XOTC:ORNC Oranco Inc Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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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        June 30, 2012

(  )  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)
   
702-583-7248
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. See 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 August 1, 2012
 Common  Stock, $0.001
 4,269,950
 

 
 

 
 
INDEX

   
Page
  Number
PART I.
 
   
ITEM 1.  Financial Statements (unaudited)
4
   
Balance Sheets
5
    June 30, 2012 and December 31, 2011
 
   
Statements of Operations
6
   For the three and six months ended June 30, 2012 and 2011 and the period June 16, 1977 to June 30, 2012
 
 
 
Statements of Cash Flows
7
    For the six months ended June 30, 2012 and 2011 and the period June 16, 1977 to June 30, 2012
 
 
 
Notes to Financial Statements
8
   
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
   
ITEM 3. Quantitative and Qualtitative Disclosures About Market Risk
11
   
ITEM 4T. Controls and Procedures
11
   
PART II.
 
   
ITEM 6. Exhibits
12
   
Signatures
13
 
 
 
2

 
 
PART I - FINANCIAL INFORMATION
 

 
ITEM 1. FINANCIAL STATEMENTS



The accompanying balance sheets of Oranco, Inc.  (a development stage company) at June 30, 2012 and December 31, 2011, and the related  statement of operations for the three and six months and the statement of cash flows for the three months,  ended June 30, 2012 and 2011 and the period June 16, 1977 to June 30, 2012 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 three and six months ended June 30, 2012, are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.
 
 
 
3

 

ORANCO, INC.
 
(Development Stage Company)
 
BALANCE SHEETS
 
   
(Unaudited)
       
   
June 30,
2012
   
December 31,
2011
 
ASSETS
       
Current Assets:
           
   Cash
  $ 152,628     $ 190,340  
                 
Total Current Assets
    152,628       190,340  
                 
TOTAL ASSETS
  $ 152,628     $ 190,340  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
         
                 
Current Liabilities:
               
Accounts payable
  $ -     $ 3,025  
 
               
TOTAL CURRENT LIABILITIES
    -       3,025  
                 
Commitments and contingencies
    -       -  
                 
Stockholders’ Equity:
               
Common stock, $0.001 par value, 100,000,000 shares authorized, 4,269,950 shares issued and outstanding at June 30, 2012 and December 31, 2011
    4,270       4,270  
Additional paid in capital
    349,898       349,898  
Deficit accumulated during the Development Stage
    (201,540 )     (166,853 )
TOTAL STOCKHOLDERS’ EQUITY
    152,628       187,315  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 152,628     $ 190,340  
 
 
The accompanying notes are an integral part of these financial statements
 
 
 
4

 
 
ORANCO, INC.
 
(Development Stage Company)
 
STATEMENTS OF OPERATIONS
 
(Unaudited)
 
   
   
For the
three months ended
   
For the
three months ended
   
For the
six months ended
   
For the
 six months ended
   
From Inception
 (June 16, 1977) to
 
   
June 30, 2012
   
June 30, 2011
   
June 30, 2012
   
June 30, 2011
   
June 30, 2012
 
                               
Revenues
  $ -     $ -     $       $       $ -  
                                         
  General and administrative
    19,106       15,418       35,021       72,125       372,533  
  Valuation adjustment - available-for-sale securities
    -       -                       30,401  
  Total operating expenses
    19,106       15,418       35,021       72,125       402,934  
                                         
Net loss from operations
    (19,106 )     (15,418 )     (35,021 )     (72,125 )     (402,934 )
                                         
  Interest and contract income
    149       306       334       677       201,394  
                                         
Net loss
    (18,957 )     (15,112 )     (34,687 )     (71,448 )     (201,540 )
                                         
Weighted average number of shares outstanding - basic and diluted
    4,269,950       4,269,950       4,269,950       4,269,950          
                                         
Net loss per share - basic and diluted
  $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.02 )        
 
 
The accompanying notes are an integral part of these financial statements
 
 
 
5

 
 
ORANCO, INC.
 
(Development Stage Company)
 
STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
   
For the
 six months ended
   
For the
six months ended
   
From Inception
(June 16, 1977) to
 
   
June 30, 2012
   
June 30, 2011
   
June 30, 2012
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net loss
  $ (34,687 )   $ (71,448 )   $ (201,540 )
Changes in operating assets and liabilities:
                       
Net change in accounts payable
    (3,025 )     4,470       -  
Net cash (used in) provided by operating activities
    (37,712 )     (66,978 )     (201,540 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
   Changes in note receivable
    -       -       -  
Net cash provided by investing activities
    -       -       -  
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Proceeds from the issuance of common stock
    -       -       354,168  
Net cash provided by financing activities
    -       -       354,168  
                      -  
INCREASE (DECREASE) IN CASH
    (37,712 )     (66,978 )     152,628  
                         
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    190,340       267,758       -  
                      -  
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 152,628     $ 200,780     $ 152,628  
                      -  
Supplemental disclosures of cash flow information:
                    -  
Cash paid for income taxes
  $ -     $ -     $ -  
Cash paid for interest expense
  $ -     $ -     $ -  
 
 
The accompanying notes are an integral part of these financial statements
 
 
 
6

 
 
ORANCO, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
(Unaudited)


1.    ORGANIZATION AND BASIS OF PRESENTATION

The Company was incorporated under the laws of the state of Nevada on June 16, 1977 with authorized common stock of 100,000 shares at a par value of $.25.   On June 10, 1997 the authorized common stock was increased to 100,000,000 shares with a par value of $.001.

The Company was in the business of developing mineral deposits until 1983, when it abandoned all related activities. The Company has remained inactive since that time.

The Company is in the development stage.

Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.

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.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Method

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Income Taxes

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse.  An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

On June 30, 2012, the Company had a net operating loss available for carryforward of $195,779.  The tax benefit of approximately $68,000 from the carryforward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful.  The net operating losses expire 20 years after they are incurred.

Financial and Concentrations Risk

The Company does not have any concentration or related financial credit risk except that the Company maintains cash in banks over the insured amounts of $250,000, however they are considered to be in banks of high quality.
 
 
 
7

 

ORANCO, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2012
(Unaudited)



2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basic and Diluted Net Income (Loss) Per Share

Loss per share is computed based on the weighted average number of shares outstanding during the year. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares and potential common shares during the specified periods. The Company has no outstanding options, warrants or other convertible instruments that could affect the calculated number of shares.

Statement of Cash Flows

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

Revenue Recognition

Revenue will be recognized on the sale and delivery of a product or the completion of a service provided.

Advertising and Market Development

The company will expense advertising and market development costs as incurred.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could vary from the estimates that were assumed in preparing these financial statements.

Financial Instruments

The carrying amounts of the Company’s financial instruments are considered by management to be their estimated fair values due to their short term maturities.

Recent Accounting Pronouncements

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
 
 
 
8

 

ORANCO, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2012
(Unaudited)



3.    RELATED PARTY TRANSACTIONS

Officers-directors have acquired 4.9% of the Company’s outstanding common stock.


 
9

 
 

 
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 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 in the two most recent calendar years.

Three and six Month Period Ended June 30, 2012 and 2011

The Company did not generate any revenue during the three and six months ended June 30, 2012 and 2011. It has interest income of $149 and $306 for the three months and $334 and $677 for the six months, respectively, ended June 30, 2012 and 2011.

General and administrative expenses were $19,106 and $15,418 for the three months and $35,021 and $72,125 for the  six months, respectively, ended June 30, 2012 and 2011. The increase in expenses for the three months ended June 30, 2012 were largely due to increased consultant's  travel expenses and increases in accounting, legal, other professional costs. As a result of the foregoing, the Company realized net losses of $18,957 and $15,112 for the three months and $34,687 and $71,448 for the six months, respectively, ended June 30, 2012.  The Company’s increased net loss is attributable to increased travel expenses and an increase in ongoing professional costs associated with preparing the Company’s public reports.
 
 
 
10

 

Liquidity and Capital Resources

At June 30, 2012, assets consisted of $152,628 in cash compared to $190,340 on December 31, 2011. As of June 30, 2012 the Company had no liabilities.

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, which it will fund from its cash assets.

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, June 30, 2012, (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 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 June 30, 2012) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


 
11

 
 
PART 2 - OTHER  INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On or about April 12, 2011 Kurt J Wagner filed an action against Claudio Gianascio and Oranco, Inc. in the Third District Court of Salt Lake County, Utah. Although not clear from the complaint, it appears that Mr. Wagner is alleging that he invested certain of his funds with an unnamed foreign investment advisor, which he believes invested part of his funds with a non-US corporation, which then loaned some of Mr. Wagner’s funds to a US company called Air Packaging Technologies, Inc. (AIRP), secured by a secured debenture equal to other debenture holders in priority. He also appears to allege that Oranco, Inc. loaned funds to AIRP during the same period, secured by a secured debenture on equal priority with the debenture owed by the non-US corporation. His claim is further based upon his allegations that Claudio Gianascio owed him a fiduciary responsibility because he was an officer of the unnamed foreign investment advisor, that Mr. Gianascio breached his fiduciary obligation to Mr. Wagner by Oranco receiving an amount larger than it was entitled to from the sale of certain equipment of AIRP while Claudio Gianascio was an officer, director, and major stockholder of Oranco. He further alleges that Oranco then took part of the funds that it received from the sale of the AIRP machine and loaned them to AIRP to finance a litigation against 3M Corp, which was settled and resulted in Oranco receiving funds from such settlement that were partially his funds because Oranco had received a disproportionate share of the funds from the sale of the AIRP machine. Mr. Wagner alleges that he was damaged in the amount of $134,000 plus interest.
 
During July 2012 the matter was settled between the parties, without either party admitting any liability and the matter was dismissed with prejudice by the Third District Court.

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.



 
12

 
 


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]
   
   
 
S/ Juan A. Zabala
 
President & Treasurer
August 10, 2012
 

 
 
13

 

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