ARVANA INC

On October 12, 2018, the Company issued a convertible note to CaiE that accrues 10% per annum, in exchange for a series of loans that totaled $57,800, which was initially due on October 11, 2019. The note is convertible into the Company’s common stock, in whole or in part, at any time prior to maturity at the option of the holder at $0.20 per share. Due to the conversion price being lower than the closing share price on the issuance date, a beneficial conversion feature was recognized as a discount against the debt. The maturity date of the note was extended on March 31, 2020, by amendment, to March 31, 2021, while all other terms of the note remain unchanged. During the three months ended March 31, 2020 and 2019, $nil and $14,450 of the discount was amortized as interest expense, while the interest expense on the note was $1,445 for the period ended March 31, 2020, and $1,445 for the period ended March 31, 2019. As at March 31, 2020 and December 31, 2019, the balance of the note was $57,800.

The MOU anticipates that we will issue shares of its common stock to acquire CaiE through merger or acquisition, will convert existing debt to equity, increase its authorized common shares, elect a new board of directors and change its name to reflect the new business. Since the MOU was signed four years ago, the terms of the MOU are expected to change. The lack of progress on concluding a definitive agreement is primarily due to accounting delays related to the compilation of CaiE’s financial statements. The delays have caused CaiE to make additional loans to us to ensure that the Company remains in compliance with its reporting obligations while CaiE compiles its audited financial statements. CaiE has loaned us $169,610 as of the filing date of this report, which sum if comprised of convertible notes and other outstanding loan amounts.

Should the Company not reach a definitive agreement with CaiE, it will seek to identify an alternative business opportunity for which purpose it will require a minimum of $25,000 in funding over the next 12 months to maintain operations. Should an alternative business opportunity be identified, we will need additional funding to complete an alternative transaction. We anticipate that required prospective funding in this instance will be in the form of unsecured debt or equity financing from stockholders and third parties. Despite our confidence that funding will become available for an alternative business opportunity, we do not have such alternative financing arranged. Therefore, we will require continued financial support from stockholders and creditors until we are able to generate sufficient cash flow to maintain operations.

Net income for the three months ended March 31, 2020, were $22,456 as compared to a net loss of $38,870 for the three months ended March 31, 2019. The decrease in net loss over the three-month period ended March 31, 2020, can be attributed to foreign exchange gain and a decrease in interest expense, offset by an increase in general administrative expenses, and professional fees over the comparable three-month period. The decrease in interest expense is due to the elimination of the requirement that we book accretion interest on convertible loans, while the gain on foreign exchange is due to a decrease in the value of foreign currencies against the US dollar, which positively impacts the cost of expenses payable in foreign currencies. Net losses for the three months ended March 31, 2019, can be attributed to the foreign exchange loss and the requirement in the prior comparative period interest booked for accretion expense on convertible loans, offset by lower general and administrative expenses and professional fees.

The Company’s current assets are insufficient to conduct its plan of operation over the next twelve (12) months as it will need at least $50,000 to maintain operations and conclude a transaction with CaiE.

Since entering into an MOU with CaiE, the Company has secured a series of loans from CaiE in the aggregate amount of $169,610. Despite CaiE’s determination to assist us until such time as we close a definitive transaction as intended by the MOU, we have no future commitments or arrangements in place to move forward. Despite our predicament, existing stockholders and/or CaiE remain the most likely sources of funding. The Company’s inability to secure a commitment for sufficient funding going forward will have a material adverse effect on its ability to sustain operations.