Annual Report for Fiscal Year Ending DECEMBER 31, 2024 (Form 10-K)

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 offering a range of curated maritime adventures including 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 have ended their discussions of the proposed transaction, and management is evaluating alternative options for pursuing this business model.

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, 2024 as compared to the year ended December 31, 2023 were as follows below:

		Year Ended
		December 31,
		2024				2023				Change
Total Revenue		$	67,964			$	68,276			$	(312	)
Cost of Services			34,320				26,685				7,635
Gross Profit			33,644				41,591				(7,947	)
Operating Expenses			406,236				528,513				(122,277	)
Operating Loss			(372,592	)			(486,922	)			114,330
Other Income and Expenses			(74,903	)			(829,651	)			754,748
Net Loss		$	(447,495	)		$	(1,316,573	)		$	869,078

Revenue

Charter revenue from operations was $67,964 for the year ended December 31, 2024 as compared to $68,276 for the twelve-month period ended December 31, 2023, a decrease of 0.5%. The decrease in revenue in the current year is attributed to complications arising due to the hurricanes occurring in the second half of 2024. 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 year ended December 31, 2024 decreased to $406,236 as compared to $528,513 for the twelve-month period ended December 31, 2023, a decrease of 23.1%. The decrease in operating expenses over the twelve-month period ended December 31, 2024 is attributed to reductions in auditing expenses as well as general and administrative expenses including stock-based compensation.

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

Other Income and Expenses

Other expense for the twelve-month period ended December 31, 2024 was $74,903 as compared to other expense of $829,651 for the twelve-month period ended December 31, 2023, a decrease of 91.0% . The reduction in other expense over the comparative periods can be primarily attributed to the loss recognized in 2023 on the acquisition of Down2Fish.

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

Net Loss

Net loss for the year ended December 31, 2024 was $447,495 as compared to a net loss of $1,316,573 for the year ended December 31, 2023, a decrease of 66.0%. The decrease in net loss in the current year over the prior comparable period can be primarily attributed to the loss recognized on the asset purchase of Down2Fish. 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

Capital expenditures during the year ended December 31, 2024 consisted of $25,000 for website development costs. Capital expenditures during the year ended December 31, 2023 consisted of the property and equipment acquired as part of Down2Fish.

Liquidity and Capital Resources

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

We had current assets of $18,393 as of December 31, 2024 consisting solely of cash as compared to $27,171 as of December 31, 2023 consisting of cash and a bond. Total assets were $202,176 as of December 31, 2024 consisting of current assets, property, equipment, and intangible assets as compared to total assets of $216,549 as of December 31, 2023 consisting of cash, a bond, property, equipment, and intangible assets. We had a working capital deficit of $969,980 as of December 31, 2024 compared to a working capital deficit of $311,316 as of December 31, 2023. Net stockholders' deficit in Arvana was $1,250,966 at December 31, 2024 compared to a net stockholders' deficit in Arvana of $962,126 at December 31, 2023.

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

		Year Ended
		December 31,
		2024				2023				Change
Net cash provided by (used in):
Operating activities		$	(193,580	)		$	(168,018	)		$	(25,562	)
Investing activities			(25,000	)			(54,552	)			29,552
Financing activities			214,802				102,276				112,526
Increase (decrease) in cash		$	(3,778	)		$	(120,294	)		$	116,516

Cash Used in Operating Activities

Net cash used operating activities for the year ended December 31, 2024 was $193,580 as compared to net cash used in operating activities of $168,018 for the year ended December 31, 2023. 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 stock-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, 2024 was $25,000 as compared to $54,552 net cash used in investing activities for the year ended December 31, 2023. Net cash used in investing activities in the prior year 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, 2024 was $214,802 as compared to net cash provided by financing activities of $102,276 for the year ended December 31, 2023. Net cash provided from financing activities in the current year consisted of proceeds from loans payable to related parties offset by payments made on loans payable to related parties.

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, 2024 .

Arvana had no commitments for future capital expenditures at December 31, 2024.

Arvana has adopted the Arvana Inc. 2022 Stock Incentive Plan.

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, 2024 and 2023 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."