10-Q 1 f10q0318_orancoinc.htm QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2018

☐ 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.)

One Liberty Plaza , Suite 2310 PMB# 21, New York, NY 10006		84117
(Address of principal executive offices)		(Zip Code)

(646)7593614

(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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-Accelerated filer

☐

Smaller Reporting Company

☒

(Do not check if a smaller reporting company)

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☒ 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 May 16, 2018
Common Stock, $0.001		57,191,480

INDEX

		Page
		Number
PART I.

ITEM 1.	Financial Statements (unaudited)	1

	Balance Sheets March 31, 2018 and December 31, 2017	2

	Statements of Operations For the three months ended March 31, 2018 and 2017	3

	Statements of Cash Flows For the three months ended March 31, 2018 and 2017	4

	Notes to Financial Statements	5

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	7

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	8

ITEM 4T.	Controls and Procedures	8

PART II.

ITEM 6.	Exhibits	10

Signatures		11

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Our unaudited interim financial statements for the three month period ended March 31, 2018 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

ORANCO, INC.

BALANCE SHEETS

MARCH 31, 2018 AND DECEMBER 31, 2017

	March 31, 2018			December 31, 2017
	(unaudited)

Assets
Current Assets:
Cash	$	4,023		$	70
Prepaid expenses		25,833			3,333

Total current assets		29,856			3,403

Total Assets	$	29,856		$	3,403

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable	$	4,200		$	665
Notes payable, stockholder		40,709
Total current liabilities		44,909			665

Stockholders’ Equity:
Common stock, $.001 par value 100,000,000 shares authorized, 42,191,480 and 4,269,950 issued and outstanding		42,192			42,192
Additional paid-in capital		349,898			349,898
Accumulated Deficit		(407,743	)		(389,352	)

Total Stockholders’ Equity		(15,053	)		2,738

Total Liabilities and Stockholders’ Equity	$	29,856		$	3,403

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

ORANCO, INC.

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

(unaudited)

	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
Revenues	$	--		$	--

Expenses, general and administrative		18,391			2,514

Operating loss		(18,391	)		(2,514	)

Other income (expense):
Interest income		--			--
Interest expense		--			(100	)

Loss before provision for income taxes		(18,391	)		(2,614	)

Provision for income taxes		--			--

Net loss	$	(18,391	)	$	(2,614	)

Net loss per share	$	--		$	--

Weighted average shares
Outstanding		42,191,480			4,269,950

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

ORANCO, INC.

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017

(unaudited)

	Three Months Ended			Three Months Ended
	March 31, 2018			March 31, 2017
Cash flows from operating activities:
Net loss for the period	$	(18,391	)	$	(2,614	)

Changes in operating assets and liabilities:
Expenses paid directly by stockholder		600
(Increase)/decrease in prepaid expenses		(22,500	)		2,500
Increase in accounts payable		3,535			--
Increase in interest payable		--			100

Net cash used in operating activities:		(36,756	)		(14	)

Cash flows from investing activities:		--			--

Cash flows from financing activities
Proceeds from stockholder loan		40,709			--

Net increase/(decrease) in cash and cash equivalents		3,953			(14	)
Cash and cash equivalents, beginning of period		70			3,234

Cash and cash equivalents, end of period	$	4,023		$	3,220
Supplemental disclosures of cash flow information:

Cash paid for interest	$	--		$	--

Cash paid for income taxes	$	--		$	--

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

ORANCO, INC.

NOTES TO FINANCIAL STATEMENTS

Summary of Business and Significant Accounting Policies

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.

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.

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.

Net Loss per Share

The net loss per share calculation is based on the weighted average number of shares outstanding during the period.

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.

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 March 31, 2018 and December 31, 2017, the carrying value of certain financial instruments approximates fair value due to the short-term nature of such instruments.

Risks and Uncertainties

The Company's operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure. See Note 2 regarding going concern matters.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.

Fair Value of Financial Instruments

Notes Payable, Stockholder

Stockholder notes payable consist of the following at March 31, 2018 and December 31, 2017:

March 31,

2018

December 31,

2017

Notes payable to an individual also a stockholder and director of the Company, interest is being charged at -0-%, the note is unsecured and payable on demand.

40,709

Warrants and Stock Options

No options or warrants are outstanding to acquire the Company's common stock.

Income Taxes

The Company has had no taxable income under Federal or State tax laws. The Company has loss carryforwards totaling $389,352 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.

Going Concern

As shown in the accompanying financial statements, the Company incurred a net loss of $18,391 during the three months ended March 31, 2018 and accumulated losses of $407,743 since inception at June 15, 1977. The Company’s current liabilities exceed its current assets by $15,053 at March 31, 2018. 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.

Subsequent Events - Date of Management Evaluation

Management has evaluated events subsequent to the date on which the financial statements were available to be issued.

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the unaudited condensed consolidated financial statements of the Company for the three months ended March 31, 2018 and 2017, and should be read in conjunction with such financial statements and related notes included in this report. Except for the historical information contained herein, the following discussion, as well as other information in this report, contain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the “safe harbor” created by those sections. Actual results and the timing of the events may differ materially from those contained in these forward looking statements due to a number of factors, including those discussed in the “Forward-Looking Statements” set forth elsewhere in this Quarterly Report on Form 10-Q.

Overview

Oranco, Inc., or the Company, was incorporated under the laws of the State of Nevada, on June 10, 1977. The purposes for which the corporation was organized were: (1) to engage in any lawful business from time to time authorized by the board of directors, (2) to act as principal, agent, partner or joint venturer or in any other capacity in any transaction, (3) to do business anywhere in the world, and (4) to have and exercise all rights and powers from time to time granted to the corporation by law.

From 1977 until 1981 the Company was dormant and undertook no activities. Beginning in 1982 the Company explored the option of entering into a joint venture to develop a mercury mining property at Mercury Mountain, Nevada. As a part of these activities the Company, through the sale of its common stock, raised funds to engage the services of an independent mining engineer to prepare a report on the feasibility of the project. By late 1983 it had been determined that the project did not warrant any further investment. From that time until 1997 the Company's activities concentrated on maintaining its corporate existence and looking for other opportunities for the Company. In May of 1997 new management was appointed, a shareholders' meeting was held, amendments to the Company's articles of incorporation were approved, and additional effort was made by new management to make the Company a viable merger candidate. These efforts included engaging the services of a certified Public Accounting firm to audit the Company's financial statements, obtaining an Opinion of Counsel as to the tradability of the Company's outstanding shares, preparation of the information required by Rule 15c2-11, and applying to the OTC Bulletin Board for trading on the medium.

By September of 1999, no viable acquisitions or merger candidates had been located for the Company and management became aware that the Company would be required to register its shares under the Securities Exchange Act of 1934 in order to maintain its stock on the OTC Bulletin Board. Management determined that the Company needed new management which might be better positioned to find a suitable acquisition or merger candidate and which would be in a position of funding the upcoming expenses of the Company. On September 1, 1999 management of the Company resigned and Claudio Gianascio was appointed as sole director and officer. On November 9, 1999 the Company sold 700,000 of its shares of common stock to Mr. Gianascio for $.05 per share, netting a total of $35,000. On November 18, 1999 the Company filed a registration statement on Form 10SB which became effective sixty days thereafter.

The Company had an initial authorized capital of $25,000 consisting of 100,000 shares of $.25 par value common stock. On June 10, 1997 the shareholders approved an amendment to the Articles of Incorporation of The Company changing the authorized capital to 100,000,000 shares at a par value of $.001 and providing for a 10 to 1 share forward split of the outstanding shares. The Articles of Amendment were filed with the State of Nevada on August 6, 1998.

In the summer of 2000, the Company completed a private placement of 2,500,000 units for which it received $250,000. Each unit consisted of one share of common stock; one “a” warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of common stock at $.10 per share within two years of the date of issuance; and one “b” warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of common stock at $.25 per share within two years of the date of issuance. Both “a” & “b” warrants expired without exercise.

On December 26, 2017, Million Success Business Limited, a British Virgin Islands corporation (“Buyer”) entered into a Share Purchase Agreement (“Purchase Agreement”) with the then largest shareholder of the Company, Mr. Claudio Gianascio, who owned 90.4% of the total outstanding shares of the Company (“Seller”). Pursuant to the terms of the Purchase Agreement, the Seller sold to the Buyer all of his shares of common stock of the Company, par value $0.001 per share (the “Common Stock”), or 38,121,530 shares of the Common Stock for $340,000 (such transaction, the “Share Purchase”). The Share Purchase closed on December 29, 2017.

At the closing of the Share Purchase, there was a change in our board and executive officers. Mr. Claudio Gianascio, sole director, President, Treasurer and Secretary of the Company appointed Mr. Peng Yang to serve as sole director, President, Treasurer and Secretary of the Company, with such appointment effective on January 5, 2018, being ten days from the date the Information Statement on Schedule 14F-1 (the “Schedule 14F-1”) reporting the change in control as a result of the Share Purchase was mailed to all the stockholders of the Company. Mr. Gianascio resigned from all his positions with the Company effective on January 5, 2018.

The Company did not generate any revenue during the three months ended March 31, 2018 and 2017.

General and administrative expenses were $18,391 and $2,514 for the three months ended March 31, 2018 and 2017. The increase in expenses for the three months ended March 31, 2018 were largely due to increased professional fees and office expense. As a result of the foregoing, the Company realized net losses of $18,391 and $2,614 for the three months ended March 31, 2018 and 2017. The Company's increased net loss is attributable to increased professional fees and office expense.

At March 31, 2018, assets consisted of $4,023 in cash and $25,833 in prepaid expenses compared to $70 in cash and $3,333 in prepaid expenses on December 31, 2017. As of March 31, 2018, the Company had $4,200 in accounts payable and $40,709 in notes payable to stockholder.

Currently, the Company has no material commitments for capital expenditures. 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Control and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended March 31, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART 2 - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

Not applicable to a smaller reporting company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Except as disclosed below, there were no unregistered sales of the Company’s equity securities during the three months ended March 31, 2018 that were not previously disclosed in reports filed with the SEC.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit No.		Description

31.1		Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
101.INS		XBRL Instance Document **
101.SCH		XBRL Taxonomy Extension Schema Document **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB		XBRL Taxonomy Extension Label Linkbase Document **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document **

* Filed herewith.

** Furnished herewith.

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, thereunto duly authorized.

	ORANCO, INC.

Date: May 18, 2018	/s/ Peng Yang
	Peng Yang
	President, Secretary,
	Treasurer and Director (Principal Executive Officer, and Principal Financial Officer and Principal Accounting Officer)