---

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 JUNE 30, 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

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

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

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

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

TURINCO, INC.(Former name, if changed since
last report)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X]  No [   ]

Indicate by check mark whether the registrant is a 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. 18,933,200
shares of Common Stock as of August 11, 2006

Transitional Small Business Disclosure Format (check one): Yes
[   ] No [X]

---

PART I

Item
1.               
Financial Statements

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

PageBalance Sheet as at June 30, 2006
      3Statements of Operations for the three
        and six months ended June 30, 2006 and 2005 and the period from January
        1, 2005, beginning of the development stage, to June 30, 2006
      4Statements of Cash Flows for the six
        months ended June 30, 2006 and 2005 and the period from January 1, 2005,
        beginning of the development stage, to June 30, 2006
      5Notes to Financial Statements
      6


- 2 -

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ARVANA INC.(A DEVELOPMENT STAGE COMPANY) 
  CONSOLIDATED INTERIM BALANCE SHEET 
  (EXPRESSED IN US DOLLARS) 
  (UNAUDITED)

|                                                                |   | June 30,    |  
|--------------------------------------------------------------- | - | ----------- | -
|                                                                |   | 2006        |  
|                                                                |   |             |  
|                                                                |   |             |  
|ASSETS                                                          |   |             |  
|                                                                |   |             |  
|Current                                                         |   |             |  
|Cash and cash equivalents                                       | $ | 45,956      |  
|Receivables                                                     |   | 123,375     |  
|Amounts due from related parties (Note
      6)                 |   | 27,850      |  
|                                                                |   |             |  
|                                                                |   | 197,182     |  
|Deferred income tax asset,                                      |   |             |  
|net of valuation allowance of $614,748                          |   | -           |  
|Property and equipment(Note 5)                                  |   | 173,639     |  
|                                                                |   |             |  
|                                                                | $ | 370,821     |  
|                                                                |   |             |  
|                                                                |   |             |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                            |   |             |  
|                                                                |   |             |  
|Current                                                         |   |             |  
|Accounts payable and accrued
      liabilities                  | $ | 152,156     |  
|Amounts due to related parties (Note 6)                         |   | 122,321     |  
|                                                                |   |             |  
|                                                                |   | 274,477     |  
|                                                                |   |             |  
|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           |   | 13,892      |  
|Additional paid-in capital                                      |   | 18,701,362  |  
|Shares to be issued (Note
      6)                              |   |             |  
|Deficit                                                         |   | (95,331     | )
|Deficit accumulated during
      the development stage          |   | (18,523,579 | )
|                                                                |   |             |  
|                                                                |   | 96,344      |  
|                                                                |   |             |  
|                                                                | $ | 370,821     |  

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

---

ARVANA INC.(A DEVELOPMENT STAGE COMPANY)
  CONSOLIDATED INTERIM STATEMENT OF OPERATIONS 
  (EXPRESSED IN US DOLLARS) 
  (UNAUDITED)

|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   | Cumulative amounts        |  
|----------------------------------------------------- | - | -------------------------- | - | - | ------------------------ | - | - | -------------------- | - | - | --------- | - | - | ------------------------- | -
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   | from the beginning of the |  
|                                                      |   | For the three months ended |   |   | For the six months ended |   |   | development stage on |  
|                                                      |   | June 30,                   |   |   | June 30,                 |   |   | January 1, 2005 to   |  
|                                                      |   | 2006                       |   |   | 2005                     |   |   | 2006                 |   |   | 2005      |   |   | June 30, 2006             |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|OPERATING COSTS                                       |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|Administration                                        | $ | 217,304                    |   | $ | 89,955                   |   | $ | 529,319              |   | $ | 92,076    |   | $ | 1,489,894                 |  
|Depreciation                                          |   | 75                         |   |   | -                        |   |   | 150                  |   |   | -         |   |   | 350                       |  
|Research and development                              |   | 38,751                     |   |   | -                        |   |   | 77,502               |   |   | -         |   |   | 130,336                   |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|                                                      |   | 256,130                    |   |   | 89,955                   |   |   | 606,971              |   |   | 92,076    |   |   | 1,620,580                 |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|OTHER ITEMS                                           |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|Stock-based compensation
      (Note 7)               |   | 1,424,000                  |   |   | -                        |   |   | 1,424,000            |   |   | -         |   |   | 9,656,540                 |  
|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           |   | (1,680,130                 | ) |   | (89,955                  | ) |   | (2,030,971           | ) |   | (92,076   | ) |   | (18,523,579               | )
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|Income taxes                                          |   | -                          |   |   | -                        |   |   | -                    |   |   | -         |   |   | -                         |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|Net loss of the period                                | $ | (1,680,130                 | ) | $ | (89,955                  | ) | $ | (2,030,971           | ) | $ | (92,076   | ) | $ | (18,523,579               | )
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|Loss per share - basic and diluted                    | $ | (0.12                      | ) | $ | (0.01                    | ) | $ | (0.15                | ) | $ | (0.01     | ) |   |                           |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|                                                      |   |                            |   |   |                          |   |   |                      |   |   |           |   |   |                           |  
|Weighted average number of common shares outstanding  |   | 13,891,500                 |   |   | 8,403,000                |   |   | 13,891,500           |   |   | 9,153,000 |   |   |                           |  

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

---

ARVANA INC.(A DEVELOPMENT STAGE COMPANY)
  CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 
  (EXPRESSED IN US DOLLARS) 
  (UNAUDITED)

|                                                                                                |   |                          |   |   |                      |   |   | Cumulative amounts        |  
|----------------------------------------------------------------------------------------------- | - | ------------------------ | - | - | -------------------- | - | - | ------------------------- | -
|                                                                                                |   |                          |   |   |                      |   |   | from the beginning of the |  
|                                                                                                |   | For the six months ended |   |   | development stage on |  
|                                                                                                |   | June 30,                 |   |   | January 1, 2005 to   |  
|                                                                                                |   | 2006                     |   |   | 2005                 |   |   | June
      30, 2006       |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                            |   |                          |   |   |                      |   |   |                           |  
|Net loss for the period                                                                         | $ | (2,030,971               | ) | $ | (92,076              | ) | $ | (18,523,579               | )
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|Adjustments to reconcile net loss for the period to
      net cash used in operating activities |   |                          |   |   |                      |   |   |                           |  
|Depreciation                                                                                    |   | 150                      |   |   | -                    |   |   | 350                       |  
|Stock-based compensation                                                                        |   | 1,424,000                |   |   | -                    |   |   | 9,656,540                 |  
|Loss on acquisition of
      Arvana Networks                                                    |   | -                        |   |   | -                    |   |   | 7,013,310                 |  
|Loss on acquisition of Arvana Comunicacoes                                                      |   | -                        |   |   | -                    |   |   | 233,149                   |  
|Increase in receivables                                                                         |   | (122,848                 | ) |   | -                    |   |   | (95,153                   | )
|Increase(decrease) in payables and accrued liabilities                                          |   | (107,047                 | ) |   | 7,746                |   |   | 22,562                    |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|Net cash used in operations                                                                     |   | (836,717                 | ) |   | (84,330              | ) |   | (1,692,823                | )
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                            |   |                          |   |   |                      |   |   |                           |  
|Acquisition of equipment                                                                        |   | (55,100                  | ) |   | -                    |   |   | (94,117                   | )
|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                                             |   | (55,100                  | ) |   | -                    |   |   | (25,852                   | )
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                            |   |                          |   |   |                      |   |   |                           |  
|Amounts due to / from related parties                                                           |   | 101,709                  |   |   | (216,526             | ) |   | (358,751                  | )
|Contribution to capital                                                                         |   | -                        |   |   | 900                  |   |   | 900                       |  
|Stock subscriptions received                                                                    |   | -                        |   |   | 562,500              |   |   | -                         |  
|Proceeds from issuance of common
      stock                                                    |   | -                        |   |   | 300,000              |   |   | 2,121,250                 |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|Net cash provided by financing activities                                                       |   | 101,709                  |   |   | 646,874              |   |   | 1,763,399                 |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|Increase in cash and cash equivalents                                                           |   | (790,108                 | ) |   | 562,544              |   |   | 44,724                    |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|Cash and cash equivalents, beginning of period                                                  |   | 836,064                  |   |   | 1,232                |   |   | 1,232                     |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|Cash and cash
      equivalents, end of period                                                  | $ | 45,956                   |   | $ | 563,776              |   | $ | 45,956                    |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|                                                                                                |   |                          |   |   |                      |   |   |                           |  
|Supplementary information                                                                       |   |                          |   |   |                      |   |   |                           |  
|Interest paid                                                                                   | $ | -                        |   | $ | -                    |   | $ | -                         |  
|Taxes Paid                                                                                      |   | -                        |   |   | -                    |   |   | -                         |  

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

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

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

Arvana Inc., (the Company) (formerly Turinco, Inc.)
  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. On July 24, 2006,
  the shareholders approved a change of the Companys name from Turinco,
  Inc. to Arvana Inc.

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

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
  Internet Protocal (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. Concurrently with the activity in Arvana Networks, management has
  identified a communications company in Germany that is presently in the carrier
  pre-select and wholesale carrier business carrying traffic to Turkey. Arvana
  has acquired this Company and plans on expanding its business including VoIP
  and calling card services. A full discussion of this acquisition can be found
  in Note 9 on Subsequent Events.

These consolidated interim financial statements for the six-month
  period ended June 30, 2006, include the accounts of the Company, its subsidiary
  Arvana Networks (including its wholly-owned subsidiary Arvana Par and 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
  June 30, 2006, the Company has an accumulated deficit during the development
  stage of $18,523,579. 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 June 30, 2006, had $45,956 remaining to fund its operational costs. Management
  plans to raise $3,000,000 to $5,000,000 in additional equity capital over the
  next twelve months to finance the operations and capital requirements of the
  Company in 2006 and 2007. 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.

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

2.          
  Summary of Significant Accounting Policies

a)Basis of presentationThe 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 Arvana Inc. for the six-month periods ended
  June 30, 2006 and 2005, and for the cumulative amounts from the beginning of
  the development stage on January 1, 2005, through June 30, 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 generally 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)EstimatesThe 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 transactionsArvana, 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 June 30, 2006, was 2.17, stated
  in the Brazilian Real per one US dollar. The average exchange rate during the
  six-month period ended June 30, 2006, was 2.1767 stated in the Brazilian Real
  per one US dollar.

d)Comprehensive incomeThe 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.

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

e)Cash equivalentsThe 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 yearsOffice equipment
      5 yearsComputer hardware
      5 yearsSoftware
      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 instrumentsFinancial 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 June 30, 2006, the estimated
  fair values of financial instruments were considered by management to be not
  materially different from their carrying values due to their short term to maturity
  or capacity for prompt liquidation.

h)Concentration of
  credit riskCash 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
  obligationsThe 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.

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

j)Income taxesIncome 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 compensationThe 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. The Company granted stock options in June 2006 and
  accordingly recorded an expense of $1,424,000 in the period. There were no options
  granted or outstanding for the six month period ended June 30, 2005.

l)Net loss per shareBasic 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 June 30, 2005,
  there were no potentially dilutive instruments. As of June 30, 2006, the Company
  had 1,600,000 of potentially dilutive instruments that were excluded from the
  determination of dilutive loss per share.

3.          
  Arvana Networks Transaction

On August 18, 2005, Arvana Inc. (Arvana) 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 Arvana 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 Arvana 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 Arvana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

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

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.

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 had also entered into agreements with Gloinfo to provide
  services to Arvana Com and be reimbursed for costs incurred. As of June 30,
  2006, Gloinfo owes Arvana Com an amount of 266,984 Brazilian Reais to be reimbursed
  in the form of either cash or an invoice showing substantiated expenses.

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.

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

5.          
  Property and Equipment

|                  |   |         |  |   | Accumulated  |  |   | Net              | 
|----------------- | - | ------- |  | - | ------------ |  | - | ---------------- | 
|2006              |   | Cost    |  |   | Amortization |  |   | Book
      Value | 
|                  |   |         |  |   |              |  |   |                  | 
|Equipment         | $ | 45,092  |  | $ | 350          |  | $ | 44,742           | 
|Computer hardware |   | 61,117  |  |   | -            |  |   | 61,117           | 
|Software          |   | 67,780  |  |   | -            |  |   | 67,780           | 
|                  |   |         |  |   |              |  |   |                  | 
|                  | $ | 173,989 |  | $ | 350          |  | $ | 173,639          | 

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 $ 172,487 as of June 30, 2006.

6.          
  Related Parties

At June 30, 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.

At June 30, 2006, the Company owed $61,750 to three directors
  for services rendered during the year. This amount is to be paid part in cash
  and part in stock at a future date with the number of common shares determined
  by the fair value of the shares on the settlement date. The amounts owing bear
  no interest.

For the six month period ended June 30, 2006, $98,752 was incurred
  by the Company for services rendered by the President, the Chief Financial Officer
  and the Corporate Secretary of Arvana Inc. As at June 30, 2006, $57,054 was
  owed to these three individuals.

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

7.          
  Share Capital

(a) During the six-month period ended June 30, 2006, the Company
  did not have any have any changes to share capital.

(b) The Company follows SFAS No. 123R, 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) On June 5, 2006, the Company granted 1,600,000 stock options
  to its directors and employees.

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,
  $1,153 is located in Canada, $55,100 is located in the United States and $117,386
  is located in Brazil.

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

9.          
  Subsequent Events

On July 26, 2006, the Company received an advance on a private
  placement in the amount of 500,000 Euros. This amount was required in order
  to complete the first closing of a transaction to acquire a German based communications
  company described below.

On August 9, 2006, Arvana Inc. (the Company), Brulex
   Consultadoria Economica E Marketing Ltda. (the Vendor) and
  Hallotel Deutschland GmbH (Hallotel) entered into a share purchase
  agreement (the Share Purchase Agreement) pursuant to which the Company
  will acquire control over Hallotel through the acquisition (the Acquisition)
  of all of the outstanding shares of BCH Beheer B.V., a wholly-owned subsidiary
  of the Vendor that owns all of the outstanding shares of Hallotel. The purchase
  price for the Acquisition is payable by way of:

|(i)   | the issue of 3,541,700 shares of common stock of the
        Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(ii)  | the payment of €500,000 in cash; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(iii) | the issuance of a promissory note in the principal amount
        of €250,000, provided that the promissory note will not be payable
        and will be deemed cancelled if certain information as set out in the
        Share Purchase Agreement to be delivered by the Vendor to the Purchaser
        within 30 days of the closing of the Acquisition relating to certain assets
        is not delivered or, if delivered, does not materially conform with information
        provided to the Company as of the date of the Share Purchase Agreement.

Pursuant to the Share Purchase Agreement, the purchase price
  will be increased by:

|(i)  | the price actually paid by Hallotel for any telephony
        technology hardware or software assets acquired after October 19, 2005
        and before the closing date of the Acquisition that are required for the
        provision of established Hallotel services to its customers; and
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                               
|(ii) | any commissions paid by Hallotel to its salespersons
        in respect of carrier pre-select sign-ups on net new customers after October
        19, 2005 and before the closing date of the Acquisition, as provided in
        the Share Purchase Agreement.                               

The Vendor has agreed that it will not sell or transfer any of
  the Companys shares issued as part of the consideration for the Acquisition
  (or any interest therein) until one year after the closing date of the Acquisition.
  In addition, the Vendor has agreed to deposit such Company shares in escrow
  with the Company to be released from escrow twelve months after the closing
  date, except in the event of a claim made by the Company under the Share Purchase
  Agreement, in which case such Company shares will be released on a final resolution
  of the claim.

Hallotel is a communications service provider offering carrier
  pre-select and wholesale carrier services and focused on the provision of long
  distance telephone calls between Germany, Austria, Switzerland and Turkey

---

|ARVANA INC.                                       
|--------------------------------------------------
|(A development stage company)                     
|NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
|Six Months Ended June 30, 2006 and 2005           
|(expressed in US dollars)                         
|(Unaudited)                                       
|                                                  

10.         Commitments

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.

---

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

In this Quarterly Report: (i) references to we, us, our,
or the Company refer to Arvana Inc. (formerly, Turinco Inc.) and its
wholly-owned subsidiary, Arvana Networks Inc. which wholly owns Arvana
Participações, a company that holds a 75% interest in Arvana Comunicações do
Brazil S.A., unless the context suggests otherwise; and (ii) all dollar amounts
are expressed in United States dollars, unless otherwise indicated.

You should read the following discussion and analysis of our
financial condition, results of operations and plan of operations together with
the interim consolidated financial statements and notes to the interim
consolidated financial statements included in this Quarterly Report, as well as
our most recent annual report Form 10-KSB for the year ended December 31, 2005.

FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial performance.
You can often identify forward-looking statements by terminology such as may,
will, should, intends, expects, plans, anticipates, believes,
estimates, predicts, potential, goal, or continue or the negative of
these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks and uncertainties, including the
risks and uncertainties set forth in reports and other documents we have filed
with or furnished to the SEC, including, without limitation, our annual report
on Form 10-KSB for the year ended December 31, 2005, any of which may cause our
actual results, levels of activity or performance to be materially different
from any future results, levels of activity or performance expressed or implied
by these forward-looking statements.

Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. Except as required by applicable law, we do
not undertake to update any of the forward-looking statements to conform these
statements to actual results.

OVERVIEW

Arvana Inc. is a company engaged in the telecommunications
industry that plans to provide voice over the internet (VOIP) telephone
technology services. Our business plan is to be a provider of Internet services
dedicated to serving our customers with complete turnkey IP telephone solutions
which enable fast deployment of voice services over existing data networks.

Proposed Acquisition of Hallotel

On August 9, 2006, the Company, Brulex  Consultadoria
Economica E Marketing Ltda. (the Vendor) and Hallotel Deutschland GmbH
(Hallotel) entered into a share purchase agreement pursuant to which we plan
to acquire control over Hallotel through the acquisition of all of the
outstanding shares of BCH Beheer B.V., a wholly-owned subsidiary of the Vendor
that owns all of the outstanding shares of Hallotel. The purchase price for the
acquisition is 5,000,000 Euros to be paid by way of the issuance of 3,541,700 of
our shares, payment of 500,000 Euros in cash, which we received from an advance
on a private placement of our securities to be completed, and the issuance of a
promissory note in the amount of 250,000 Euros.

- 3 -

---

Business of Hallotel

Hallotel, a company based in Frankfurt, Germany, was organized
under the laws of Germany in August, 2000 and is a telecommunications service
provider focused on the provision of long distance telephone calls between
Germany, Austria, Switzerland and Turkey. Hallotels switching facilities and
agreements with the incumbent carriers enables its customers to call between
cities within Germany and to international destinations. Hallotels marketing
efforts and rate structures are designed to be attractive to those customers
that are likely to call frequently between countries and specifically between
Germany, Russia and Turkey. As an example, Hallotel focuses on generating
revenues by marketing to members of the Turkish community living in Germany who
make frequent calls to their families and friends in Turkey.

The services provided by Hallotel are comprised primarily of
the following:

Carrier Pre-Select:Carrier Pre-Select (CPS) is a
service that allows the customer to route their outgoing calls using Hallotels
network. There is no installation or programming of equipment required and the
customer does not have to dial a code to activate the service. CPS gives the
customer access to competitive call rates because Hallotel is free to negotiate
wholesale deals with different network providers and to make use of cost
effective VoIP technology and the Internet whenever appropriate.

Call By Call Pre-Select:Call by call pre-select service
is provided in essentially the same manner as CPS described above, except that
the customer does not need to authorize the change of long distance access to
one of Hallotels carrier partners. Call by call pre-select allows the customer
to choose Hallotels long distance service and benefit from competitive rates at
any time and for any particular call and the customer can choose on a call by
call basis. The customer initially establishes an account with Hallotel and may
then make long distance calls at any time by using a pre-select code ahead of
all routing and called-party numbers.

Wholesale Carrier Services.Hallotel has established
agreements with certain other telecommunications service providers whereby
Hallotel will accept long distance telephone traffic from these wholesale
carriers and provide terminations in Germany and Turkey.

Calling Cards.Hallotel is in the process of producing
calling cards to be distributed to a network of resellers in Austria and
Germany. A calling card user can call a toll free number to make long distance
calls to destinations throughout the world. Hallotel markets these cards with
promotional offers and calling rates that are particularly attractive for those
customers that call Turkey frequently and who are looking for reliability,
quality and competitive pricing. All such calling cards are prepaid.

We plan to meet with management of Hallotel upon the completion
of the acquisition of Hallotel in order to define our plan of operations for
Hallotel.

Arvana in Brazil

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. Arvana Pars activities have included market analysis, development of
business plans, identifying appropriate local

- 4 -

---

associates and development of technical plans required in order
to launch Internet telephone services in Brazil.

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, to acquire 100% ownership of Arvana Com, and to develop our planned
Brazilian Internet telephone business independent of Gloinfo, which is subject
to our achieving additional financing, as set forth below.

Development Stage Company

We are presently in the development stage of our business. To
June 30, 2006, we had not achieved any revenues and we require substantial
additional financing in order to continue with our plan of operations. Our
ability to continue as a going concern is dependent upon our ability to obtain
additional financing.

PLAN OF OPERATIONS

Our present plan of operation for the next twelve months, which
is subject to our achieving additional financing, 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 technical staff centered in Annapolis Maryland.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 2. | If the market conditions are appropriate, in the future,
      Arvana Comunicações in Brazil plans to complete the acquisition of the
      STFC license which will enable the company 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. | Arvana Networks plans to complete the development of
      partnerships and facilities in Argentina and Bolivia based on the
      experience gained in Brazil. This part of the plan will involve the
      development of a web-based Internet telephone service under the branding
      of Televoz which will solicit subscribers who frequently make long
      distance calls to North America and Europe.                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 4. | We plan to complete the acquisition of Hallotel as
      promptly as possible in accordance with the terms of the Share Purchase
      Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Immediately after completion of the acquisition of Hallotel, we
plan to meet with Hallotel management in order to define our plan of operations
for Hallotel. This plan will then be presented to our board of directors for
their evaluation and approval. We will also re-evaluate our plan of operations
for Arvana Networks Brazilian operations in order to assess which elements of
this plan of operations can be achieved with the financing that is available to
us. As discussed further below, we are presently not able to achieve our plan of
operations for the Arvana Networks without additional financing. Our board of
directors will also consider how to allocate any new financing that we achieve
between our plan of operations for Arvana Networks and expansion of the Hallotel
business. The evaluation may result in a

- 5 -

---

determination to significantly scale back our plan of
operations for Arvana Networks and our Internet telephony business, as described
in more detail below.

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
$45,956 and a working capital deficit of $77,295 as of June 30, 2006. Based on
our planned expenditures, we will require a minimum of $2,000,000 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 Europe, Brazil and other
countries.

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.

Internet Telephony Business

In each country that we target in our internet telephony
business, 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 in our Internet telephony
business 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 infrastructure 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

- 6 -

---

each subscriber to call another subscriber anywhere on an
unlimited time basis at no 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 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.

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.

Termination of the Investment Agreement

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
owned 75% of Arvana Com and Gloinfo owned 25%.

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 mutual 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 of the Investment Agreement
that have been agreed to in principle by Gloinfo are as follows:

|(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.

- 7 -

---

|(e) | Arvana Com will obtain the Televoz branding and the
      website associated with this product from Gloinfo.                                                                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                   
|(f) | 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 have negotiated the main terms of a definitive agreement
with Gloinfo pursuant to which the Investment Agreement will be terminated. This
definitive agreement has not been executed to date and there is no assurance
that we will complete this 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.

Subject to our achieving additional financing, we plan 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 SCM license was granted and enables Arvana Com to conduct its
internet telephone business in Brazil. Based on this authorization, we must
comply with the ANATEL laws and regulations and present an installation project
summary to ANATEL by September 3, 2006. We have until September 3, 2007 to begin
commercial operations 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 Internet telephony businesses which would
offer us the ability to deploy Internet telephone solutions and develop and
expand our customer base and business. We anticipate that our determination to
pursue any prospective acquisitions or new business opportunities will be
contingent upon our achieving additional financing, of which there is no
assurance.

RESULTS OF OPERATIONS

Our results of operations for the six month periods ended June
30, 2006 and 2005 are summarized below. We commenced with our plans to enter
into the Internet telephony business in March 2005. As a result, we had limited
operating results in the first six months of 2005. The following table provides
a summary of our financial results for the periods indicated:

Six months ended
      June 30, 2006
    Six months ended
      June 30, 2005
    Cumulative Amounts from the
      beginning of the development stage on January 1,
      2005 to June 30, 2006Administration
    $529,319
    $92,076
    $1,489,894Depreciation
    $150
    $0
    $350Research and Development
    $77,502
    $0
    $130,336Stock Based Compensation
    $1,424,000
    $0
      $9,656,540


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Loss on acquisition of Arvana Networks
      $0
    $0
    $7,013,310Loss on acquisition of Arvana Com
      $0
    $0
    $233,149Net Loss for the Period
    $2,030,971
    $92,076
    $18,523,579


Revenues

We have not earned any revenues to the end of the second
quarter of 2006. 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 by the Brazilian regulatory agency ANATEL. This license
was 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 six months of fiscal 2006, we had
administration expenses of $529,319 compared to $92,076 for the first six months
of fiscal 2005. Administration expenses in the six months ended June 30, 2005
were for investigation and analysis of the Brazilian proposal and operations.
For the six months period ended June 30, 2006, these expenses related to
directors fees, consulting fees, travel expenses, office services and rent.

Research and Development/Technical Operations

Research and development expenses associated with technical
operations were $77,502 for the first six months of fiscal 2006. Our research
and 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 our technology and hardware platform.

Stock-based Compensation

On June 5, 2006, our board of directors approved a 2006 Stock
Option plan and granted options to various members of our company and certain
subsidiaries. The options granted vest over a three year period and have an
exercise price of $1.25. As a result, we recorded a stock based compensation
expense for the six month period ended in June 30, 2006 in the amount of
$1,424,000.

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 that 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 to IP Horizons LLC. 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.

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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 $2,030,971 or $0.15 per share for the
first six months of fiscal 2006 compared to a loss of $92,076 or $0.01 per share
for first six months of fiscal 2005. The loss reflects the increased
administration and research and development expenses associated with the
development of our VOIP telephone services business with the majority of the
loss being the stock based compensation expense.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2006, we had cash of $45,956 and a working
capital deficit of $77,295. 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 six months of fiscal 2006,
as discussed above. We require additional financing in order to carry out our
objectives.

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 includes projected administration costs. We
anticipate that we will require a minimum of approximately $2,000,000 in
additional financing to proceed with our plan of operations over the next twelve
months. In addition, we anticipate that we 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 we plan to reduce the amounts that we
spend on the development of our business opportunities and our administrative
expenses in order to be within the amount of capital resources that are
available to us.

Cash Used in Operating Activities

We used cash in operations in the amount of $836,717 during the
first six months of 2006 and $84,330 during the same six month period in 2005,
which reflects our net loss. Cash used in operations was attributable primarily
to administration and research and development expenses incurred with the
commencement of our business of the development of VOIP telephone services.

Cash Used in Investing Activities

We acquired software in the amount of $55,100 during the first
  six months of fiscal 2006. In 2005 for this same period, there were no investing
  activities. In the first quarter of 2006, we purchased software that allows
  customers to access VOIP service through their computers and in the second quarter,
  we purchased a billing system and control software package.

Cash Flows from Financing Activities

Financing activities provided cash of $101,709 in the first six
months of 2006, compared to $646,874 in the prior period of 2005. 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. In the second
quarter, we increased our payables due to related parties as we have limited
funds and are accruing amounts due to some employees, directors and

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contractors. During the first six months of 2005, we completed
a private placement of our stock for proceeds of $300,000, received stock
subscriptions of $562,500 in advance of a private placement and repaid $216,526
to related parties. In July 2006, we received proceeds of $681,400 in advance of
a private placement to be completed in August 2006.

Going Concern

We have not earned any revenues to the end of the second
quarter of 2006, we have not attained profitable operations and we are dependent
upon obtaining financing to purse our plan of operations. As a result, our
auditors have expressed substantial doubt about our Companys ability to
continue as a going concern in their report relating to our audited consolidated
financial statements contained in our annual report on Form 10-KSB for the year
ended December 31, 2005.

Future Financings

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

Off-Balance Sheet Arrangements

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

CRITICAL ACCOUNTING POLICIES

Basis of Presentation

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

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 June
30, 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 June 30, 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 June 30, 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 June 30, 2006.

Item
3.               
Defaults Upon Senior Securities

None.

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

None.

Item
5.               
Other Information

None.

Item
6.               
Exhibits

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

Exhibit Number
    Description of Exhibit3.1
    Articles of Incorporation(1)3.2
    Bylaws, as amended(1)10.1
    Agreement and Plan of Reorganization between the Company,
      Arvana Networks, Inc. and the Shareholders of Arvana Networks, Inc. dated
      August 18, 2005(2)10.2
    Investment Agreement dated October 6, 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)10.4
    Share Purchase Agreement dated August 9, 2006 among
      Brulex-Consultadoria Economica E Marketing Ltda, Turinco Inc. and Hallotel
      Deutschland GmbH(4)14.1
    Code of Ethics (5)


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31.1
      Certification of Chief Executive
          Officer pursuant to Rule 13a-14(a) of the Exchange Act31.2
      Certification of Chief Financial
          Officer pursuant to Rule 13a-14(a) of the Exchange Act32.1
      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 200232.2
      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


|(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 Current Report on Form 8-K filed with the SEC on August 15,
      2006.       
|(5) | 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.      

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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.

|      | ARVANA INC.                                           | 
|----- | ----------------------------------------------------- | 
|      |                                                       | 
|By:   | /s/ Michael Jervis                                    | 
|      | Michael Jervis, President and Chief Executive Officer | 
|      |                                                       | 
|Date: | August 16, 2006                                       | 

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