United States 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
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____ to ____
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)
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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 [X] No [ ]
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, 2003 - $11,987
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.
At March 15, 2004, the market value of the voting stock held by non-affiliates is undeterminable and is considered to be 0.
(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, 2004
4,019,950
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the part
of the form 10- KSB (e.g., part I, part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) any proxy or other
information statement; and (3) Any prospectus filed pursuant to rule 424 (b) or
(c) under the Securities Act of 1933: None
TABLE OF CONTENTS
PART I
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Page
ITEM 1. DESCRIPTION OF BUSINESS 4
ITEM 2. DESCRIPTION OF PROPERTIES 8
ITEM 3. LEGAL PROCEEDINGS 8
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 8
PART II
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 8
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 10
ITEM 7. FINANCIAL STATEMENTS 11
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 11
PART III
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ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT 12
ITEM 10. EXECUTIVE COMPENSATION 13
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 15
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 16
ITEM 13. EXHIBITS & REPORTS ON FORM 8K 16
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 17
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PART I
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.
In the summer of 2000, the Company completed a private placement of 2,500,000 units for which it received $250,000 Each unit consisted of one share of common stock; one "a" warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of common stock at $.10 per share within two years of the date of issuance; and one "b" warrant giving the holder thereof the right to purchase, upon a minimum of 60 days prior notice of exercise, one share of common stock at $.25 per share within two years of the date of issuance.
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.
The limited business operations of the Company, as now contemplated, involve those of a "blank check" 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.
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.
None; not applicable.
Management believes that there are literally thousands of "blank check" 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.
None; not applicable.
None; not applicable.
None; not applicable.
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.
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.
None; not applicable.
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.
None.
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 no 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.
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.
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
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 aware of only one transaction having taken place in the year 2000. 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.
The number of record holders of the Company's common stock as of the date of this Report is approximately 45.
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.
None
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 both because management is located there and because management believes that the Company can locate superior acquisition opportunities in Europe. 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, 2003, it had $282,673 in cash or cash equivalents. 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.
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.
Revenues for the year ended December 31, 2003 were $11,987 compared to $24,156 for the year ended December 31, 2002. This represents an decrease of $12,169 or 50.3%. This decrease is attributable to the repayment of an outstanding convertible debenture and the reinvestment of the proceeds in a bank money market account earning lower rates of interest than the note.
Expenses for the year ended December 31, 2003 were $26,803 compared to $19,759 for the year ended December 31, 2002. This represents a increase of $7,044 or 35.6% and is attributable to a slight increase in legal and other administrative costs and the decrease in value of available for sale securities owned by the Company.
Net loss for the year ended December 31, 2003 was $15,238 compared to a net income of $3,910 for the year ended December 31, 2002. This decrease is attributable to the decrease in value of available for sale securities owned by the Company.
The Company's primary need for capital has been to pay the ongoing administrative expenses associated with being a reporting company such as legal, accounting and EDGAR filing. The Company, although more aggressively seeking an acquisition or merger partner, does not anticipate this changing in the next 12 months, unless a suitable acquisition or merger candidate is located. However, because of the limited amount available no assurance can be given that this will be the case.
During the fiscal years ended December 31, 2003 the Company has been able to pay its expenses and costs through it cash on hand. As of December 31, 2003 had $282,673 in cash or cash equivalents compared to $25,689 at December 31, 2002, an increase of $256,984or 1000%. This was attributable to repayment of an outstanding convertible debenture.
The financial statements of the Company are included following the signature pages to this form 10-KSB.
The Company's independent auditor for the years ended December 31, 2001 and 2002 was Sellers and Andersen, LLC. On or about March 2, 2004, the Company terminated the engagement of Sellers and Andersen, LLC as its independent auditor. The Board of Directors approved the accounting firm of Madsen & Associates, CPA's, P.C. to serve as independent auditor of the Company for the year ended December 31, 2003 and any interim periods. The Company has been advised that neither Madsen & Associates CPA's, P.C. nor any of their members or associates has any relationship with the Company or any of its affiliates, except in the firm's proposed capacity as the Company's independent auditor.
During the fiscal years ended December 31, 2001 and 2002, and any subsequent interim periods, the financial statements of the Company did not contain any adverse opinion or disclaimer of opinion from the Company's former independent auditor, and were not modified as to uncertainty, audit scope, or accounting principles, except the reports issued by Sellers and Andersen, LLC contained a statement expressing doubt about the ability of the Company to continue as a going concern due to its status as a development stage company with no significant operating results. During the year ended December 31, 2002, and from that date to the present, there were no disagreements with the former independent auditor on any matter of accounting principles, financial statement disclosure, or auditing scope or procedure which, if not resolved to the former independent auditor's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its audit report.
Based on an evaluation as of the date of the end of the period covered by this Form 10-KSB, our Chief Executive Office/ Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, our Chief Executive Officer/ Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms.
Changes in Internal Controls
There were no significant changes in our internal controls over financial reporting that occurred during the quarter and year ended December 31, 2003 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
PART III
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.
NAME POSITION(S) DATE ELECTED OR APPOINTED
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Claudio Gianascio President, Secretary,
Treasurer, Director 09/01/1999
Alfredo M. Villa Director 01/10/2000
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Mr. Gianascio is presently an independent financial advisor and currently residing in Andorra. Formerly he was CEO and Chairman of the Board of Givigest Fiduciaria S.A., a Swiss financial services company he co-founded in 1990. Until 2002 he was also a board member of III Intermediazioni Immobiliari Internazionali S.A., a real estate company; Until 2000 he was a board member of SCF Societa di Consulenza Finanziaria S.A., a Swiss private banking 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 was a licensed Fiduciario Finanziario within the state of Ticino, Switzerland until 2002. 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
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 20 years of experience with the Swiss banking industry. Since 1999 he has been a founding Director of Mediapolis S.A. Until 2001, he was 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 served since 1994. Since 2000, he has been a director of Gabbrielli & Associates, an investment banking firm based in Milan, Italy 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 was, until 2000, Secretary and a Director of Private Media Group, Inc., a reporting company listed on NASDAQ.
The Company has no employees who are not executive officers, but who are expected to make a significant contribution to the Company's business.
There are no family relationships between any current directors or executive officers of the Company, either by blood or by marriage.
The Company has no audit committee financial expert, as defined under
Section 228.401, serving on its audit committee because it has no audit
committee and is not required to have an audit committee because it is not a
listed security as defined in Section 240.10A-3.
The Company has adopted a code of ethics that applies to the Company's principal executive officer, principal financial officer, principal accounting officer or controller which is attached hereto as Exhibit 99.1.
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.
Since the Company ceased operations in 1990, the Company knows of no person, who at any time during the subsequent fiscal years, was a director, officer, beneficial owner of more than ten percent of any class of equity securities of the registrant registered pursuant to Section 12 ("Reporting Person"), that failed to file on a timely basis any reports required to be furnished pursuant to Section 16 (a). Based upon a review of Forms 3 and 4 furnished to the registrant under Rule 16a-3(d) during its most recent fiscal year, other than disclosed below, the registrant knows of no Reporting Person that failed to file the required reports during the most recent fiscal year or prior years.
The following table sets forth as of December 31, 2003, the name and position of each Reporting Person that failed to file on a timely basis any reports required pursuant to Section 16(a) during the most recent fiscal year or prior years.
Name Position Reports Filed
NONE
The following table sets forth the aggregate compensation paid by the Company for services rendered during the periods indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation Awards Payouts
---------------------------------------------------------- -------------------- -------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
All ities
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricted lying Pay- Comp-
Position Ended ($) ($) Compensation Stock Options(#) outs ensation
--------------------------------------------------------------------------------------------------------
Claudio
Gianascio, 12/31/2003 0 0 0 0 0 0 0
Pres, Sec, 12/31/2002 0 0 0 0 0 0 0
Treas, Dir 12/31/2001 0 0 0 0 0 0 0
** Claudio Gianascio became an officer and director of the Company on September
1, 1999.
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Option/SAR Grants in Last Fiscal Year
Individual Grants
No. Of Sec. % of Total
Underlying Options/SARs
Options/ Granted to Exercise
SARs Employees or Base
Granted In Fiscal Price Expiration
Name (#) Year ($/Sh) Date
---- --- ---- ------ ----
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NONE
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.
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.
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 4,019,950 shares of common stock being outstanding, unless otherwise noted.
Number of Shares Percentage
Name and Address Beneficially Owned of Class
---------------- ------------------- ----------
Claudio Gianascio 825,000(1) 19.90%(2)
La Pleta de Sant Pere
El Tartar, Canillo, Andorra
Comprehensive Ventures Inc. Ltd. 400,000(3) 9.95%
Clinch's House Lord Street
Douglas, Isle of Man
British Isles IM99 1RZ
Progressive Emerging Ventures Ltd. 400,000(3) 9.95%
Suite 743, Europort
P.O. Box 629
Gibraltar
Capital One International SA 350,000(3) 8.71%
Torre Banco Germanico
P.O. Box 850048
Calle 50 Y 55 Este, 8th Floor
Panama, Republic of Panama
Prestige Underwriters NV 350,000(3) 8.71%
Middenstraat 1A,
P.O. Box 97
Willemstad, Curacao
Netherland Antilles
OTC Opportunities Limited 350,000(3) 8.71%
The Lake Building, First Floor
P.O. Box 915
Roadtown, BVI
|
(1) Includes options to purchase 125,000 granted to Mr. Gianascio on January
11, 2000.
(2) Percentage is calculated assuming that Mr. Gianascio had exercised his
options to purchase 125,000 shares of stock and that there were thus
4,144,950 shares outstanding.
(3) Does not include "b" warrants that require 60 days prior notice to
exercise..
The following table sets forth the shareholdings of the Company's directors and executive officers as of the date of this Report:
Number of Percentage of
Name and Address Shares Beneficially Owned of Class
---------------- -------------------------- ---------
Claudio Gianascio 825,000(1) 20.5%(2)
La Pleta de Sant Pere
El Tartar, Canillo, Andorra
Alfredo M. Villa 125,000(1) 3.01%(3)
Chelsea Court No. 2262
Triq 1-1M6HAZEL, Swiequi
Malta
All directors and
executive officers 950,000(1) 23.51%(4)
as a group (2 people)
|
(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 4,144,950 shares outstanding.
(3) Percentage is calculated assuming Mr. Villa had exercised his option and
therefore there were 4,144,950 shares outstanding.
(4) Percentage assumes that both Mr. Gianascio and Mr. Villa had exercised
their options and therefore there were 4,269,950 shares outstanding.
There are no present arrangements or pledges of the Company's securities which may result in a change in control of the Company.
For a description of transactions between members of management, five percent stockholders, "affiliates", promoters and finders, see captions "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. .
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.
31.1 Rule 13a-14(a)/15d-14(a) Certification.
32.1 Certification by the Chief Executive Officer/Acting Chief
Financial Officer Relating to a Periodic Report Containing
Financial Statements.***
99.1 Code of Ethics
|
*** 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.
DOCUMENTS INCORPORATED BY REFERENCE
* Documents previously filed as exhibits to Form 10 filed on November 18, 1999 and incorporated herein by this reference. ** Documents previously filed as exhibits to Form 10KSB annual report for years ending 12/31/99.
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal account for the audit of Oranco's annual financial statement and review of financial statements included in Oranco's 10-QSB reports and services normally provided by the accountant in connection with statutory and regulatory filings or engagements were $3,140.00 for fiscal year ended 2002 and $3,825.00 for fiscal year ended 2003.
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of Oranco's financial statements that are not reported above were $ -0- for fiscal years ended 2002 and 2003.
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advise, and tax planning were $150.00 for fiscal year ended 2002 and $150.00 for fiscal year ended 2003.
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above were $ -0- for fiscal years ended 2002 and 2003.
We do not have an audit committee currently serving and as a result our board of directors performs the duties of an audit committee. Our board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. We do not rely on pre-approval policies and procedures.
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: 3-28-2004 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: 3-28-2004 By S/ Claudio Gianascio
--------------------------------
Claudio Gianascio
President, Secretary, Treasurer and Director
Date: 3-28-2004 S/ Alfredo Villa
-------------------------------
Alfredo M. Villa
Director
|
MADSEN & ASSOCIATES, CPA's INC.
------------------------------- 684 East Vine St, #3
Certified Public Accountants and Business Consultants Murray, Utah 84107
Telephone 801-268-2632
Fax 801-262-3978
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, 2003 and the statement of operations, stockholders' equity, and cash flows for the years ended December 31, 2003, and 2002 and the period June 16, 1977 (date of inception) to December 31, 2003. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 financial statement presentation. We believe that our audit provides 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, 2003 and the results of operations, and cash flows for the years ended December 31, 2003 and 2002 and the period June 16, 1977 (date of inception) to December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.
March 23, 2004
Salt Lake City, Utah s/Madsen & Associates, CPA's Inc. |
ORANCO, INC.
( Development Stage Company)
BALANCE SHEET
December 31, 2003
ASSETS
CURRENT ASSETS
Cash $ 282,673
---------
Total Current Assets $ 282,673
=========
|
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Income tax payable $ 422
---------
Total Current Liabilities 422
---------
|
STOCKHOLDERS' EQUITY
Common stock
100,000,000 shares authorized, at $0.001 par value;
4,019,950 shares issued and outstanding 4,020
Capital in excess of par value 325,148
Deficit accumulated during the development stage (46,917)
---------
Total Stockholders' Equity $ 282,251
==========
|
The accompanying notes are an integral part of these financial statements.
ORANCO, INC.
( Development Stage Company)
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2003, and 2002 and the Period June 16, 1977 (Date of Inception) to December 31, 2003
Dec 31, Dec 31, Jun 16, 1977 to
2003 2002 Dec 31, 2003
----------- ----------- -----------
REVENUES $ 11,987 $ 24,156 $ 53,997
----------- ----------- -----------
EXPENSES
Administrative 9,175 6,986 69,604
Valuation adjustment-
available-for-securities 17,628 12,773 30,401
----------- ----------- -----------
26,803 19,759 100,005
----------- ----------- -----------
NET PROFIT (LOSS) - before income tax (14,816) 4,397 (46,008)
Provision for income tax (422) (487) (909)
----------- ----------- -----------
NET PROFIT (LOSS) $ (15,238) $ 3,910 $ (46,917)
=========== =========== ===========
|
NET LOSS PER COMMON
SHARE
Basic and diluted $ -- $ --
----------- -----------
Diluted $ -- $ --
----------- -----------
AVERAGE OUTSTANDING
SHARES
Basic 4,019,950 4,019,950
----------- -----------
Diluted 6,519,950 6,519,950
----------- -----------
|
The accompanying notes are an integral part of these financial state
ORANCO, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period June 16, 1977 (date of inception) to December 31, 2003
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------------------------------------------------------------
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)
Net operating loss for the year ended
December 31, 1998 -- -- -- (7,710)
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)
Issuance of common stock for cash
at $.10 - June and July 2000 2,500,000 2,500 247,500 --
Issuance of common stock for cash
at $.10 - July 5, 2000 125,000 125 12,375 --
Net operating loss for the year
ended December 31, 2000 -- -- -- (7,497)
Net operating profit for the year
ended December 31, 2001 -- -- -- 11,247
Net operating profit for the year
ended December 31, 2002 -- -- -- 3,910
Net operating loss fot the year
ended December 31, 2003 -- -- -- (15,238)
--------- --------- --------- ---------
Balance December 31, 2003 4,019,950 $ 4,020 $ 325,148 $ (46,917)
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
|
ORANCO, INC.
( Development Stage Company)
STATEMENT OF CASH FLOWS
For the Years Ended December 31, 2003, and 2002 and the
Period June 16, 1977 (Date of Inception) to December 31, 2003
Jun 16, 1977
Dec 31, Dec 31, to Dec 31,
2003 2002 2003
--------- --------- ---------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit (loss) $ (15,238) $ 3,910 $ (46,917)
Adjustments to reconcile net loss to
net cash provided by operating activities
Change in income tax payable (65) 487 422
Changes in accrued interest receivable 6,430 (10,197) --
Valuation adjustment - securities 17,628 12,773 30,401
--------- --------- ---------
Net Change in Cash from Operations 8,755 6,973 (16,094)
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase available-for-sale securities (16,771) (13,630) (30,401)
Payment of note receivable 265,000 -- --
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common stock -- -- 329,168
--------- --------- ---------
Net Change in Cash 256,984 (6,657) 282,673
Cash at Beginning of Period 25,689 32,346 --
--------- --------- ---------
Cash at End of Period $ 282,673 $ 25,689 $ 282,673
========= ========= =========
The accompanying notes are an integral part of these financial statements.
23
|
ORANCO, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
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.
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
The Company recognizes income and expenses based on the accrual method of accounting.
The Company has not yet adopted a policy regarding payment of dividends.
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 December 31, 2003 the Company did not have a net operating loss available for carryforward.
For the two years ended December 31, 2003 the Company has recorded a valuation adjustment to the available-for-sale securities of $30,401. If a loss results from the future sale of the securities it is uncertain whether it will be available as a deduction against future taxable profits and therefore no income tax benefit is recognized.
Certain reclassifications have been made to the 2002 financial statements to conform to the 2003 presentation.
ORANCO, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2003
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.
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.
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 $100,000, however they are considered to be in banks of high quality.
Revenue will be recognized on the sale and delivery of a product or the completion of a service provided.
The company will expense advertising and market development costs as incurred.
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.
ORANCO, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2003
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The carrying amounts of financial instruments, including cash, are considered by management to be their estimated fair values.
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 these financial statements.
The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
3. AVAILABLE FOR SALE SECURITIES
Available-for-sale securities consists of 320,519 common shares of Air Packaging Technologies Inc. which was received as payment of interest on a note receivable. The value of the shares have been impaired and are being carried with no value.
4. COMMON CAPITAL STOCK
During June 2000 the board of directors authorized and completed the sale of a private placement of 2,500,000 units at $0.10. Each unit consisted of one share of common stock, a warrant to purchase an additional share of common stock for $0.10 at any time within two years (expired), and a warrant to purchase a second share of common stock for $0.25 any time before July 7, 2004. No warrants have been exercised.
On January 11, 2000 the Company adopted a non qualified key man stock option plan of 500,000 common shares of its capital stock which can be exercised at the trading value on the date of grant. 375,000 of the options were granted on June 22, 2000 and 125,000 of the options were exercised for the purchase of 125,000 common shares at $.10 a share. The remaining 250,000 of the granted shares will expire December 31, 2004.
5 SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors have acquired or have under option 22% of the outstanding common stock.
Exhibit 31.1
CERTIFICATION
I, as Chief Executive Officer and Chief Financial Officer, certify that:
I have reviewed this Form 10KSB of Oranco, Inc.; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: March 28, 2004 S/ Claudio Gianascio
--------------------
Claudio Gianascio, CEO & CFO
|
EXHIBIT 32.1
CERTIFICATION
Pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2003 (18 U.S.C.ss. 1350, as adopted), I, Claudio Giamascio, Chief Executive Officer and Chief Financial Officer of the Company, hereby certifiy that, to the best of his or her knowledge:
1. The Company's Annual Report on Form 10-KSB for the period ended December 31 2003, and to which this Certification is attached as Exhibit 32.1 (the "PERIODIC REPORT") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report.
Dated: March 28, 2004 S/Claudio Gianascio ------------------------ Claudio Gianascio CEO & CFO |
THIS CERTIFICATION ACCOMPANIES THIS REPORT PURSUANT TO SS. 906 OF THE SARBANES-OXLEY ACT OF 2003 AND SHALL NOT BE DEEMED "FILED" BY THE COMPANY FOR PURPOSES OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Exhibit 99.1
Code of Ethics and Business Conduct for Officers, Directors and Employees of Oranco, Inc.
1. Treat in an Ethical Manner Those to Whom Oranco, Inc. Has an Obligation
We are committed to honesty, just management, fairness, providing a safe and healthy environment free from the fear of retribution, and respecting the dignity due everyone.
For the communities in which we live and work we are committed to observe sound environmental business practices and to act as concerned and responsible neighbors, reflecting all aspects of good citizenship.
For our shareholders we are committed to pursuing sound growth and earnings objectives and to exercising prudence in the use of our assets and resources.
2. Promote a Positive Work Environment
All employees want and deserve a workplace where they feel respected, satisfied, and appreciated. We respect cultural diversity and recognize that the various communities in which we may do business may have different legal provisions pertaining to the workplace. As such, we will adhere to the limitations specified by law in all of our localities, and further, we will not tolerate harassment or discrimination of any kind -- especially involving race, color, religion, gender, age, national origin, disability, and veteran or marital status.
Providing an environment that supports honesty, integrity, respect, trust, responsibility, and citizenship permits us the opportunity to achieve excellence in our workplace. While everyone who works for the Company must contribute to the creation and maintenance of such an environment, our executives and management personnel assume special responsibility for fostering a work environment that is free from the fear of retribution and will bring out the best in all of us. Supervisors must be careful in words and conduct to avoid placing, or seeming to place, pressure on subordinates that could cause them to deviate from acceptable ethical behavior.
3. Protect Yourself, Your Fellow Employees, and the World We Live In
We are committed to providing a drug-free, safe, and healthy work environment, and to observe environmentally sound business practices. We will strive, at a minimum, to do no harm and where possible, to make the communities in which we work a better place to live. Each of us is responsible for compliance with environmental, health, and safety laws and regulations. Observe posted warnings and regulations. Report immediately to the appropriate management any accident or injury sustained on the job, or any environmental or safety concern you may have.
4. Keep Accurate and Complete Records
We must maintain accurate and complete Company records. Transactions between the Company and outside individuals and organizations must be promptly and accurately entered in our books in accordance with generally accepted accounting practices and principles. No one should rationalize or even consider misrepresenting facts or falsifying records. It will not be tolerated and will result in disciplinary action.
5. Obey the Law
We will conduct our business in accordance with all applicable laws and regulations. Compliance with the law does not comprise our entire ethical responsibility. Rather, it is a minimum, absolutely essential condition for performance of our duties. In conducting business, we shall:
a. Strictly Adhere to All Antitrust Laws
Officer, directors and employees must strictly adhere to all antitrust laws. Such laws exist in the United States, the European Union, and in many other countries where the Company may conduct business. These laws prohibit practices in restraint of trade such as price fixing and boycotting suppliers or customers. They also bar pricing intended to run a competitor out of business; disparaging, misrepresenting, or harassing a competitor; stealing trade secrets; bribery; and kickbacks.
b. Strictly Comply with All Securities Laws
In our role as a publicly owned company, we must always be alert to and comply with the security laws and regulations of the United States and other countries.
i. Do Not Engage in Speculative or Insider Trading
Federal law and Company policy prohibits officers, directors and employees, directly or indirectly through their families or others, from purchasing or selling company stock while in the possession of material, non-public information concerning the Company. This same prohibition applies to trading in the stock of other publicly held companies on the basis of material, non-public information. To avoid even the appearance of impropriety, Company policy also prohibits officers, directors and employees from trading options on the open market in Company stock under any circumstances.
Material, non-public information is any information that could reasonably be expected to affect the price of a stock. If an officer, director or employee is considering buying or selling a stock because of inside information they possess, they should assume that such information is material. It is also important for the officer, director or employee to keep in mind that if any trade they make becomes the subject of an investigation by the government, the trade will be viewed after-the-fact with the benefit of hindsight. Consequently, officers, directors and employees should always carefully consider how their trades would look from this perspective.
Two simple rules can help protect you in this area: (1) Don=t use non-public information for personal gain. (2) Don't pass along such information to someone else who has no need to know.
This guidance also applies to the securities of other companies for which you receive information in the course of your employment at Drilling, Inc.
ii. Be Timely and Accurate in All Public Reports
As a public company, Drilling, Inc must be fair and accurate in all reports filed with the United States Securities and Exchange Commission. Officers, directors and management of Drilling, Inc
are responsible for ensuring that all reports are filed in a timely manner and that they fairly present the financial condition and operating results of the Company.
Securities laws are vigorously enforced. Violations may result in severe penalties including forced sales of parts of the business and significant fines against the Company. There may also be sanctions against individual employees including substantial fines and prison sentences.
The Chief Executive Officer and Chief Financial Officer will certify to the accuracy of reports filed with the SEC in accordance with the Sarbanes-Oxley Act of 2002. Officers and Directors who knowingly or willingly make false certifications may be subject to criminal penalties or sanctions including fines and imprisonment.
6. Avoid Conflicts of Interest
Our officers, directors and employees have an obligation to give their complete loyalty to the best interests of the Company. They should avoid any action that may involve, or may appear to involve, a conflict of interest with the company. Officers, directors and employees should not have any financial or other business relationships with suppliers, customers or competitors that might impair, or even appear to impair, the independence of any judgment they may need to make on behalf of the Company.
Here are some ways a conflict of interest could arise:
Employment by a competitor, or potential competitor, regardless of the nature of the employment, while employed by Drilling, Inc.
Acceptance of gifts, payment, or services from those seeking to do business with Drilling, Inc.
Placement of business with a firm owned or controlled by an officer, director or employee or his/her family.
Ownership of, or substantial interest in, a company that is a competitor, client or supplier.
Acting as a consultant to a Drilling, Inc customer, client or supplier.
Seeking the services or advice of an accountant or attorney who has provided services to Drilling, Inc.
Officers, directors and employees are under a continuing obligation to disclose any situation that presents the possibility of a conflict or disparity of interest between the officer, director or employee and the Company. Disclosure of any potential conflict is the key to remaining in full compliance with this policy.
7. Compete Ethically and Fairly for Business Opportunities
We must comply with the laws and regulations that pertain to the acquisition of goods and services. We will compete fairly and ethically for all business opportunities. In circumstances where there is reason to believe that the
release or receipt of non-public information is unauthorized, do not attempt to obtain and do not accept such information from any source. If you are involved in Company transactions, you must be certain that all statements, communications, and representations are accurate and truthful.
8. Avoid Illegal and Questionable Gifts or Favors
The sale and marketing of our products and services should always be free from even the perception that favorable treatment was sought, received, or given in exchange for the furnishing or receipt of business courtesies. Officers, directors and employees of Drilling, Inc will neither give nor accept business courtesies that constitute, or could be reasonably perceived as constituting, unfair business inducements or that would violate law, regulation or policies of the Company, or could cause embarrassment to or reflect negatively on the Company=s reputation.
9. Maintain the Integrity of Consultants, Agents, and Representatives
Business integrity is a key standard for the selection and retention of those who represent Drilling, Inc. Agents, representatives, or consultants must certify their willingness to comply with the Company=s policies and procedures and must never be retained to circumvent our values and principles. Paying bribes or kickbacks, engaging in industrial espionage, obtaining the proprietary data of a third party without authority, or gaining inside information or influence are just a few examples of what could give us an unfair competitive advantage and could result in violations of law.
10. Protect Proprietary Information
Proprietary Company information may not be disclosed to anyone without proper authorization. Keep proprietary documents protected and secure. In the course of normal business activities, suppliers, customers, and competitors may sometimes divulge to you information that is proprietary to their business. Respect these confidences.
11. Obtain and Use Company Assets Wisely
Personal use of Company property must always be in accordance with corporate policy. Proper use of Company property, information resources, material, facilities, and equipment is your responsibility. Use and maintain these assets with the utmost care and respect, guarding against waste and abuse, and never borrow or remove Company property without management's permission.
12. Follow the Law and Use Common Sense in Political Contributions and Activities
Drilling, Inc encourages its employees to become involved in civic affairs and to participate in the political process. Employees must understand, however, that their involvement and participation must be on an individual basis, on their own time, and at their own expense. In the United States, federal law prohibits corporations from donating corporate funds, goods, or services, directly or indirectly, to candidates for federal offices -- this includes employees' work time. Local and state laws also govern political contributions and activities as they apply to their respective jurisdictions, and similar laws exist in other countries.
13. Board Committees.
The Company shall establish an Audit Committee, at the appropriate time, empowered to enforce this Code of Ethics. The Audit Committee will report to the Board of Directors at least once each year regarding the general effectiveness
of the Company=s Code of Ethics, the Company=s controls and reporting procedures and the Company=s business conduct.
14. Disciplinary Measures.
The Company shall consistently enforce its Code of Ethics and Business Conduct through appropriate means of discipline. Violations of the Code shall be promptly reported to the Audit Committee. Pursuant to procedures adopted by it, the Audit Committee shall determine whether violations of the Code have occurred and, if so, shall determine the disciplinary measures to be taken against any employee or agent of the Company who has so violated the Code.The disciplinary measures, which may be invoked at the discretion of the Audit Committee, include, but are not limited to, counseling, oral or written reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, termination of employment and restitution.Persons subject to disciplinary measures shall include, in addition to the violator, others involved in the wrongdoing such as (i) persons who fail to use reasonable care to detect a violation, (ii) persons who if requested to divulge information withhold material information regarding a violation, and (iii) supervisors who approve or condone the violations or attempt to retaliate against employees or agents for reporting violations or violators.