to continue as a going concern.





Future Financings





We anticipate continuing to rely on equity sales of our shares of common stock in order to continue to fund our business operations. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our plan of operations.





Off-Balance Sheet Arrangements





We have no 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.





ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





Not required for smaller reporting companies.





10







ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.




Our audited financial statements for the year ended December 31, 2010, as set forth below, are included with this Annual Report on Form 10-K. Our audited financial statements are prepared on the basis of accounting principles generally accepted in the United States and are expressed in U.S. dollars.




PAGEAuditors’ Report
12Consolidated Balance Sheets, December 31, 2010 and 2009
13Consolidated Statements of Operations for the years ended December 31, 2010 and 2009 and cumulative amounts from the beginning of the development stage on January 1, 2010 to December 31, 2010
14Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009 and cumulative amounts from the beginning of the development stage on January 1, 2010 to December 31, 2010
15Consolidated Statements of Changes in Stockholders’ Equity for the year ended December 31, 2010
16Notes to Consolidated Financial Statements
17


11


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
 To the Shareholders and the Board of Directors of
 Arvana Inc. and subsidiaries
 
 We have audited the accompanying consolidated balance sheets of Arvana Inc. as of December 31, 2010 and 2009 and the related consolidated statements of operations and comprehensive loss, stockholders' deficiency and cash flows for the years ended December 31, 2010 and 2009 and for the cumulative amounts from the beginning on the development stage on January 1, 2010 to December 31, 2010. The Company’s management is responsible for these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2010 and 2009, and the results of its operations and its cash flows for years then ended and for the cumulative amounts from the beginning of the development stage on January 1, 2010 to December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company generated negative cash flows from operating activities during the past year. The Company has an accumulated deficit of approximately $22,831,850 for the year ended December 31, 2010. This raises substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 /s/    DAVIDSON & COMPANY LLP
 
 Vancouver, Canada
Chartered AccountantsMarch 30, 2011





12


Arvana Inc. and Subsidiaries


(A Development Stage Company)


Consolidated Balance Sheets


(Expressed In US Dollars)








December 31,


December 31,2010


2009ASSETSCurrent assets:Cash

$
2,074


$
534Total current assets


2,074



534Equipment, net (Note 3)


-



103Total assets

$
2,074


$
637LIABILITIES AND STOCKHOLDERS' DEFICIENCYCurrent liabilitiesAccounts payable and accrued liabilities

$
657,603


$
621,143Loans payable stockholders (Note 4)


604,653



613,087Loans payable related party (Note 4)


100,000



100,000Loans payable (Note 4)


25,000



-Amounts due to related parties (Note 4)


282,500



207,661Total current liabilities


1,669,756



1,541,891Stockholders' deficiencyCommon stock, $.001 par value 5,000,000 authorized,1,060,130 shares issued and outstanding atDecember 31, 2010 and 2009 (Note 5)


1,060



21,203Additional paid-in capital


21,446,444



21,426,301Deficit


(22,705,422
)


(95,331
)Deficit accumulated during the development stage


(126,428
)


(22,610,091
)(1,384,346
)


(1,257,918
)Less: Treasury stock - 177,085 common shares at December 31, 2010 and 2009


(283,336
)


(283,336
)Total stockholders’ deficiency


(1,667,682
)


(1,541,254
)$
2,074


$
637




The accompanying notes are an integral part of these consolidated financial statements.




13


Arvana Inc. and Subsidiaries


(A Development Stage Company)


Consolidated Statements of Operations and Comprehensive Loss


(Expressed In US Dollars)





For the year ended

Cumulative amounts from the beginning of the

development stage onDecember 31,

January 1, 2010 to2010


2009

December 31, 2010Operating expensesGeneral and administrative

$
103,388


$
148,153


$
103,388Depreciation


103



300



103Total operating expenses


103,491



148,453



103,491Loss from operations


(103,491
)


(148,453
)


(103,491
)Interest expense


(42,751
)


(41,866
)


(42,751
)Net loss for the year


(146,242
)


(190,319
)


(146,242
)Other comprehensive income (loss):Foreign exchange gain (loss)


19,814



(53,604
)


19,814Comprehensive loss for the year

$
(126,428
)

$
(243,923
)

$
(126,428
)Per common share information – basic and fully diluted:Weighted average shares outstanding


1,060,130



1,060,130Net loss per common share

$
(0.12
)

$
(0.23
)











The accompanying notes are an integral part of these consolidated financial statements.




14


Arvana Inc. and Subsidiaries


(A Development Stage Company)


Consolidated Statements of Cash Flows


(Expressed In US Dollars)








For the year ended

Cumulative amounts from the beginning of the development stage onDecember 31,

January 1, 2010 to2010


2009

December 31, 2010Cash flows from operating activitiesNet loss for the period

$
(126,428
)

$
(243,923
)

$
(126,428
)Items not involving cash:Depreciation and amortization


103



300



103Unrealized foreign exchange


(23,388
)


48,790



(23,388
)Changes in non-cash working capital:Accounts payable and accrued liabilities


44,362



67,801



54,117Amounts due to related parties


71,578



3,806



61,823Net cash used in operations


(33,773
)


(123,226
)


(33,773
)Cash flows from financing activitiesProceeds of loans payable


35,313



126,800



35,313Repayments of loan payable


-



(3,778
)


-Net cash provided by financing activities


35,313



123,022



35,313Increase (decrease) in cash


1,540



(204
)


1,540Cash , beginning of period


534



738



534Cash, end of period

$
2,074


$
534


$
2,074Supplementary informationCash paid for interest

$
-


$
1,608Cash paid for income taxes paid

$
-


$
-











The accompanying notes are an integral part of these consolidated financial statements.




15


Arvana Inc. and Subsidiaries


(A Development Stage Company)


Consolidated Statement of Stockholders' Deficiency


(Expressed In US Dollars)


For the year ended December 31, 2010





Common Shares


Additional

Paid-





Deficit Accumulated During Development


Treasury


Total Stockholders’Shares


Amount


in Capital


Deficit


Stage


Shares


Amount


(Deficiency)From Inception to December 31, 2009


1,060,130


$
21,203


$
21,426,301


$
(22,705,422
)





(177,085
)

$
(283,336
)

$
(1,541,254
)Net loss for the year ended December 31, 2010

















(126,428
)










(126,428
)Adjustment of par value






(20,143
)


20,143Balance December 31, 2010


1,060,130


$
1,060


$
21,446,444


$
(22,705,422
)

$
(126.428
)


(177,085
)

$
(283,336
)

$
(1,667,682
)



































The accompanying notes are an integral part of these consolidated financial statements.







16
 Arvana Inc. and Subsidiaries
 (A Development Stage Company)
 Notes to Consolidated Financial Statements
 For the Years Ended December 31, 2010 and 2009
 (Expressed in U.S. Dollars)


1. Nature of Business and Ability to Continue as a Going Concern





Arvana Inc., (the ‘Company’) was incorporated under the laws of the State of Nevada as Turinco, Inc. on September 16, 1977.  On July 24, 2006, the shareholders approved a change of the Company’s name from Turinco, Inc. to Arvana Inc.





These consolidated financial statements for the year ended December 31, 2010 include the accounts of the Company and its subsidiary Arvana Networks Inc. (including its wholly-owned subsidiaries, Arvana Participaçōes S.A.(“Arvana Par”) and Arvana Comunicações do Brasil S. A. (“Arvana Com”)). The Company has ceased all operations in its subsidiary companies, and has written-off or disposed of all assets in the subsidiary companies, consequently they are now all considered to be inactive subsidiaries. As a result, the Company has entered into a new development stage as of January 1, 2010.





These consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. For the year ended December 31, 2010, the Company incurred a loss from operations of $126,428. At December 31, 2010, the Company had a working capital deficiency of $1,667,682. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.





Accordingly, the Company will require continued financial support from its shareholders and creditors until it is able to generate sufficient cash flow from operations on a sustained basis. There is substantial doubt that the Company will be successful at achieving these results. Failure to obtain the ongoing support of its shareholders and creditors may make the going concern basis of accounting inappropriate, in which case the Company’s assets and liabilities would need to be recognized at their liquidation values. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might arise from this uncertainty.








2. Summary of Significant Accounting Policies





a) Basis of presentation


The Company is in the process of evaluating business opportunities and is a development stage company. The Company’s fiscal year end is December 31. The accompanying consolidated financial statements of Arvana Inc. for the years ended December 31, 2010 and 2009, and for the cumulative amounts from the beginning of the development stage on January 1, 2010, through December 31, 2010, have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for financial information with the instructions to Form 10-K and Regulation S-K. In the opinion of management, they include all adjustments, consisting only of normal recurring items, necessary for a fair presentation. Results are not necessarily indicative of results which may be achieved in the future.





b) Basis of consolidation


Included in the financial statements are the accounts of the Company, its wholly-owned inactive subsidiaries Arvana Networks, Arvana Par, and Arvana Com. All inter-company transactions and balances have been eliminated.





c) Estimates


The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.





17
 Arvana Inc. and Subsidiaries
 (A Development Stage Company)
 Notes to Consolidated Financial Statements
 For the Years Ended December 31, 2010 and 2009
 (Expressed in U.S. Dollars)


d) Foreign currency translation and transactions


The Company uses the temporal method when translating the Brazilian subsidiary operations. Long-term assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate in effect on the transaction date. Revenue and expenses are translated at the average rates of exchange prevailing during the periods.





Transactions conducted in foreign currencies are recorded using the exchange rate in effect on the transaction date. At the period end, monetary assets and liabilities are translated to the functional currency of each entity using the exchange rate in effect at the period end date. Transaction gains and losses are recorded in foreign exchange gain or loss.





e) Comprehensive income


The Company considers comprehensive income (loss) as a change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.





f) Cash equivalents


The Company considers all highly liquid investments, with terms to maturity of three months or less when acquired, to be cash equivalents.





g) Financial instruments


Financial instruments of the Company are comprised of cash, accounts payable and accrued liabilities, note payable, amounts due to and from related parties, loans payable – stockholders, loans payable – related parties, and loans payable. The estimated fair values of financial instruments were considered by management to be not materially different from their carrying values due to their short term to maturity or capacity for prompt liquidation.





h) Concentration of credit risk


Financial instruments that potentially subject the company to concentrations of credit risk consists of cash. The Company maintains cash in bank accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.





i) Income taxes


A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.





Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.





j) Stock-based compensation


The Company accounts for all stock-based payments to employees and non-employees under ASC 718 “Stock Compensation,” using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.





k) Loss per share


Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted loss per share is computed using the weighted average number of common shares and potentially dilutive common stock equivalents, including stock options and warrants.




18
 Arvana Inc. and Subsidiaries
 (A Development Stage Company)
 Notes to Consolidated Financial Statements
 For the Years Ended December 31, 2010 and 2009
 (Expressed in U.S. Dollars)


l) Reclassifications


Certain of the comparative figures for the prior years have been reclassified to conform with the presentation adopted in the current year.





m) Recent accounting pronouncements


In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value measurements,” which amends ASC 820, “Fair Value Measures and Disclosures.” ASU 2010-06 requires disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The changes to the ASC as a result of this update are effective for annual and interim reporting periods beginning after December 15, 2009, except for requirements related to Level 3 disclosures, which are effective for annual and interim reporting periods beginning after December 15, 2010. This guidance requires new disclosures only, and had no impact on our financial statements. In February 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855).” This update provides amendments to Subtopic 855-10-50-4 and related guidance within U.S. GAAP to clarify that an SEC registrant is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC’s requirements. The Company has adopted this standard and it had no impact on this financial statements.





In December 2010, the FASB issued ASU 2010-29, which contains updated accounting guidance to clarify the acquisition date that should be used for reporting pro forma financial information when comparative financial statements are issued. This update requires that a company should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This update also requires disclosure of the nature and amount of material, nonrecurring pro forma adjustments. The provisions of this update, which are to be applied prospectively, are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. The impact of this update on the Company’s financial statements will depend on the size and nature of future business combinations.








3. Equipment





2010


2009Equipment

$
1,502


$
1,502Accumulated amortization


(1,502
)


(1,399
)$
-


$
103








4. Amounts Due to Related Parties and Loans Payable to Stockholders





From February, 2007 until December 31, 2010 the Company received a number of loans from shareholders and loans from an unrelated third party.  As of December 31, 2010 the Company had received loans of $604,653 (December 31, 2009 - $613,087) from shareholders, loans of $100,000 (December 31, 2009 - $100,000) from a related party and loans of $25,000 (December 31, 2009 - $0) from an unrelated third party. All of the loans bear interest at 6% per annum.  The loans were made in 3 different currencies, Euros, Canadian Dollars and US Dollars.  All amounts reflected on these financial statements are expressed in US Dollars.  Repayment of the loans is due on closing of any future financing arrangement by the Company.  The balance of accrued interest of $123,104 and $83,051 is included in accounts payable and accrued expenses at December 31, 2010 and 2009, respectively.  Interest expense recognized on these loans was $42,751 for the year ended December 31, 2010, compared to $41,866 for the year ended December 31, 2009.





19
 Arvana Inc. and Subsidiaries
 (A Development Stage Company)
 Notes to Consolidated Financial Statements
 For the Years Ended December 31, 2010 and 2009
 (Expressed in U.S. Dollars)


At December 31, 2010 and 2009, the Company had amounts due to related parties of $282,500 and $207,661, respectively.  This amount includes $136,100 at December 31, 2010 and December 31, 2009, payable to three directors for services rendered during 2007. This amount is to be paid part in cash and part in stock at a future date with the number of common shares determined by the fair value of the shares on the settlement date. The amounts owing bear no interest, are unsecured, and have no fixed terms of repayment.








5. Common stock





The Company has a stock option plan in place under which it is authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 150,000 shares of the common stock of the Company. Under the plan, the exercise price of each option equals the market price of the Company's stock as calculated on the date of grant. The options can be granted for a maximum term of 10 years. On June 5, 2006, the Company granted 1,600,000 stock options to its directors and employees. Each option was exercisable into one common share until December 31, 2009 at an exercise price of $1.25. These options expired on December 31, 2009. The options were valued at $1,424,000 using the Black-Scholes model, and have been expensed over the vesting period of the options. The weighted average fair value of options granted during 2006 was $0.89.





At December 31, 2010 and December 31, 2009, there were no stock options outstanding.  No options were granted, exercised or expired during the year ended December 31, 2010.





On September 30, 2010, the Company completed a common stock reverse split of one share for each twenty shares outstanding. These consolidated financial statements have been prepared showing after stock reverse split shares with a par value of $0.001.








6. Segmented Information





The Company has no reportable segments. All of the Company’s equipment at December 31, 2009, was located in Canada.








7. Deferred Income Taxes





Income tax benefits attributable to losses from United States of America operations was $Nil for the years ended December 31, 2010 and 2009, and differed from the amounts computed by applying the United States of America federal income tax rate of 34 percent to pretax losses from operations as a result of the following:




2010


2009Loss for the year before income taxes

$
(126,428
)

$
(243,923
)Computed "expected" tax benefit

$
(42,986
)

$
(82,934
)Nondeductible expenses


(6,702
)


18,327Lower effective income tax rate on (income) loss of foreign subsidiaries


-



-Change in valuation allowance


49,688



64,607Income tax expense

$
-


$
-









20
 Arvana Inc. and Subsidiaries
 (A Development Stage Company)
 Notes to Consolidated Financial Statements
 For the Years Ended December 31, 2010 and 2009
 (Expressed in U.S. Dollars)




The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2010 and 2009 are presented below:




2010


2009Deferred tax assets:Net operating loss carry forwards - US

$
495,084


$
452,098Valuation allowance


(495,084
)


(452,098
)Net deferred tax asset

$
-


$
-





The valuation allowance for deferred tax assets as of December 31, 2010 and 2009 was $495,084 and $452,098, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.





Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in assessing the realizability of deferred tax assets. In order to fully realize the deferred tax asset attributable to net operating loss carryforwards, the Company will need to generate future taxable income of approximately $1,456,000 prior to the expiration of the net operating loss carryforwards.








8. Subsequent Events





Subsequent to December 31, 2010, the Company received loans totaling $10,000. These loans are unsecured, payable on demand and bear interest at the rate of 6% per annum.







21




ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.





Not applicable.





ITEM 9A.
CONTROLS AND PROCEDURES.





Disclosure Controls and Procedures





We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2010 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.





Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.





Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2010 fairly present our financial condition, results of operations and cash flows in all material respects.





Management's Annual Report on Internal Control over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.





Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.





Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.





A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.





Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the





22








Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.





Management assessed the effectiveness of the Company’s internal control over financial reporting as of the Evaluation Date and identified the following material weaknesses:





Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.





Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, and (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel.





Management, including our Chief Executive Officer and Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.





This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.





Changes in internal control over financial reporting





As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2010 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.





Limitations on the effectiveness of controls and procedures





Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.





ITEM 9B.
OTHER INFORMATION.





Not applicable.


23


PART III





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.





Our current executive officers and directors are:





Name
Age
PositionSir John Baring
64
Chairman of the Board of DirectorsZahir Dhanani  (1)
55
Chief Executive Officer and DirectorArnold Tinter
66
Chief Financial Officer and DirectorRobert Naso (1)
51
Director





(1)
Member of our Audit Committee





Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years:





Sir John Baring was appointed Chief Executive Officer and director to the board of directors (“the Board”) on May 26, 2005. Following the appointment of Mr. Jervis as Chief Executive Officer on October 17, 2005, Sir John was appointed Chairman of the board. Sir John brings more than 30 years of banking and investing experience to the board. Since June 2002, Sir John has acted as a managing and founding member of Mercator Management LLC, a leading fund management company.  We have concluded that Sir John should serve as a director in light of his banking and investing experience.





Zahir Dhanani was appointed director on August 17, 2009 and Chief Executive Officer on July 27, 2010. Mr. Dhanani is currently the President & CEO of Bread Garden Franchising Inc., which operates a chain of restaurants in British Columbia and Australia. He has been with the Bread Garden since April 2004. Over the past 11 years Mr. Dhanani has also acted as a self-employed consultant providing financial consulting and advisory services to publicly traded companies listed on Canadian Stock Exchanges, including serving on the advisory board of a publicly traded company that has a gold project in Nevada.  We have concluded that Mr. Dhanani should serve as a director because of his financial consulting experience with publicly-traded companies.





Arnold Tinter was appointed director and Chief Financial Officer on July 27, 2010. Mr. Tinter founded Corporate Finance Group, Inc., a consulting firm located in Denver, Colorado, in 1992, and is its President. Corporate Finance Group, Inc. is involved in financial consulting in the areas of strategic planning, mergers and acquisitions and capital formation.  He has provided CFO services to Spicy Pickle Franchising, Inc., a publically held company, from 2006 to October 2010, where his responsibilities included oversight of all accounting functions including SEC reporting, strategic planning and capital formation.    From April 2010 to the present he provides CFO services to Agrisolar Solutions, Inc., a publically held company, where his responsibilities included oversight of all accounting functions including SEC reporting, strategic planning and capital formation    From May 2001 to May 2003, he served as Chief Financial Officer of Bayview Technology Group, LLC, a privately held company that manufactured and distributed energy-efficient products. From May 2003 to October 2004, he served as that company’s Chief Executive Officer. Prior to 1990 Mr. Tinter was Chief Executive Officer of Source Venture Capital, a holding company with investments in the gaming, printing, retail industries. Mr. Tinter received a B.S. degree in Accounting in 1967 from C.W. Post College, Long Island University, and is licensed as a Certified Public Accountant in Colorado and New York.  We have concluded that Mr. Tinter should serve as a director as a result of his background and experience in financial consulting.





Robert Naso was appointed director on August 17, 2009. Mr. Naso is currently the General Manager of Bread Garden Franchising Inc., he has been with Bread Garden since April of 2005. Prior to joining the Bread Garden he was employed in the construction, hospitality and security industries in a variety of management positions.  We have concluded that Mr. Naso should serve as a director because of his business experience.





Each member of our board of directors is elected annually and holds office until the next annual meeting of shareholders or until his or her successor has been elected or appointed, unless his or her office is earlier vacated in





24





accordance with our bylaws. Our officers serve at the discretion of our board of directors and are appointed annually.





Audit Committee and Audit Committee Financial Expert





Our board of directors has established an audit committee that is comprised of Zahir Dhanani and Robert Naso.





Our board of directors has determined that Zahir Dhanani qualifies as an “audit committee financial expert”, as defined by the rules of the SEC. Our board of directors has further determined that all members of the audit committee are “independent” as that term is defined in Rule 121 of the American Stock Exchange (“AMEX”) listing standards.





The audit committee recommends independent accountants to audit its financial statements, discusses the scope and results of the audit with the independent accountants, considers the adequacy of the internal accounting controls, considers the audit procedures of the Company and reviews the non-audit services to be performed by the independent accountants.





Code of Ethics





We have adopted a Code of Ethics that applies to all the Company’s directors, officers and employees. A copy of our Code of Ethics was incorporated by reference in our previously filed Form 10-KSB for fiscal 2006 as an exhibit.





Significant Employees





We do not have any other significant employees, other than our directors and executive officers named above.





Compliance with Section 16(a) of the Securities Exchange Act





Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than ten percent of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms received by us, we believe that during the fiscal year ended December 31, 2010 all such filing requirements applicable to our officers and directors were complied with, except that Messrs. Dhanani and Tinter should have filed Forms 3 when they became officers and directors of our company.





ITEM 11.
EXECUTIVE COMPENSATION.





Summary Compensation Table





The following table sets forth certain compensation information for:


·
Zahir Dhanani, our chief executive officer and director,


·
Arnold Tinter, our chief financial officer and director and,


·
Wayne Smith, our former chief executive officer and former chief financial officer.




Name and

Principal

Position
Year
Salary

($)
Bonus

($)
Stock

Awards

($)
Option

Awards

($)
Non-

Equity

Incentive

Plan

Compensation

($)
Non-

qualified

Deferred

Compensation

Earnings

($)
All

Other

Compensation

($)
Total

($)Zahir Dhanani,

Chief

Executive

Officer and Director(1)
2010

2009
$24,346

-
-

-
-

-
-

-
-

-
-

-
-

-
$24,346

-








25


Name and

Principal

Position
Year
Salary

($)
Bonus

($)
Stock

Awards

($)
Option

Awards

($)
Non-

Equity

Incentive

Plan

Compensation

($)
Non-

qualified

Deferred

Compensation

Earnings

($)
All

Other

Compensation

($)
Total

($)Arnold Tinter

Chief Financial Officer and Director (2)
2010
-
-
-
-
-
-
-
-Wayne

Smith, Former Chief Executive Officer and Chief

Financial

Officer(3)
2010

2009
$28,759

$84,426
Nil

Nil
Nil

Nil
Nil

Nil
Nil

Nil
Nil

Nil
Nil

Nil
$28,759

$84,426
 __________________


(1)
Mr. Dhanani was appointed director on August 17, 2009 and chief executive officer on July 27, 2010.
 (2)
Mr. Tinter was appointed as our chief financial officer and director on July 27, 2010.


(3)
Mr. Smith was appointed as our chief financial officer on May 8, 2007 and our chief executive officer on December 7, 2007 and held these positions until July 27, 2010.





Outstanding Equity Awards as of December 31, 2010





There were no outstanding equity awards as of December 31, 2010 for any of our named executive officers:





No share purchase options were granted to or exercised by our named executive officers during our fiscal year ended December 31, 2010.





Long-Term Incentive Plans





We do not have any long-term incentive plans, pension plans, or similar compensatory plans for our directors or executive officers.





Change of Control Agreements





We are not party to any change of control agreements with any of our directors or executive officers.





Compensation of Directors





The following table summarizes the compensation of our company’s directors for the year ended December 31, 2010:





Name(1)
Fees

Earned or

Paid in

Cash

($)
Stock

Awards

($)
Option

Awards

($)
Non- Equity

Incentive Plan

Compensation

($)
Non-qualified

Deferred

Compensation

Earnings

($)
All Other

Compensation

($)
Total

($)Sir John Baring
-
-
-
-
-
-
-Robert Naso
-
-
-
-
-
-
-





(1)
Zahir Dhanani and Arnold Tinter are not included in this table as they are reported as officers of the Company and did not receive additional compensation for service as directors.




26




Outstanding Equity Awards as of December 31, 2010





There were no outstanding equity awards as of December 31, 2010 for any of our directors. No share purchase options were granted to or exercised by our directors during our fiscal year ended December 31, 2010.





Employment Agreements





There are no employment agreements with any of the named executive officers.





ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.





Security Ownership





The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as at March 31, 2011 by: (i) each of our directors, (ii) each of our executive officers, (iii) our executive officers and directors as a group, and (iv) each beneficial shareholder known to us to own more than 5% of our outstanding common stock. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.





Title of Class
Name and Address

of Beneficial Owner
Number of Common

Shares
Percentage of

Common Shares(1)Directors and

OfficersCommon Stock
Zahir Dhanani, CEO and director

145-925 W. Georgia St.

Vancouver, B.C. V6C 3L2
-
-Common Stock
Arnold Tinter, CFO and director

145-925 W. Georgia St.

Vancouver, B.C. V6C 3L2
-
-Common Stock
Sir John Baring, director

328 Arcadia Drive

Ancramdale, New York 12503
14,625
1.4%Common Stock
Robert Naso, director

145-925 W. Georgia St.

Vancouver, B.C. V6C 3L2
-
-Common Stock
All Directors and Executive

Officers as a Group (4 persons)
14,625
1.4%5% ShareholdersCommon Stock
N/A
N/A
N/A





(1)
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such




27
 person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on March 31, 2011. The percentage calculations are based on the aggregate of 1,060,130 shares issued and outstanding as at March 31, 2011.


Change of Control





We are not aware of any arrangement that might result in a change in control in the future.





Equity Compensation Plan Information as at December 31, 2010





Plan Category
Number of securities

to be issued upon

exercise of outstanding

options.
Exercise price
Number of securities

remaining available

for future issuance

under equity

compensation plansEquity compensation

plan approved by

security holders
-0-
N/A
150,000Equity compensation

plans not approved by

security holders
N/A
N/A
N/A





ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.





Except as described below, none of the following persons has any direct or indirect material interest in any transaction to which we were or are a party during the past two years, or in any proposed transaction to which we propose to be a party:





(A)
any director or officer;(B)
any proposed nominee for election as a director;(C)
any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or(D)
any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary.





Amounts Due to Related Parties





At December 31, 2010, amounts due to related parties included $63,600 owed by us to Ross Wilmot, a former director of the Company and $60,000 owed by us to Sir John Baring, a director of the Company. A former director of the Company was owed $12,500 by us. Zahir Dhanani, the Company’s CEO, was owed $41,416 and Wayne Smith, the Company’s former CEO and CFO, was owed $42,730. At December 31, 2010, $20,108 was owed to the former Chief Financial Officer and Corporate Secretary and $28,151 was owed to the former President / Chief Executive Officer. The Corporate Secretary of Arvana Networks Inc. was owed $13,995 at December 31, 2010.


These amounts are unsecured, non-interest bearing and payable on demand.





At December 31, 2010, Zahir Dhanani, the Company’s CEO, was owed $100,000 for a loan made to the Company. This loan is unsecured, and bears interest at 6% per annum.





28


Director Independence





Our common stock trades in the OTCQB.  As such, we are not currently subject to corporate governance standards of listed companies, which require, among other things, that the majority of the board of directors be independent.





Since we are not currently subject to corporate governance standards relating to the independence of our directors, we choose to define an “independent” director in accordance with the NASDAQ Capital Market’s requirements for independent directors (NASDAQ Marketplace Rule 5605(a)(2)).  The NASDAQ independence definition includes a series of objective tests, such as that the director is not an employee of the company and has not engaged in various types of business dealings with the company.





We do not have any independent directors under the above definition.  We do not list that definition on our Internet website.





ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES




The following table sets forth information regarding the amount billed to us by our independent auditor, Davidson & Company, LLP, for our fiscal years ended December 31, 2010 and 2009:




Years ended December 312010
2009Audit Fees:
$15,000
$20,000Audit Related Fees:
$ 8,250
$ 8,250Tax Fees:
$         -
$         -All Other Fees:
$         -
$         -Total:
$23,250
$28,250





Audit Fees





Audit Fees are the aggregate fees billed by our independent auditor for the audit of our consolidated annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.





Audit-Related Fees





Audit-Related Fees are fees charged by our independent auditor for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit Fees." This category comprises fees billed for independent accountant review of our interim financial statements and management discussion and analysis, as well as advisory services associated with our financial reporting.





Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors





Our Audit Committee pre-approves all audit services to be provided to us by our independent auditors. Our Audit Committee’s policy regarding the pre-approval of non-audit services to be provided to us by our independent auditors is that all such services shall be pre-approved by the Audit Committee. Non-audit services that are prohibited to be provided by our independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, our Audit Committee must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors.


29


PART IV




ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES





The following exhibits are included with this Annual Report on Form 10-K:





Regulation

S-K Number
Exhibit2.1
Agreement and Plan of Reorganization between the Company, Arvana Networks, Inc. and the Shareholders of Arvana Networks, Inc. dated August 18, 2005(1)3.1
Articles of Incorporation(2)3.2
Bylaws, as amended(2)3.3
Amendment to Articles of Incorporation (3)10.1
2006 Stock Option Plan, dated June 5, 2006(4)14.1
Code of Ethics (5)31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act (6)31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act (6)32.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(d) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)32.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(d) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)





(1)
Previously filed with the SEC as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2005.(2)
Previously filed with the SEC as an exhibit to the Company’s registration statement on Form 10- SB filed with the SEC on May 24, 2000.(3)
Previously filed with the SEC as an exhibit to the Company’s registration statement on Form 8-K filed with the SEC on October 12, 2010.(4)
Previously filed with the SEC as an exhibit to the Company’s Quarterly Report on Form 8-K filed with the SEC on June 7, 2006.(5)
Previously filed with the SEC as an exhibit to the Company’s Annual Report on Form 10-KSB filed with the SEC on April 16, 2007.(6)
Filed as an exhibit to this Annual Report on Form 10-K.

















30





SIGNATURES




Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.






ARVANA INC.




By:
/s/ Zahir DhananiZahir Dhanani, Chief Executive Officer and DirectorDate:
April 6, 2011




Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.




By:
/s/ Zahir DhananiZahir Dhanani, Chief Executive Officer and DirectorDate:
April 6, 2011By:
/s/ Arnold TinterArnold Tinter, Chief Financial Officer and Director(Principal Financial Officer and Principal Accounting Officer)Date:
April 6, 2011By:Sir John BaringDirectorDate:By:
/s/ Robert NasoRobert NasoDirectorDate:
April 6, 2011









31


EXHIBIT INDEX




Regulation

S-K Number
Exhibit2.1
Agreement and Plan of Reorganization between the Company, Arvana Networks, Inc. and the Shareholders of Arvana Networks, Inc. dated August 18, 2005(1)3.1
Articles of Incorporation(2)3.2
Bylaws, as amended(2)3.3
Amendment to Articles of Incorporation (3)10.1
2006 Stock Option Plan, dated June 5, 2006(4)14.1
Code of Ethics (5)31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act (6)31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act (6)32.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(d) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)32.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(d) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)





(1)
Previously filed with the SEC as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2005.(2)
Previously filed with the SEC as an exhibit to the Company’s registration statement on Form 10- SB filed with the SEC on May 24, 2000.(3)
Previously filed with the SEC as an exhibit to the Company’s registration statement on Form 8-K filed with the SEC on October 12, 2010.(4)
Previously filed with the SEC as an exhibit to the Company’s Quarterly Report on Form 8-K filed with the SEC on June 7, 2006.(5)
Previously filed with the SEC as an exhibit to the Company’s Annual Report on Form 10-KSB filed with the SEC on April 16, 2007.(6)
Filed as an exhibit to this Annual Report on Form 10-K.