ARVANA INC [AVNI] Filings

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended DECEMBER 31, 2023.

☐ 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)

299 Main Street, 13th Floor, Salt Lake City, Utah 84111

(Address of principal executive offices) (Zip Code)

(801) 232-7395

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Act: None.

Securities registered under Section 12(g) of the Act: Common Stock, $0.001 par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐  No ☒

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 ☐  No ☒

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 ☒  No ☐

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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check number if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant including in the filing reflect the correction of an error in previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐  No ☒

The aggregate market value of the registrant’s common stock, $0.001 par value (the only class of voting stock), held by non-affiliates (44,657,614 shares) was $20,095,923 based on the average of the bid and ask price ($0.45) on June 30, 2023.

At April 5, 2024, the number of shares outstanding of the registrant’s common stock, $0.001 par value (the only class of voting stock), was 107,845,554. 

TABLE OF CONTENTS

PART I

ITEM 1 BUSINESS

As used herein the terms “Arvana,” “we,” “our,” and “us” refer to Arvana Inc., its subsidiary, and its predecessor, unless context indicates otherwise. Any distinct references to Down2Fish refer to Down 2 Fish Charters, LLC., a wholly owned subsidiary of Arvana.

FORWARD-LOOKING STATEMENTS

The information in this Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties, including our capital needs, business plans and expectations. Forward-looking statements also involve risks and uncertainties regarding our business, capital, government regulations, stock price, operating costs, capital costs, and other factors. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. 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. Forward-looking statements are based on assumptions and analyses made by management considering their experience and perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. Actual events or results may differ materially. We disclaim any obligation to publicly update forward-looking statements or disclose any difference between actual results and those reflected in these statements. Given these uncertainties, readers are cautioned not to place undue reliance on forward-looking statements.

Overview

Arvana was incorporated in the State of Nevada on June 16, 1977, as “Turinco, Inc.” to engage in any legal undertaking. On July 24, 2006, Arvana changed its name from Turinco, Inc. to Arvana Inc. on the acquisition of Arvana Networks, Inc., a telecommunications business. We discontinued efforts related to that business as of December 31, 2009. Arvana acquired Down 2 Fish Charters, LLC on February 3, 2023. Down2Fish was organized under the laws of the State of Florida on April 1, 2019.

Arvana acquired the assets and assumed the liabilities of Down2Fish on February 3, 2023, from LCF Salons, LLC, (“LCF”) in exchange for fifty thousand dollars ($50,000) and a secured promissory note (“Note”) in the amount of seven hundred thousand dollars ($700,000) payable twenty-four (24) months after the closing date that bears interest of seven and one quarter percent (7¼%) per annum. Interest on the promissory note is payable on an annual basis. On January 29, 2024, Arvana and LCF agreed to extend the interest due date on the Note from the annual anniversary to April 3, 2024.

Stockholders approved a forward stock split of Arvana’s common shares on a 3-for-1 basis effected on April 19, 2023, to stockholders of record on March 31, 2023. All changes in Arvana’s capital structure have been given retroactive effect in this annual report.

While Arvana operates its fishing charter business it has continued to seek business opportunities in real estate development. On December 12, 2023, Arvana announced a non-binding memorandum of understanding to acquire the business of FirstShot Centers, LLC (“FirstShot”), a Nevada based company intent on expanding its specialty use concept to acquire and repurpose vacant shopping malls, outlet locations and big bog stores throughout the United States to attract new tenants from targeted industries that offer goods or services that are not available online. The parties are yet to enter into a definitive agreement pending delivery of the FirstShot business and financing plan.

Arvana

Our office is located at 299 Main Street, 13^th Floor, Salt Lake City, Utah 84111, and our telephone number is (801) 232-7395. AA Registered Agents, 4869 Nightwood Court, Las Vegas, Nevada 89149, is our registered agent in the State of Nevada.

Arvana is registered with the Securities and Exchange Commission and traded on the OTC Pink Sheets Current Information Alternative Reporting electronic platform under the symbol “AVNI.”

History

Down2Fish operates a Florida based fishing charter business that offers a range of curated maritime adventures that include inshore, offshore, and custom charters for fishing enthusiasts, nature lovers and tourists. The business is operated from a private dock in Palmetto, Florida that services the Tampa Bay area in addition to St Petersburg, Sarasota, Venice, Port Charlotte, and Clearwater. Down2Fish generates revenue from the sale and provision of fishing charter services.

Services

Down2Fish offers the following service options for seaborne adventures:

In-shore fishing charters are an excellent way to experience deep-sea fishing off the Florida Gulf coast without spending the day motoring out to the open sea and back again. Customers get the full experience of baiting their line, casting, hooking, and landing a real live Gulf water fish, all within sight of shore. We offer in-shore charters as full or half-day adventures that includes exploring flats and bays up to three miles from the beach. May, June, and July are the best months for inshore fishing in the Tampa Bay area. Popular inshore fish species include mangrove snapper, snook, redfish, tarpon, and cobia. Fishing lessons are included on our charters along with help in cleaning the catch.

An offshore deep-sea fishing charter is designed to be an immersive experience. Charters are all-day trips that travel up to eighty miles offshore to open waters off the Florida Gulf coast, that are home to large fish, up to 50lbs or more including red grouper, scamp grouper, gag grouper, mahi mahi, American red snapper, red porgy, greater amberjack, blackfin tuna, various shark species, king mackerel, jack crevalle, and cobia. The skills required for deep-sea fishing can be more challenging than that required for in-shore fishing and the equipment more exhaustive to use. Fishing lessons for inexperienced deep-sea anglers are often a good part of the charter. We offer deep-sea fishing all year round subject to weather conditions.

Sight-seeing charters specialize in taking customers out on local waterways on guided tours of aquatic and terrestrial points of interest. This type of charter works well in tourist destinations such as Tampa.

Custom or special event charters are all-day trips designed to commemorate special events such as weddings, corporate outings, or birthday parties that can combine in-shore and off-shore fishing charters. Customers can choose from a variety of activities and sight-seeing options tailored to specific requests.

We intend to offer dolphin watching charters as the means to grow the Down2Fish brand in the Greater Tampa area and are exploring the possibilities for offering whale watching charters. The Tampa Bay area is ideal for dolphin spotting as many dolphins live in shallow waters close to the coastline. Dolphin tours are popular with families and groups. However, Down2Fish will need a larger vessel that can carry more clients to initiate dolphin watching charters. North Atlantic right whales can be sporadically spotted from November to April calving in waters off the Florida Gulf coast. Given that right whale spotting in Florida is a rarity, we are unaware of any fishing charter companies in Florida that offer whale watching tours so to offer this service could quickly help us distinguish the Down2Fish brand.

Industry

The fishing charter industry consists of businesses that engage in services such as inshore/coastal fishing, offshore fishing, and tournament fishing. Operators provide charter boat services for individuals, parties, and companies. Operators may vary greatly in size, ranging from large operators with a fleet of vessels to single boat owner-operators and part-time charter companies. The industry has seen faltering growth over the past five years. COVID-19 was the primary disruption that resulted in a significant decline in domestic tourism.

The IBISWorld report dated to September 2023, explains that the fishing charter industry has experienced a moderate decline over the last five years. Overall revenue was estimated to drop at an annualized rate of 4.8% through that period to $440.3 million. Despite the fall in revenue, the IBISWorld report added that the number of charter boat businesses grew by 2.4% to 3,649, and the number of charter boat employees grew by 1.4% to 5,753 during the prior five years to September 2023. While the fishing charter industry benefited from a recovering economy in 2021 post pandemic, rising inflation in 2022, dampened growth through 2023. The reports notes that the fishing charter industry continues to face stiff competition from other recreational activities such as hiking, running, and video games along with a negative shift in consumer confidence. Inflation has caused consumers to save more of their earnings in response economic uncertainty which sentiment has had a chilling effect on the demand for fishing charter boat services.

Looking ahead, the IBISWorld report for the fishing charter business has forecast an increase in revenue at an annualized rate of 3.0% to $511.3 over the next five years as disposable income is expected to increase in a tight labor market, which development will likely provide consumers with more discretionary income for recreational services such as fishing charters.

Competition

While no single participant in the fishing charter business holds a dominant share of the available market, we do nonetheless face intense competition. Competitors range from industry operators that maintain fleets of vessels, to single vessel owner-operators and part-time charter companies. Existing and prospective competitors have or could have advantages over us such as those with greater name recognition, longer operating histories, deeper service offerings, larger customer bases, substantially greater financial or other resources. Many of our competitors offer fishing charters at a low-cost that may be difficult or impossible for us to match and are able to book fishing charters directly from their own e-commerce websites as compared to our reliance on third-party booking sites or services to accept payment, all of which are paid a fee for each engagement.

We are faced with a bevy of competitors in the Tampa Bay area that include:

While this list of competitors is in no way exhaustive it does provide a snapshot of competition in the area and some of the distinguishing characteristics used by these competitors to attract fishing charters.

Our competitive weaknesses are tied to our limited operating history and the size of our operation. Since we are relatively new to operating in the Tampa Bay area, our business struggles with brand recognition in a market filled with options. We expect that the implementation of our business plan will increase brand recognition and customers for our fishing charters. However, efforts to expand brand recognition require that we overcome our biggest competitive weakness that being the limited financial resources at our disposal. Material growth will depend, in no small part on our ability to purchase an additional vessel to host dolphin sightseeing charters, and our willingness to spend additional sums on marketing our charters. We do not presently have the funds necessary to purchase a suitable dolphin sightseeing vessel, or to boost marketing efforts.

Despite the nature of the fishing charter industry and our competitive weaknesses, we believe that the services we offer today will continue to compete effectively due to several factors. We have a team with excellent experience in the fishing charter industry that provides the core strength of our workforce. Aside from the synergies that exist in our carefully selected workforce, our charters are guided by best practices in the industry. Our captain is at the top of the range for expertise in running fishing charters. Another of our strengths is our location in Palmetto, Florida with easy access to the Florida Gulf Coast, an area extremely popular for anglers and tourists alike. The state-of-art condition of our fishing boats and fishing equipment is an attraction for customers. Another of our strengths is our attention to fishing rules and regulations focused on preserving the environment. Our concern for the environment is not lost on customers who are increasingly focused on enjoying nature without causing harm in the process. We are also cost competitive with other fishing charter businesses in the area.

Market Analysis

The fishing charter industry competes with a wide variety of other recreational activities that include non-fishing sightseeing, land-based recreation such as hiking, city sightseeing, and even sporting events. A research report published by IBISWorld in 2018 reported that during the five years that preceded that year, the industry lost ground to other forms of recreation as consumer preferences changed. The COVID-19 pandemic had a further chilling effect on the industry as prospective customers were bound to remain in their homes. However, a post-COVID-19 IBISWorld report on the fishing charter industry released in September of 2023 forecasts that the industry is expected to realize annualized revenue growth through 2028, on the basis that sustained economic growth will lead to an increase in consumer incomes which will enable more people to spend more money on recreational activities. Despite the effects of inflation, there is reason to believe that the fishing charter industry is about to enter a consistent growth pattern in the face of competing recreational activities.

Marketing Strategy

Our marketing strategies are directed towards achieving specific objectives that support our strategic goals to create new market channels, increase revenue and grow market share. We expect to leverage off premier fishing charter experiences to win new customers and retain existing ones. Down2Fish maintains modern well equipped fishing charter vessels, experienced crews, a convenient location from which to embark on charters, and reliance on highly reliable payment platforms for payment. Our intention is also to work with brand and publicity consultants to help us map out publicity and advertising strategies that will help us reach our target market.

We expect to continue to make use of the following marketing and sales strategies:

Our pricing is similar to the average price of what is charged for a fishing charter. While we do not charge more than our competitors, we do not charge less. Nonetheless, we do intend to offer discounts on our fishing charters for special events, and to reward loyal customers especially for referrals to our business.

Our facility to accept payments is all inclusive, as we are quite aware that different customers prefer different payment options such as:

Governmental Regulation

Our business is subject to extensive federal, state, and local regulations in Florida.

The captain of a saltwater fishing charter must comply with U.S. Coast Guard (“USGC”) regulations which include holding a USGC Captain’s License. Vessels used by a charter captain to do business must be commercially registered or have a USGC certificate of documentation with a commercial designation and follow USGC vessel safety requirements. Vessels carrying more than six passengers for hire must also have a Certificate of Inspection issued by the USGC. The USGC also exercises full authority over the safety and health of crews aboard vessels that have been inspected and certified. Any safety or health complaints received by the Occupational Safety and Health Administration (“OSHA”) concerning crew working conditions on an inspected vessel are referred to the USGC for determination of whether the events complained of constitute hazardous conditions. Fishing charters conducted in the Gulf of Mexico are also required to hold Gulf of Mexico Charter/Headboat for Reef Fish, and a Gulf of Mexico Charter/Headboat for Coastal Migratory Pelagics permits issued by the National Oceanic and Atmospheric Administration (“NOAA”). Enforcement falls on the NOAA Office of Law Enforcement.

Florida requires a Charter Captain or Boat Fishing License to carry paying customers for the purpose of taking, attempting to take or possessing saltwater fish or organisms. A Florida Charter Capitan license also covers customers on a charter who are not required to hold separate recreational saltwater fishing licenses and permit the licensed captain to go from boat to boat to do business. Florida also requires us to hold a Gulf Reef Fish Charter/Endorsement. State licenses are issued by the Florida Fish and Wildlife Conservation Commission (“FWC”). Our business is also subject to FWC Florida Charter for Hire Regulations and Florida Recreational Fishing Regulations. We are further required to register as our boats as commercial vessels with the Florida Highway Safety and Motor Vehicles. Our business must also follow certain local restrictions as to seasons, volume, and fish species subject to catch.

We are also subject to city and county business license requirements.

Our failure to comply with the rules and regulations that govern fishing charter businesses could result in substantial penalties. Since such rules and regulations are frequently amended or interpreted differently by regulatory agencies, we are unable to accurately predict the future cost or impact on our business in complying with such laws or ultimately what cost or impact compliance or otherwise will have on us. Nevertheless, we do believe that our business is currently in regulatory compliance with those rules and regulations incumbent upon us.

Environment

We seek to comply with all applicable federal, state, and local statutory laws or regulations concerning the preservation of our environment. The Magnuson-Stevens Fishery Conservation and Management Act (“MSA”) is the primary federal law governing marine fisheries management in federal waters up to two hundred nautical miles off the U.S. coasts. The MSA works through local councils to maintain its objectives. Our business falls under the Gulf of Mexico Fishery Management Council, one of eight councils that are responsible for developing management plans to prevent overfishing, rebuild fish stocks and promote the long-term health of fishing. MSA councils look to the Scientific and Statistical Committee (“SSC”) for advice over a range management issues, such as what is an acceptable biological catch, maximum sustainability, and rebuilding targets. Based on data generated by the SSC, each council develops a fish management plan and submits recommended regulations to the U.S. Secretary of Commerce. The Gulf of Mexico Fishery Management will also work with the FWC to ensure consistency in catch limitations. NOAA is one of the agencies responsible the enforcement of MSA directives.

Florida is fiercely protective of its fish stocks given the tremendous economic impact it has on the state. On the state level the FWC is responsible for saltwater regulations that extend up to nine nautical miles off the Florida Gulf Coast. Regulations published through the FWC go to bag limits, species, size, and season for each fish species that can be legally caught. The FWC also publishes a list of fish species that cannot be caught. Since restrictions are subject to change, current restrictions are published online on the FWC’s website, eRegulations.com, and through independent businesses that offer fishing charters. Local fishing areas may also maintain restrictions on fishing that apply to their communities.

Expenditures for compliance with federal state and local environmental laws have not had, and are not expected to have, a material effect on our business.

Employees

Arvana has one employee who serves as its chief executive officer, chief financial officer, and a director. He engages consultants, attorneys, accountants, and auditors as necessary to direct Arvana’s business. Management has no intention of engaging additional employees until the sustainability of our business is assured.

Down2Fish has a non-employee compensation arrangement with its manager and plans to hire additional persons moving forward to increase the number of fishing charters tours undertaken.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements and Labor Contracts

Arvana owns no patents, trademarks, licenses, franchises, concessions, or royalty agreements and is not subject to any labor contracts.

Reports to Security Holders

Our annual report contains audited financial statements. We are not required to deliver an annual report to security holders and will not automatically deliver a copy of the annual report to our security holders unless a request is made for such delivery. We file our required reports and other information with the Commission. The statements and forms filed by us with the Commission have also been filed electronically and are available for viewing or copy on the Commission maintained Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The Internet address for this site can be found at http://www.sec.gov.

ITEM 1A. RISK FACTORS

Arvana is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and, as such, are not required to provide the information under this Item.

ITEM 1B. UNRESOLVED STAFF COMMENTS 

Arvana is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.

ITEM 1C. CYBERSECURITY

Limited Risk Management Strategy for Handling Sensitive Data

Arvana is committed to the integrity and security of the sensitive data that it collects, maintains, and transmits across its computer systems. Over the ordinary course of our business, Arvana and its third-party service providers, such as charter booking services, collect, maintain, and transmit sensitive data including proprietary or confidential business information (such as operational data and personal information). The secure maintenance of this information is critical to our business and reputation.

Despite our efforts to implement robust security measures, in reliance on administrative, technical, and physical safeguards, our risk management strategies, and practices for protecting sensitive data are subject to certain limitations. A variety of factors give rise to these limitations including the evolving nature of cyber threats, resource constraints, and the inherent risks associated with the technologies we and third-party service providers employ. Arvana relies on third parties, including cloud vendors and consultants, for various business functions. Many of our third-party service providers have access to our information systems and data, and we rely on such third parties for the operation of our business. We oversee third-party service providers by conducting vendor diligence. Vendors are generally assessed for risk based on the nature of their service, access to data and systems and supply chain risk.

Arvana’s current risk management strategy may not fully account for or mitigate the risks posed by emerging technologies or the potential impact of these limitations on our business. Financial liabilities, damage to our reputation, and erosion of customer trust could negatively affect our business operations and financial condition.

We have adopted a cybersecurity governance structure to identify, assess, and manage material risks from cybersecurity threats that include a framework to respond to and assess internal and external threats to the security, confidentiality, and integrity of Arvana’s data and information systems. Under which framework management is responsible for assessing and managing material risks that arise from cybersecurity threats. We have not engaged third-party qualified contractors or claim any management expertise from which to draw in the event of cybersecurity threats.

Governance

When identified by management, cybersecurity threats are to be immediately reported to Arvana’s Audit Committee. The Audit Committee has primary responsibility for oversight of cybersecurity threats once a cybersecurity threat has been reported to it by management. Matters to be considered by the Audit Committee include management risks relating to data privacy, technology, and information security. The Audit Committee must also consider Arvana’s cyber security measures and the back-up of information systems, along with what steps Arvana has taken to monitor and control cybersecurity exposure. Further, the Audit Committee is tasked with the responsibility for conferring with management and Arvana’s auditors as to the adequacy and effectiveness of information safeguards, cybersecurity policies, and internal controls that impact information security. The Audit Committee will be briefed on any material cybersecurity incidents that might adversely affect our business at least once each year, such brief will include topics such as risk assessment, risk management, control decisions, service provider arrangements, security incidents, responses with recommendations for changes or updates to policies and procedures.

While Arvana has not experienced cybersecurity incidents in the past, it cannot guarantee that our cybersecurity safeguards will prevent breaches or breakdowns of our third-party service providers’ information technology systems, particularly in the face of continually evolving cybersecurity threats and increasingly sophisticated threat actors.

A cybersecurity incident could materially affect our business, results of operations, financial condition, and reputation, in addition to potentially subjecting us to government investigations, litigation, fines or damages.

ITEM 2. PROPERTIES 

Arvana leases executive office is located at 299 Main Street, 13^th Floor, Salt Lake City, Utah 84111. We pay an annual rent of $828 payable on a month-to-month basis.

Our business office is located at 901 25^th Avenue W, Palmetto, Florida 34221. We paid a nominal fee for the use of a boat dock and two boat slips to cover the term of the lease that expires on December 31, 2025.

We believe that these arrangements are appropriate at this time given our focus on operating efficiencies and do not believe that we will need to maintain a larger spaces in the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS 

Arvana is not a party to any material litigation, arbitration, governmental proceeding, or other legal proceeding currently pending or known to be contemplated against it, or any of its officers or directors in their respective capacities as members of Arvana’s management team.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

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

Market Information

Shares of Arvana’s common stock are quoted on the OTC Pink Sheets Current Information Alternative Reporting electronic platform under the symbol “AVNI”.

Over-the-counter market quotations of our common stock reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions.

On February 22, 2023, Arvana’s stockholders approved a forward-split on a 3-1 basis of its outstanding common stock that was effected on April 19, 2023, to stockholders of record on March 31, 2023.

Holders

Arvana has 103 stockholders of record holding a total of 107,845,554 shares of fully paid and non-assessable common stock of the 500,000,000 shares of common stock, par value $0.001, authorized. We believe that the number of beneficial owners is substantially greater than the number of record holders given a portion of our outstanding common stock is held in broker “street names” for the benefit of individual investors.

Dividends

Arvana has neither the ability nor any history of paying cash dividends to its stockholders and has no intention to pay cash dividend in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

The table below details compensation plans, including individual compensation arrangements, under which Arvana equity securities have been authorized for issuance as of year-end December 31, 2023, aggregated as follows: (i) All compensation plans previously approved by security holders; and (ii) All compensation plans not previously approved by security holders.

¹ The Arvana Inc. 2002 Stock Incentive Plan was approved by stockholders on February 22, 2023.

Arvana Inc. 2022 Stock Incentive Plan

The purpose of the Arvana Inc. 2022 Stock Incentive Plan (“Incentive Plan”) is to provide a means through which Arvana may attract able persons to serve as employees, directors, or consultants of Arvana or its subsidiaries, and to provide a means whereby those individuals upon whom the responsibilities for the successful administration and management of Arvana rest, and whose present and potential contributions to Arvana are of importance, may acquire and maintain stock ownership, thereby strengthening their concern for the welfare of Arvana. The Incentive Plan provides for granting incentive stock options (“ISO’s”), non-qualified stock options (“NQSO’s”), restricted stock awards (“RSA’s”), or any combination of the foregoing, as is best suited to the circumstances of the employee, consultant, or director who might be eligible for participation. Employees are eligible for incentive stock options and non-qualified stock options under the Incentive Plan. Non-employee members of our board of directors (“Board”) and consultants are eligible for non-qualified stock options.

Performance Graph

Arvana is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.

Recent Sales of Unregistered Securities

The table below details Arvana sales of securities over the past three years which were not registered under the Securities Act of 1933, as amended (“Securities Act”) that includes sales or reacquired securities, new issues, securities issued in exchange for property, services or other securities, and new securities that resulted from the modification of outstanding securities. None of sales detailed below involved any underwriters, underwriting discounts, or commissions, except as specified hereto.

On September 30, 2022, Arvana sold an aggregate of five million four hundred thousand (5,400,000) shares to 16 individuals and 2 corporations, pursuant to the exemptions from the registration promulgated under Securities Act as follows;

⁽¹⁾  Brian Buckley participated in the placement twice.

⁽²⁾ Orsa & Company is wholly owned by Ruairidh Campbell, an officer and director of Arvana.

⁽³⁾ Arvana paid a 10% referral fee to a resident of Alberta, Canada pursuant to provincial regulatory exemptions from registration.

On July 23, 2021, we issued an aggregate of eighty-eight million six hundred and thirteen thousand five hundred and forty-four (88,613,544) shares in debt settlement to four individuals (4) and five (5) entities, pursuant to the exemptions from the registration promulgated under Securities Act as follows;

⁽¹⁾  Zahir Zhanani was a former officer and director of Arvana.

⁽²⁾  Valor Invest Ltd. and International Portfolio Management are under the common control of Altaf Nazerali.

⁽³⁾  Sir John Baring is the chairman of Arvana’s Board.

⁽⁴⁾  681315 B.C. Ltd. is beneficially owned by Arvana’s former bookkeeper.

ITEM 6. [RESERVED]

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this annual report contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include but are not limited to those discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition below. The following discussion should be read in conjunction with our financial statements and notes thereto included in this report. Our fiscal year end is December 31.

Discussion and Analysis

Overview

Arvana acquired Down2Fish on February 3, 2023, as a wholly owned subsidiary. Down2Fish operates a Florida based fishing charter business that offers a range of curated maritime adventures that include inshore, offshore, and custom charters for fishing enthusiasts, nature lovers and tourists. The business is operated from a private dock in Palmetto, Florida that services the Tampa Bay area in addition to St Petersburg, Sarasota, Venice, Port Charlotte, and Clearwater. Down2Fish generates its revenue from the sale and provision of fishing charter services.

Plan of Operation

Our plan of operation is to support the development of our business, and to build on its existing business model. We believe that an expansion of marketing efforts around Tampa Bay, to offer a wider range of services, such as dolphin tours, will help establish the Down2Fish brand, attract more customers and increase revenues. Expansion into new service offerings will however require capital sufficient to finance the purchase of another vessel and additional boating equipment. We believe that dolphin tours can return net revenue on a consistent basis if we are able to attract sufficient customers to each excursion. We are currently licensed and equipped to carry no more than six (6) customers on each fishing charter. A vessel designed primarily for dolphin tours can carry from fifty (50) to one hundred (100) customers. Our primary impediment for equipment procurement and installation is cost. We are presently considering financing options that might become available to us in the near term but have no assurance that financing options will become available or that if such did become available, that the financing terms would be tenable for our business. Unless or until we can offer excursions that cater to a greater number of customers on each excursion, we will continue to focus on offering more fishing charter excursions to build revenue and improve our results of operations.

While Arvana operates its fishing charter business it has continued to seek business opportunities in real estate development. On December 12, 2023, Arvana announced a non-binding memorandum of understanding to acquire the business of FirstShot Centers, LLC, a Nevada based company intent on expanding its specialty use concept to acquire and repurpose vacant shopping malls, outlet locations and big bog stores throughout the United States to attract new tenants from targeted industries that offer goods or services that are not available online. The parties are yet to enter into a definitive agreement pending delivery of its business and financing plan.

Results of Operations

During the year ended December 31, 2023, Arvana purchased Down2Fish as a wholly owned subsidiary, raised capital to sustain operations, evaluated other business opportunities, and offered charter fishing services.

Charter fishing services were curtailed in the third quarter of 2023 and halted in the fourth quarter of 2023, due to necessary repairs to both of our vessels under their respective warranties.

Our results of operations for the year ended December 31, 2023, as compared to the year ended December 31, 2022, were as follows below:

Revenue

Charter revenue from operations for the twelve-month period ended December 31, 2023, was $24,276 from $0 for the comparable twelve-month period ended December 31, 2022. The increase in revenue in the current twelve-month period is attributed to the purchase of Down2Fish in February of the current year. Revenue results for the current year were hampered by necessary repairs to both of our fishing charter vessels.

We expect charter revenue from operations to increase over the next twelve months as both of our fishing charter vessels return to active service.

Operating Expenses

Operating expenses for the twelve-month period ended December 31, 2023, increased to $555,198 as compared to $165,831 for the twelve-month period ended December 31, 2022, an increase of 235%. The increase in operating expenses over the twelve-month period ended December 31, 2023, is attributed to the addition of charter expenses, the increase in general and administrative expenses that included stock-based compensation, transfer agent costs and auditing expenses connected to the purchase of Down2Fish.

We expect operating expenses to increase in future periods as our business development strategies are implemented while auditing and accounting professional fees are expected to decrease over the next twelve months.

Other Expense (Income)

Other expense for the twelve-month period ended December 31, 2023, was $785,651 as compared to other income of $14,435 for the twelve-month period ended December 31, 2022. The transition from other income to other expense over the comparative periods can be primarily attributed to the loss recognized with the acquisition of Down2Fishon and interest expanse offset by lease income realized in the current twelve-month period. Other income in the current prior-month period can be attributed to an amount forgiven in connection with a rescission and mutual release agreement, offset by interest expense.

We expect other expense to decrease over future periods as debt instruments tied to the fishing charter vessels are satisfied and lease income increases.

Net Loss

Net loss for the year ended December 31, 2023, was $1,316,573, as compared to a net loss of $151,395 for the year ended December 31, 2022, an increase of 770%. The increase in net loss in the current twelve-month period over the prior comparable period can be primarily attributed to an increase in losses from operating expenses, interest expenses and the loss recognized on the asset purchase of Down2Fish, offset by the realization of revenue from charter boat services and other income that is generated through a lease of the charter vessels.

We expect to continue to realize net losses from operations over the next twelve months as management works to implement its business model.

Capital Expenditures

We expended no amounts on capital expenditures for the respective twelve-month periods ended December 31, 2023, and December 31, 2022.

Liquidity and Capital Resources

Since inception, Arvana has experienced significant changes in liquidity, capital resources, and stockholders’ deficit.

We had current assets of $27,171 as of December 31, 2023, that consisted of cash, and a bond as compared to current assets of $142,365 as of December 31, 2022, that consisted solely of cash. Total assets were $216,549 as of December 31, 2023, that consisted of current assets, property, equipment, and intangible assets, as compared to total assets, of $142,365 as of December 31, 2022, that consisted solely of cash. We had a working capital deficit of $311,316 as of December 31, 2023, as compared to a working capital surplus of $104,495 as of December 31, 2022. Net stockholders' deficit in Arvana was $962,126 at December 31, 2023, as compared to a net stockholders' equity in Arvana of $104,495 at December 31, 2022.

The following table shows a summary of our cash flows for the periods presented:

Cash Used in Operating Activities

Net cash used operating activities for the year ended December 31, 2023, was $206,118 as compared to net cash used in operating activities of $133,238 for the twelve-month period ended December 31, 2022. Net cash used in operating activities in the current period can be attributed to book expense items that do not affect the total amount relative to actual cash used, such as share based compensation, depreciation, and loss on asset purchase. Balance sheet accounts that affect cash but are not income statement related that are added or deducted to arrive at cash used in operating activities, include accounts payable and amounts due to related parties.

We expect net cash used in operating activities to continue over the next twelve months as we implement our business plan.

Cash Used in Investing Activities

Net cash used in investing activities for the year ended December 31, 2023, was $54,552 as compared to $0 net cash used in investing activities for the year ended December 31, 2022. Net cash used in investing activities in the current twelve-month period can be attributed to asset acquisition and the purchase of fixed assets offset by amounts received from the sale of fixed assets.

We expect to use net cash in investing activities in the near term as investment will be required of us in connection with the expansion our fishing charter business.

Cash Flows from Financing Activities

Net cash provided by financing activities for the year ended December 31, 2023, was $140,376, as compared to net cash provided by financing activities of $272,263 for the year ended December 31, 2022. Net cash provided from financing activities in the current twelve-month period consisted of proceeds from loans payable to related parties offset by payments made on loans payable to related parties. Net cash provided by financing activities for the year ended December 31, 2022, was $272,263, consisted of a private equity placement offset by payments on loans payable to related parties and equity issuance costs.

We expect to continue to use net cash provided by financing activities over the next twelve months generated through additional private equity placements, public offerings, or private debt to expand our business.

Arvana does not intend to pay cash dividends in the foreseeable future.

Arvana had no lines of credit or other bank financing arrangements as of December 31, 2023.

Arvana had no commitments for future capital expenditures at December 31, 2023.

Arvana has adopted the Arvana Inc. 2022 Stock Incentive Plan and has an employment agreement with its executive officer.

Arvana has no current plans for the purchase or sale of any plant or equipment.

Arvana has no current plans to make any changes in the number of employees.

Critical Accounting Policies

The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses in the reporting period. We base our estimates and assumptions on current facts, historical experience, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. We continually review the estimates and underlying assumptions to ensure they are appropriate for the circumstances. Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from our estimates.

A summary of our critical accounting policies is provided in Note 1 to the audited financial statements for the years ended December 31, 2023, and 2022, that are included in this Form 10-K. We discuss accounting policies that are significant in determining our results of operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities.”

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

Our audited financial statements for the year ended December 31, 2023, 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.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders’ of Arvana Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Arvana Inc. (the Company) as of December 31, 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2023, and the related consolidated notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred recurring operating losses, has incurred negative cash flows from operations and has an accumulated deficit. For the year ended December 31, 2023, the Company had an operating loss of $530,922, net cash $206,118 and working capital deficit of $311,316. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, 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.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

We did not identify any critical audit matters that need to be communicated.

We have served as the Company’s auditor since 2023.

Margate, Florida

April 5, 2024

PCAOB #5036 

ASSURANCE DIMENSIONS CERTIFIED PUBLIC ACCOUNTANTS & ASSOCIATES

also d/b/a McNAMARA and ASSOCIATES, PLLC

TAMPA BAY: 4920 W Cypress Street, Suite 102 | Tampa, FL 33607 | Office: 813.443.5048 | Fax: 813.443.5053

JACKSONVILLE: 4720 Salisbury Road, Suite 223 | Jacksonville, FL 32256 | Office: 888.410.2323 | Fax: 813.443.5053

ORLANDO:  1800 Pembrook Drive, Suite 300 | Orlando, FL 32810 | Office: 888.410.2323 | Fax: 813.443.5053

SOUTH FLORIDA:  2000 Banks Road, Suite 218 | Margate, FL 33063 | Office: 754.800.3400 | Fax: 813.443.5053

www.assurancedimensions.com

Report of Independent Registered Public Accounting Firm

To the Shareholders and Directors of Arvana Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Arvana Inc. (the “Company”) as of December 31, 2022, and the related statements of operations and comprehensive loss, changes in stockholders’ equity (deficiency), and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, during the year, the Company recognized a net loss of $151,396, has a working capital surplus of $104,495 and has an accumulated deficit of $36,240,368 that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

We determined that there are no critical audit matters.

We have served as the Company’s auditor from 2005 to 2023.

Vancouver, Canada

/s/ DAVIDSON & COMPANY LLP

PCAOB# 731

April 14, 2023 Chartered Professional Accountants

ARVANA INC.

CONSOLIDATED BALANCE SHEETS

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

ARVANA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended

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

Arvana Inc.
CONSOLIDATED Statements of Stockholders' EQUITY (DEFICIT)
Years Ended December 31, 2023, and 2022

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

ARVANA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2023, and 2022

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