---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT

For the transition period from _______to _______

Commission File Number: 000-30695

ARVANA INC.(Exact
name of small business issuer as specified in its charter)

|NEVADA                                           | 87-0618509                       
|------------------------------------------------ | ---------------------------------
|                                                 |                                  
|(State or other jurisdiction of incorporation or | (IRS Employer Identification No.)
|organization)                                    |                                  

2610-1066 West Hastings St., Vancouver, British Columbia,
Canada V6E 3X2(Address of principal executive offices)

604-684-4691(Issuer's telephone
number)

Not Applicable(Former name, if changed
since last report)

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 registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
[X] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.

|Large accelerated filer | [ ] | Accelerated filer         | [ ]
|----------------------- | --- | ------------------------- | ---
|Non-accelerated filer   | [ ] | Smaller reporting company | [X]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of outstanding shares of the Issuers common stock,
$0.001 par value per share, was 21,202,375 as of August 8, 2008.

---

ARVANA INC.

FORM 10-Q

For the Quarterly Period Ended June 30, 2008

INDEX

|PART
        I | Financial
      Information                                                                 | 3 
|-------------- | ------------------------------------------------------------------------------------------- | --
|Item 1.        | Financial Statements                                                                        | 3 
|Item 2.        | Managements
      Discussion and Analysis of Financial Condition and Results of Operations | 13
|Item 4T.       | Controls and Procedures                                                                     | 18
|               |                                                                                             |   
|PART II        | Other Information                                                                           | 20
|Item 1.        | Legal Proceedings                                                                           | 20
|Item 2.        | Unregistered Sales of Equity
      Securities and Use of Proceeds                           | 20
|Item 3.        | Defaults Upon
      Senior Securities                                                       | 20
|Item 4.        | Submission of Matters to a Vote
      of Security Holders                                   | 20
|Item 5.        | Other Information                                                                           | 20
|Item 6.        | Exhibits                                                                                    | 21
|Signatures     |                                                                                             | 23

---

PART I

Item 1. Financial Statements

The following unaudited consolidated interim financial
statements of Arvana Inc. are included in this Quarterly Report on Form 10-Q:

PageConsolidated Balance Sheets at June 30, 2008 and December
        31, 2007
      4Consolidated Statements of Operations for the three and six
        months ended June 30, 2008 and 2007
      5Consolidated Statements of Cash Flows for the six months
        ended June 30, 2008 and 2007
      6Consolidated Statement of Stockholders Equity for the six
        months ended June 30, 2008
      7Notes to Consolidated Financial Statements
      8


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|ARVANA INC. AND SUBSIDIARIES                                                           |   |             |   |   |              |  
|-------------------------------------------------------------------------------------- | - | ----------- | - | - | ------------ | -
|(A DEVELOPMENT STAGE COMPANY)                                                          |   |             |   |   |              |  
|CONSOLIDATED BALANCE SHEETS                                                            |   |             |   |   |              |  
|(EXPRESSED IN US DOLLARS)                                                              |   |             |   |   |              |  
|(UNAUDITED)                                                                            |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   | June 30,    |   |   | December 31, |  
|                                                                                       |   | 2008        |   |   | 2007         |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|ASSETS                                                                                 |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|Current                                                                                |   |             |   |   |              |  
|Cash                                                                                   | $ | 1,529       |   | $ | 2,913        |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   | 1,529       |   |   | 2,913        |  
|                                                                                       |   |             |   |   |              |  
|Long-term                                                                              |   |             |   |   |              |  
|Property and
      equipment (Note 3)                                                  |   | 553         |   |   | 702          |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       | $ | 2,082       |   | $ | 3,615        |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                   |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|Current                                                                                |   |             |   |   |              |  
|Accounts payable
      and accrued liabilities                                         | $ | 349,343     |   | $ | 340,122      |  
|Note payable                                                                           |   | 188,976     |   |   | 220,935      |  
|Amounts due to
      related parties (Note 4)                                          |   | 197,169     |   |   | 198,517      |  
|Loans Payable (Note 4)                                                                 |   | 591,597     |   |   | 360,672      |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   | 1,327,085   |   |   | 1,120,246    |  
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   |             |   |   |              |  
|Stockholders' equity                                                                   |   |             |   |   |              |  
|Common stock (Note 5)                                                                  |   |             |   |   |              |  
|100,000,000 common shares authorized at $0.001 par value;                              |   |             |   |   |              |  
|21,202,375
      common shares issued and outstanding (December 31, 2007 - 21,202,375) |   | 21,203      |   |   | 21,203       |  
|Additional
      paid-in capital                                                       |   | 21,228,301  |   |   | 20,897,501   |  
|Deficit                                                                                |   | (95,331     | ) |   | (95,331      | )
|Deficit
      accumulated during the development stage                                 |   | (22,195,840 | ) |   | (21,656,668  | )
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   | (1,041,667  | ) |   | (833,295     | )
|Less: Treasury stock - 3,541,700
      common shares (December 31, 2007 - 3,541,700)   |   | (283,336    | ) |   | (283,336     | )
|                                                                                       |   |             |   |   |              |  
|                                                                                       |   | (1,325,003  | ) |   | (1,116,631   | )
|                                                                                       |   |             |   |   |              |  
|                                                                                       | $ | 2,082       |   | $ | 3,615        |  

The accompanying notes are an integral part of these
consolidated financial statements.

---

|ARVANA INC. AND SUBSIDIARIES        
|------------------------------------
|(A DEVELOPMENT STAGE COMPANY)       
|CONSOLIDATED STATEMENT OF OPERATIONS
|(EXPRESSED IN US DOLLARS)           
|(UNAUDITED)                         

|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   | Cumulative amounts        |  
|---------------------------------------------------------- | - | -------------------------- | - | - | ------------------------ | - | - | -------------------- | - | - | ------------------ | - | - | ------------------------- | -
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   | from the beginning of the |  
|                                                           |   | For the three months ended |   |   | For the six months ended |   |   | development stage on |  
|                                                           |   | June 30,                   |   |   |                          |   |   | June 30,             |   |   | January 1, 2005 to |  
|                                                           |   | 2008                       |   |   | 2007                     |   |   | 2008                 |   |   | 2007               |   |   | June
      30, 2008       |  
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Sales                                                      | $ | -                          |   | $ | 1,200,520                |   | $ | -                    |   | $ | 2,916,741          |   | $ | 7,573,714                 |  
|Cost of sales                                              |   | -                          |   |   | (913,999                 | ) |   | -                    |   |   | (2,208,987         | ) |   | (5,896,638                | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Gross profit                                               |   | -                          |   |   | 286,521                  |   |   | -                    |   |   | 707,754            |   |   | 1,677,076                 |  
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Operating expenses                                         |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Selling and promotion                                      |   | -                          |   |   | (29,617                  | ) |   | -                    |   |   | (34,480            | ) |   | (188,078                  | )
|General and administrative                                 |   | (118,269                   | ) |   | (235,748                 | ) |   | (208,222             | ) |   | (634,567           | ) |   | (3,919,675                | )
|Research and development                                   |   | -                          |   |   | -                        |   |   | -                    |   |   | -                  |   |   | (170,083                  | )
|Depreciation                                               |   | (76                        | ) |   | (53,621                  | ) |   | (150                 | ) |   | (104,384           | ) |   | (269,872                  | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Operating loss                                             |   | (118,345                   | ) |   | (32,465                  | ) |   | (208,372             | ) |   | (65,677            | ) |   | (2,870,632                | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Other items                                                |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Stock-based compensation
      (Note 5)                    |   | (33,200                    | ) |   | (66,400                  | ) |   | (330,800             | ) |   | (530,000           | ) |   | (9,639,290                | )
|Loss on write-off of equipment                             |   | -                          |   |   | -                        |   |   | -                    |   |   | (10,059            | ) |   | (67,798                   | )
|Loss on acquisition of
      Arvana Networks               |   | -                          |   |   | -                        |   |   | -                    |   |   | -                  |   |   | (7,013,310                | )
|Loss on acquisition of Arvana Com                          |   | -                          |   |   | -                        |   |   | -                    |   |   | -                  |   |   | (279,037                  | )
|Loss on bad debt expense                                   |   | -                          |   |   | -                        |   |   | -                    |   |   | -                  |   |   | (58,411                   | )
|Loss on disposal of Hallotel                               |   | -                          |   |   | -                        |   |   | -                    |   |   | -                  |   |   | (2,239,014                | )
|Other income                                               |   | -                          |   |   | (35,223                  | ) |   | -                    |   |   | 3,738              |   |   | 9,425                     |  
|Gain on debt settlement                                    |   | -                          |   |   | -                        |   |   | -                    |   |   | -                  |   |   | 75,000                    |  
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Net loss before income taxes                               |   | (151,545                   | ) |   | (134,088                 | ) |   | (539,172             | ) |   | (601,998           | ) |   | (22,083,067               | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Income taxes                                               |   | -                          |   |   | (36,787                  | ) |   | -                    |   |   | (89,001            | ) |   | (67,035                   | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Net loss for the period                                    | $ | (151,545                   | ) | $ | (170,875                 | ) | $ | (539,172             | ) | $ | (690,999           | ) | $ | (22,150,102               | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Other comprehensive gain (loss)                            |   | -                          |   |   | 1,499                    |   |   | -                    |   |   | 3,556              |   |   | (45,740                   | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Comprehensive
      loss for the period                    | $ | (151,545                   | ) | $ | (169,376                 | ) | $ | (539,172             | ) | $ | (687,443           | ) | $ | (22,195,842               | )
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Loss per share - basic and diluted                         | $ | (0.01                      | ) | $ | (0.01                    | ) | $ | (0.03                | ) | $ | (0.03              | ) |   |                           |  
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|                                                           |   |                            |   |   |                          |   |   |                      |   |   |                    |   |   |                           |  
|Weighted average
      number of common shares outstanding |   | 21,202,375                 |   |   | 20,702,375               |   |   | 21,202,375           |   |   | 20,703,789         |   |   |                           |  

The accompanying notes are an integral part of these
consolidated financial statements.

---

|ARVANA INC. AND SUBSIDIARIES                                                                        |   |                          |   |   |                      |   |   |                           |  
|--------------------------------------------------------------------------------------------------- | - | ------------------------ | - | - | -------------------- | - | - | ------------------------- | -
|(A DEVELOPMENT STAGE COMPANY)                                                                       |   |                          |   |   |                      |   |   |                           |  
|CONSOLIDATED STATEMENT OF CASH FLOWS                                                                |   |                          |   |   |                      |   |   |                           |  
|(EXPRESSED IN US DOLLARS)                                                                           |   |                          |   |   |                      |   |   |                           |  
|(UNAUDITED)                                                                                         |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   | Cumulative amounts        |  
|                                                                                                    |   |                          |   |   |                      |   |   | from the beginning of the |  
|                                                                                                    |   | For the six months ended |   |   | development stage on |  
|                                                                                                    |   | June 30,                 |   |   | January 1, 2005 to   |  
|                                                                                                    |   | 2008                     |   |   | 2007                 |   |   | June
      30, 2008       |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Cash flows from operating activities                                                                |   |                          |   |   |                      |   |   |                           |  
|Net loss for the period                                                                             | $ | (539,172                 | ) | $ | (690,999             | ) | $ | (22,150,100               | )
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Items not involving
      cash:                                                                     |   |                          |   |   |                      |   |   |                           |  
|Depreciation and
      amortization                                                                 |   | 150                      |   |   | 104,384              |   |   | 269,872                   |  
|Stock-based compensation                                                                            |   | 330,800                  |   |   | 530,000              |   |   | 9,639,290                 |  
|Loss on
      acquisition of Arvana Networks                                                        |   | -                        |   |   | -                    |   |   | 7,013,310                 |  
|Loss on acquisition of Arvana Comunicacoes                                                          |   | -                        |   |   | -                    |   |   | 279,037                   |  
|Loss on write-off
      of equipment                                                                |   | -                        |   |   | 10,059               |   |   | 67,798                    |  
|Loss on bad debt expense                                                                            |   | -                        |   |   | -                    |   |   | 58,411                    |  
|Gain on debt
      settlement                                                                       |   | -                        |   |   | -                    |   |   | (75,000                   | )
|Loss on disposal of Hallotel                                                                        |   | -                        |   |   | -                    |   |   | 2,239,014                 |  
|Deferred income
      taxes                                                                         |   | -                        |   |   | (12,475              | ) |   | 31,294                    |  
|Changes in non-cash
      working capital:                                                          |   |                          |   |   |                      |   |   |                           |  
|Receivables                                                                                         |   | -                        |   |   | (368,535             | ) |   | (503,998                  | )
|Accounts payable and accrued liabilities                                                            |   | (34,933                  | ) |   | (65,709              | ) |   | 1,414,759                 |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Net cash used in
      operations                                                                   |   | (243,155                 | ) |   | (493,275             | ) |   | (1,716,313                | )
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Cash flows from investing activities                                                                |   |                          |   |   |                      |   |   |                           |  
|Acquisition of
      equipment                                                                      |   | -                        |   |   | (27,432              | ) |   | (378,751                  | )
|Proceeds of sale of equipment                                                                       |   | -                        |   |   | -                    |   |   | 3,702                     |  
|Cash portion of
      Investment in BCH Beheer / Hallotel                                           |   | -                        |   |   | -                    |   |   | (1,445,235                | )
|Cash of Hallotel on disposition date                                                                |   | -                        |   |   | -                    |   |   | (53,136                   | )
|Cash of BCH Beheer /
      Hallotel on acquisition date                                             |   | -                        |   |   | -                    |   |   | 105,659                   |  
|Cash of Arvana Networks on acquisition
      date                                                   |   | -                        |   |   | -                    |   |   | 5,800                     |  
|Cash of Arvana
      Comunicacoes on acquisition date                                               |   | -                        |   |   | -                    |   |   | 62,465                    |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Net cash used in
      investing activities                                                         |   | -                        |   |   | (27,432              | ) |   | (1,699,496                | )
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Cash flows from financing activities                                                                |   |                          |   |   |                      |   |   |                           |  
|Advances from (to)
      related parties                                                            |   | -                        |   |   | 79,075               |   |   | (239,334                  | )
|Proceeds of loan payable                                                                            |   | 208,981                  |   |   | 235,161              |   |   | 569,653                   |  
|Contribution to capital                                                                             |   | -                        |   |   | -                    |   |   | 900                       |  
|Proceeds from issuance of common stock,
      net of finders' fees                                  |   | -                        |   |   | -                    |   |   | 3,097,750                 |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Net cash provided by financing
      activities                                                     |   | 208,981                  |   |   | 314,236              |   |   | 3,428,969                 |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Effect of exchange rate changes on
      cash                                                       |   | 32,790                   |   |   | 3,556                |   |   | (12,863                   | )
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Increase (decrease) in cash                                                                         |   | (1,384                   | ) |   | (202,915             | ) |   | 297                       |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Cash , beginning of period                                                                          |   | 2,913                    |   |   | 233,452              |   |   | 1,232                     |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Cash, end of period                                                                                 | $ | 1,529                    |   | $ | 30,537               |   | $ | 1,529                     |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Supplementary information                                                                           |   |                          |   |   |                      |   |   |                           |  
|Interest paid                                                                                       | $ | -                        |   | $ | 2,281                |   |   |                           |  
|Taxes paid                                                                                          |   | -                        |   |   | 161                  |   |   |                           |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Transactions not involving cash                                                                     |   |                          |   |   |                      |   |   |                           |  
|Write-off of software
      associated with the disposal of Hallotel                                |   | -                        |   |   | -                    |   |   | 64,104                    |  
|Issuance of stock for settlement of
      debt; 500,000 shares of common stock                      |   | -                        |   |   | -                    |   |   | 75,000                    |  
|Decrease in accounts
      payable due to Brulex due to disposal of Hallotel                        |   | -                        |   |   | -                    |   |   | 338,236                   |  
|Decrease in note payable due to Brulex
      due to disposal of Hallotel                            |   | -                        |   |   | -                    |   |   | 108,880                   |  
|Loss of receivables due
      to Hallotel disposal                                                  |   | -                        |   |   | -                    |   |   | 1,554,068                 |  
|Loss of property and equipment due to
      Hallotel disposal                                       |   | -                        |   |   | -                    |   |   | 516,497                   |  
|Loss of accounts
      payable and accrued liabilities due to Hallotel disposal                     |   | -                        |   |   | -                    |   |   | 1,867,306                 |  
|Loss of deferred income tax liability
      due to Hallotel disposal                                |   | -                        |   |   | -                    |   |   | 31,445                    |  
|                                                                                                    |   |                          |   |   |                      |   |   |                           |  
|Common shares cancelled due to disposal
      of Hallotel (3,541,700 @ $0.08)                       |   | -                        |   |   | -                    |   |   | 283,336                   |  
|Common shares issued
      for services (451,875 @ $0.40)                                           |   | -                        |   |   | -                    |   |   | 180,750                   |  
|Common shares issued for acquisition of
      BCH Beheer / Hallotel (3,541,700 @ $0.40)             |   | -                        |   |   | -                    |   |   | 1,416,680                 |  
|Common shares issued
      for finders fees for BCH Beheer / Hallotel Acquisition (208,300 @ $0.40) |   | -                        |   |   | -                    |   |   | 83,320                    |  

The accompanying notes are an integral part of these
consolidated financial statements.

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                 
|CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
|(EXPRESSED IN US DOLLARS)                     
|(UNAUDITED)                                   

|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   | ****    |                                  |   |             |  
|-------------------------------------------------------------------------------------------------- |  | ------------ | - | - | -------------- | - |  | ---------- | - | - | -------- | - | - | ------------------------------------------------ | - | - | ------- | - | - | ----------- | ----------------------------------------- | - | ------- | -------------------------------- | - | ----------- | -
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|                                                                                                   |  | Common Stock |   |   | Treasury Stock |   |  |            |   |   |          |   |   | Deficit Accumulated during the development stage |   |   |         |   |   |             |                                          
|                                                                                                   |  | Shares       |   |   | Amount         |   |  | Shares     |   |   | Amount   |   |   | Additional Paid-in
      Capital                 |   |   | Deficit |   |   |             | Accumlated other
      comprehensive loss |   |         | Total Stockholders'
      Equity |  
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|From inception to December 31, 2004                                                                |  | 8,253,000    |   | $ | 8,253          |   |  | -          |   | $ | -        |   | $ | 88,310                                           |   | $ | (95,331 | ) | $ | -           |                                           | $ | -       |                                  | $ | 1,232       |  
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Contribution to capital                                                                            |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | 900                                              |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 900         |  
|Return and cancellation of common stock
      - March 2005                                         |  | (1,350,000   | ) |   | (1,350         | ) |  | -          |   |   | -        |   |   | 1,350                                            |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | -           |  
|Issuance of common stock
      for cash at $0.10 - May 2005                                        |  | 3,000,000    |   |   | 3,000          |   |  | -          |   |   | -        |   |   | 5,997,000                                        |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 6,000,000   |  
|Issuance of common stock for cash at $1.25
      - July 2005                                       |  | 400,000      |   |   | 400            |   |  | -          |   |   | -        |   |   | 911,600                                          |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 912,000     |  
|Return and cancellation
      of common stock - August 2005                                        |  | (1,017,000   | ) |   | (1,017         | ) |  | -          |   |   | -        |   |   | 1,017                                            |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | -           |  
|Issuance of common stock for cash
      at $1.25 - August 2005                                     |  | 792,000      |   |   | 792            |   |  | -          |   |   | -        |   |   | 1,804,968                                        |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 1,805,760   |  
|Issuance of common stock
      for finders fee at $2.28 - August 2005                              |  | 330,000      |   |   | 330            |   |  | -          |   |   | -        |   |   | 752,070                                          |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 752,400     |  
|Issuance of common stock in transaction
      with Arvana Networks at $2.28 - August 2005          |  | 3,000,000    |   |   | 3,000          |   |  | -          |   |   | -        |   |   | 6,837,000                                        |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 6,840,000   |  
|Finders fees paid in cash
      - July, August, September 2005                                     |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | (164,000                                         | ) |   | -       |   |   | -           |                                           |   | -       |                                  |   | (164,000    | )
|Issuance of common stock for cash at $1.25
      - October 2005                                    |  | 440,000      |   |   | 440            |   |  | -          |   |   | -        |   |   | 1,002,760                                        |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 1,003,200   |  
|Issuance of common stock
      for finders fee at $2.28 - October 2005                             |  | 43,500       |   |   | 44             |   |  | -          |   |   | -        |   |   | 99,137                                           |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 99,181      |  
|Finders fees paid in cash - October 2005                                                           |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | (54,750                                          | ) |   | -       |   |   | -           |                                           |   | -       |                                  |   | (54,750     | )
|Net operating loss for
      the year ended December 31, 2005                                      |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | -                                                |   |   |         |   |   | (16,492,608 | )                                         |   | -       |                                  |   | (16,492,608 | )
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Balance December 31, 2005                                                                          |  | 13,891,500   |   | $ | 13,892         |   |  | -          |   | $ | -        |   | $ | 17,277,362                                       |   | $ | (95,331 | ) | $ | (16,492,608 | )                                         | $ | -       |                                  | $ | 703,315     |  
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Stock-based compensation                                                                           |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | 232,400                                          |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 232,400     |  
|Issuance of common stock for acquisition
      of BCH Beheer / Hallotel, including transaction fee |  | 3,750,000    |   |   | 3,750          |   |  | -          |   |   | -        |   |   | 1,496,250                                        |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 1,500,000   |  
|Issuance of common stock
      for cash at $0.40                                                   |  | 2,625,000    |   |   | 2,625          |   |  | -          |   |   | -        |   |   | 1,047,375                                        |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 1,050,000   |  
|Issuance of common stock for services at
      $0.40                                               |  | 451,875      |   |   | 452            |   |  | -          |   |   | -        |   |   | 180,298                                          |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 180,750     |  
|Finders fees paid in cash                                                                          |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | (73,500                                          | ) |   | -       |   |   | -           |                                           |   | -       |                                  |   | (73,500     | )
|Net operating loss for the year ended December
      31, 2006                                      |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | -                                                |   |   | -       |   |   | (1,742,930  | )                                         |   | -       |                                  |   | (1,742,930  | )
|Foreign currency translation
      adjustment                                                      |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | -                                                |   |   | -       |   |   | -           |                                           |   | (59,530 | )                                |   | (59,530     | )
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Balance December 31, 2006                                                                          |  | 20,718,375   |   | $ | 20,719         |   |  | -          |   | $ | -        |   | $ | 20,160,185                                       |   | $ | (95,331 | ) | $ | (18,235,538 | )                                         | $ | (59,530 | )                                | $ | 1,790,505   |  
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Stock-based compensation                                                                           |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | 662,800                                          |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 662,800     |  
|Return and cancellation of common stock                                                            |  | (16,000      | ) |   | (16            | ) |  | -          |   |   | -        |   |   | 16                                               |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | -           |  
|Issuance of common stock
      for debt settlement                                                 |  | 500,000      |   |   | 500            |   |  | -          |   |   | -        |   |   | 74,500                                           |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 75,000      |  
|Treasury stock acquired on disposal of
      subsidiary                                            |  | -            |   |   | -              |   |  | (3,541,700 | ) |   | (283,336 | ) |   |                                                  |   |   | -       |   |   | (45,740     | )                                         |   | 45,740  |                                  |   | (283,336    | )
|Net operating loss for
      the year ended December 31, 2007                                      |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | -                                                |   |   | -       |   |   | (3,375,390  | )                                         |   | -       |                                  |   | (3,375,390  | )
|Foreign currency translation adjustment                                                            |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | -                                                |   |   | -       |   |   | -           |                                           |   | 13,790  |                                  |   | 13,790      |  
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Balance December 31, 2007                                                                          |  | 21,202,375   |   | $ | 21,203         |   |  | (3,541,700 | ) | $ | (283,336 | ) | $ | 20,897,501                                       |   | $ | (95,331 | ) | $ | (21,656,668 | )                                         | $ | -       |                                  | $ | (1,116,631  | )
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Stock-based compensation                                                                           |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | 330,800                                          |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | 330,800     |  
|Net operating loss for
      the six months ended June 30, 2008                                    |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | -                                                |   |   | -       |   |   | (539,172    | )                                         |   | -       |                                  |   | (539,172    | )
|Foreign currency translation adjustment                                                            |  | -            |   |   | -              |   |  | -          |   |   | -        |   |   | -                                                |   |   | -       |   |   | -           |                                           |   | -       |                                  |   | -           |  
|                                                                                                   |  |              |   |   |                |   |  |            |   |   |          |   |   |                                                  |   |   |         |   |   |             |                                           |   |         |                                  |   |             |  
|Balance June 30, 2008                                                                              |  | 21,202,375   |   | $ | 21,203         |   |  | (3,541,700 | ) | $ | (283,336 | ) | $ | 21,228,301                                       |   | $ | (95,331 | ) | $ | (22,195,840 | )                                         | $ | -       |                                  | $ | (1,325,003  | )

The accompanying notes are an integral part of these
consolidated financial statements.

---

|ARVANA INC. AND SUBSIDIARIES                   
|-----------------------------------------------
|(A development stage company)                  
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|For the Six Months Ended June 30, 2008 and 2007
|(expressed in US dollars)                      
|(Unaudited)                                    

1. Nature of Business and Ability to Continue as a Going
Concern

Arvana Inc., (the Company) was incorporated under the laws of
the State of Nevada as Turinco, Inc. on September 16, 1977, with authorized
common stock of 2,500 shares with a par value of $0.25. On October 16, 1998, the
authorized capital stock was increased to 100,000,000 shares with a par value of
$0.001. On July 24, 2006, the shareholders approved a change of the Companys
name from Turinco, Inc. to Arvana Inc.

In 1998, the Company completed a common stock split of eight
shares for each outstanding share. In 2005, the Company completed another common
stock split of nine shares for each outstanding share. These consolidated
financial statements have been prepared showing after stock split shares with a
par value of $0.001.

These consolidated interim financial statements for the six
month period ended June 30, 2008 include the accounts of the Company, and its
wholly-owned subsidiaries Arvana Networks (including its wholly-owned
subsidiaries Arvana Par and Arvana Comunicações do Brasil S. A. (Arvana Com)
and BCH Beheer. The Company has ceased all operations in its subsidiary
companies, and has written-off or disposed of all assets in the subsidiary
companies, consequently they are now all considered to be inactive subsidiaries.

These consolidated interim financial statements have been
prepared on a going concern basis, which assumes the realization of assets and
settlement of liabilities in the normal course of business. For the six month
period ended June 30, 2008, the Company incurred a loss from operations of
$539,172. At June 30, 2008, the Company had a working capital deficiency of
$1,325,556. These conditions raise substantial doubt about the Companys ability
to continue as a going concern.

Accordingly, the Company will require continued financial
support from its shareholders and creditors until it is able to generate
sufficient cash flow from operations on a sustained basis. There is substantial
doubt that the Company will be successful at achieving these results. Failure to
obtain the ongoing support of its shareholders and creditors may make the going
concern basis of accounting inappropriate, in which case the Companys assets
and liabilities would need to be recognized at their liquidation values. These
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might arise from this uncertainty.

2. Summary of Significant Accounting Policies

a) Basis of presentation

The Company began to generate revenues as a result of the
acquisition of Hallotel during the final four months of 2006. In 2007 the
Company commenced its planned principal operations and determined its target
market segments and market strategies. The Company then disposed of Hallotel in
December 2007 and ceased all operations in its subsidiary companies. The Company
is again in the process of evaluating business opportunities and is in the
development stage and presents its financial statements in accordance with
Statement of Financial Accounting Standard (SFAS) No. 7, Accounting and
Reporting by Development Stage Enterprises. The Companys fiscal year end is
December 31. The accompanying consolidated interim financial statements of
Arvana Inc. for the three and six month periods ended June 30, 2008 and 2007,
and for the cumulative amounts from the beginning of the development stage on
January 1, 2005, through June 30, 2008, have been prepared in accordance with
accounting principles generally accepted in the United States for financial
information with the instructions to Form 10-Q and Regulation S-X. Although they
are unaudited, in the opinion of management, they include all adjustments,
consisting only of normal recurring items, necessary for a fair presentation.
Results are not necessarily indicative of results which may be achieved in the
future. The consolidated interim financial statements and notes appearing in
this report should be read in conjunction with the Companys consolidated
audited financial statements and related notes

---

ARVANA INC. AND SUBSIDIARIES(A development stage company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor the Six Months Ended June 30, 2008 and 2007(expressed in US dollars)(Unaudited)

2. Summary of Significant Accounting Policies cont

thereto, together with Managements Discussion and Analysis of
Financial Condition and Results of Operations, contained in the Companys Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2007, as filed with
the Securities and Exchange Commission (the SEC) on April 15, 2008 (file no.
000-30695).

b) Recent accounting pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. SFAS No. 157 establishes a framework for measuring the fair value
of assets and liabilities. This framework is intended to provide increased
consistency in how fair value determinations are made under various existing
accounting standards which permit, or in some cases require, estimates of fair
market value. SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. Earlier
application is encouraged, provided that the reporting entity has not yet issued
financial statements for that fiscal year, including any financial statements
for an interim period within that fiscal year.

FASB Staff Position 157-2 (FSP FAS 157-2) delayed the
effective date of FAS 157 until fiscal years beginning after November 15, 2008,
and interim periods within those fiscal years, for all nonfinancial assets and
nonfinancial liabilities, except for items that are recognized or disclosed at
fair value in the financial statements on a recurring basis (at least annually).
The Company adopted FAS 157 on January 1, 2008, and utilized the one year
deferral for nonfinancial assets and nonfinancial liabilities that was granted
by FSP FAS 157-2. The adoption of FAS 157 did not have a material impact on the
Companys consolidated financial statements.

In February, 2007, the FASB issued SFAS No. 159 The Fair Value
Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option
has been elected are reported in earnings. SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007. The adoption of FAS 159 did not have a
material impact on the Companys consolidated financial statements.

In March 2008, the FASB issued FAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities (FAS 161). FAS 161 changes the
disclosure requirements for derivative instruments and hedging activities by
requiring enhanced disclosures about how and why an entity uses derivative
instruments, how derivative instruments and related hedged items are accounted
for under FAS 133, and how derivative instruments and related hedged items
affect an entitys operating results, financial position, and cash flows. FAS
161 is effective for fiscal years beginning after November 15, 2008. Early
adoption is permitted. The Company is currently reviewing the provisions of FAS
161 and has not yet adopted the statement. However, as the provisions of FAS 161
are only related to disclosure of derivative and hedging activities, the Company
does not believe the adoption of FAS 161 will have a material impact on its
consolidated operating results, financial position, or cash flows.

---

ARVANA INC. AND SUBSIDIARIES(A development stage company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor the Six Months Ended June 30, 2008 and 2007(expressed in US dollars)(Unaudited)

3. Property and Equipment

|At June 30, 2008:    |   |       |  |   |              |  |   |                  | 
|-------------------- | - | ----- |  | - | ------------ |  | - | ---------------- | 
|                     |   |       |  |   | Accumulated  |  |   | Net              | 
|                     |   | Cost  |  |   | Amortization |  |   | Book
      Value | 
|Equipment            | $ | 1,502 |  | $ | 949          |  | $ | 553              | 
|                     |   |       |  |   |              |  |   |                  | 
|At December 31, 2007 |   |       |  |   |              |  |   |                  | 
|                     |   |       |  |   | Accumulated  |  |   | Net              | 
|                     |   | Cost  |  |   | Amortization |  |   | Book
      Value | 
|Equipment            | $ | 1,502 |  | $ | 800          |  | $ | 702              | 

4. Related Parties and Loans Payable

On February 20, 2007, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
150,000 Euros ($236,220 USD). Repayment of the loan is due on closing of any
future financing arrangement by the Company. Accrued interest of $17,713 has
been recorded in accounts payable and accrued liabilities for the period ended
June 30, 2008.

On June 1, 2007, the Company received an unsecured, 6% interest
per annum loan from a shareholder of the Company in the amount of $35,000 CAD
($34,325 USD). Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $2,226 has been recorded in
accounts payable and accrued liabilities for the period ended June 30, 2008.

On November 6, 2007, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
75,000 Euros ($118,110 USD). Repayment of the loan is due on closing of any
future financing arrangement by the Company. Accrued interest of $4,536 has been
recorded in accounts payable and accrued liabilities for the period ended June
30, 2008.

On March 26, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$50,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $798 has been recorded in
accounts payable and accrued liabilities for the period ended June 30, 2008.

On March 26, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$5,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $80 has been recorded in
accounts payable and accrued liabilities for the period ended June 30, 2008.

On March 31, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$50,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $758 has been recorded in
accounts payable and accrued liabilities for the period ended June 30, 2008.

On April 7, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$50,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $700 has been recorded in
accounts payable and accrued liabilities for the period ended June 30, 2008.

---

ARVANA INC. AND SUBSIDIARIES(A development stage company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor the Six Months Ended June 30, 2008 and 2007(expressed in US dollars)(Unaudited)

4. Related Parties and Loans Payable cont

On April 9, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$45,000 USD. Repayment of the loan is due on closing of any future financing
arrangement by the Company. Accrued interest of $615 has been recorded in
accounts payable and accrued liabilities for the period ended June 30, 2008.

On June 26, 2008, the Company received an unsecured, 6%
interest per annum loan from a shareholder of the Company in the amount of
$3,000 CAD ($2,942 USD). Repayment of the loan is due on closing of any future
financing arrangement by the Company. Accrued interest of $2 has been recorded
in accounts payable and accrued liabilities for the period ended June 30, 2008.

At June 30, 2008, the Company had amounts due to related
parties in the amount of $197,169 (December 31, 2007 $198,517). This amount
includes $136,100 (December 31, 2007 $136,100) payable to three directors for
services rendered during prior periods. This amount is to be paid part in cash
and part in stock at a future date with the number of common shares determined
by the fair value of the shares on the settlement date. The amounts owing bear
no interest and are unsecured.

For the three-month period ended June 30, 2008, $46,112 (June
30, 2007 $14,427) and for the six-month period ended June 30, 2008, $56,947
(June 30, 2007 $23,657) was incurred in general and administrative expenses by
the Company for services rendered by the current Chief Executive Officer and
Chief Financial Officer of the Company. At June 30, 2008, $5,215 (December 31,
2007 $NIL) was owed to the current Chief Executive Officer and Chief Financial
Officer of the Company, $19,614 (December 31, 2007 $20,176) was owed to the
former Chief Financial Officer and Corporate Secretary and $27,460 (December 31,
2007 $28,246) was owed to the former President / Chief Executive Officer. The
former Corporate Secretary of Arvana Networks Inc. was owed $13,995 at June 30,
2008 (December 31, 2007 $13,995). The amounts owing bear no interest and are
unsecured.

5. Stockholders Equity

During the quarter ended December 31, 2007, 3,541,700 shares
were to be returned to the Company and cancelled as part of an agreement entered
into on December 7, 2007. As at June 30, 2008 3,500,000 of the shares have been
received and the remaining 41,700 will be received subsequent to June 30, 2008.
The shares have been recorded as treasury stock at a value of $283,336 until
they are all received and cancelled.

The Company accounts for all stock-based payments to employees
and non-employees under SFAS No.123R, Accounting for Stock-Based Compensation,
using the fair value based method. Under the fair value method, stock-based
payments are measured at the fair value of the consideration received, or the
fair value of the equity instruments issued, or liabilities incurred, whichever
is more reliably measurable. The cost of stock-based payments to non-employees
that are fully vested and non-forfeitable at the grant date is measured and
recognized at that date.

The Company has a stock option plan in place under which it is
authorized to grant options to executive officers and directors, employees and
consultants enabling them to acquire up to 10% of the issued and outstanding
common stock of the Company. Under the plan, the exercise price of each option
equals the market price of the Company's stock as calculated on the date of
grant. The options can be granted for a maximum term of 10 years. On June 5,
2006, the Company granted 1,600,000 stock options to its directors and
employees. Each option is exercisable into one common share until December 31,
2009 at an exercise price of $1.25. The options were valued at $1,424,000 using
the Black-Scholes model, and will be expensed over the vesting period of the
options. The Company recorded an expense of $330,800 in the six month period
ended June 30, 2008 ($662,800 in 2007) for the pro-rated portion of the full
charge.

---

ARVANA INC. AND SUBSIDIARIES(A development stage company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor the Six Months Ended June 30, 2008 and 2007(expressed in US dollars)(Unaudited)

5. Stockholders Equity cont

As at June 30, 2008, the following incentive stock options are
outstanding:

|Number     | Exercise |                  
|---------- | -------- | -----------------
|of options | Price    | Expiry Date      
|           |          |                  
|1,600,000  | $ 1.25   | December 31, 2009

Stock option transactions and the number of share options
outstanding are summarized as follows:

|                                        |  |                  |  |   | Weighted | 
|--------------------------------------- |  | ---------------- |  | - | -------- | 
|                                        |  |                  |  |   | Average  | 
|                                        |  | Number           |  |   | Exercise | 
|                                        |  | of
      Options |  |   | Price    | 
|                                        |  |                  |  |   |          | 
|Balance, December 31, 2007              |  | 1,600,000        |  |   | 1.25     | 
|Options granted                         |  | -                |  |   | -        | 
|Options expired                         |  | -                |  |   | -        | 
|Options exercised                       |  | -                |  |   | -        | 
|Balance, June 30, 2008                  |  | 1,600,000        |  | $ | 1.25     | 
|                                        |  |                  |  |   |          | 
|Number of options currently exercisable |  | 1,066,667        |  | $ | 1.25     | 

The following assumptions were used for the Black-Scholes
valuation of stock options granted:

|Risk-free interest rate  | 5.00%    
|------------------------ | ---------
|Expected life of options | 3.6 years
|Annualized volatility    | 100%     
|Dividend rate            | 0.00%    

6. Segmented Information

The Company had one reportable segment in 2007, which was the
development of VoIP telephone services. That reportable segment was determined
based on the nature of the products offered. The Companys reportable segment
for 2008 has not yet been determined as the Company is seeking new business
opportunities. All the total property and equipment of $553 at June 30, 2008 is
located in North America, at December 31, 2007, the total property and equipment
of $702 was also located in North America.

7. Subsequent Event

Subsequent to June 30, 2008 the Company has received loans from
one individual totaling $12,500. The loans are unsecured, payable on demand and
bear interest at the rate of 6% per annum.

---

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.

In this Quarterly Report:

|(i)  | references to we, us, our, or the Company refer
      to Arvana Inc. and our wholly-owned subsidiaries, namely:
|---- | -----------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                        
|     |                                                                                                                        
|     |                                                                                                                        
|     |                                                                                                                        
|     |                                                                                                                        
|(ii) | all dollar amounts are expressed in United States
      dollars, unless otherwise indicated.                           

You should read the following discussion and analysis of our
financial condition, results of operations and plan of operations together with
the interim consolidated financial statements and notes to the interim
consolidated financial statements included in this Quarterly Report, as well as
our most recent annual report Form 10-KSB for the year ended December 31, 2007
and current reports on Form 8-K.

Forward-Looking Statements

The information in this Quarterly Report on Form 10-Q contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve risks
and uncertainties, including statements regarding our capital needs, business
plans and expectations. Such forward-looking statements involve risks and
uncertainties regarding our planned business, availability of funds, government
regulations, common share prices, operating costs, capital costs, our ability to
deploy our planned business and generate revenues and other factors. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. These statements are based on certain assumptions and analyses made
by our management in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors they believe are appropriate in the circumstances. Actual events or
results may differ materially. In evaluating these statements, you should
consider various factors, including the risks outlined below, and, from time to
time, in other reports we file with the SEC. These factors may cause our actual
results to differ materially from any forward-looking statement. We disclaim any
obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements.

Overview

Until the end of 2007 our business operations were focused on
the telecommunications industry. In December 2007 we decided to exit the
telecommunications industry and disposed of our German subsidiary Hallotel. We
are currently in the process of evaluating other industries and business
opportunities in order to determine the focus of our future business
opportunities. There can be no guarantee that we will be successful in
identifying suitable business opportunities, or if we are able to identify
suitable business opportunities, that we will be able to find an adequate source
of financing to acquire any business or business assets, and commence
operations, or that those operations, if commenced, will be successful in
generating profits.

Hallotel is a German based telecommunications service provider
that is focused on the provision of long distance telephone calls between
Germany, Austria, Switzerland and Turkey. Hallotel was acquired by us on August
23, 2006 and disposed of on December 7, 2007. Prior to the acquisition of
Hallotel we were engaged in the telecommunications industry through our
subsidiary Arvana Networks. Arvana Networks was planning to provide voice over
the internet (VoIP) telephone technology services, primarily in Brazil, and was
in the startup phase of its operations since March, 2005. With the acquisition
of the Hallotel operation in 2006 and the limitation of funds, the plans to
develop Arvana Networks as a provider of Internet services were put on hold in
2006 and abandoned in 2007.

Our Plan of Operations

We exited the telecommunications industry at the end of 2007
and our present plan of operations for the next twelve months is to identify and
evaluate industries and business opportunities in order to find a suitable
business to enter into.

We will not be able to pursue any new business opportunities
without additional financing. Our board of directors and management are actively
pursuing obtaining financing in order to maintain operations while we evaluate
potential businesses. Since December 31, 2007 we have obtained loans totaling
$243,425 to provide operating capital.

---

In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $150,000 during 2008. We had cash in the amount of $1,529 and a working capital deficit of $1,325,556 as
at June 30, 2008. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.

During the next twelve month period, we anticipate that our revenues will not exceed our operating expenses. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations. Other than small advances from
shareholders, we believe that debt financing will not be an alternative for funding additional phases of our business development as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the
form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock to fund
our plan of operations. In addition, in order to obtain equity financing it may be necessary for us to consider a capital restructuring, which may or may not include a common stock reverse split. The board is currently considering all avenues
available to obtain financing.

Accordingly, we will require continued financial support from our shareholders and creditors until we are able to generate sufficient cash flow from operations on a sustained basis. There is substantial doubt that we will be successful at achieving
these results.

Critical Accounting Policies

Critical accounting policies are those that management believes are both most important to the portrayal of the Companys financial condition and results of operations and that require difficult, subjective, or complex judgments, often as a
result of the need to make estimates about the effects of matters that involve uncertainty.

We believe that the critical accounting policies that we use in the preparation of our financial statements are as follows:

a) Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

b) Foreign currency translation and transactions

Our functional currency is the United States dollar.

The Company uses the temporal method when translating the Brazilian subsidiary operations. Long-term assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate in effect on the transaction date.
Revenue and expenses are translated at the average rates of exchange prevailing during the periods. The cumulative effects of these translation adjustments were included in administration expenses as they were insignificant.

The Company used the current rate method when translating its former German subsidiary operations Hallotel. All assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate in effect on the balance
sheet date. Revenue and expenses are translated at the average rates of exchange prevailing during the periods. The cumulative effects of these translation adjustments are presented as a component of comprehensive income.

Transactions conducted in foreign currencies are recorded using the exchange rate in effect on the transaction date. At the period end, monetary assets and liabilities are translated to the functional currency of each entity using the exchange rate
in effect at the period end date. Transaction gains and losses are recorded in foreign exchange gain or loss in administration expenses as they were insignificant.

c) Impairment of long-lived assets and long-lived assets to be disposed of:

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying
amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair
value of the assets. Assets to be disposed of are reported at the lower of the carrying amount and the fair value less costs to sell. We have reviewed our long-lived assets and have determined that no impairment charges were necessary for the period
ended June 30, 2008.

---

d) Stock-based compensation

The Company accounts for all stock-based payments to employees
and non-employees under SFAS No.123R, Accounting for Stock-Based Compensation,
using the fair value based method. Under the fair value method, stock-based
payments are measured at the fair value of the consideration received, or the
fair value of the equity instruments issued, or liabilities incurred, whichever
is more reliably measurable. The cost of stock-based payments to non-employees
that are fully vested and non-forfeitable at the grant date is measured and
recognized at that date. We granted stock options in June 2006 and will record
an expense of $1,424,000 in stock-based compensation expense over the vesting
period of the options. The Company recorded an expense of $330,800 for the six
month period ended June 30, 2008 and $662,800 in 2007 and $232,400 in 2006 for
the pro-rated portion of the full charge.

Presentation of Financial Information

Our financial statements for the quarter ended June 30, 2008
include the accounts of:

- Arvana Networks;
- Arvana Par;
- Arvana Com; and
- BCH Beheer.

The accounts of BCH Beheer and Hallotel are included in our
statements of operations and statements of cash flows through June 30, 2008 for
BCH Beheer and December 7, 2007 for Hallotel, the date of disposal of Hallotel.
Our results of operations presented below do not include the results of
operations of Hallotel after December 7, 2007.

Results of Operations

Our operations for the six months ended June 30, 2008 and 2007
are summarized below. The results of operations for the six months ended June
30, 2007 include our former telecommunications industry business. We are no
longer in the telecommunications industry and future results are not expected to
be comparable to those of 2007 periods.

Three months ended
      June 30, 2008
    Three months ended
      June 30, 2007
    Six months ended
      June 30, 2008
    Six months ended
      June 30, 2007Revenues
    $0
    $1,200,520
    $0
    $2,916,741Costs of Sales
    $0
    $913,999
    $0
    $2,208,987Gross profit
    $0
    $286,521
    $0
    $707,754Operating Expenses:Selling and
      promotion
    $0
    $29,617
    $0
    $34,480General and
      Administration
    $118,269
    $235,748
    $208,222
    $634,567Depreciation
    $76
    $53,621
    $150
    $104,384Other Items:Stock Based
      Compensation
    $33,200
    $66,400
    $330,800
    $530,000Loss on write-off
      of equipment
    $0
    $0
    $0
    $10,059Other Income
    $0
    $35,223
    $0
    $3,738Income taxes
    $0
    $36,787
    $0
    $89,001Other
      comprehensive gains
    $0
    $1,499
    $0
    $3,556Comprehensive Loss for the Period
    $151,545
    $169,376
    $539,172
    $687,443


Revenues

All of our past revenues are attributable to the services
provided by our former subsidiary, Hallotel, up to the disposal date of December
7, 2007. We did not generate any revenues during the period prior to our
acquisition of Hallotel or during the period after our disposal of Hallotel and
did not generate any revenues outside of our former Hallotel business. We
presently do not earn revenues and will not earn revenues until we enter into
another business, and there can be no assurance that we will earn revenues at
that time.

---

Cost of Sales

All of our costs of sales are attributable to costs of sales
incurred by our former Hallotel business in connection with providing its
services. We currently do not incur costs of sales.

Gross Profits

All of our gross profits were attributable to our former
Hallotel business. We currently do not generate gross profits.

Sales and Promotion Expenses

Sales and promotion expenses consisted primarily of commissions
paid to third parties in connection with our former Hallotel business. We
currently do not incur sales and promotion expenses.

Administration Expenses

Administrative expenses are comprised of costs associated with
management compensation, office overhead including rent, legal fees, and
consulting services. The decrease in our administrative expenses for the three
and six months ended June 30, 2008 compared to June 30, 2007 is due to the
disposal of Hallotel which generated a majority of our previous general and
administrative expenses.

Stock-based Compensation

In June 2006, we awarded 1,600,000 stock options to a number of
directors, management and consultants. The stock options have an exercise price
of $1.25 per share which was the current market value of the shares at the time.
As a result of this program, we will record an expense of $1,424,000 in
stock-based compensation expense over the vesting period of the options. The
Company recorded an expense of $33,200 for the three months and $330,800 for the
six months ended June 30, 2008 and $66,400 for the three months and $530,000 for
the six months ended June 30, 2007 for the pro-rated portion of the full charge.
The final period that will record an expense associated with these options will
be the first quarter of 2009.

Loss on the write-off of equipment

There were no write-offs during the three and six months ended
June 30, 2008. In the six months ended June 30, 2007, we recorded a loss on the
write-off of equipment in the amount of $10,059 which was attributable to
software that was no longer usable for our operations.

Net Loss for the Period

We incurred a net loss of $151,545 for the three months and
$539,172 for the six months ended June 30, 2008 compared with a net loss of
$170,875 for the three months and $690,999 in the six months ended June 30,
2007. While the net loss amounts are similar, the results of operations are not
considered to be comparable due to the significant difference in the operations
of the Company during the two years. Future quarterly net losses are expected to
be comparable to the current quarter until such time as a new business is
entered into, net losses if any due to any new business cannot be estimated at
this time.

Liquidity and Capital Resources

As at June 30, 2008, we had cash of $1,529 and a working
capital deficit of $1,325,556. This compares to cash of $2,913 and working
capital deficit of $1,117,333 as at December 31, 2007.

Cash Used in Operating Activities

We used cash in operations in the amount of $243,155 during the
six months ended June 30, 2008, as compared to $493,275 during the six months
ended June 30, 2007. Cash used in operations for the two periods is not
considered to be comparable due to the significant difference in the operations
of the Company during the two periods. Cash used in operations during the six
months ended June 30, 2008 was attributable primarily to payments for
administration expenses.

Cash Used in Investing Activities

We did not use cash in investing activities during the six
months ended June 30, 2008. In the six months ended June 30, 2007 cash of
$27,432 was used by our former subsidiary Hallotel in the acquisition of
equipment.

---

Cash Flows from Financing Activities

The Company gained $208,981 from financing activities during the six months ended June 30, 2008. The Company received $208,981 from unsecured loans bearing 6% interest per annum. In the six months ended June 30, 2007 the Company obtained
$235,161 from unsecured loans bearing 6% interest per annum and received advances from related parties of $79,075 resulting in net cash gained from financing activities of $314,236.

Going Concern

For the six months ended June 30, 2008, the Company incurred a loss from operations of $539,172. At June 30, 2008, the Company had a working capital deficiency of $1,325,556. These conditions raise substantial doubt about the Companys
ability to continue as a going concern. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operations. Our auditors stated in their report on our December 31, 2007 audited financial statements
that they have substantial doubt we will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our shares of common stock in order to continue to fund our business operations. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or
other financing to fund our plan of operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources that are material to stockholders.

---

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2008 (the Evaluation Date). This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not
effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Quarterly Report on
Form 10-Q for the period ended June 30, 2008 fairly present our financial condition, results of operations and cash flows in all material respects.

Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with
authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial
statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation
and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our
established policies and procedures.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented
or detected.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based
on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control
over financial reporting was not effective as of the Evaluation Date.

Management assessed the effectiveness of the Companys internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Insufficient Number of Directors to form a Functioning Audit Committee:We only have two directors on our Board of Directors and while they are both outside directors this is not considered sufficient to have a functioning audit committee,
resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of
independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) consider appointing outside directors and audit committee members in the future.

---

Management, including our Chief Executive Officer and Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than
remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

Changes in internal control over financial reporting

As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the period ended June 30, 2008 that have materially affected, or that are reasonably likely to materially affect, our internal
control over financial reporting.

Limitations on the effectiveness of controls and procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met.

---

PART II

Item 1. Legal Proceedings.

We currently are not a party to any material legal proceedings
and to our knowledge, no such proceedings are threatened or contemplated.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

We did not complete any sales of securities without
registration under the Securities Act of 1933 during our second quarter ended
June 30, 2008.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security
Holders

No matters were submitted to a vote of our security holders
during the six month period ended June 30, 2008.

Item 5. Other Information

None.

---

Item 6. Exhibits

The following exhibits are included with this Quarterly Report
on Form 10-Q:

Exhibit Number
      Description of Exhibit3.1
      Articles of Incorporation(1)3.2
      Bylaws, as amended(1)10.1
      Agreement and Plan of Reorganization between
        the Company, Arvana Networks, Inc. and the Shareholders of Arvana Networks,
        Inc. dated August 18, 2005(2)10.2
      Investment Agreement dated October 6, 2005 between
        the Company, Arvana Networks, Inc., Arvana Participações S.A.,
        Gloinfo 500 Soluções EM Telemática Ltda. and Paulo Messina
        (3)10.3
      Amendment to Investment Agreement signed October
        6, 2005 and dated October 4, 2005 between the Company, Arvana Networks,
        Inc., Arvana Participações S.A., Gloinfo 500 Soluções
        EM Telemática Ltda. and Paulo Messina(3)10.4
      2006 Stock Option Plan, dated June 5, 20065(5)10.5
      Share Purchase Agreement dated August 9, 2006
        among Brulex-Consultadoria Economica E Marketing Ltda, Turinco Inc. and
        Hallotel Deutschland GmbH (6)10.6
      Termination Agreement between Arvana Inc., Gloinfo
        500 Soluções EM Telemática Ltda., Paulo Santos Messina
        and Lucia Sangiacomo Messina, Arvana Participações S.A., Arvana
        Comunicações do Brasil S. A. and Arvana Networks Inc. dated
        October 31, 2006. (7)10.7
      Regulation D Debt Conversion Agreement between
        Arvana Inc, Arvana Networks Inc, and IPH Horizon LLC, dated March 28,
        2007(8)10.8
      Settlement and Share Purchase Agreement between
        Arvana Inc, Hallotel Deutschland GMBH, BCH Beheer B.V., and Teyfik Oezcan,
        dated December 7, 2007. (10)10.9
      Settlement and Share Repurchase Agreement between
        Arvana Inc and Brulex-Consultadoria Economica E Marketing Ltda, dated
        December 7, 2007. (10)14.1
      Code of Ethics (4)16.1
      Change in Registrants Certifying Accountant,
        dated May 8, 2007(9)31.1
      Certification of Chief
        Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)
        of the Exchange Act (11)32.1
      Certification of Chief
        Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b)
        of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to
        Section 906 of the Sarbanes-Oxley Act of 2002 (11)


|(1) | Previously filed with the SEC as an exhibit to the
      Companys registration statement on Form 10-SB filed with the SEC on May
      24, 2000.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                  
|(2) | Previously filed with the SEC as an exhibit to the
      Companys Current Report on Form 8-K filed with the SEC on August 19,
      2005.       
|    |                                                                                                                                                  
|(3) | Previously filed with the SEC as an exhibit to the
      Companys Current Report on Form 8-K filed with the SEC on December 14,
      2005.     
|    |                                                                                                                                                  
|(4) | Previously filed with the SEC as an exhibit to the
      Companys Annual Report on Form 10-KSB filed with the SEC on March 31,
      2006.      

---

|(5)  | Previously filed with the SEC as an exhibit to the Companys Quarterly Report on Form 8-K filed with the SEC on June 7, 2006.  
|---- | -------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                
|(6)  | Previously filed with the SEC as an exhibit to the Companys Current Report on Form 8-K filed with the SEC on August 15, 2006. 
|     |                                                                                                                                
|(7)  | Previously filed with the SEC as an exhibit to the Companys Current Report on Form 8-K filed with the SEC on August 15, 2006. 
|     |                                                                                                                                
|(8)  | Previously filed with the SEC as an exhibit to the Companys Current Report on Form 8-K filed with the SEC on May 4, 2007.     
|     |                                                                                                                                
|(9)  | Previously filed with the SEC as an exhibit to the Companys Current Report on Form 8-K filed with the SEC on May 8, 2007.     
|     |                                                                                                                                
|(10) | Previously filed with the SEC as an exhibit to the Companys Current Report on Form 8-K filed with the SEC on December 7, 2007.
|     |                                                                                                                                
|(11) | Filed as an exhibit to this Quarterly Report on Form 10-Q.                                                                     

---

SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

ARVANA INC.

|By: | /s/ Wayne Smith                                           | 
|--- | --------------------------------------------------------- | 
|    | Wayne Smith,                                              | 
|    | Chief Executive Officer and Chief
      Financial Officer | 

Date: August 12, 2008

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