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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

x Quarterly Report
  Under Section 13 or 15(d) of the Securities Exchange Act of 1934
  for the quarterly period ended March 31, 2006

 ̈ Transition Report
  Under Section 13 or 15(d) of the Securities Exchange Act of 1934
  for the transition period from _______________ to _______________

Commission File Number: 000-30695

TURINCO, INC.(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)

604-684-4691Issuer's telephone number

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 shell company
  (as defined in Rule 12b-2 of the 
  Exchange Act). Yes  ̈ No x

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
15,391,500 shares of Common Stock as of April 21, 2006

Transitional Small Business Disclosure Format (check one): Yes
   ̈ No x

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PART I

Item
1.                Financial
Statements

The following unaudited consolidated interim financial
statements of Turinco Inc. (the Company) are included in this Quarterly Report
on Form 10-QSB:

|Page                                                                                                                                                                                   | **Page**
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                                                                                       |         
|Balance Sheets as at March 31, 2006                                                                                                                                                    | F-1     
|                                                                                                                                                                                       |         
|Statements of Operations for the three
        months ended March 31, 2006 and 2005 and the period from January 1, 2005,
        beginning of the development stage, to March 31, 2006 | F-2     
|                                                                                                                                                                                       |         
|Statements of Cash Flows for the three
        months ended March 31, 2006 and 2005 and the period from January 1, 2005,
        beginning of the development stage, to March 31, 2006 | F-3     
|                                                                                                                                                                                       |         
|Notes to Financial Statements                                                                                                                                                          | F-4     

- 2 -

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|TURINCO, INC.                      
|-----------------------------------
|(A DEVELOPMENT STAGE COMPANY)      
|CONSOLIDATED INTERIM BALANCE SHEETS
|(EXPRESSED IN US DOLLARS)          
|(UNAUDITED)                        

|                                                                                                                   |   | March
      31, |  
|------------------------------------------------------------------------------------------------------------------ | - | --------------- | -
|                                                                                                                   |   | 2006            |  
|                                                                                                                   |   |                 |  
|                                                                                                                   |   |                 |  
|ASSETS                                                                                                             |   |                 |  
|                                                                                                                   |   |                 |  
|Current                                                                                                            |   |                 |  
|Cash and
      cash equivalents                                                                                    | $ | 340,101         |  
|Receivables                                                                                                        |   | 122,921         |  
|Amounts due
      from related parties (Note 6)                                                                    |   | 27,850          |  
|                                                                                                                   |   |                 |  
|                                                                                                                   |   | 490,872         |  
|Deferred income tax asset,                                                                                         |   |                 |  
|net of valuation
      allowance of $527,664 as at March 31, 2006 (418,466 at December 31, 2005)                   |   | -               |  
|Property and equipment(Note 5)                                                                                     |   | 146,614         |  
|                                                                                                                   |   |                 |  
|                                                                                                                   | $ | 637,486         |  
|                                                                                                                   |   |                 |  
|                                                                                                                   |   |                 |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                               |   |                 |  
|                                                                                                                   |   |                 |  
|Current                                                                                                            |   |                 |  
|Accounts payable and accrued
      liabilities                                                                     | $ | 232,722         |  
|Amounts due
      to related parties (Note 6)                                                                      |   | 52,290          |  
|                                                                                                                   |   |                 |  
|                                                                                                                   |   | 285,012         |  
|                                                                                                                   |   |                 |  
|Commitments(Note 10)                                                                                               |   |                 |  
|                                                                                                                   |   |                 |  
|Stockholders' equity                                                                                               |   |                 |  
|Common stock (Note 7)                                                                                              |   |                 |  
|100,000,000
      common shares authorized at $0.001 par value;                                                    |   |                 |  
|13,891,500
      common shares issued and outstanding as at March 31, 2006 (13,891,500 at
      December 31, 2005) |   | 13,892          |  
|Additional
      paid-in capital                                                                                   |   | 17,277,362      |  
|Deficit                                                                                                            |   | (95,331         | )
|Deficit accumulated
      during the development stage                                                             |   | (16,843,449     | )
|                                                                                                                   |   |                 |  
|                                                                                                                   |   | 352,474         |  
|                                                                                                                   |   |                 |  
|                                                                                                                   | $ | 637,486         |  

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

F-1

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|TURINCO, INC.                                
|---------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                
|CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
|(EXPRESSED IN US DOLLARS)                    
|(UNAUDITED)                                  

|                                                           |   |                            |   |   |                      |   |   | Cumulative
      amounts  |  
|---------------------------------------------------------- | - | -------------------------- | - | - | -------------------- | - | - | ------------------------- | -
|                                                           |   |                            |   |   |                      |   |   | from the beginning of the |  
|                                                           |   | For the three months ended |   |   | development stage on |  
|                                                           |   | March 31,                  |   |   | January 1, 2005 to   |  
|                                                           |   | 2006                       |   |   | 2005                 |   |   | March
      31, 2006      |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|OPERATING COSTS                                            |   |                            |   |   |                      |   |   |                           |  
|Administration                                             | $ | 312,015                    |   | $ | 2,121                |   | $ | 1,272,590                 |  
|Depreciation                                               |   | 75                         |   |   | -                    |   |   | 275                       |  
|Research
      and development                             |   | 38,751                     |   |   | -                    |   |   | 91,585                    |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|                                                           |   | 350,841                    |   |   | 2,121                |   |   | 1,364,450                 |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|OTHER ITEMS                                                |   |                            |   |   |                      |   |   |                           |  
|Stock-based compensation
      (Note 7)                    |   | -                          |   |   | -                    |   |   | 8,232,540                 |  
|Loss on acquisition
      of Arvana Networks (Note 3)      |   | -                          |   |   | -                    |   |   | 7,013,310                 |  
|Loss on acquisition of Arvana
      Com (Note 4)           |   | -                          |   |   | -                    |   |   | 233,149                   |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|Net loss for the period before income taxes                |   | (350,841                   | ) |   | (2,121               | ) |   | (16,843,449               | )
|                                                           |   |                            |   |   |                      |   |   |                           |  
|Income taxes                                               |   | -                          |   |   | -                    |   |   | -                         |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|Net loss of the period                                     |   | (350,841                   | ) |   | (2,121               | ) |   | (16,843,449               | )
|                                                           |   |                            |   |   |                      |   |   |                           |  
|Other comprehensive income                                 |   | -                          |   |   | -                    |   |   | -                         |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|Comprehensive
      loss for the period                    | $ | (350,841                   | ) | $ | (2,121               | ) | $ | (16,843,449               | )
|                                                           |   |                            |   |   |                      |   |   |                           |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|Loss per share
      - basic and diluted                   | $ | (0.03                      | ) | $ | (0.00                | ) |   |                           |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|                                                           |   |                            |   |   |                      |   |   |                           |  
|Weighted
      average number of common shares outstanding |   | 13,891,500                 |   |   | 6,903,000            |   |   |                           |  

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

F-2

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|TURINCO, INC.                                
|---------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                
|CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
|(EXPRESSED IN US DOLLARS)                    
|(UNAUDITED)                                  

|                                                                                                |   |                            |   |   |                      |   |   | Cumulative
      amounts  |  
|----------------------------------------------------------------------------------------------- | - | -------------------------- | - | - | -------------------- | - | - | ------------------------- | -
|                                                                                                |   |                            |   |   |                      |   |   | from the beginning of the |  
|                                                                                                |   | For the three months ended |   |   | development stage on |  
|                                                                                                |   | March 31,                  |   |   | January 1, 2005 to   |  
|                                                                                                |   | 2006                       |   |   | 2005                 |   |   | March
      31, 2006      |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                            |   |                            |   |   |                      |   |   |                           |  
|Net loss
      for the period                                                                   | $ | (350,841                   | ) | $ | (2,121               | ) | $ | (16,843,449               | )
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Adjustments
      to reconcile net loss for the period to net cash used in operating activities |   |                            |   |   |                      |   |   |                           |  
|Depreciation                                                                                    |   | 75                         |   |   | -                    |   |   | 275                       |  
|Stock-based compensation                                                                        |   | -                          |   |   | -                    |   |   | 8,232,540                 |  
|Loss
      on acquisition of Arvana Networks                                                    |   | -                          |   |   | -                    |   |   | 7,013,310                 |  
|Loss on acquisition of Arvana Comunicacoes                                                      |   | -                          |   |   | -                    |   |   | 233,149                   |  
|Increase in receivables                                                                         |   | (122,394                   | ) |   | -                    |   |   | (94,700                   | )
|Increase(decrease)
      in payables and accrued liabilities                                    |   | (26,481                    | ) |   | -                    |   |   | 103,128                   |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Net cash
      used in operations                                                               |   | (499,641                   | ) |   | (2,121               | ) |   | (1,355,748                | )
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                            |   |                            |   |   |                      |   |   |                           |  
|Acquisition
      of equipment                                                                  |   | (28,000                    | ) |   | -                    |   |   | (67,017                   | )
|Cash of Arvana Networks on
      acquisition date                                               |   | -                          |   |   | -                    |   |   | 5,800                     |  
|Cash of Arvana
      Comunicacoes on acquisition date                                           |   | -                          |   |   | -                    |   |   | 62,465                    |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Net cash
      provided by (used in) investing activities                                       |   | (28,000                    | ) |   | -                    |   |   | 1,248                     |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                            |   |                            |   |   |                      |   |   |                           |  
|Amounts due
      to / from related parties                                                     |   | 31,678                     |   |   | -                    |   |   | (428,782                  | )
|Contribution to capital                                                                         |   | -                          |   |   | 900                  |   |   | 900                       |  
|Proceeds
      from issuance of common stock                                                    |   | -                          |   |   | -                    |   |   | 2,121,250                 |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Net cash
      provided by financing activities                                                 |   | 31,678                     |   |   | 900                  |   |   | 1,693,368                 |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Increase in cash and cash equivalents                                                           |   | (495,963                   | ) |   | (1,221               | ) |   | 338,868                   |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Cash and cash equivalents, beginning of period                                                  |   | 836,064                    |   |   | 1,232                |   |   | 1,232                     |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Cash and
      cash equivalents, end of period                                                  | $ | 340,101                    |   | $ | 11                   |   | $ | 340,100                   |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|                                                                                                |   |                            |   |   |                      |   |   |                           |  
|Supplementary information                                                                       |   |                            |   |   |                      |   |   |                           |  
|Interest paid                                                                                   | $ | -                          |   | $ | -                    |   | $ | -                         |  
|Taxes Paid                                                                                      |   | -                          |   |   | -                    |   |   | -                         |  

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

F-3

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|TURINCO, INC.                                     
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Three Months Ended March 31, 2006 and 2005        
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

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

Turinco, Inc., (the Company) is a development stage
  company and was incorporated under the laws of the State of Nevada on June 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.

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.

The Company was inactive from 1982 until 2005, during which time
  the Company was in the process of seeking profitable business opportunities.
  In 2005, the Company was introduced to the emerging technology of Voice over
  the Internet (VOIP) telephone services. Since then, the Company has been engaged
  in the exploration and development of the business plan for the provision of
  VOIP telephone services, and is actively engaged in implementing the digital
  technology of the VOIP solutions in market areas that present business opportunities.

The Company plans on developing the first phase of this business
  through its wholly-owned subsidiary Arvana Networks Inc. (Arvana Networks),
  a company incorporated in Barbados, which wholly owns Arvana Participações
  (Arvana Par) a company incorporated in Brazil. The Companys
  business activities to date have been directed towards the acquisition of Arvana
  Comunicações, market analysis, developing business plans, searching
  out appropriate local partners and developing technical plans in order to launch
  VOIP telephone services in Rio de Janeiro, Sao Paulo and other major cities
  in Brazil in 2006.

These consolidated interim financial statements for the three-month
  period ended March 31, 2006, include the accounts of the Company, its subsidiary
  Arvana Networks (including its wholly-owned subsidiary Arvana Par) and a 75%
  ownership in Arvana Comunicações do Brasil S. A. (Arvana Com).
  These 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. At March 31, 2006, the Company has an accumulated deficit
  during the development stage of $16,843,449. To date, the Company has generated
  no revenue from its VOIP business. These conditions raise substantial doubt
  about the Companys ability to continue as a going concern. 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.

The continuation of the Company is dependent upon achieving a
  profitable level of operations as well as obtaining further long-term financing.
  During 2005, the Company completed private placements of its common stock raising
  $2,340,000 ($2,121,250 net of issuance costs) in cash for working capital purposes,
  and at March 31, 2006, had $340,101 remaining to fund its operational costs.
  Management plans to raise $5,000,000 in additional equity capital over the next
  twelve months to finance the operations and capital requirements of the Company
  in 2006. While the Company is expending its efforts to achieve the above plans,
  there is no assurance that any such activity will generate sufficient funds
  for operations.

F-4

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|TURINCO, INC.                                     
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Three Months Ended March 31, 2006 and 2005        
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

2. Summary of Significant Accounting Policies

a) Basis of presentation

The Company is currently 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 Turinco, Inc.
  for the three-month periods ended March 31, 2006 and 2005, and for the cumulative
  amounts from the beginning of the development stage on January 1, 2005, through
  March 31, 2006, have been prepared in accordance with accounting principles
  generally accepted in the United States for interim financial information with
  the instructions to Form 10-QSB and Regulation S-B. Accordingly, they do not
  include all of the information and footnotes required by the accounting principles
  genarally accepted in the United States for complete financial statements. 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.

Included in the financial statements are the accounts of the
  Company, its wholly-owned subsidiaries Arvana Networks, Arvana Par and Arvana
  Com. All significant inter-company transactions and balances have been eliminated.

b) 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.

c) Foreign currency translation and transactions

Turinco, Inc.s functional currency is the United States
  dollar.

The Company uses the integrated method when translating the 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.

Transactions conducted in currencies other than the respective
  functional currency of the Company 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.

The exchange rate prevailing at March 31, 2006, was 2.172, stated
  in the Brazilian Real per one US dollar. The average exchange rate during the
  three-month period ended March 31, 2006, was 2.194 stated in the Brazilian Real
  per one US dollar.

d) Comprehensive income

The Company has adopted SFAS No. 130, Reporting Comprehensive
  Income, which establishes standards for reporting and presentation of
  comprehensive income, its components and accumulated balances. The Company has
  no items of other comprehensive income in any year presented. Therefore, net
  income presented in the consolidated statements of operations equals comprehensive
  income.

F-5

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|TURINCO, INC.                                     
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Three Months Ended March 31, 2006 and 2005        
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

e) Cash equivalents

The Company considers all highly liquid investments, with terms
  to maturity of three months or less when acquired, to be cash equivalents.

f) Property and equipment:

Property and equipment is stated at cost less accumulated depreciation
  and is depreciated on a straight line basis, commencing when the assets are
  put into use over the estimated useful lives of the assets as follows:

| | Machinery & equipment | 10 years
| | --------------------- | --------
| | Office equipment      | 5 years 
| | Computer hardware     | 5 years 
| | Computer software     | 1 year  

The majority of the equipment was acquired in September 2005
  or later.

In accordance with SFAS 144, Accounting for Impairment or
  Disposal of Long-Lived Assets, the Company reviews the carrying value of
  long-lived assets for impairment whenever events and circumstances indicate
  that the carrying value of the assets might be impaired and the carrying value
  may not be recoverable. Recoverability of these assets is measured by comparison
  of the carrying value of the assets to the undiscounted cash flows estimated
  to be generated by those assets over the remaining economic life. If the undiscounted
  cash flows are not sufficient to recover the carrying value of such assets,
  the assets are considered impaired. The impairment loss is measured by comparing
  the fair value of the assets to their carrying values. Fair value is determined
  by either a quoted market price or a value determined by a discounted cash flow
  technique, whichever is more appropriate under the circumstances involved. No
  impairment was required to be recorded during the periods presented in these
  consolidated financial statements.

g) Financial instruments

Financial instruments of the Company are comprised of cash and
  cash equivalents, receivables, accounts payable and accrued liabilities, and
  amounts due to and from related parties. Except as indicated in Note 6, on March
  31, 2006, the estimated fair values of financial instruments were considered
  by management to be not materially different from their carrying value due to
  their short term to maturity or capacity for prompt liquidation.

h) Concentration of credit risk

Cash is the only financial instrument that potentially subjects
  the Company to concentration of credit risk. The Company maintains cash in bank
  accounts that, at times, may exceed federally insured limits. The Company has
  not experienced any losses in such accounts and believes it is not exposed to
  any significant risks on its cash in bank accounts.

i) Asset retirement obligations

The Company records the fair value of an asset retirement obligation
  as a liability in the period in which it incurs a legal obligation associated
  with the retirement of tangible long-lived assets that result from the acquisition,
  construction, development, and/or normal use of the long-lived assets. The Company
  also records a corresponding asset which is amortized over the life of the asset.
  Subsequent to the initial measurement of the asset retirement obligation, the
  obligation is adjusted at the end of each period to reflect the passage of time
  (accretion expense) and changes in the estimated future cash flows underlying
  the obligation (asset retirement cost). The Company does not have any asset
  retirement obligations for the periods presented.

F-6

---

|TURINCO, INC.                                     
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Three Months Ended March 31, 2006 and 2005        
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

j) Income taxes

Income taxes are provided in accordance with Statement of Financial
  Accounting Standards No. 109 "Accounting for Income Taxes". A deferred
  tax asset or liability is recorded for all temporary differences between financial
  and tax reporting and net operating loss carryforwards. Deferred tax expense
  (benefit) results from the net change during the year of deferred tax assets
  and liabilities.

Deferred tax assets are reduced by a valuation allowance when,
  in the opinion of management, it is more likely than not that some portion or
  all of the deferred tax assets will not be realized. Deferred tax assets and
  liabilities are adjusted for the effects of changes in tax laws and rates on
  the date of enactment.

k) Stock-based compensation

The Company accounts for all stock-based payments to employees
  and non-employees 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. There were no options granted or outstanding for the
  three month periods ended March 31, 2006 and 2005.

l) Net loss per share

Basic loss per share is computed using the weighted average number
  of common shares outstanding during the year. Diluted loss per share is computed
  using the weighted average number of common shares and potentially dilutive
  common stock equivalents, including stock options and warrants. As of March
  31, 2006 and 2005, there were no potentially dilutive instruments.

m) New accounting pronouncements

On December 16, 2004, the Financial Accounting Standards Board
  (FASB) issued Statement of Financial Accounting Standards (SFAS)
  No. 123 (revised 2004), Share-Based Payment. SFAS No. 123(R) would
  require the Company to measure all employee stock-based compensation awards
  using a fair value method and record such expense in its consolidated financial
  statements. In addition, SFAS No. 123(R) will require additional accounting
  related to the income tax effects and additional disclosure regarding the cash
  flow effects resulting from share-based payment arrangements. For non-public
  entities, SFAS No. 123(R) is effective for the first interim or annual reporting
  period beginning after December 15, 2005.

In December 2004, FASB issued SFAS No. 153 to amend Opinion 29
  by eliminating the exception for non-monetary exchanges of similar productive
  assets and replaces it with general exception for exchanges of non-monetary
  assets that do not have commercial substance. A non-monetary exchange is defined
  to have commercial substance if the future cash flows of the entity are expected
  to change significantly as a result of the exchange. The provision of this Statement
  is effective for non-monetary asset exchanges occurring in fiscal periods beginning
  after June 15, 2005, and should be applied prospectively.

In June 2005, the FASB issued Statement 154, Accounting
  Changes and Error Corrections, which replaces APB Opinion 20 and FASB
  Statement 3. Statement 154 changes the requirements for the accounting and reporting
  of a change in accounting principle. Opinion 20 previously required that most
  voluntary changes in accounting principles be recognized by including the cumulative
  effect of the new accounting principle in net income of the period of change.
  Statement 154 now requires retrospective application of changes in accounting
  principle to prior period financial statements, unless it is impractical to
  determine either the period-specific effects or the cumulative effect of the
  change. The statement is effective for fiscal years beginning after December
  15, 2005.

The Company is presently assessing the impact of the implementation
  of these new standards.

F-7

---

|TURINCO, INC.                                     
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Three Months Ended March 31, 2006 and 2005        
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

3. Arvana Networks Transaction

On August 18, 2005, Turinco, Inc. (Turinco) completed
  a transaction with Arvana Networks whereby 100% of the 4,500,000 shares (1,500,000
  shares which are described below) of Arvana Networks were exchanged for an equal
  number of shares in Turinco, Inc. Arvana Networks business activities
  to date have been directed towards market analysis, developing business plans
  and searching out appropriate local partners in order to launch VOIP telephone
  services in Rio de Janeiro, Sao Paulo and other major cities in Brazil in 2006.

Arvana Networks has an agreement with IP Horizon LLC (IPH),
  whereby IPH was issued 1,500,000 shares in exchange for a commitment to deliver
  equipment, software and network hardware for the initial launching of VOIP service
  in Brazil. IPH will also provide termination services to Arvana Networks, at
  its cost plus an administration fee not to exceed 13 percent. As discussed in
  Note 7(g), these shares are not considered issued for accounting purposes because
  the Company had not yet received the assets to be acquired in connection with
  this transaction.

As both Turinco and Arvana Networks are development stage companies,
  the share exchange transaction was outside the scope of Statement of Financial
  Accounting Standard No. 141, Business Combination. Consequently,
  the transaction was recorded at the fair value of the 3.0 million Turincos
  common shares issued for the transaction based on the quoted market price of
  the Companys common stock on the date of the agreement of $2.28 per share.
  This agreed upon consideration paid for the transaction was calculated based
  on the fair value of the assets recorded on Arvana Networks financial statements
  at the time of the transaction and on the compensation expenses given to management
  of Arvana Networks for pre-operating services provided to Arvana Networks and
  to retain their services. As such, the purchase price of the transaction was
  allocated among the $5,800 in cash and $131,747 in other assets acquired and
  $310,857 in liabilities assumed based on the fair value and the excess of purchase
  price over fair value of assets acquired and liabilities assumed was recorded
  in 2005 as compensation expense paid of $7,013,310 to the management of Arvana
  Networks at the time of the transaction.

4. Arvana Comunicações Transaction

On October 6, 2005, the Company, through its wholly-owned subsidiaries,
  completed the first closing of an investment agreement with Gloinfo 500 Soluções
  EM Telemática Ltda. (Gloinfo) and Paulo Messina (described
  below) for the acquisition of Arvana Comunicações.

Arvana Com was incorporated in January 2005. In March 2005, the
  Companys subsidiary Arvana Networks signed a letter of intent to acquire
  Arvana Com. The Company had supplied Arvana Com a non-interest bearing, no repayment
  term loan to be used for the pre-operating costs of the business. Arvana Com
  would not be able to operate without this loan and this capital was therefore
  at risk. Accordingly, the Company was considered the beneficiary of Arvana Com
  (because it absorbed the expected risk and residual gain of Arvana Com), and
  Arvana Com was treated as a Variable Interest Entity up until October 6, 2005.
  Upon completion of the first closing, the Company acquired 75% of Arvana Coms
  shares, at no additional cost, and it is now considered a majority owned subsidiary
  for accounting purposes.

Similarly to the transaction between the Company and Arvana Networks,
  the share exchange transaction was scoped out of Statement of Financial Accounting
  Standard No. 141, Business Combination. Consequently, the transaction
  was recorded at the fair value of the net assets acquired of Arvana Com on the
  date of the agreement. The purchase price of the transaction has been allocated
  among the $62,465 in cash, $78,258 of equipment, $8,482 of receivables, and
  $382,354 in liabilities assumed based on their respective fair values. Accordingly,
  $233,149, being the excess of purchase price over fair value of assets acquired
  and liabilities assumed was recorded in 2005 as the loss on acquisition of Arvana
  Com.

F-8

---

|TURINCO, INC.                                     
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Three Months Ended March 31, 2006 and 2005        
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

First Closing

The first closing required the Company to acquire 75% of Arvana
  Coms shares (which has been acquired as of October 6, 2005 for no further
  consideration). Upon completion of the first closing, the Company entered into
  an office space leasing agreement, a software leasing agreement, an equipment
  lease agreement, and a shareholder agreement with Gloinfo (the 25% owner of
  Arvana Com), which will enable Gloinfo to have the opportunity to participate
  pro-rata in future issuances of Arvana Coms share capital.

Interim period between the first and second closing

Arvana Com has applied for and received the license to operate
  in the VOIP business subsequent to the first closing. In conjunction with this
  application, Arvana Com has also entered into agreements with Gloinfo to provide
  services to Arvana Com and be reimbursed for costs incurred. In addition, loans
  of up to 250,000 Brazilian Real may be provided to Gloinfo for the sole use
  in the conduct of the VOIP operation of Arvana Com. These loans would bear 1%
  interest if repayments are late.

Second closing

During the first quarter, the Companys management entered
  into negotiations with the principals of Gloinfo with the intention of changing
  the provisions of the Investment agreement to acquire 100% of Arvana Com, and
  achieve complete operating separation from the activities and facilities of
  Gloinfo.

5. Property and Equipment

|          |   |         |  |   | Accumulated  |  |   | Net        | 
|--------- | - | ------- |  | - | ------------ |  | - | ---------- | 
|2006      |   | Cost    |  |   | Amortization |  |   | Book Value | 
|          |   |         |  |   |              |  |   |            | 
|Equipment | $ | 45,092  |  | $ | 275          |  | $ | 44,817     | 
|Computers |   | 61,117  |  |   | -            |  |   | 61,117     | 
|Software  |   | 40,680  |  |   | -            |  |   | 40,680     | 
|          |   |         |  |   |              |  |   |            | 
|          | $ | 146,889 |  | $ | 275          |  | $ | 146,614    | 

The Company has not taken any amortization on most of its equipment
  as utilization of the equipment has not yet begun. The net carrying amount of
  equipment not being amortized was $ 145,386 as of March 31, 2006.

6. Related Parties

At March 31, 2006, the Company was owed $27,850 from a company
  with a director in common. The loan bears no interest and has no specific terms
  of repayment. We have a corresponding payable to a previous director which relates
  to start-up operations in Brazil. These amounts will be cleared in the second
  quarter.

At March 31, 2006, the Company owed $3,504 to a director for
  reimbursement of expenses. These loans bear no interest and have no specific
  terms of repayment.

At March 31, 2006, the Company owed $48,200 to three directors
  for services rendered during the year. This amount is to be paid in stock at
  a future date with the number of common shares determined by the fair value
  of the shares on the settlement date. An additional $586 was owed to one of
  these directors for expenses incurred on behalf of the Company. The amounts
  owing bear no interest.

F-9

---

|TURINCO, INC.                                     
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Three Months Ended March 31, 2006 and 2005        
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

For the three month period ended March 31, 2006, $74,499 was
  incurred by the Company for services rendered by directors, the President, the
  Chief Financial Officer and the Corporate Secretary of Turinco, Inc.

The amount of imputed interest would not be material. Therefore,
  it was not recorded in the period.

7. Share Capital

(a) During the three-month period ended March 31, 2006, the Company
  did not have any have any changes to share capital.

(b) The Company follows SFAS No. 123, Accounting for Stock-Based
  Compensation, in accounting for stock-based employee compensation plans
  and transactions in which an entity issued its equity instruments to acquire
  goods or services from non-employees. Where the fair value of equity instruments
  issued in connection with the provision of goods or services or the issuance
  of share capital is more reliably measurable than the fair value of the consideration
  received, the transaction is accounted for based on the fair value of the equity
  instruments issued and the difference between the fair value and recorded value
  of the transaction is recorded as stock-based compensation expense.

(c) As of March 31, 2006, the Company had not granted any stock
  options or warrants.

8. Segmented Information

The Company has one reportable segment, being the development
  of the VOIP telephone services. This reportable segment was determined based
  on the nature of the products offered. Of the total property and equipment,
  $1,228 is located in Canada, and $145,386 is located in Brazil.

9. Subsequent Events

None.

10. Commitments

Arvana Networks has a contract for corporate secretarial services
  in the amount of $1,000 per month or $12,000 per year to Binnema Management
  Services in Barbados.

In connection with contracts entered into with consultants, Arvana
  Networks has $25,417 in potential termination obligations, should the consulting
  contracts be terminated for other than cause.

F-10

---

Item
2. **Managements
Discussion and Analysis or Plan of Operations**

OVERVIEW

Turinco Inc. is engaged in the development of business
opportunities in the telecommunications industry which are focused on the
development and implementation of voice over the internet (VOIP) telephone
technology. Our business plan is to be a provider of Internet services dedicated
to serving our partners with complete turnkey IP telephone solutions which
enable fast deployment of voice services over existing data networks.

We have been engaged since March 2005 in the acquisition and
implementation of digital technology that will enable us to provide Internet
telecommunication services for prospective customers. In August 2005, we
completed a transaction whereby we acquired all of the issued and outstanding
shares of Arvana Networks Inc. (Arvana Networks). Arvana Networks is a company
incorporated in Barbados that wholly owns Arvana Participações, a company
incorporated in Brazil (Arvana Par). Arvana Pars business activities to date
have been directed towards development of an Internet telephone services
business to be located in Rio de Janeiro, Sao Paulo and other major cities in
Brazil in 2006. Arvana Pars activities have included market analysis,
development of business plans, identifying appropriate local associates and
development of technical plans required in order to launch Internet telephone
services in Brazil in 2006.

As discussed below, and via Arvana Par, we entered into an
investment agreement with a local associate in 2005 for the development of
Internet telephone services in Brazil. This business was planned to be carried
out by Arvana Comunicações do Brasil S. A. (Arvana Com), a Brazilian company
intended to be 75% owned by Arvana Par and 25% owned by Gloinfo 500 Soluções EM
Telemática Ltda. (Gloinfo). Gloinfo was planned to be our local associate in
Brazil. We have since agreed in principal with Gloinfo to terminate our
agreement, acquire 100% ownership of Arvana Com, and develop our planned
Brazilian Internet telephone business independent of Gloinfo. Our plan for the
development of Arvana Com is set forth below.

We are presently in the development stage of our business. We
have yet to achieve any revenues and the Company requires substantial additional
financing in order to continue with the plan of operations which, in the opinion
of management, will provide a profit. Our ability to continue as a going concern
is dependent upon our ability to obtain additional financing.

PLAN OF OPERATIONS

Our plan of operation for the next twelve months is to
undertake and achieve the following objectives:

| | 1. | Arvana Networks plans to complete a current research and
      development program which is anticipated to include advancements in our
      SIP-based Internet Telephony Service Provider (ITSP) call platform c/w
      VOIP Gateways and SS7 signalling translation; a Dedicated Calling Card
      Platform; a Billing System for the ITSP platform (includes signup,
      customer bill presentment, and real-time call authorization and balance
      tracking); and an associated Accounting System into which data is fed from
      the Calling Card Platform, the Billing System, and other
  subsystems.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | These research and development activities are planned to
      be carried out by Arvana Networks technology staff centered in Annapolis
      Maryland.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 2. | Arvana Com plans to initiate a web-based Internet
      telephone service under the branding of Televoz which will solicit
      subscribers in Brazil, Argentina and Bolivia who frequently make long
      distance calls to North America and Europe.                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 3. | The acquisition of the STFC license in Brazil which will
      enable Arvana Comunicações to move forward with its plan to provide low
      cost calling for business users within Brazil and a variety of calling
      card services also targeted to business applications and international
      ethnic communities.                                                                                                                                                                                                                                                                                           

- 3 -

---

| | 4. | The phase one development of partnerships and facilities
      in Argentina and Bolivia based on the experience and developments achieved
      in Brazil.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                           
| | 5. | The continued exploration of opportunities in Internet
      telephony in Europe and the Middle East.                                                     

We anticipate spending approximately $2,000,000 to proceed with
our plan of operations over the next twelve months. We had cash in the amount of
$340,101 and working capital in the amount of $205,859 as of March 31, 2006.
Based on our planned expenditures, we will require a minimum of $1,500,000 in
additional financing. Also, we anticipate that we will require additional
financing in order to pursue development of partnerships and opportunities in
Internet telephony that are over and above our plans for Brazil. If we achieve
less than the full amount of financing that we require, we will scale back our
development and expansion plans based on our available financial resources.

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 firm
  assurance that we will be able to raise sufficient funding from the sale of
  our common stock to fund our plan of operations.

Our plan of operations is to target markets in developing and
mature countries that have established telephone communication networks and
where there is a competitive advantage for Internet telephony over existing
telecommunication networks.

In each country that we target, we intend to build our own
network of Internet access points, called POPs, which will enable users to
access the network through a local call. Once established, these networks will
bypass the existing phone carriers trunk lines and will enable us to complete
calls at our own highly competitive rates.

To minimize time to market, we plan to partner with local
companies in targeted markets who we believe will enable us to assemble all the
required components of the service.

We intend to generate revenues through three main types of
service using our proposed networks:

|1. | Inexpensive call handling for both outbound and inbound
      calls.                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                
|2. | Monthly subscriptions to our voice service offering a
      further significant reduction in telephony costs. We anticipate that our
      primary focus will be on the corporate market where long distance and
      international calls are frequent, and thus where the savings and call
      features we offer are of the greatest value.
|   |                                                                                                                                                                                                                                                                                                                                                
|3. | Long distance/international calling cards for both the
      corporate and consumer markets.                                                                                                                                                                                                                                                   

Our plan is to link all of the above services using an
underlying Arvana network infrastructure. Our network infrastructures is planned
to be comprised of a series of access gateways located in major cities and
regions involving several countries. Each gateway is planned to incorporate
sufficient phone lines to handle the peak number of calls in each respective
area, enabling anyone to gain access to the Arvana network for the cost of a
local call. We plan to offer a calling card system that will use our network
infrastructure to provide local access for long distance and international
calls.

We plan to enable corporate subscribers to use their
analog/digital gateway to route long distance calls from their existing PBX to
the Arvana service, while local calls remain routed to the local carrier.

A primary source of revenue is expected to be of the provision
of long distance and international calling services to enterprises which have
several national or international offices, or have a need to communicate with
their employees, major customers, and suppliers remotely. Our Arvana service is
planned to permit each subscriber to call another subscriber anywhere on an
unlimited time basis at no

- 4 -

---

incremental cost. We also plan to offer the origination and
termination of calls on the public switched network (PSTN), enabling an Arvana
user to call any other phone user in the world at competitive rates.

We plan to bill business customers through a monthly
subscription which we anticipate to include a base bundle of minutes and a core
set of call features, such as caller identification and voicemail. We also
expect to offer an international numbering plan such that a company in
Argentina, for example, can have a US number which could be dialled by their US
customers and have the phone ring in Buenos Aires.

We plan to complement the above Arvana services by providing
long distance/international telephone calling cards which are prepaid and
provide access to our digital network locally from any landline phone, cell
phone or payphone. Arvana expects to provide businesses with branded calling
cards for promotions as well as corporate cards for employees who travel,
enabling them to minimize the cost of long distance calling.

Our initial focus will be on providing Arvanas services in
Brazil. Brazil is the 5th largest telecom market in the world with over 100
million phone lines and well over two million broadband users. Broadband growth
in the region is developing rapidly.

IP Horizon LLC is Arvanas technology and termination partner
and a significant shareholder. IP Horizon is controlled by Draper Holdings
Business Trust. IP Horizon has expertise in carrier-class digital telephony
systems, provides comprehensive management/billing software, a high capacity
calling card management system and contributed hardware and software to Arvana.
IP Horizon is also able to provide competitive international call termination
rates.

Arvana Comunicações

The Company, Arvana Networks and Arvana Par entered into an
investment agreement dated October 6, 2005 (the Investment Agreement) with
Gloinfo and Paulo Messina, an unrelated party. Arvana Par is a wholly owned
subsidiary of Arvana Networks. Gloinfo is a Brazilian limited company that is
controlled by Mr. Messina.

The Investment Agreement provided for subscription for the
capital stock of Arvana Com by each of Arvana Par and Gloinfo. Arvana Com is a
Brazilian corporation that was formed to carry out a VOIP business in Brazil as
a jointly owned venture between Arvana Par and Gloinfo. As a result of the
initial closing under the Investment Agreement on October 6, 2005, Arvana Par
presently owns 75% of Arvana Com and Gloinfo owns 25%.

Upon execution of the Investment Agreement, Gloinfo contributed
certain equipment relating to the VOIP business presently being carried on by
Gloinfo and certain billing and operating software for the provision of the
Intervoz and Televoz services. In turn, Arvana Par subscribed for additional
share capital of Arvana Com representing a 75% interest in Arvana Com for a
total subscription investment of R$5,000,000.00 (five million Reais) (equivalent
to $2,197,319 based on a foreign exchange rate of R$2.2755 per US $1.00 as of
October 6, 2005). Arvana Par has an eighteen month period during which to
complete this investment which may be paid for in cash, assets and/or credits.
Arvana Par may also loan funds or lease equipment to Arvana Com, on industry
standard terms, and will be permitted to convert into share capital, in
satisfaction of its subscription obligations in respect of the Investment and
subject to applicable Brazilian law, the outstanding amount of any loan or value
of any leased equipment.

Arvana Com Termination Agreement

During the first quarter of fiscal 2006, our management entered
into negotiations with the principals of Gloinfo with the intention of
terminating the Investment Agreement by agreement. The contemplated termination
of the Investment Agreement would include the acquisition by Arvana Par of 100%
of Arvana Com and the separation of the operating activities of Arvana Com from
the activities and facilities of Gloinfo.

The main terms of the termination that have been agreed to in
principle by Gloinfo are as follows:

- 5 -

---

|(a) | The terms of the investment agreement will be cancelled
      and Gloinfo will transfer its 25% ownership to Arvana Par.                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                   
|(b) | The customers that were to be transferred to Arvana Com
      following the final closing will remain with Gloinfo.                                                                                                                               
|    |                                                                                                                                                                                                                                                   
|(c) | The employees that were to be transferred following the
      final closing will remain with Gloinfo.                                                                                                                                             
|    |                                                                                                                                                                                                                                                   
|(d) | Employees that were hired into the project were
      terminated and the termination costs were shared 75% by Arvana Com and 25%
      by Gloinfo.                                                                                                
|    |                                                                                                                                                                                                                                                   
|(e) | Arvana Com will obtain the Televoz branding and the
      website associated with this product from Gloinfo.                                                                                                                                    
|    |                                                                                                                                                                                                                                                   
|(f) | The billing system software will be licensed to Arvana
      Com and the source code provided to the technology department.                                                                                                                       
|    |                                                                                                                                                                                                                                                   
|(g) | Arvana Com will retain ownership and operating control of
      the technology platform currently used by Gloinfo to service their
      customers. Gloinfo will purchase and install a new technology platform
      within an estimated 90 days.

We are presently negotiating a definitive termination agreement
with Gloinfo pursuant to which the Investment Agreement will be terminated.
There is no assurance that we will reach a termination agreement with Gloinfo or
that the terms of the termination agreement will include all of the terms stated
above that have been agreed to in principal by Gloinfo.

The Company plans to continue developing the VOIP business
independent of Gloinfo once the equipment has been returned by Gloinfo. The
Arvana Com platform will be used for new customers to be acquired by Arvana Com
using the Televoz branding for VOIP and calling card service.

In October 2005, Arvana Com applied for a SCM (Serviço de
Comunicação Multimídia) license from ANATEL (Agência Nacional de
Telecomunicações), the Brazilian government regulatory authority that is
responsible for regulating telecommunications activities in Brazil.During the quarter, the Company was granted its SCM license which allows it
to conduct it internet telephone business in Brazil. Based on this
authorization, the Company must comply with the ANATEL laws and regulations and
present an installation project summary to ANATEL by September 3, 2006. The
Company has until September 3, 2007 to begin commercial operations by September
3, 2007 in accordance with article 27 of the SCM regulation.

Additional Acquisitions and New Business Opportunities

We plan to consider and evaluate prospective acquisitions and
new business opportunities in the VOIP market which would offer us the ability
to deploy Internet telephone solutions and develop and expand our customer base
and business. We are presently in negotiations to acquire an established long
distance telephone carrier business based in Europe. We have not entered into
any definitive agreement to date and there is no assurance that any definitive
agreement will be executed. Further, we anticipate that the completion of the
acquisition would be subject to our achieving additional financing, of which
there are no assurances of success.

RESULTS OF OPERATIONS

Our operations for the three month periods ended March 31, 2006
and 2005 are summarized below. Our current activities relating to the
development of its planned VOIP telephone services business are only reflected
in the results of operations for the period from January 2005 to March 31,
2006.

- 6 -

---

References below to the first quarters of fiscal 2006 and
fiscal 2005 are to the three month periods ending March 31, 2006 and 2005,
respectively. We were inactive during all periods prior to December 31, 2004.
References to fiscal 2006 and fiscal 2005 are to our fiscal years ended December
31, 2006 and 2005, respectively.

Three months ended March 31,
      2006
    Three months ended March 31,
      2006
    Cumulative Amounts from the
      beginning of the development stage on January 1,
      2005 to March 31, 2006Administration
    $312,015
    $2,121
    $1,272,590Depreciation
    $75
    $0
    $275Research and Development
    $38,751
    $0
    $91,585Stock Based Compensation
    $0
    $0
    $8,232,540Loss on acquisition of Arvana Networks
    $0
    $0
    $7,013,310Loss on acquisition of Arvana Com
    $0
    $0
    $233,149Net Loss for the Period
    $350,841
    $2,121
    $16,843,449


Revenues

We have not earned revenues from the VOIP business to date. Our
ability to earn revenues will be subject to its ability to successfully
implement its plan of operations. The ability of Arvana Com to earn revenues
from the Brazilian VOIP telephone services business was contingent upon the
granting of the necessary SCM license which was granted to the Company by the
regulatory agency ANATEL. This license has been granted in January 2006. We
anticipate that Arvana Com will not achieve revenues until completion of planned
separation of the operations of Arvana Com and Gloinfo under the contemplated
termination of the investment agreement.

Administration Expenses

During the first quarter of fiscal 2006, we had administration
expenses of $312,015 compared to expenses of $2,121 for the first quarter of
fiscal 2005. Expenses in the first quarter of fiscal 2005 were for minimal
operating requirements. For the first quarter of fiscal 2006, the expenses
related to directors fees, consulting fees, travel expenses, office services and
rent.

Research and Development/Technical Operations

Our research development expenses and technical operations
expenses were attributable to the costs of our chief technology officer and our
network architect. These individuals are responsible for specifying and
overseeing the implementation and management of the Companys technology and
hardware platform. Research and development expenses associated with technical
operations were $38,751 for the first quarter of fiscal 2006.

- 7 -

---

Stock-based Compensation

There was no stock based compensation expense for the first
quarter of fiscal 2006 or 2005. We anticipate adopting a stock option plan
during the second quarter of fiscal 2006.

We recorded stock compensation expense in the amount of
$8,232,540 during fiscal 2005. This stock compensation expense reflects the
value of shares issued to date by us by means of certain private placements at a
lower than quoted market price at the time of closing. The difference between
the trading price and the cash proceeds has been included in stock-based
compensation. Of this amount, $752,400 was attributable to the issue of 330,000
shares as finders fees related to the Arvana Networks transaction and the
introduction of the Company to IP Horizons LLC (IPH). The balance of the stock
compensation expense was attributable to private placements completed by us.

Loss on the acquisition of Arvana Networks

The loss on the acquisition of Arvana Networks expense of
$7,013,310, recorded in fiscal 2005, was attributable to the excess of the
purchase price over the fair market value of the assets acquired and liabilities
assumed. Assets acquired included $5,800 in cash and $131,747 in other assets
acquired and liabilities in the amount of $310,857.

Loss on acquisition of Arvana Comunicações

The loss on the acquisition of Arvana Comunicações recorded in
fiscal 2005 in the amount of $233,149 was a result of the development costs of
our VOIP project in Brazil. This amount represents legal, accounting, consulting
and other start up fees.

Net Loss for the Period

We incurred a net loss of $350,841 for the first quarter of
fiscal 2006 compared to a loss of $2,121 for first quarter of fiscal 2005. The
loss reflects the increased administration and research and development expenses
associated with the development of our VOIP telephone services business.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2006, we had cash of $340,101 and working
capital of $205,859. This compares to cash of $836,064 and working capital of
$584,626 as of December 31, 2005. The decrease in cash and working capital is a
result of expenditures during the first quarter of fiscal 2006, as discussed
above.

Plan of Operations

We estimate that our total expenditures over the next twelve
months will be at least $2,000,000, as discussed above under the heading Plan
of Operations, which amount will include projected administration costs. The
Company anticipates that it will require a minimum of approximately $1,500,000
in additional financing to proceed with our plan of operations over the next
twelve months. In addition, the Company anticipates that it will require
additional financing in order to pursue the acquisition of any opportunities in
the VOIP business beyond the specific opportunities that are outlined above. If
we are unable to achieve the necessary additional financing, then it plans to
reduce the amounts that it spend on the development of our VOIP business
opportunities and its administrative expenses in order to be within the amount
of capital resources that are available to the Company.

Cash Used in Operating Activities

We used cash in operations in the amount of $499,641 during the
first quarter of fiscal 2006. Cash used in operations was attributable primarily
to administration and research and development expenses incurred with the
commencement of the our business of the development of VOIP telephone services.

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Cash Used in Investing Activities

We acquired software in the amount of $28,000 during the first
quarter of fiscal 2006.

Cash Flows from Financing Activities

We reclassified a related party loan in the amount of $31,678
during first quarter of fiscal 2006 due to a person who is no longer a
shareholder in Arvana Comunicações. This amount is now classified in accounts
payable.

Going Concern

We has not attained profitable operations and is dependent upon
obtaining financing to purser its plan of operations.

Future Financings

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

CRITICAL ACCOUNTING POLICIES

Basis of Presentation

We are currently in the development stage and presents our
financial statements in accordance with Statement of Financial Accounting
Standard (SFAS) No. 7, Accounting and Reporting by Development Stage
Enterprises.

Our financial statements include the accounts of the Company,
our wholly-owned subsidiaries Arvana Networks, Arvana Par, and its 75% ownership
of Arvana Com. All significant inter-company transactions and balances have been
eliminated.

Foreign currency translation and transactions

Our functional currency is the United States dollar.

Long-term assets and liabilities of Arvana Par and Arvana Com
denominated in a foreign currency are translated into US dollars at the exchange
rate in effect at the transaction date. Monetary assets and liabilities are
translated at the period end 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 our financial statements under
administration expenses as they were insignificant.

Transactions conducted in currencies other than the respective
functional currency of each of the entities 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 the Statement of Operations under administration expenses.

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Stock Compensation Expense

Where the fair value of equity instruments issued in connection
  with the provision of goods or services or the issuance of share capital is
  more reliably measurable than the fair value of the consideration received,
  the transaction is accounted for based on the fair value of the equity instruments
  issued and the difference between the fair value and recorded value of the transaction
  is recorded as stock-based compensation expense.

Item
3.                Controls
and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of
1934 (the Exchange Act), we carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures as of March
31, 2006, being the date of our most recently completed quarter. This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer, Mr. Michael Jervis, and our Chief Financial Officer, Mr.
Leonard Gordon. Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the
rules and forms of the Securities and Exchange Commission (the SEC) .

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is 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 our Chief
Financial Officer, to allow timely decisions regarding required disclosure.

During the fiscal quarter ended March 31, 2006, there were no
changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to affect, our internal control over
financial reporting during the quarter ended March 31, 2006.

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, the registrants
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrants board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:

|(a) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the registrant;                                                                                                                                                                                                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(b) | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that
      receipts and expenditures of the registrant are being made only in
      accordance with authorizations of management and directors of the
      registrant; and
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(c) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      registrants assets that could have a material effect on the financial
      statements.                                                                                                                                              

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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 pursuant to the Securities Act of 1933 during our fiscal quarter
ended March 31, 2006.

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,
through the solicitation of proxies or otherwise, during our first quarter ended
March 31, 2006.

Item
5.                Other
Information

None.

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Item
6.                Exhibits

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

ExhibitNumber
      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, 2006 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)14.1
      Code of Ethics (4)31.1
      Certification
          of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange
          Act (5)31.2
      Certification
          of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange
          Act (5)32.1
      Certification
          of Chief Executive 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 (5)32.2
      Certification
          of 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 (5)


|    |                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(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 Quarterly Report on Form 10-QSB 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) | Filed as an Exhibit to this Quarterly Report on Form
      10-QSB.                                                                                
|    |                                                                                                                                                   

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

TURINCO INC.



|By:   | /s/ *Michael Jervis*                                        | 
|----- | ----------------------------------------------------------- | 
|      | Michael Jervis, President and
      Chief Executive Officer | 
|      |                                                             | 
|Date: | May 15, 2006                                                | 

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