10-Q 1 oranco.htm 10Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 
FORM 10-Q


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

For the quarterly period ended     September 30, 2017

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

For the transition period from                                           to _______________
 
Commission File number    000-28181

ORANCO,  INC. 
(Exact name of registrant as specified in charter) 
   
Nevada
87-0574491
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
 1981 E. Murray Holladay Rd, Suite 100,  Salt Lake City, Utah
84117
(Address of principal executive offices)
(Zip Code)
   
702-834-9810 
Registrant's telephone number, including area code 

                               
(Former name, former address, and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [x ]   No  [  ]

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Se the definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act

Large Accelerated Filer [  ]
Accelerated Filer [  ]
   
Non-Accelerated filer [  ]
Smaller Reporting Company [ x ]
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)           Yes [X]      No [ ]
 
APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer=s classes of common stock, as of the last practicable date

Class 
Outstanding as of  November 5, 2017
Common  Stock, $0.001
32,644,630
 
 
 
INDEX
 
   
Page
   
Number
PART I.
    
     
ITEM 1.
Financial Statements (unaudited)
4
     
 
Balance Sheets - September 30, 2017 and December 31, 2016
5
     
 
Statements of Operations - For the three and nine months ended September 30, 2017 and 2016
 6
     
 
Statements of Cash Flows -  For the nine months ended September 30, 2017 and 2016
 7
     
 
Notes to  Financial Statements
8
     
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
9
     
ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk
10
     
ITEM 4T.
Controls and Procedures
10
     
PART II.
    
     
ITEM 2.
 Unregistered Sales of Equity Securities and Use of Proceeds.
10
     
ITEM 6.
 Exhibits
10
     
Signatures
  
11

2
PART I - FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS
 

The accompanying  balance sheets of Oranco, Inc.  (a development stage company) at September 30, 2017 and December 31, 2016, and the related  statement of operations for the three and nine months ended September 30, 2017 and 2016  and the  statement of cash flows for the nine months, ended September 30, 2017 and 2016 have been prepared by the Company's management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating  results for the nine months ended September 30, 2017, are not necessarily indicative of the results that can be expected for the year ending December 31, 2017.
3
 
ORANCO, INC.
  
   
BALANCE SHEETS
  
   
SEPTEMBER 30, 2017 AND DECEMBER 31, 2016
  
             
   
September 30,
    
December 31,
  
   
2017
    
2016
  
Assets
            
             
Current Assets:
            
 Cash
  
$
483
    
$
3,234
  
Prepaid expenses
    
5,833
      
3,333
  
                 
Total current assets
    
6,316
      
6,567
  
                 
Total Assets
  
$
6,316
    
$
6,567
  
                 
Liabilities and Stockholders' Equity
                
                 
Current Liabilities:
                
Accounts payable
  
$
5,560
    
$
1,300
  
Interest payable, stockholder
    
781
      
164
  
Note payable, stockholder
    
27,500
      
10,000
  
                 
Total current liabilities
    
33,841
      
11,464
  
                 
Stockholders' Equity:
                
Common stock, $.001 par value 100,000,000 shares authorized, 4,269,950 issued and outstanding
    
4,270
      
4,270
  
Additional paid-in capital
    
349,898
      
349,898
  
Accumulated deficit
    
(381,693
)
    
(359,065
)
                 
Total Stockholders' Equity
    
(27,525
)
    
(4,897
)
               
Total Liabilities and Stockholders'  Equity
  
$
6,316
    
$
6,567
  
 
The accompanying notes are an integral part of the financial statements.


4
ORANCO, INC.
  
   
STATEMENTS OF OPERATIONS
  
                         
   
For the
    
For the
    
For the
    
For the
  
   
Three Months
    
Three Months
    
Nine Months
    
Nine Months
  
   
Ended
    
Ended
    
Ended
    
Ended
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2017
    
2016
    
2017
    
2016
  
                         
Revenues
  
$
--
    
$
--
    
$
--
    
$
--
  
                                 
Expenses, general and administrative
    
5,200
      
7,442
      
22,012
      
22,741
  
                                 
Operating loss
    
(5,200
)
    
(7,442
)
    
(22,012
)
    
(22,741
)
                                 
Other income (expense):
                                
   Interest income
    
--
      
1
      
1
      
3
  
   Interest expense
    
(277
)
    
(63
)
    
(617
)
    
(63
)
Total other income (expense)
    
(277
)
    
(62
)
    
(616
)
    
(60
)
                                 
Loss before provision for income taxes
    
(5,477
)
    
(7,504
)
    
(22,628
)
    
(22,801
)
                                 
Provision for income taxes
    
--
      
--
      
--
      
--
  
                                 
Net loss
  
$
(5,477
)
  
$
(7,504
)
  
$
(22,628
)
  
$
(22,801
)
                                 
Net loss per share
  
$
--
    
$
--
    
$
(0.01
)
  
$
(0.01
)
                                 
Weighted average shares outstanding
    
4,269,950
      
4,269,950
      
4,269,950
      
4,269,950
  
 
The accompanying notes are an integral part of the financial statements.
5
ORANCO, INC.
  
             
STATEMENTS OF CASH FLOWS
  
             
    
For the
    
For the
  
    
Nine Months
    
Nine Months
  
    
Ended
    
Ended
  
    
September 30,
    
September 30,
  
   
2017
    
2016
  
             
Cash flows from operating activities:
            
Net loss
  
$
(22,628
)
  
$
(22,801
)
Adjustments to reconcile net loss to cash provided by operating activities:
                
(Increase) decrease in prepaid expenses
    
(2,500
)
    
1,930
  
Increase (decrease) in accounts payable
    
4,260
      
(650
)
Increase in interest payable
    
617
      
63
  
               
Net cash used by operating activities
    
(20,251
)
    
(21,458
)
               
Cash flows from investing activities:
    
--
      
--
  
Cash flows from financing activities:
                
               
Proceeds from related party note payable
    
17,500
      
10,000
  
Net decrease in cash
    
(2,751
)
    
(11,458
)
                 
Cash, beginning of period
    
3,234
      
16,792
  
                 
Cash, end of period
  
$
483
    
$
5,334
  
Interest paid
  
$
--
    
$
--
  
Income taxes paid
  
$
--
    
$
--
  
 
The accompanying notes are an integral part of the financial statements.

6

ORANCO, INC.

NOTES TO FINANCIAL STATEMENTS


1.
Summary of Business and Significant Accounting Policies 
     
 
a.
Summary of Business
     
   
The Company was incorporated under the laws of the State of Nevada on June 16, 1977.  The Company has been in the business of the development of mineral deposits. During 1983 all activities were abandoned and the Company has remained inactive since that time. The Company has not commenced principal operations. The Company is looking to pursue business opportunities.
     
 
b.
Basis of Presentation
     
   
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") as promulgated in the United States of America.
     
 
c.
Cash Flows
     
   
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash or cash equivalents.
     
 
d.
Net Loss per Share
     
   
The net loss per share calculation is based on the weighted average number of shares outstanding during the period.
     
 
e.
Use of Estimates
     
   
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.
     
 
f.
Fair Value of Financial Instruments
     
   
ASC 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2017 and December 31, 2016, the carrying value of certain   financial  instruments   approximates fair value due to the short-term nature of such instruments.
 
7
 
Notes to Financial Statements – Continued:
 
2.
Notes Payable, Stockholder
   
Stockholder notes payable consist of the following at September 30, 2017 and December 31, 2016:

   
2017
    
2016
  
Notes payable to an individual also a stockholder and director of the Company, interest is being charged at 4%, the notes are unsecured and due one year from issuance. The note principal and accrued interest is convertible into common stock at $.001 per share.
  
$
27,500
    
$
10,000
  
 
  On November 4, 2017, the notes payable and accrued interest was converted into 28,374,680 shares of common stock.  There was no gain or loss on the conversion.
   
3.
Warrants and Stock Options
   
  No options or warrants are outstanding to acquire the Company's common stock.
   
4.
Income Taxes
   
The Company has had no taxable income under Federal or State tax laws. The Company has loss carrforwards totaling $359,065 that may be offset against future federal income taxes.  If not used, the carryforwards will expire 20 years after they are incurred.  Due to the Company being in the development stage and incurring net operating losses, a valuation allowance has been provided to reduce the deferred tax assets from the net operating losses to zero.  Therefore, there are no tax benefits recognized in the accompanying statement of operations.
   
5.
Going Concern
   
As shown in the accompanying financial statements, the Company incurred a net loss of $22,628 during the period ended September 30, 2017 and accumulated losses of $381,693 since inception at June 15, 1977.  The Company's current liabilities exceed its current assets by $27,525 at September 30, 2017.  These factors create an uncertainty as to the Company's ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent upon the success of raising additional capital through the issuance of common stock and the ability to generate sufficient operating revenue.  The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.


8
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 

Plan of Operations.

The Company has not engaged in any material operations or had any revenues from operations  since inception.  The  Company's  plan of operation  for the next 12  months is to  continue  to seek the  acquisition  of assets,  properties  or  businesses  that  may  benefit  the  Company  and  its stockholders. Management intends to focus is efforts in Europe, Africa, and South America both because management is located Europe and because management believes that the Company can locate superior acquisition opportunities in these geographical areas.  Management anticipates that to achieve any such acquisition, the Company will issue shares of its common stock as the sole consideration for such acquisition.

During the next 12 months, the Company's only foreseeable cash requirements will relate to maintaining  the  Company in good  standing  or the  payment of expenses  associated  with  reviewing or  investigating  any potential  business venture,  which  the  Company  expects  to pay from its  cash  resources as well as loans from management.  Management believes that these funds are sufficient to cover its cash needs for the next 12 months. If additional funds are required during this period, such funds may be  advanced  by  management  or stockholders as loans to the Company. Because the Company has not identified any such venture as of the date of this Report, it is impossible to predict the amount of any such loan.  However, any such loan will be on terms no less favorable to the Company than would be available from a commercial lender in an arm's length transaction. As of the date of this Report, the Company is not engaged in any negotiations  with any person  regarding  any venture.
 
Results of Operations.

Other than restoring and maintaining its good  corporate  standing in the State  of  Nevada,  obtaining an audit of the Company's financial statements, submitting the Company's common stock for quotation on the NASD OTC Bulleting Board, the filing of  a Form 10 Registration, and the completion of a private placement, the Company has had no material business operations and in the two most recent calendar years, it activities have been limited to evaluating possible merger or acquisition candidates..

Three And Nine Month Period Ended September 30, 2017 and 2016
 
The Company did not generate any revenue during the three and nine months ended September 30, 2017 and 2016, respectively. It had interest income of $0 and $1 for the three months  and $1 and $3 for the  nine months ended September 30, 2017 and 2016.
 
General and administrative expenses, including interest, were $5,477 and $7,504 for the three months and $22,628 and  $22,801 for the nine months ended September 30, 2017 and 2016, respectively . The changes in expenses for the three months ended September 30, 2017 and 2016 were largely some decreases in accounting, legal, other professional costs and timing issues and as to nine months ended September 30, 2010 and 2016 largely due to decreased regulatory costs. As a result of the foregoing, the Company realized net losses of $5,477 and $7,504 for the three months and $ 22,628 and $22,801 for the nine months ended September 30, 2017 and 2016, respectively

Liquidity and Capital Resources

At September 30, 2017, assets consisted of $483 in cash and $5833 in prepaid expenses compared to $3,234 in cash and $3,333 in prepaid expenses on December 31, 2016. As of September 30, 2017, the Company had $5,560 in accounts payable. In addition, Notes Payable to stockholders increased from $10,000 to $27,500, the proceeds of which were used to pay the Company's operating costs.

Currently, the Company has no material commitments for capital expenditures.  Management anticipates that operating expenses for the next twelve months will be approximately $20,000 to $25,000. Management understands that it does not have sufficient cash to meet its immediate operational needs and will require additional capital to cover ongoing operating expenses. Management may attempt to raise additional capital for its current operational needs through loans from its officers or shareholders, debt financing, equity financing or a combination of financing options.  However, there are no existing understandings, commitments or agreements for such an infusion; nor can there be assurances to that effect.
9

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Required by smaller reporting companies.


ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our president/chief financial officer, carried out an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of our last fiscal quarter, September 30, 2017, (the "Evaluation Date"). Based upon that evaluation, our president/chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to our management, including our president and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter (ended September 30, 2017) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART 2 - OTHER  INFORMATION

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) On November 4, 2017, pursuant to the terms of the notes, the holder of  three Convertible notes in the principal amount of $27,500 elected to convert such notes, together with accrued interest of $874.68 into 28,374,680 common shares of the Company. The shares were issued pursuant to the exemption from registration provided for under Section 4(2) of the Securities Act of 1933, as amended.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit 31.1
Rule 13a-14(a)/15d-14(a) Certification.
   
Exhibit 32.1
Certification by the Chief Executive Officer/Acting Chief Financial Officer Relating to a Periodic Report Containing Financial Statements.*
   
101.INS
XBRL Instance*
   
101.SCH
XBRL Schema*
   
101.CAL
XBRL Calculation*
   
101.DEF
 XBRL Definition*
   
101.LAB
XBRL Label*
   
101.PRE
XBRL Presentation*

* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
10
 
SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized.

 
ORANCO, Inc.
 
[Registrant]
November 5, 2017
  
 
/s/ Claudio Gianascio
  Claudio Gianascio
 
President & Treasurer
 
 
 
11