U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission File No. 0-28181
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Oranco, INC.
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(Name of Small Business Issuer in its Charter)
Nevada 87-0574491
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1981 East 4800 South, SUITE 110
Salt Lake City, Utah 84117
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 272-9294
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(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: Common
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes No X
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year:
December 31, 1999 - $0.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
April 14, 1999 - $$694.00 There are approximately 694,500 shares of common
voting stock of the Company held by non-affiliates. Because there has been no
"public market" for the Company's common stock during the past five years, the
Company has arbitrarily valued these shares at par value of $0.001 per share.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
March 15, 2000
1,394,950
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in Item
13 of this Report.
Transitional Small Business Issuer Format Yes No X
--- ---
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
------------------------
BUSINESS DEVELOPMENT.
- ---------------------
ORGANIZATION AND CHARTER AMENDMENTS.
- -----------------------------------
Oranco, Inc., (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 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.
RECENT MATERIAL CHANGES IN CONTROL
- ----------------------------------
On November 9, 1999, the Company authorized the issuance of 700,000
"unregistered" and "restricted" shares of its $0.001 par value common
stock to Claudio Gianascio in exchange for $35,000. With such issuance
Mr. Gianascio became the owner of 50.2% of the outstanding shares of the
Company's common stock.
BUSINESS.
- ---------
Other than the above-referenced matters and seeking and investigating
potential assets, properties or businesses to acquire, the Company has had no
business operations since inception. To the extent that the Company
intends to continue to seek the acquisition of assets, property or
business that may benefit the Company and its stockholders, it is
essentially a "blank check" company. Because the Company has limited
assets and conducts no business, management anticipates that any such
acquisition would require it to issue shares of its common stock as the sole
consideration for the acquisition. This may result in substantial dilution of
the shares of current stockholders. The Company's Board of Directors shall
make the final determination whether to complete any such acquisition; the
approval of stockholders will not be sought unless required by applicable
laws, rules and regulations, its Articles of Incorporation or Bylaws, or
contract. The Company makes no assurance that any future enterprise will be
profitable or successful.
The Company is not currently engaging in any substantive business activity
and has no plans to engage in any such activity in the foreseeable future. In
its present form, the Company may be deemed to be a vehicle to acquire or merge
with a business or company. The Company does not intend to restrict its search
to any particular business or industry, and the areas in which it will seek out
acquisitions, reorganizations or mergers may include, but will not be limited
to, the fields of high technology, manufacturing, natural resources, service,
research and development, communications, transportation, insurance, brokerage,
finance and all medically related fields, among others. The Company recognizes
that the number of suitable potential business ventures that may be available to
it may be extremely limited, and may be restricted to entities who desire to
avoid what these entities may deem to be the adverse factors related to an
initial public offering ("IPO"). The most prevalent of these factors include
substantial time requirements, legal and accounting costs, the inability to
obtain an underwriter who is willing to publicly offer and sell shares, the lack
of or the inability to obtain the required financial statements for such an
undertaking, limitations on the amount of dilution to public investors in
comparison to the stockholders of any such entities, along with other conditions
or requirements imposed by various federal and state securities laws, rules and
regulations. Any of these types of entities, regardless of their prospects,
would require the Company to issue a substantial number of shares of its common
stock to complete any such acquisition, reorganization or merger, usually
amounting to between 80 and 95 percent of the outstanding shares of the Company
following the completion of any such transaction; accordingly, investments in
any such private entity, if available, would be much more favorable than any
investment in the Company.
In the event that the Company engages in any transaction resulting in a
change of control of the Company and/or the acquisition of a business, the
Company will be required to file with the Commission a Current Report on Form
8-K within 15 days of such transaction. A filing on Form 8-K also requires the
filing of audited financial statements of the business acquired, as well as pro
forma financial information consisting of a pro forma condensed balance sheet,
pro forma statements of income and accompanying explanatory notes.
Management intends to consider a number of factors prior to making any
decision as to whether to participate in any specific business endeavor, none of
which may be determinative or provide any assurance of success. These may
include, but will not be limited to an analysis of the quality of the entity's
management personnel; the anticipated acceptability of any new products or
marketing concepts; the merit of technological changes; its present financial
condition, projected growth potential and available technical, financial and
managerial resources; its working capital, history of operations and future
prospects; the nature of its present and expected competition; the quality and
experience of its management services and the depth of its management; its
potential for further research, development or exploration; risk factors
specifically related to its business operations; its potential for growth,
expansion and profit; the perceived public recognition or acceptance of its
products, services, trademarks and name identification; and numerous other
factors which are difficult, if not impossible, to properly or accurately
analyze, let alone describe or identify, without referring to specific objective
criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of changing
market strategies, plant or product expansion, changes in product emphasis,
future management personnel and changes in innumerable other factors. Further,
in the case of a new business venture or one that is in a research and
development mode, the risks will be substantial, and there will be no objective
criteria to examine the effectiveness or the abilities of its management or its
business objectives. Also, a firm market for its products or services may yet
need to be established, and with no past track record, the profitability of any
such entity will be unproven and cannot be predicted with any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may actually
participate in any specific business endeavor. The Company anticipates that
proposed business ventures will be made available to it through personal
contacts of directors, executive officers and principal stockholders,
professional advisors, broker dealers in securities, venture capital personnel,
members of the financial community and others who may present unsolicited
proposals. In certain cases, the Company may agree to pay a finder's fee or to
otherwise compensate the persons who submit a potential business endeavor in
which the Company eventually participates. Such persons may include the
Company's directors, executive officers, beneficial owners or their affiliates.
In this event, such fees may become a factor in negotiations regarding a
potential acquisition and, accordingly, may present a conflict of interest for
such individuals.
Although the Company has not identified any potential acquisition target,
the possibility exists that the Company may acquire or merge with a business or
company in which the Company's executive officers, directors, beneficial owners
or their affiliates may have an ownership interest. Current Company policy does
not prohibit such transactions. Because no such transaction is currently
contemplated, it is impossible to estimate the potential pecuniary benefits to
these persons.
Further, substantial fees are often paid in connection with the completion
of these types of acquisitions, reorganizations or mergers, ranging from a small
amount to as much as $250,000. These fees are usually divided among promoters or
founders, after deduction of legal, accounting and other related expenses, and
it is not unusual for a portion of these fees to be paid to members of
management or to principal stockholders as consideration for their agreement to
retire a portion of the shares of common stock owned by them. In the event that
such fees are paid, they may become a factor in negotiations regarding any
potential acquisition by the Company and, accordingly, may present a conflict of
interest for such individuals.
PRINCIPAL PRODUCTS AND SERVICES.
- --------------------------------
The limited business operations of the Company, as now contemplated,
involve those of a shell company. The only activities to be conducted by
the Company are to manage its current limited assets and to seek out and
investigate the acquisition of any viable business opportunity by purchase and
exchange for securities of the Company or pursuant to a reorganization or merger
through which securities of the Company will be issued or exchanged.
DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES.
- -------------------------------------------------
Management will seek out and investigate business opportunities through
every reasonably available fashion, including personal contacts, professionals,
securities broker dealers, venture capital personnel, members of the financial
community and others who may present unsolicited proposals; the Company may also
advertise its availability as a vehicle to bring a company to the public market
through a "reverse" reorganization or merger.
STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE.
- --------------------------------------------------------
None; not applicable.
COMPETITIVE BUSINESS CONDITIONS.
- --------------------------------
Management believes that there are literally thousands of shell
companies engaged in endeavors similar to those engaged in by the Company; many
of these companies have substantial current assets and cash reserves.
Competitors also include thousands of other publicly-held companies whose
business operations have proven unsuccessful, and whose only viable business
opportunity is that of providing a publicly-held vehicle through which a private
entity may have access to the public capital markets. There is no reasonable way
to predict the competitive position of the Company or any other entity in the
strata of these endeavors; however, the Company, having limited assets and cash
reserves, will no doubt be at a competitive disadvantage in competing with
entities which have recently completed IPO's, have significant cash resources
and have recent operating histories when compared with the complete lack of any
substantive operations by the Company for the past several years.
SOURCES AND AVAILABILITY OF RAW MATERIALS AND NAMES OF PRINCIPAL SUPPLIERS.
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None; not applicable.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS.
- -------------------------------------------
None; not applicable.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS
OR LABOR CONTRACTS.
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None; not applicable.
NEED FOR ANY GOVERNMENTAL APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES.
- ---------------------------------------------------------------------
Because the Company currently produces no products or services, it is not
presently subject to any governmental regulation in this regard. However, in the
event that the Company engages in a merger or acquisition transaction with an
entity that engages in such activities, it will become subject to all
governmental approval requirements to which the merged or acquired entity is
subject.
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON BUSINESS.
- -------------------------------------------------------------------
The integrated disclosure system for small business issuers adopted by the
Commission in Release No. 34-30968 and effective as of August 13, 1992,
substantially modified the information and financial requirements of a "Small
Business Issuer," defined to be an issuer that has revenues of less than $25
million; is a U.S. or Canadian issuer; is not an investment company; and if a
majority-owned subsidiary, the parent is also a small business issuer; provided,
however, an entity is not a small business issuer if it has a public float (the
aggregate market value of the issuer's outstanding securities held by
non-affiliates) of $25 million or more.
The Commission, state securities commissions and the North American
Securities Administrators Association, Inc. ("NASAA") have expressed an interest
in adopting policies that will streamline the registration process and make it
easier for a small business issuer to have access to the public capital markets.
The present laws, rules and regulations designed to promote availability to the
small business issuer of these capital markets and similar laws, rules and
regulations that may be adopted in the future will substantially limit the
demand for "blank check" companies like the Company, and may make the use of
these companies obsolete.
RESEARCH AND DEVELOPMENT.
- -------------------------
None; not applicable.
COST AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS.
- -------------------------------------------------------
None; not applicable. However, environmental laws, rules and regulations
may have an adverse effect on any business venture viewed by the Company as an
attractive acquisition, reorganization or merger candidate, and these factors
may further limit the number of potential candidates available to the Company
for acquisition, reorganization or merger.
NUMBER OF EMPLOYEES.
- --------------------
None.
ITEM 2. DESCRIPTION OF PROPERTY.
-----------------------
The Company has no assets, property or business; its principal executive
office address and telephone number are the business office address and
telephone number of its transfer agent, Interwest Transfer Co., Inc., and are
currently provided at minimal cost. Because the Company has had no business,
its activities will be limited to keeping itself in good standing in the State
of Nevada, seeking out acquisitions, reorganizations or mergers and
preparing and filing the appropriate reports with the Securities and
Exchange Commission. These activities have consumed an insubstantial amount of
management's time.
ITEM 3. LEGAL PROCEEDINGS.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
----------------------------------------------------
No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the calendar year covered by this Report.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
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MARKET INFORMATION
- ------------------
There is no "public market" for shares of common stock of the Company.
Although the Company's shares are quoted on the OTC Bulletin Board of the
National Association of Securities Dealers, the Company is unaware of any
trades having been consummated. In any event, no assurance can be given that
any market for the Company's common stock will develop or be maintained.
The ability of an individual shareholder to trade their shares in a particular
state may be subject to various rules and regulations of that state. A number
of states require that an issuer's securities be registered in their state or
appropriately exempted from registration before the securities are permitted to
trade in that state. Presently, the Company has no plans to register its
securities in any particular state. Further, most likely the Company's shares
will be subject to the provisions of Section 15(g) and Rule 15g-9 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly
referred to as the "penny stock" rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security that
has a market price less than $5.00 per share, subject to certain exceptions.
Rule 3a51-1 provides that any equity security is considered to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting specified criteria set by the Commission; authorized for quotation on
The NASDAQ Stock Market; issued by a registered investment company; excluded
from the definition on the basis of price (at least $5.00 per share) or the
issuer's net tangible assets; or exempted from the definition by the Commission.
If the Company's shares are deemed to be a penny stock, trading in the shares
will be subject to additional sales practice requirements on broker- dealers who
sell penny stocks to persons other than established customers and accredited
investors, generally persons with assets in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a special
suitability determination for the purchase of such securities and must have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker- dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker-dealers to
trade and/or maintain a market in the Company's Common stock and may affect the
ability of shareholders to sell their shares.
HOLDERS
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The number of record holders of the Company's common stock as of the date
of this Report is approximately 36.
DIVIDENDS
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The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its common stock.
<TABLE>
<CAPTION>
SALES OF "UNREGISTERED" AND "RESTRICTED" SECURITIES OVER THE PAST THREE YEARS.
- ------------------------------------------------------------------------------
Name and Address Date Number of Shares Consideration
- ---------------- ---- ---------------- -------------
<S> <C> <C> <C>
Claudio Gianascio. . . . . . 11/09/99 700,000 (1) $ 35,000
Corso Elvezia 4
Ch-6900 Lugano,
Switzerland
John Riche(2). . . . . . . . 05/16/97 100,000 $ 5,000
6595 S.W. Cherry Hill Drive
Beaverton, Or 97008
Vicki Riche(2) . . . . . . . 05/16/97 100,000 $ 5,000
6595 S.W. Cherry Hill Drive
Beaverton, Or 7008
<FN>
(1) Does not include certain options granted to Mr. Gianascio in January, 2000.
See Part II, Item 10 and 11 for information regarding executive
compensation and stock ownership.
(2) Mr. And Mrs. Riche are husband and Wife.
* All shares sold were common shares, were sold for cash with no discounts or
commissions paid, and were sold pursuant to exemptions from registration under
Sections 4(2) and 4(6) of the Securities Act of 1933.
</TABLE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
------------------------------------------------------------------
PLAN OF OPERATION.
- ------------------
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 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 of
December 31, 1999, it had $27,829 in cash or cash equivalents. 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 should not
exceed $25,000 and 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 such 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, and the filing of a Form 10 Registration, the Company has had no
material business operations in the three most recent calendar years.
At December 31, 1999, the Company's had total assets of $27,829. See
the Index to Financial Statements, Item 7 of this Report.
During the calendar year ended December 31, 1999, the Company had a net
loss of $7,671. The Company has received no revenues in either of its three
most recent calendar years. See the Index to Financial Statements, Item 7 of
this Report.
LIQUIDITY.
- ---------
During the fiscal years ended December 31, 99, 98, and 97 the Company has
been able to pay its expenses and costs through the private sale of its stock to
officers and directors of the Company. As of December 31, 1999 the Company had
27,829 in cash or cash equivalents on hand. The Company anticipates that this
will be sufficient for its needs for the twelve months of 2000. However, because
of the limited amount available no assurance can be given that this will be the
case.
RECENT ACCOUNTING PRONOUNCEMENTS.
- --------------------------------
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share" and
Statement of Financial Accounting Standards No. 129 "Disclosures of Information
About an Entity's Capital Structure." SFAS No. 128 provides a different method
of calculating earnings per share than is currently used in accordance with
Accounting Principles Board Opinion No. 15, "Earnings Per Share." SFAS No. 128
provides for the calculation of "Basic" and "Dilutive" earnings per share.
Basic earnings per share includes no dilution and is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution of securities that could share in the earnings of an entity, similar to
fully diluted earnings per share. SFAS No. 129 establishes standards for
disclosing information about an entity's capital structure. SFAS No. 128 and
SFAS No. 129 are effective for financial statements issued for periods ending
after December 15, 1997. Their implementation is not expected to have a
material effect on the financial statements.
The FASB has also issued SFAS No. 130, "Reporting Comprehensive Income" and
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 130 establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures,
SFAS No. 130 requires that all items that are required to be recognized under
current accounting standards as components of comprehensive income be reported
in a financial statement that displays with the same prominence as other
financial statements. SFAS No. 131 supersedes SFAS No. 14 "Financial Reporting
for Segments of a Business Enterprise." SFAS No. 131 establishes standards on
the way that public companies report financial information about operating
segments in annual financial statements and requires reporting of selected
information about operating segments in interim financial statements issued to
the public. It also establishes standards for disclosure regarding products and
services, geographic areas and major customers. SFAS No. 131 defines operating
segments as components of a company about which separate financial information
is available that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources and in assessing performance.
SFAS 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and requires comparative information for
earlier years to be restated. Management believes that the implementation of
the new standards will not have a material effect on the Company's financial
statements.
The FASB has also issued SFAS No 132. "Employers' Disclosures about
Pensions and other Post-retirement Benefits," which standardizes the disclosure
requirements for pensions and other Post-retirement benefits and requires
additional information on changes in the benefit obligations and fair values of
plan assets that will facilitate financial analysis. SFAS No. 132 is effective
for years beginning after December 15, 1997 and requires comparative information
for earlier years to be restated, unless such information is not readily
available. Management believes the adoption of this statement will have no
material impact on the Company's financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives as assets or liabilities, measured at fair market value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. The key criterion for hedge accounting is that the
hedging relationship must be highly effective in achieving offsetting changes in
fair value or cash flows. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. Management believes the adoption of
this statement will have no material impact on the Company.
ITEM 7. FINANCIAL STATEMENTS.
---------------------
ORANCO, INC.
FINANCIAL STATEMENTS AND REPORT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
DECEMBER 31, 1999, AND DECEMBER 31, 1998
<PAGE>
[LETTERHEAD OF ANDERSEN ANDERSEN & STRONG, L.C.]
Board of Directors
Oranco, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of Oranco, Inc. ( development
stage company) at December 31, 1999, and 1998 the statement of operations,
stockholders' equity, and cash flows for the years ended December 31, 1999, 1998
and 1997 and the period from June 16, 1977 (date of inception) to December 31,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall balance sheet presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oranco, Inc. at December
31, 1999 and 1998, and the results of operations, and cash flows for the year
ended December 31, 1999, 1998 and 1997 and the period from June 16, 1977 (date
of inception) to December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is in the development
stage and will need additional working capital for its planned activity, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 4 . These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ ANDERSEN ANDERSEN & STRONG, L.C.
February 10, 2000
Salt Lake City, Utah
<PAGE>
<TABLE>
<CAPTION>
ORANCO, INC.
BALANCE SHEETS
DECEMBER 31, 1999 AND DECEMBER 31, 1998
DEC 31, DEC 31,
1999 1998
---------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,829 $ -
---------- ---------
Total Current Assets . . . . . . . . . . . . . . . . $ 27,829 $ -
========== =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . . . . . $ 500 $ -
---------- ---------
Total Current Liabilities. . . . . . . . . . . . . . . . . . 500 -
---------- ---------
STOCKHOLDERS' EQUITY
Common stock
100,000,000 shares authorized at $0.001 par value;
1,394,950 issued and outstanding on December 31, 1999
694,950 on December 31, 1998. . . . . . . . . . . . . 1,395 695
Capital in excess of par value . . . . . . . . . . . . . . . 65,273 30,973
Accumulated deficit during
the development stage. . . . . . . . . . . . . . . . . . . . (39,339) (31,668)
---------- ---------
Total Stockholders' Equity . . . . . . . . . . . . . . . . . 27,329 -
---------- ---------
$ 27,829 $ -
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ORANCO INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND THE PERIOD JUNE 16, 1977 (DATE OF INCEPTION) TO DECEMBER 31, 1999
PERIOD
DEC 31, DEC 31, DEC 31, JUN 16, 1977
1999 1998 1997 TO DEC 31, 1999
------------ ------------ ------------- -----------------
<S> <C> <C> <C> <C>
REVENUES. . . . . . $ - $ - $ - $ -
EXPENSES. . . . . . 7,671 7,710 2,290 39,339
------------ ------------ ------------- -----------------
NET LOSS. . . . . . $ (7,671) $ (7,710) $ (2,290) $ (39,339)
============ ============ ============= -----------------
NET LOSS PER COMMON
SHARE
Basic . . . . . . . $ (.009) $ (.11) $ (003)
------------ ------------ -------------
AVERAGE OUTSTANDING
SHARES
Basic . . . 810,000 694,950 694,950
------------ ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
.
<PAGE>
<TABLE>
<CAPTION>
ORANCO, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD JUNE 16, 1977 (DATE OF INCEPTION) TO DECEMBER 31, 1999
COMMON STOCK CAPITAL In
------------------ EXCESS OF ACCUMULATED
SHARES AMOUNT PAR VALUE DEFICIT
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
BALANCE JUNE 16, 1977 (date of inception) . . - $ - $ - $ -
Issuance of common stock for cash at $.034 -
July 9, 1982. . . . . . . . . . . . . . . 231,300 231 7,594 -
Issuance of common stock for cash at $.079 -
November 12, 1982. . . . . . . . . . . . . 143,650 144 11,199 -
Issuance of common stock for cash at $.025
December 12, 1983 . . . . . . . . . . . . 40,000 40 960 -
Net operating loss for the year ended
December 31, 1983 . . . . . . . . . . . . - - - (20,168)
Issuance of common stock for cash at $.019
June 6, 1984 . . . . . . . . . . . . . . . 40,000 40 710 -
Net operating loss for the year ended
December 31, 1984 . . . . . . . . . . . . - - - (750)
Issuance of common stock for cash at $.019
January 15, 1985 . . . . . . . . . . . . 40,000 40 710 -
Net operating loss for the year ended
December 31, 1985 . . . . . . . . . . . - - - (750)
Issuance of common stock for cash at $.05 -
May 16, 1997 . . . . . . . . . . . . . . . 200,000 200 9,800 -
Net operating loss for the year ended
December 31, 1997. . . . . . . . . . . - - - (2,290)
BALANCE DECEMBER 31, 1997 . . . . . . . . . . 694,950 695 30,973 (23,958)
Net operating loss for the year ended
December 31, 1998 . . . . . . . . . . . . - - - (7,710)
------------ ---------- ------------ ----------
BALANCE DECEMBER 31, 1998. . . . . . . . . . 694,950 695 30,973 (31,668)
Issuance of common stock for cash
at $.05 - November 12, 1999 . . . . . . . 700,000 700 34,300 -
Net operating loss for the year
ended December 31, 1999 . . . . . . . . . - - - (7,671)
------------ ---------- ------------ ----------
BALANCE DECEMBER 31, 1999 . . . . . . . . . . 1,394,950 $ 1,395 $ 65,273 $ (39,339)
============ ========== ============ ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ORANCO INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997,
AND THE PERIOD JUNE 16, 1977 (DATE OF INCEPTION) TO DECEMBER 31, 1999
PERIOD
DEC 31, DEC 31, DEC 31, JUN 16, 1977
1999 1998 1997 TO DEC 31, 1999
---------- --------- --------- -----------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss . . . . . . . . . . . . . . . $ (7,671) $ (7,710) $ (2,290) (39,339)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Change in accounts payable. . 500 - - 500
Net Cash From (Used) in Operations ( 7,171) (7,710) (2,290) (38,839)
---------- --------- --------- -----------------
CASH FLOWS FROM INVESTING
ACTIVITIES
- - - -
---------- --------- --------- -----------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common
stock. . . . . . . . . . . . . . . . . 35,000 - 10,000 66,668
Net Increase (Decrease) in Cash . . . 27,829 (7,710) 7,710 27,829
Cash at Beginning of Period. . . . . . - 7,710 - -
---------- --------- --------- -----------------
Cash at End of Period. . . . . . . . . $ 27,829 $ - $ 7,710 $ 27,829
========== ========= ========= =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ORANCO, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
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 $0.25.
On June 10, 1997 the authorized common stock was increased to 100,000,000
shares with a par value of $0.001 in connection with a forward stock split of
ten shares for each outstanding share.
This report has been prepared showing after stock split shares with a par value
of $0.001 from inception.
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 is in the development stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
- -------------------
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
- -------------
On December 31, 1999, the Company had a net operating loss carry forward of
$39,339. The tax benefit from the loss carry forward has been fully offset by a
valuation reserve because the use of the future tax benefit is undeterminable
since the Company has no operations. The loss carryover expires in the years
from 1999 through 2021.
Estimates and Assumptions
- ---------------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. 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 the financial statements.
Earnings (Loss) Per Share
- ----------------------------
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding, after the stock split, in accordance with
FASB statement number 128.
<PAGE>
ORANCO, INC.
NOTES TO FINANCIAL STATEMENTS - continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments
- ----------------------
The carrying amounts of financial instruments, including cash and accounts
payable, is considered by management to be their estimated fair values.
3. RELATED PARTY TRANSACTIONS
Related parties have acquired 50% of the common stock issued by the Company.
4. GOING CONCERN
The Company intends to acquire interests in various business opportunities
which, in the opinion of management, will provide a profit to the Company,
however there is insufficient working capital for any future planned activity.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through additional
equity funding and long term debt which will enable the Company to conduct
operations for the coming year.
There can be no assurance that they may be successful in this effort.
5. SUBSEQUENT EVENTS
On January 11, 2000 the Company adopted a Nonqualified Key Man Stock Option Plan
which provides for the granting of stock options to key employees, consultants,
officers and directors of the Company. The number of shares subject to the
plan cannot exceed 500,000 and the exercise price cannot be less than 100%
of the fair value of the shares on the option date.
On January 11, 2000 250,000 options were granted to purchase 250,000 shares of
common stock of the Company to an officer and a consultant. Additional options
were granted to purchase 125,000 shares to an individual in exchange for his
agreement to join the Board of Directors by February 10, 2000.
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
----------------------------------------------------------------------
None, Not applicable
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
------------------------------------------------------------------------
PART III
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------------------------
The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination. In addition
the table sets forth the same information as to all persons who were officers or
directors during the year of 1999 but who are no longer officers or directors.
<TABLE>
<CAPTION>
Date of Date of
Positions Election or Termination
Name Held Designation or Resignation
- ---- ------------------ ----------- --------------
<S> <C> <C> <C>
Claudio Gianascio President, Secretary,
Treasurer, Director. 09/01/99 (2)
John Riche (1) President and Director 05/08/97 09/01/99
Vicki Riche (1) Secretary, Treasurer &
Director 05/08/97 09/01/99
Alfredo M. Villa Director 01/10/2000 (2)
<FN>
(1) Mr. & Mrs. Riche are husband and wife.
(2) These persons presently serve in the capacities indicated.
</TABLE>
Business Experience.
- ---------------------
Mr. Gianascio is presently CEO and Chairman of the Board of Givigest Fiduciaria
S.A., a Swiss financial services company he co-founded in 1990. He is also a
board member of SCF Societa di Consulenza Finanziaria S.A., a Swiss private
banking company; a board member of III Intermediazioni Immobiliari
Internazionali S.A., a real estate company; and a board member of Zandano and
Partners S.A., a Swiss financial consulting company. Mr. Gianascio holds a
Master Degree in Economics which he received from the University of Geneva,
Switzerland and is a licensed Fiduciario Finanziario within the state of Ticino,
Switzerland. Prior to co-founding Givigest Fiduciaria S.A., Mr. Gianascio was
employed within the banking and financial industries by Union Bank of
Switzerland, Manufacturers Hanover (Suisse) S.A., and Chemical Bank (Suisse)
S.A
Mr. Riche has been employed by Pitney Bowes Corporation since 1997 as a sales
representative for the North West region. From 1995 to 1997 he worked for
Flying J Corporation as general manager for Hotels. Prior to that he was
involved in the hotel and motel industry in various positions, including five
years as the general manager for the Sea Gypsy Hotel. He is the husband of Vicki
Riche
Mrs. Riche , since 1996, has been a sales associate for America the Beautiful
Dreamer, a Portland, Oregon furniture and design store. In addition she provides
bookeeping and reconciliation services to Atwaters Restaurant of Beverton,
Oregon and to Restaurant Associates Northwest of Clackamas, Oregon. In addition,
she was the store manager for Susie's Casuals of Clackamas, Oregon for many
years.In 1979 Mrs. Riche received a B.A. degree in Clothing and Textiles from
Oregon state University.
Alfredo M. Villa holds a masters degree in economics from the University of
Geneva, Switzerland and attended Bocconi University in Milan, Italy. He has over
13 years of experience with the Swiss banking industry. Mr. Villa is currently
Chairman and CEO of SCF Societa di Consulenza Finanziaria S.A., a Swiss
corporation specializing in asset management, mergers, acquisitions, and
investment banking, where he has served since 1994. Prior to that Mr. Villa was
an asset manager with several other European financial institutions. In
addition, Mr. Villa was Chairman of the Board of Alma Grafiche Srl, of Milan,
Italy, a leader in the high quality printing of books and magazines from 1995
until February 1998. In addition, Mr. Villa is Secretary and a Director of
Private Media Group, Inc., a reporting company listed on NASDAQ.
SIGNIFICANT EMPLOYEES.
- ----------------------
The Company has no employees who are not executive officers, but who are
expected to make a significant contribution to the Company's business.
FAMILY RELATIONSHIPS.
- ---------------------
There are no family relationships between any current directors or
executive officers of the Company, either by blood or by marriage.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
- -----------------------------------------
Except as stated above, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person of
the Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- -------------------------------------------------
Claudio Gianascio filed a Form 3, Initial Statement of Beneficial
Ownership of Securities on or about January 4, 2000, prior to the effective date
of the Company's Form 10 registration. Mr. Gianascio filed a Form 4, Statement
of Changes In Beneficial Ownership, on February 10,2000. Alfredo M. Villa filed
a Form 3 on February 17, 2000.
ITEM 10. EXECUTIVE COMPENSATION.
-----------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricted lying Pay- Comp-
Position Ended ($) ($) Compen Stock Options outs ensat'n
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Claudio
Gianascio, 12/31/98 0 0 0 0 0 0 0
Pres, Sec, 12/31/97 0 0 0 0 0 0 0
Treas, Dir 12/31/96 0 0 0 0 0 0 0
Vicki Riche 12/31/98 0 0 0 0 0 0 0
Secretary/ 12/31/97 0 0 0 0 0 0 0
Treasurer, 12/31/96 0 0 0 0 0 0 0
Director
John Riche 12/31/98 0 0 0 0 0 0 0
President 12/31/97 0 0 0 0 0 0 0
Director 12/31/96 0 0 0 0 0 0 0
<FN>
*Alfredo M. Villa is not included in this table because he was not a director in
any of the above three years.
** Claudio Gianascio became an officer and director of the Company on September
1, 1999. Both John Riche and Vicki Riche, husband and wife, served as officers
and directors of the Company from May 8, 1997 until September 1, 1999.
*** Does not reflect options issued under the 2000 Non-qualified Key man Stock
Option Plan adopted January 11, 2000. See Item 11.
</TABLE>
COMPENSATION OF DIRECTORS.
- --------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
There are no arrangements pursuant to which any of the Company's directors
was compensated during the Company's last completed calendar year for any
service provided as director.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS.
- -------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company or any subsidiary, any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
- ------------------------------------------------
The following table sets forth the shareholdings of those persons who
beneficially own more than five percent of the Company's common stock as of the
date of this Report, with the computations being based upon 1,394,950 shares of
common stock being outstanding, unless otherwise noted.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ ----------------
<S> <C> <C>
Claudio Gianascio . . . . . . . . . 825,000(1) 54.28(2)
Corso Elvezia 4
Ch-6900 Lugano
Switzerland
Darwin Long(3). . . . . . . . . . . . 100,000 7.17%
7808 S. Dolphin Circle
Salt Lake City, Utah 84121
Jackie Hall(3). . . . . . . . . . . . 80,000 5.74%
7808 S. Darwin Circle
Salt Lake City, Utah 84121
John Riche(3) . . . . . . . . . . . . 115,000 8.24%
6595 S.W. Cherry Hill Dr.
Beaverton, Or 97008
Vicki Riche(3). . . . . . . . . . . . 110,000 7.89%
6595 S.W. Cherry Hill Dr.
Beaverton, Or 97008
--------- ---------
1,230,000 83.32%(4)
<FN>
(1) Includes options to purchase 125,000 granted to Mr. Gianascio on January 11,
2000. See Below.
(2) Percentage is calculated assuming that Mr. Gianascio had exercised his option
to purchase 125,000 shares of stock and that there were then 1,519,950
shares outstanding.
(3) Darwin Long and Jackie Hall are husband and wife. John Riche and Vicki Riche
are husband and wife. Each disclaims any interest in the holdings of their
spouse.
(4) Calculated assuming that Mr. Gianascio had exercised his option to purchase
125,000 shares and that there were therefore 1,519,950 shares outstanding.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT.
- ---------------------------------
The following table sets forth the shareholdings of the Company's directors
and executive officers as of the date of this Report:
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Beneficially Owned of Class *
- ---------------- ------------------------- ---------------
<S> <C> <C>
Claudio Gianascio . . 825,000(1) 54.28%(2)
Corso Elvezia 4
Ch-6900 Lugano
Switzerland
Alfredo M. Villa. . . 125,000(1) 8.22%(3)
Corso Elvezia 4
Ch-6900 Lugano
switzerland
---------- ---------
All directors and
executive officers. . 950,000(1) 62.5%
as a group (2 people)
<FN>
(1) Includes options granted to Mr. Gianascio and Mr. Villa on January 11, 2000
granting each of them the right to purchase up to 125,000 shares of the common
stock of the Company at a price of $.10 per share on or before December 31,
2004.
(2) Percentage is calculated assuming Mr. Gianascio had exercised his option and
therefore there were 1,519,950 shares outstanding.
(3) Percentage is calculated assuming Mr. Villa had exercised his option and
therefore there were 1,519,950 shares outstanding.
</TABLE>
CHANGES IN CONTROL.
- -------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
-----------------------------------------------
TRANSACTIONS WITH MANAGEMENT AND OTHERS.
- ----------------------------------------
For a description of transactions between members of management, five
percent stockholders, "affiliates", promoters and finders, see captions
"Recent Changes in Control" under Item 1, "Sales of 'Unregistered' and
'Restricted' Securities Over the Past Three Years" under Item 5, and footnote 1
under "Security ownership of Management" under Item 11
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
---------------------------------
REPORTS ON FORM 8-K
- -------------------
NONE
EXHIBITS
- --------
Exhibit
Number Description*
- ------ -----------
3.1 * Initial Articles of Incorporation,
3.2 * Articles of Amendment to the
Articles of Incorporation,
3.3 * By-Laws
10.1 2000 non-Qualified Key Man Stock Option Plan
10.2 Form of Option Certificate delivered in connection
with the grant of individual options.
27 Financial Data Schedule
DOCUMENTS INCORPORATED BY REFERENCE
* Documents previously filed as exhibits to Form 10 filed on November 18, 1999
and incorporated herein by this reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Oranco, INC.
Date: 3-24-2000 By /S/Claudio Gianascio
-----------------------
Claudio Gianascio
President, Secretary, Treasurer and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
ORANCO, INC.
Date: 3-24-2000 By/S/Claudio Gianascio
-----------------------
Claudio Gianascio
President, Secretary,
Treasurer and Director
Date: 3-24-2000 By/S/Alfredo M. Villa
-----------------------
Alfredo M. Villa
Director
EXHIBIT 10.1
2000 NON-QUALIFIED KEY MAN STOCK OPTION PLAN
PURPOSE: The purpose of the Oranco, Inc. 2000 Non-Qualified Key Man Stock
Option Plan (hereinafter referred to as the "Plan") is to provide a special
incentive to selected key persons associated with or employed by Oranco, Inc.
(the "Company") and its subsidiaries, to promote the Company's business. The
Plan is designed to accomplish this purpose by offering such personnel an
opportunity to purchase shares of the common stock of the Company so that they
will share in the Company's success.
1. The Board of Directors shall administer the Plan.
2. Options may be granted to key employees and consultants of the Company
and to Officers and Directors. The Board shall select grantees. Board members
are eligible to receive options.
3. The total number of shares subject to this Plan shall not exceed
500,000.
4. The purchase price of shares of common stock issuable upon exercise of
each option granted pursuant to the Plan shall be not less than 100 percent of
the fair market value of the shares on the date the option is granted, as
determined by the Board of Directors.
5. The Options granted under the Plan shall vest at such time as is fixed
at the time of their grant by the Board of Directors.
6. Each option is non transferable, except in the case of death, in which
case it shall be exercisable by the holder's heirs, according to the terms of
the option document.
7. If any change is made in the shares subject to this Plan or any option
granted hereunder (through merger, consolidation, reorganization,
recapitalization, or change in capital structure), appropriate adjustment shall
be made by the Board in the number of shares and kind of common stock for which
options may be or may have been granted under the Plan, to the end that the
proportionate interests shall be maintained viz-a-viz other shareholders of
Oranco, Inc. in a manner which is the same as before the occurrence of such
event.
8. The Plan participant agrees that all shares purchased by the
Participant under the option, unless they have been registered, are acquired for
investment and not for distribution, and may not be resold, except pursuant to
registration, or an exemption therefrom, under the Securities Act of 1933. Each
notice of exercise of the option shall be accompanied by a written
representation, signed by the Participant, to that effect, and share
certificates upon issuance, shall bear a private placement legend, unless an
applicable registration statement or exemption from registration is then in
effect.
<PAGE>
9. All options issued hereunder shall be issued only to persons who and for
services which qualify under the terms of Rule 701 and/or an S-8 registration,
in the event the Company becomes a "reporting company", under the Securities Act
of 1933, as amended.
Adopted by action of the Board of Directors of Oranco, Inc. on January 11, 2000.
s/ Claudio Gianascio
- ----------------------
Claudio Gianascio, President & Sole Director
EXHIBIT 10.2
ORANCO, INC. of
1981 East 4800 South, Suite 100
Salt Lake City, Utah 84117
(the "Company")
OF THE FIRST PART
AND:
(the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionee is an employee, officer, director, consultant, or advisor
of the Company, as the case may be;
B. The Company wishes to grant the Optionee an option to purchase common
shares in the capital of the Company;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the sum of $1.00
given by the Optionee to the Company (the receipt of which is hereby
acknowledged by the Company) the parties hereto agree as follows:
1. The Company hereby grants the Optionee as an appreciation of past
loyalty and performance and as an incentive for the same in the future and not
in lieu of salary or any other compensation for services, an option to purchase
a total of ______ common shares in its capital (the "Option") at a price
of_______ per share exercisable on or before ______________ (the "Expiration
Date").
2. In order to exercise the Option, the Optionee shall, before 5:00 p.m.
PST on the Expiration Date, give notice to the Company of the Optionee's
intention to exercise the Option in whole or in part, such notice to be
accompanied by cash, bank draft, money order or certified cheque, payable to the
Company, in the appropriate amount.
<PAGE>
3. If the issued and outstanding common shares in the capital of the
Company are at any time changed by subdivision, consolidation, re-division,
reduction in capital, reclassification or recapitalization (such changes are
herein called collectively "Capital Alterations"), not including any issuance of
additional shares for consideration, the Option shall be adjusted as follows:
(a) the number and class of shares in respect of which the Option is
granted shall be adjusted in such a manner as to parallel the change created by
the Capital Alterations in the class and total number of the issued and
outstanding common shares; and
(b) the exercise price of each share in respect of which the Option shall
operate shall be increased or decreased proportionately, as the case may
require, so that upon exercising the Option the same proportionate shareholdings
at the same aggregate purchase price shall be acquired after such Capital
Alterations as would have been acquired before the Capital Alterations.
4. The Option granted is personal to the Optionee and may not be assigned
or transferred in whole or in part, except to "family members" as defined under
Rule 701 as promulgated under the Securities Act of 1933 (the "Act").
5. The option hereby granted, and the underlying shares of Common which will
be issued upon exercise, are each restricted securities as defined in Rule 144
as promulgated under the Securities Act of 1933 ("the Act"), and such securities
in each case may not be resold without registration under the Act or the
availability of an exemption from registration in connection with resale. The
share certificates evidencing the shares upon option exercise, unless there is
in effect a registration under the Act or an exemption from registration which
is then in fact applicable to the shares, will bear substantially the following
legend:
The securities evidenced hereby have not been registered under
the Securities Act of 1933 or any state securities laws; such
securities may not be transferred, sold, pledged or otherwise
disposed of unless such securities are registered under the
Securities Act of 1933 and such state laws or such transactions
are exempt from the registration requirements therefore.
6. If Optionee is a consultant or an advisor, optionee hereby acknowledges
and warrants that he is not receiving these options for services that are in
connection with the offer or sale of securities in a capital-raising
transaction, nor for services that directly or indirectly promote or maintain a
market for the Company's securities.
7. This Agreement constitutes and expresses the whole agreement of the
parties with reference to the subject matter herein, all promises,
representations and understandings relative thereto being merged herein.
Notwithstanding the foregoing, it is acknowledged and agreed that the Option
herein is in addition to, and not in substitution for, the Optionee's
previously granted and yet unexercised stock options.
<PAGE>
8. This Agreement shall be construed and enforced in accordance with the
laws of the State of Nevada and the parties hereby irrevocably attorn to the
exclusive jurisdiction of the Courts of the State of Nevada.
ORANCO, INC.
by__________________________________
Claudio Gianascio, President
Dated________________________
OPTIONEE
____________________________________
Signature
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 27829
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27829
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 27829
<CURRENT-LIABILITIES> 500
<BONDS> 0
0
0
<COMMON> 1395
<OTHER-SE> 25934
<TOTAL-LIABILITY-AND-EQUITY> 27329
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7671
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7671)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7671
<EPS-BASIC> (.009)
<EPS-DILUTED> 0
</TABLE>
