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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF1934

For the fiscal year ended: December 31, 2006

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
  OF THE SECURITIES EXCHANGEACT OF 1934

For the transition period from _____ to  ______

Commission File Number: 0-30695

ARVANA INC.(Name of small
business issuer in its charter)

|NEVADA                                                               | 87-0618509                               
|-------------------------------------------------------------------- | -----------------------------------------
|(State or other jurisdiction of incorporation or                     | (I.R.S. Employer Identification No.)     
|organization)                                                        |                                          
|                                                                     |                                          
|Suite 2610, 1066 West Hastings Street                                |                                          
|Vancouver, British Columbia, Canada                                  | V6E 3X2                                  
|(Address of principal executive offices)                             | (Zip Code)                               
|                                                                     |                                          
|Issuers telephone number: (604) 684-4691                            |                                          
|                                                                     |                                          
|Securities registered under Section 12(b) of the Exchange
      Act: |                                          
|                                                                     |                                          
|Title of each class                                                  | Name of each exchange on which registered
|                                                                     |                                          
|Not Applicable                                                       | Not Applicable                           

Securities registered under Section 12(g) of the Exchange
Act:

Common Stock, $0.001 par value(Title of
class)

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[   ]

Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B is not contained in
this form, and no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
[ X ]

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 issuer's revenues for its most recent fiscal year
$2,832,819

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State the aggregate market value
of the voting and non-voting common equity held by non-affiliates computed by
reference to the price at which the common equity was sold, or the average bid
and asked price of such common equity, as of a specified date within the past 60
days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) $5,175,594 as at March 20,
2007.

State the number of shares
outstanding of each of the issuer's classes of common equity, as of the latest
practicable date. 20,702,375 common shares, no par value outstanding as at
March 20, 2007.

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

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|ITEM 1. | DESCRIPTION OF BUSINESS.
|------- | ------------------------

FORWARD-LOOKING STATEMENTS

The information in this Annual Report on Form 10-KSB contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements involve risks and uncertainties,
including statements regarding our capital needs, business plans and
expectations. Such forward-looking statements involve risks and uncertainties
regarding the our planned VoIP business, availability of funds, government
regulations, common share prices, operating costs, capital costs, our ability to
deploy our planned business and generate revenues and other factors. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. These statements are based on certain assumptions and analyses made
by our management in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors they believe are appropriate in the circumstances. Actual events or
results may differ materially. In evaluating these statements, you should
consider various factors, including the risks outlined below, and, from time to
time, in other reports we file with the SEC. These factors may cause our actual
results to differ materially from any forward-looking statement. We disclaim any
obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements.

Overview

We are engaged in the telecommunications industry through our
Hallotel and Arvana Networks subsidiaries. Hallotel is a German based
telecommunications service provider that is focused on the provision of long
distance telephone calls between Germany, Austria, Switzerland and Turkey.
Hallotel has been in operations since August, 2000, and was acquired by us on
August 23, 2006. Arvana Networks was planning to provide voice over the internet
(VoIP) telephone technology services and has been in the start-up phase of its
operations since March, 2005. Due to our new focus on the Hallotel operation and
the limitation of funds, the plans to develop Arvana Networks as a provider of
Internet services have been put on hold.

Corporate Organization

We were incorporated under the laws of the State of Nevada on
June 16, 1977. Our authorized capital is comprised of 100,000,000 shares of
common stock, par value of $0.001.

Subsidiaries

We operate through our wholly-owned subsidiaries which include
the following:

|1. | Arvana Networks Inc., a company incorporated in Barbados
      in January, 2005.                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                
|2. | Arvana Participações S.A., a company incorporated in
      Brazil in April, 2005 and its subsidiary Arvana Comunicações.
  S.A..               
|   |                                                                                                                                                
|3. | BCH Beheer, a company incorporated in the Netherlands in
      October, 2004, and its wholly- owned subsidiary Hallotel Deutschland
      GmbH.

- 3 -

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Acquisition of Arvana Networks

We acquired Arvana Networks in August, 2005 in a transaction
whereby we issued 4,500,000 shares of our common stock to the former
shareholders of Arvana Networks. Included in the 4,500,000 shares were 1,500,000
shares that were not considered issued for accounting purposes as the
consideration for those shares had not yet been received. In 2007, the 1,500,000
shares were returned to the Company and cancelled. 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. Due to the termination of an agreement with our partner Gloinfo
500 Soluções EM Telemática Ltda (described below), we are no longer pursuing
business in Brazil.

Acquisition of BCH Beheer and Hallotel

On August 9, 2006, we entered into a share purchase agreement
with Brulex  Consultadoria Economica E Marketing Ltda. (Brulex) and Hallotel
whereby we agreed to acquire Hallotel through the acquisition of all of the
outstanding shares of BCH Beheer from Brulex. We completed this transaction on
August 23, 2006, and we paid to Brulex the following consideration for the
purchase:

- the issuance of 3,541,700 shares of our common stock;
- the payment of 500,000 Euros in cash (equivalent to $639,700 based on an
  exchange rate of $1.00 per 0.7816 Euros); and
- the issuance of a promissory note in the amount of 250,000 Euros
  ($319,850).

In addition, we provided for an adjustment to the purchase
price for certain payments made by Hallotel after October, 2005, and up to the
closing date of August 23, 2006; 80,932 Euros ($103,544) for certain telephony
technology hardware purchased; and 277,630 Euros ($355,200) for actual
commissions paid by Hallotel to its third party sales persons in respect of
carrier pre-select sign-ups on net new customers. The total amount provided for
in these adjustments is 358,562 Euros ($458,744) and is payable to the
vendor.

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 enable 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.

- 4 -

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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 will market 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.

Arvana in Brazil

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. Later in 2005, we entered into an
investment agreement with a local associate 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.

This business did not develop in accord with our plan or
expectations and we decided to withdraw from the telecommunications market in
Brazil. We have since terminated our agreement with Gloinfo, as discussed
below.

Based on our experience and our analysis of the highly
competitive market and the adverse regulatory and tax environment in Brazil, we
have decided to end our activities in Brazil for the foreseeable future.

Termination of the Investment Agreement in
Brazil

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. 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%.

- 5 -

---

On October 31, 2006, we signed a definitive agreement with Gloinfo
  pursuant to which the Investment Agreement has been terminated. The main terms
  of the termination of the Investment Agreement that have been agreed to are
  as follows:

- The terms of the Investment Agreement are cancelled and Gloinfo transferred
  its 25% ownership to Arvana Par.
- The customers that were to be transferred to Arvana Com following the final
  closing will remain with Gloinfo.
- The employees that were to be transferred following the final closing will
  remain with Gloinfo.
- Employees that were hired into the project were terminated and the
  termination costs were shared 75% by Arvana Com and 25% by Gloinfo.
- Arvana Com will obtain the Televoz branding and the website associated
  with this product from Gloinfo.
- Arvana Com will retain ownership and operating control of the technology
  platform originally used by Gloinfo to service their customers. Gloinfo
  purchased and installed a new technology platform.

Our Plan of Operations

Our present plan of operation for the next twelve months is to
focus on continuing and expanding the business of Hallotel. Since completion of
the acquisition of Hallotel, we have been working with the management of
Hallotel in order to develop and define our plan of operations for Hallotel.

We anticipate that this plan of operations may include the
following objectives, subject to our achieving additional financing:

VoIP Services

Hallotel intends to launch VoIP services specifically targeted
to immigrant communities and small and medium sized enterprises which operate
multi-nationally. Hallotel is negotiating agreements with broad band suppliers
to provide high speed data services which will then be bundled with voice over
internet protocol (VoIP) telephony services. The combined package will be priced
at an attractive rate when compared to buying the services separately, and will
provide discounted or unlimited calling on a zone basis as selected by the
customer e.g. unlimited calling within Germany, or specific groups of countries
within the EEC, and Eastern Europe.

Hallotel is now testing the software and equipment to deploy
VoIP across Germany and is negotiating agreements with resellers and
distributors to launch service in the second quarter of 2007.

Wholesale Carrier Services

This continues to present significant opportunities and Hallotel
  is expanding capacity through additional equipment purchases. The Company has
  an ongoing objective to negotiate wholesale termination rates with countries
  that have large immigrant populations in Germany, and neighbouring countries
  such as Austria and Switzerland. These include Eastern and Southeastern Europe,
  the Middle East and Central Asia.

- 6 -

---

As discussed further below, we are presently not able to
achieve our plan of operations without additional financing. Our board of
directors has considered 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 resulted in a determination to significantly scale back
our plan of operations for Arvana Networks and our Internet telephony
business.

We anticipate spending approximately $3,000,000 to $4,000,000
to proceed with our plan of operations over the next twelve months. We had cash
in the amount of $233,452 and a working capital deficit of $1,486,521 as at
December 31, 2006. This deficit includes the balance payable for the BCH Beheer
transaction. Based on our planned expenditures, we will require a minimum of
$3,000,000 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
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.

Management Team

In December, 2006, Michael Jervis retired as President and
Chief Executive Officer. As a result of the acquisition of Hallotel, its Chief
Executive, Teyfik Oezcan was invited to join the Arvana board and was appointed
President and Chief Executive Officer on December 20, 2006, reflecting our
refocus. Mr. Oezcan established Hallotels business and personally involved in
negotiating the wholesale agreements for the carrier business. Leonard Gordon
resigned as Chief Financial Officer effective March 12, 2007. Karen Engleson was
appointed Acting Chief Financial Officer until a new Officer is appointed. She
was also appointed Corporate Secretary on October 17, 2005. Ms. Engleson is a
senior finance executive and has held a number of controllership positions with
one of the largest cable operators in Canada. She has been responsible for many
functions, including the preparation of the monthly financial statements,
budgeting and forecasting, operational controls, remittance processing,
collections, management information systems and facilities management. Since
July of 1996, Ms. Engleson has been the Controller for Multivision, the largest
wireless cable operator in Bolivia.

Competition

Our main competition is the incumbent telephone companies and
new specialized competitive service providers who use VoIP technology to enhance
their economic advantages.

In providing pre-select long distance telephone services, we
market in direct competition against established companies who offer various
long distance service plans to their existing customers. Additionally, there are
many competitors that are presently offering and plan to offer similar long
distance services using VoIP technology to customers that we have established as
our target for our telephony services. These competitors may be able to expand
their operations faster than we can due to greater access to capital and
financial resources and due to established brand names and customer recognition.

- 7 -

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Incumbent telephone companies and well established specialized
competitors have strong customer acceptance and offer brand name recognition in
the markets in which they compete. Further, established competitors will have
greater access to capital in order to defend their customer base or to expand
the telecommunications services that they provide.

In providing wholesale carrier services, our main competition
is the incumbent telephone companies that have well developed relationships and
contractual arrangements for trading in the provision of bulk transmission
facilities and interconnection agreements. These same companies however, are
often in the position of being customers for our transmission and
interconnection facilities and are inclined to respond well to our reliable and
economic wholesale services to the selective markets in which we specialize.

Research and Development Expenditures

Arvana Networks had spent several months developing voice
services for our project in Brazil. As part of this implementation we have
successfully customized and deployed several scalable, open-source software
systems, including:

- SIP proxy platform for voice, video and presence applications.
- A distributed far-end NAT traversal solution.
- Scalable, open-source relational databases.
- Various reporting and management interfaces, including SIP trace and Ping
  tools
- Graphing and performance management solutions.
- Trouble Ticket and Work Order management system.

This research and development program resulted in our
development of a SIP-based Internet Telephony Service Provider (ITSP) call
platform c/w VoIP Gateways and SS7 signaling translation and other subsystems.
These research and development activities were carried out by Arvana Networks
technology resources centered in Annapolis, Maryland.

We determined to terminate these research and development
activities during the fourth quarter of fiscal 2006. As a result, we have
terminated the services of our chief technology officer and his network
assistant at the end of fiscal 2006. This project has been put on hold until
further notice.

We spent $52,834 in research and development activities during
fiscal 2005 and $117,249 in fiscal 2006.

- 8 -

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|ITEM 2. | DESCRIPTION OF PROPERTIES.
|------- | --------------------------

We rent approximately 1300 square feet of office space at 1066
West Hastings Street in Vancouver, British Columbia, Canada that we use for our
principal executive offices. Our monthly rent payments total $6,000 Canadian
dollars.

We lease approximately 2000 square feet of office space at
Otto-Hahn-Strase 8 in Langen Germany for our Hallotel operations. Our monthly
lease payments are 1,490 Euros and the lease extends to February 1, 2008

|ITEM 3. | 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 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS.
|------- | ----------------------------------------------------------

No matters were submitted to a vote of our security holders,
through the solicitation of proxies or otherwise, during our fourth quarter
ended December 31, 2006.

- 9 -

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PART II

|ITEM 5. | MARKET FOR COMMON
      EQUITY AND RELATED STOCKHOLDER MATTERS.
|------- | ---------------------------------------------------------------

Market Information

Our common shares are quoted on the OTC Bulletin Board under
the symbol ARVI and on the Frankfurt Stock Exchange under the symbol T5U.F. The
following table indicates the high and low bid prices of our common shares
during the periods indicated:

OTCBB:QUARTER
    HIGH BID
    LOW BIDENDEDDecember 31, 2006
    $0.50
    $0.20September 30, 2006
    $1.00
    $0.35June 30, 2006
    $1.80
    $0.75March 31, 2006
    $2.12
    $1.75December 31, 2005
    $2.39
    $1.50September 30, 2005
    $2.40
    $2.05June 30, 2005
    $2.10
    $0.25March 31, 2005
    N/A
    N/AFRANKFURT (in Euros):QUARTER
    HIGH BID
    LOW BIDENDEDDecember 31, 2006
    0.42
    0.10September 30, 2006
    0.75
    0.33June 30, 2006
    1.46
    0.75March 31, 2006
    1.70
    1.42December 31, 2005
    1.60
    1.46September 30, 2005
    1.70
    1.70June 30, 2005
    N/A
    N/AMarch 31, 2005
    N/A
    N/A


The source of the high and low bid information for the OTCBB is
the NASD OTC Bulletin Board. The market quotations provided reflect inter-dealer
prices, without retail mark-up, markdown or commission and may not represent
actual transactions.

Holders of Common Stock

As at March 20, 2007, we had 20,702,375 shares of common stock
  issued and outstanding and there were 58 registered holders based on the records
  of the Companys transfer agent. The registered holders do not include
  beneficial owners of the Company's common shares whose shares are held in the
  names of various securities brokers, dealers and registered clearing agencies.

- 10 -

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Dividends

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:

|1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                             
|2. | Our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      shareholders who have preferential rights superior to those receiving the
      distribution.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities

We have reported sales of securities without registration under
the Securities Act of 1933 during our fiscal year ended December 31, 2006, on
the following Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K
that we have filed with the Securities and Exchange Commission.

Report
    Date of Filing with SECCurrent Report on Form 8K
    August 29, 2006Quarterly Report on Form 10-QSB for nine months ended
      September 30, 2006
    November 14, 2006Current Report on Form 8K
    December 22, 2006


We have not completed any sales of securities without
registration pursuant to the Securities Act of 1933 during the fiscal year ended
December 31, 2006, that were not reported on the Quarterly Reports on Form
10-QSB and Current Reports on Form 8-K described above.

Small Business Issuer Purchases of Equity Securities

During the quarter ended December 31, 2006, there were no
purchases of equity securities effected by the Company or any affiliated
purchasers.

- 11 -

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|ITEM 6. | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
      OF OPERATION.
|------- | ----------------------------------------------------------------

The following discussion of our financial condition, changes in
financial condition and results of operations for the year ended December 31,
2006 should be read in conjunction with our audited consolidated financial
statements and related notes for the year ended December 31, 2006.

Presentation of Financial Information

Our financial statements for the year ended December 31, 2006
include the accounts of:

- Arvana Networks;
- Arvana Par;
- Arvana Com;
- BCH Beheer and its wholly-owned subsidiary Hallotel Deutschland GmbH.

The accounts of BCH Beheer and Hallotel are included in our
statements of operations and statements of cash flows from August 23, 2006,
being the date of closing of our acquisition of BCH Beheer and Hallotel, through
December 31, 2006. Our results of operations presented below for periods prior
to August 23, 2006 do not include the results of operations of BCH Beheer and
Hallotel.

Results of Operations

References in the discussion below to 2006 are to our fiscal
year ended December 31, 2006. Similarly, references to 2005 are to our fiscal
year ended December 31, 2005. References to 2007 are to our current fiscal year
that will end December 31, 2007.

Our operations for the years ended December 31, 2006 and 2005
are summarized below. Our current activities relating to the development of our
planned VoIP telephone services business are reflected in the results of
operations for the year ended December 31, 2006 and 2005.

Year ended December 31,
      2006
    Year ended December 31,
      2005Revenues
    $2,832,819
    $0Costs of Sales
    ($2,242,209)
    $0Gross profit
    $590,610
    $0Operating Expenses:Selling and promotion
    $120,749
    $0General and Administration
    $1,522,285
    $960,575Research and Development
    $117,249
    $52,834


- 12 -

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Depreciation
    $71,117
    $200Other Items:Stock Based Compensation
    $413,150
    $8,232,540Loss on write-off of equipment
    $30,602
    $0Loss on acquisition of Arvana Networks
    $0
    $7,013,310Loss on acquisition of Arvana Com
    $45,888
    $233,149Income taxes
    $12,500
    $0Other comprehensive losses
    $59,530
    $0Comprehensive Loss for the Period
    $1,802,460
    $16,492,608


Revenues

Our revenues are attributable to the services provided by
Hallotel. We did not generate any revenues during the period prior to our
acquisition of Hallotel and do not generate any revenues outside of our Hallotel
business.

We reported gross revenues of $2,832,819 for fiscal 2006. All
of these revenues were generated by Hallotel during the period from our
acquisition of Hallotel on August 23, 2006 to December 31, 2006.

Cost of Sales

Our costs of sales are attributable to costs of sales incurred
by Hallotel in connection with providing its services.

Our cost of sales was $2,242,209 for fiscal 2006, representing
79.2% of revenues.

Gross Profits

Our gross profits were $590,610 for fiscal 2006, representing
20.8% of revenues. All of our gross profits were attributable to our Hallotel
business.

Sales and Promotion Expenses

Sales and promotion expenses consist primarily of commissions
paid to third parties in connection with our Hallotel business.

Sales and promotion expenses were $120,749 for fiscal 2006.

Administration Expenses

Our administration expenses increased to $1,522,285 for fiscal
  2006, compared to $960,575 for fiscal 2005. Administration expenses associated
  with the public company, Arvana Inc., and Arvana Networks were $1,106,474 and
  administration expenses of BCH Beheer and Hallotel were $596,561.

- 13 -

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Accordingly, the majority of the increase in administrative
  expenses over last year is attributable to our acquisition of Hallotel. The
  majority of the expenses in the Arvana Inc. and Arvana Networks consisted of
  rent, directors fees, legal, audit, travel and consulting fees. In Hallotel,
  administration expenses are comprised of personnel expenses, postal and telecommunication
  costs, consulting fees, car expenses, maintenance expenses and bank charges.

Research and Development

Our research and development expenses were attributable to the
hiring of staff in connection with our planned VoIP telephone services business.
We hired a chief technology officer in August, 2005, and a network architect in
September, 2005. These individuals were responsible for specifying and
overseeing the implementation and management of the Companys technology and
hardware platform.

Research and development expenses associated with technical
operations increased to $117,249 for fiscal 2006 from $52,834 for fiscal
2005.

Our research and development team were terminated in November,
2006, as a result of our decision to close down our Brazilian operations.

Stock-based Compensation

In June 2006, we awarded 1,600,000 stock options to a number of
directors, management and consultants. The stock options have an exercise price
of $1.25 per share which was the current market value of the shares at the time.
As a result of this program, we will record an expense of $1,424,000 in
stock-based compensation expense over the vesting period of the options. The
Company recorded an expense of $232,400 in 2006 for the pro-rated portion of the
full charge.

In December 2006, the Company issued 451,875 common shares to
three directors in settlement of $180,750 of unpaid directors fees.

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

Loss on the write-off of equipment

In fiscal 2006, we recorded a loss on the write-off of
equipment in the amount of $30,602 which was attributable to the write-down of
the carrying value to the fair market value of equipment owned by Arvana
Comunicacoes.

Loss on the acquisition of Arvana
Networks

In fiscal 2005, we recorded a loss on the acquisition of Arvana
Networks in the amount of $7,013,310 which 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.

- 14 -

---

Loss on acquisition of Arvana
Comunicações

In fiscal 2006, the amount of $45,888 was written-off as a
result of increasing our investment in Arvana Comunicacoes from 75% to 100% in
exchange for capital assets originally contributed by Gloinfo under the terms of
the cancelled Investment Agreement discussed above.

In fiscal 2005, the amount of $233,149 was written-off for 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 $1,742,930 for the year ended
December 31, 2006, compared with a net loss of $16,492,608 in 2005. The majority
of the loss in 2005 related to the increased administration and research and
development expenses associated with the development of our VoIP telephone
services business, the loss on the acquisition of Arvana Networks and the stock
compensation expense associated with the value of shares issued 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.

Liquidity and Capital Resources

As at December 31, 2006, we had cash of $233,452 and a working
capital deficit of $1,486,521. This compares to cash of $836,064 and working
capital of $584,626 as at December 31, 2005.

Plan of Operations

We estimate that our total expenditures over the next twelve
months will be at least $3,000,000, as discussed above under the heading
Description of Business - Plan of Operations, which amount will include
projected administration costs. Accordingly, we anticipate that we will require
a minimum of approximately $3,000,000 in additional financing to proceed with
our plan of operations over the next twelve months. In addition, we anticipate
that the Company 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 VoIP business opportunities and our administrative expenses
in order to be within the amount of capital resources that are available to
us.

During the next twelve-month period, we anticipate that our
revenues will not exceed our operating expenses. Accordingly, we will be
required to obtain additional financing in order to continue our plan of
operations. We believe that debt financing will not be an alternative for
funding our business. We anticipate that additional funding will be in the form
of equity financing from the sale of our common stock. However, we do not have
any financing arranged and we cannot provide investors with any assurance that
we will be able to raise sufficient funding from the sale of our common stock to
fund our plan of operations.

Cash Used in Operating Activities

We used cash in operations in the amount of $352 during fiscal
2006. Cash used in operations was attributable primarily to administration
expenses incurred with the commencement of our business of the development of
VoIP telephone services.

*Cash Used in Investing Activities*

We used cash in investing activities in the amount of $1,589,390
  during fiscal 2006. Of this amount, $249,814 was attributable to our acquisition
  of equipment and $1,445,235 was attributable to our acquisition of BCH Beheer
  and Hallotel.

- 15 -

---

Cash Flows from Financing Activities

We netted $1,046,660 from financing activities during the
fiscal 2006.

On October 31, 2006, we completed a private placement with
three investors for the sale of 2,625,000 shares of our common stock at a price
of US$0.40 per share for gross proceeds of US$1,050,000. A commission of
US$73,500 was paid in connection with the private placement transaction. Net
proceeds to us were $976,500.

We completed a private placement of 3,000,000 shares of common
stock at a price of $0.10 per share for total proceeds of $300,000 during the
second quarter of fiscal 2005 prior to the Arvana Networks transaction. For
accounting purposes, the shares issued were recorded at their fair value of
$6,000,000 ($2.00 per share) based on the quoted market price of our common
stock on the date of issuance. The $5,700,000 difference between the trading
price and the cash proceeds is included in stock based compensation.

In addition to the above, we completed private placements of
1,632,000 shares of common stock at a price of $1.25 per share for total
proceeds of $2,040,000. In total, we raised $2,121,250 from the issuance of
common stock, net of offering expenses. The proceeds from the private placements
have been used and are continuing to be used for the development of our VoIP
business, with expenses associated with the Arvana Networks transaction, the
investment agreement with Gloinfo for Arvana Com and for administration
expenses. For accounting purposes, these transactions have been recorded using
the market price at the date of issue, being $2.28 per share. As a result, we
recorded stock-based compensation expense in the amount of $1,680,960 in
connection with these share issuances.

We also increased our indebtedness to third parties during the
year.

Amounts due to IP Horizon LLC

We agreed to issue 1,500,000 shares to IP Horizon, LLC (IPH)
upon completion of the Arvana Networks transaction. IPH was one of the
shareholders of Arvana Networks at the time of the Arvana Networks transaction.
IPH was issued these shares in exchange for a commitment to deliver equipment,
software and network hardware for the initial launching of the Companys VoIP
telephone services in Brazil. IPH also agreed to provide termination services to
Arvana Networks for these VoIP telephone services at its cost plus an
administration fee not to exceed 13 percent. As of December 31, 2006, we had not
received the full complement of assets to be acquired in connection with this
transaction or other consideration. Accordingly, the 1,500,000 shares are not
reflected on our financial statements as having been issued. The following
agreement has been reached with IPH with respect to this transaction:

- IPH agreed to return to us for cancellation the 1,500,000 common shares
  issued to IPH in August, 2005. These shares were received and cancelled in
  early 2007.
- IPH has contributed certain equipment and has developed certain software,
  some of which is recorded in Arvana Comunicações general ledger in the amount
  of $36,309.25. In recognition of the contribution of the aforementioned
  equipment and software architecture services from IPH to Arvana Inc. and
  Arvana Networks, Arvana Inc. and IPH have agreed to settle indebtedness of
  $150,000 to IPH. The balance due to IPH as at December 31, 2006 was $125,283
  with an additional amount of $24,717 due as a result of payments in February,
  2007, providing a total due to IPH of $150,000.

- 16 -

---

- For settlement of this indebtedness, we agreed to issue 500,000 common
  shares at a deemed price of $0.30 per share.

Going Concern

We have not attained profitable operations and are dependent
upon obtaining financing to pursue our plan of operations. For these reasons our
auditors stated in their report on our audited financial statements that they
have substantial doubt we will be able to continue as a going concern.

Future Financings

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

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

Basis of Presentation

While the Company has begun to generate revenues as a result of
the acquisition of its German subsidiary its planned principal operations have
not yet commenced. The Companys target market segments and market strategies
for its planned principal operations are still in development. Consequently the
Company is currently in the development stage and presents its financial
statements in accordance with Statement of Financial Accounting Standard
(SFAS) No. 7, Accounting and Reporting by Development Stage Enterprises. The
Company expects to exit the development stage and enter the operating stage
during fiscal 2007.

Our financial statements include the accounts of the Company,
its wholly-owned subsidiaries Arvana Networks, Arvana Par, Arvana Com, BCH
Beheer and its wholly owned subsidiary Hallotel. All significant inter-company
transactions and balances have been eliminated.

Foreign currency translation and transactions

Our functional currency is the United States dollar.

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

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

- 17 -

---

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 our Statement of Operations under administration expenses.

Stock Compensation Expense

We account 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. We granted stock options in June
2006 and will record an expense of $1,424,000 in stock-based compensation
expense over the vesting period of the options. The Company recorded an expense
of $232,400 in 2006 for the pro-rated portion of the full charge.

|ITEM 7. | FINANCIAL STATEMENTS.
|------- | ---------------------

Our audited financial statements for the year ended December
31, 2006, as set forth below, are included with this Annual Report on Form
10-KSB. Our audited financial statements are prepared on the basis of accounting
principles generally accepted in the United States and are expressed in U.S.
dollars.

PAGEAuditors Report
    F-1Consolidated Balance Sheets, December 31, 2006 and 2005
    F-2Consolidated Statements of Operations for the years ended
      December 31, 2006 and 2005 and cumulative amounts from the beginning of
      the development stage on January 1, 2005 to December 31, 2006
    F-3Consolidated Statements of Cash Flows for the years ended
      December 31, 2006 and 2005 and cumulative amounts from the beginning of
      the development stage on January 1, 2005 to December 31, 2006
    F-4Consolidated Statements of Changes in Stockholders
      Equity for the years ended December 31, 2006 and 2005
    F-5Notes to Consolidated Financial Statements
    F-6


- 18 -

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|Dohan and Company            | 7700 North Kendall Drive, 200
|---------------------------- | -----------------------------
|Certified Public Accountants | Miami, Florida               
|A Professional Association   | Telephone                    
|                             | Facsimile                    
|                             | E-mail                       
|                             | Internet                     

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors
  Arvana, Inc. (A Development Stage Company)
  Vancouver, British Columbia

We have audited the accompanying consolidated balance sheets
  of Arvana, Inc. and Subsidiaries (A Development Stage Company) (the Company)
  as of December 31, 2006 and 2005, and the related consolidated statements of
  operations, stockholders equity and cash flows for the years then ended
  December 31, 2006 and 2005 and for the period from the beginning of the development
  stage (January 1, 2005) to December 31, 2006. These consolidated financial statements
  are the responsibility of the Company's management. Our responsibility is to
  express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audit to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. The Company is not
  required to have, nor were we engaged to perform, an audit of its internal control
  over financial reporting. Our audits include consideration of internal control
  over financial reporting as a basis for designing audit procedures that are
  appropriate in the circumstances, but not for the purpose of expressing an opinion
  on the effectiveness of the Companys internal control over financial reporting.
  Accordingly, we express no such opinion. An audit includes examining, on a test
  basis, evidence supporting the amounts and disclosures in the financial statements.
  An audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial statement
  presentation. We believe that our audits provide a reasonable basis for our
  opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  Arvana, Inc. and Subsidiaries (A Development Stage Company) at December 31,
  2006 and 2005, and the results of their operations and their cash flows for
  the years then ended December 31, 2006 and 2005, and the period from the beginning
  of the development stage (January 1, 2005) to December 31, 2006 in conformity
  with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been
  prepared assuming that the Company will continue as a going concern. As discussed
  in Note 1 to the consolidated financial statements, the Company is in the development
  stage, has suffered recurring losses from operation, has used, rather than provided,
  cash from operations and has an accumulated deficit during the development stage
  of $18,235,538 that raise substantial doubt about its ability to continue as
  a going concern. Managements plans in regard to these matters are also
  described in Note 1. The consolidated financial statements do not include any
  adjustments that might result from the outcome of this uncertainty.

/s/ Dohan and Company, P.A.
  Certified Public Accountants

Miami, Florida
  March 31, 2007

F-1

---

|ARVANA INC. AND SUBSIDIARIES                             
|---------------------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                            
|CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2006 AND 2005
|(EXPRESSED IN US DOLLARS)                                
|                                                         

|                                                                          |   | 2006        |   |   | 2005        |  
|------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                          |   |             |   |   |             |  
|                                                                          |   |             |   |   |             |  
|ASSETS                                                                    |   |             |   |   |             |  
|                                                                          |   |             |   |   |             |  
|Current                                                                   |   |             |   |   |             |  
|Cash and cash equivalents                                                 | $ | 233,452     |   | $ | 836,064     |  
|Receivables (net of allowance of $32,355
      (2005 - $Nil))             |   | 1,676,177   |   |   | 527         |  
|Amounts due from related
      parties (Note 7)                           |   | -           |   |   | 27,998      |  
|                                                                          |   |             |   |   |             |  
|                                                                          |   | 1,909,629   |   |   | 864,589     |  
|Long-term                                                                 |   |             |   |   |             |  
|Deferred income tax asset,                                                |   |             |   |   |             |  
|net
      of valuation allowance of $599,370 (2005 - $418,466)            |   | -           |   |   | -           |  
|Property and equipment
      (Note 6)                                     |   | 730,686     |   |   | 118,689     |  
|Subscriber accounts (Note 5)                                              |   | 2,605,499   |   |   | -           |  
|                                                                          |   |             |   |   |             |  
|                                                                          | $ | 5,245,814   |   | $ | 983,278     |  
|                                                                          |   |             |   |   |             |  
|                                                                          |   |             |   |   |             |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                      |   |             |   |   |             |  
|                                                                          |   |             |   |   |             |  
|Current                                                                   |   |             |   |   |             |  
|Accounts payable and accrued liabilities                                  | $ | 3,018,784   |   | $ | 259,203     |  
|Note payable (Note 5)                                                     |   | 329,815     |   |   | -           |  
|Amounts due to related parties (Note 7)                                   |   | 47,551      |   |   | 20,760      |  
|                                                                          |   |             |   |   |             |  
|                                                                          |   | 3,396,150   |   |   | 279,963     |  
|                                                                          |   |             |   |   |             |  
|Long-term                                                                 |   |             |   |   |             |  
|Deferred income taxes (Note
      10)                                     |   | 59,159      |   |   | -           |  
|                                                                          |   |             |   |   |             |  
|                                                                          |   | 3,455,309   |   |   | 279,963     |  
|                                                                          |   |             |   |   |             |  
|Commitments (Note 10)                                                     |   |             |   |   |             |  
|                                                                          |   |             |   |   |             |  
|Stockholders' equity                                                      |   |             |   |   |             |  
|Common stock (Note 8)                                                     |   |             |   |   |             |  
|100,000,000
      common shares authorized at $0.001 par value;           |   |             |   |   |             |  
|20,718,375 common
      shares issued and outstanding (2005 - 13,891,500) |   | 20,719      |   |   | 13,892      |  
|Additional paid-in capital                                                |   | 20,160,185  |   |   | 17,277,362  |  
|Deficit                                                                   |   | (95,331     | ) |   | (95,331     | )
|Deficit accumulated during
      the development stage                    |   | (18,235,538 | ) |   | (16,492,608 | )
|Accumulated other comprehensive loss                                      |   | (59,530     | ) |   | -           |  
|                                                                          |   |             |   |   |             |  
|                                                                          |   | 1,790,505   |   |   | 703,315     |  
|                                                                          |   |             |   |   |             |  
|                                                                          | $ | 5,245,814   |   | $ | 983,278     |  

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

F-2

---



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

|                                                                               |   |            |   |   |             |   |   | Cumulative amounts        |  
|------------------------------------------------------------------------------ | - | ---------- | - | - | ----------- | - | - | ------------------------- | -
|                                                                               |   |            |   |   |             |   |   | from the beginning of the |  
|                                                                               |   |            |   |   |             |   |   | development stage on      |  
|                                                                               |   |            |   |   |             |   |   | January 1, 2005 to        |  
|                                                                               |   | 2006       |   |   | 2005        |   |   | December 31, 2006         |  
|                                                                               |   |            |   |   |             |   |   |                           |  
|                                                                               |   |            |   |   |             |   |   |                           |  
|Sales                                                                          | $ | 2,832,819  |   | $ | -           |   | $ | 2,832,819                 |  
|Cost of sales                                                                  |   | (2,242,209 | ) |   | -           |   |   | (2,242,209                | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Gross profit                                                                   |   | 590,610    |   |   | -           |   |   | 590,610                   |  
|                                                                               |   |            |   |   |             |   |   |                           |  
|Operating expenses                                                             |   |            |   |   |             |   |   |                           |  
|Selling and promotion                                                          |   | (120,749   | ) |   | -           |   |   | (120,749                  | )
|General and administrative                                                     |   | (1,522,285 | ) |   | (960,575    | ) |   | (2,482,860                | )
|Research and development                                                       |   | (117,249   | ) |   | (52,834     | ) |   | (170,083                  | )
|Depreciation                                                                   |   | (71,117    | ) |   | (200        | ) |   | (71,317                   | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Operating loss                                                                 |   | (1,240,790 | ) |   | (1,013,609  | ) |   | (2,254,399                | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Other items                                                                    |   |            |   |   |             |   |   |                           |  
|Stock-based compensation
      (Note 8)                                        |   | (413,150   | ) |   | (8,232,540  | ) |   | (8,645,690                | )
|Loss on write-off of equipment                                                 |   | (30,602    | ) |   | -           |   |   | (30,602                   | )
|Loss on acquisition of
      Arvana Networks (Note 3)                          |   | -          |   |   | (7,013,310  | ) |   | (7,013,310                | )
|Loss on acquisition of Arvana Com (Note
      4)                               |   | (45,888    | ) |   | (233,149    | ) |   | (279,037                  | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Net loss before income taxes                                                   |   | (1,730,430 | ) |   | (16,492,608 | ) |   | (18,223,038               | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Income taxes                                                                   |   | (12,500    | ) |   | -           |   |   | (12,500                   | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Net loss of the period                                                         | $ | (1,742,930 | ) | $ | (16,492,608 | ) | $ | (18,235,538               | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Other comprehensive loss                                                       |   | (59,530    | ) |   | -           |   |   | (59,530                   | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|Comprehensive
      loss for the period                                        | $ | (1,802,460 | ) | $ | (16,492,608 | ) | $ | (18,295,068               | )
|                                                                               |   |            |   |   |             |   |   |                           |  
|                                                                               |   |            |   |   |             |   |   |                           |  
|Loss per share - basic and diluted                                             | $ | (0.10      | ) | $ | (1.58       | ) |   |                           |  
|                                                                               |   |            |   |   |             |   |   |                           |  
|                                                                               |   |            |   |   |             |   |   |                           |  
|Weighted average
      number of common shares outstanding - basic and diluted |   | 17,170,283 |   |   | 10,442,000  |   |   |                           |  

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

F-3

---



|ARVANA INC. AND SUBSIDIARIES                                                              
|------------------------------------------------------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                                                             
|CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER
      31, 2006 AND 2005
|(EXPRESSED IN US DOLLARS)                                                                 
|                                                                                          

|                                                                                                |   |            |   |   |             |   |   | Cumulative amount     |  
|----------------------------------------------------------------------------------------------- | - | ---------- | - | - | ----------- | - | - | --------------------- | -
|                                                                                                |   |            |   |   |             |   |   | from the beginning of |  
|                                                                                                |   |            |   |   |             |   |   | development stage on  |  
|                                                                                                |   |            |   |   |             |   |   | January 1, 2005 to    |  
|                                                                                                |   | 2006       |   |   | 2005        |   |   | December 31, 2006     |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Cash flows from operating activities                                                            |   |            |   |   |             |   |   |                       |  
|Net loss for the period                                                                         | $ | (1,742,930 | ) | $ | (16,492,608 | ) | $ | (18,235,538           | )
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Adjustments to reconcile
      net loss for the period to net cash used in operating activities |   |            |   |   |             |   |   |                       |  
|Depreciation and amortization                                                                   |   | 71,117     |   |   | 200         |   |   | 71,317                |  
|Stock-based
      compensation                                                                  |   | 413,150    |   |   | 8,232,540   |   |   | 8,645,690             |  
|Loss on acquisition
      of Arvana Networks                                                    |   | -          |   |   | 7,013,310   |   |   | 7,013,310             |  
|Loss
      on acquisition of Arvana Comunicacoes                                                |   | 45,888     |   |   | 233,149     |   |   | 279,037               |  
|Loss on write-off
      of equipment                                                            |   | 30,602     |   |   | -           |   |   | 30,602                |  
|Deferred
      income taxes                                                                     |   | 59,008     |   |   | -           |   |   | 59,008                |  
|Increase in receivables                                                                         |   | (595,390   | ) |   | 27,694      |   |   | (567,696              | )
|Increase(decrease) in payables
      and accrued liabilities                                    |   | 1,718,203  |   |   | 129,609     |   |   | 1,847,812             |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Net cash used in operations                                                                     |   | (352       | ) |   | (856,106    | ) |   | (856,458              | )
|                                                                                                |   |            |   |   |             |   |   |                       |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Cash flows from investing activities                                                            |   |            |   |   |             |   |   |                       |  
|Acquisition of equipment                                                                        |   | (249,814   | ) |   | (39,017     | ) |   | (288,831              | )
|Cash portion of Investment in BCH Beheer
      / Hallotel                                       |   | (1,445,235 | ) |   | -           |   |   | (1,445,235            | )
|Cash of BCH Beheer / Hallotel
      on acquisition date                                         |   | 105,659    |   |   | -           |   |   | 105,659               |  
|Cash of Arvana Networks on acquisition
      date                                               |   | -          |   |   | 5,800       |   |   | 5,800                 |  
|Cash of Arvana Comunicacoes
      on acquisition date                                           |   | -          |   |   | 62,465      |   |   | 62,465                |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Net cash provided by (used
      in) investing activities                                       |   | (1,589,390 | ) |   | 29,248      |   |   | (1,560,142            | )
|                                                                                                |   |            |   |   |             |   |   |                       |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Cash flows from financing activities                                                            |   |            |   |   |             |   |   |                       |  
|Amounts due to (from) related
      parties                                                     |   | 70,160     |   |   | (460,460    | ) |   | (390,300              | )
|Contribution to capital                                                                         |   | -          |   |   | 900         |   |   | 900                   |  
|Proceeds from issuance
      of common stock, net of finders' fees                              |   | 976,500    |   |   | 2,121,250   |   |   | 3,097,750             |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Net cash provided by financing
      activities                                                 |   | 1,046,660  |   |   | 1,661,690   |   |   | 2,708,350             |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Effect of exchange rate changes on cash and cash equivalents                                    |   | (59,530    | ) |   | -           |   |   | (59,530               | )
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Increase in cash and cash equivalents                                                           |   | (602,612   | ) |   | 834,832     |   |   | 232,220               |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Cash and cash equivalents, beginning of period                                                  |   | 836,064    |   |   | 1,232       |   |   | 1,232                 |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Cash and cash
      equivalents, end of period                                                  | $ | 233,452    |   | $ | 836,064     |   | $ | 233,452               |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Supplementary information                                                                       |   |            |   |   |             |   |   |                       |  
|Interest paid                                                                                   | $ | 7,246      |   | $ | -           |   |   |                       |  
|Taxes Paid                                                                                      | $ | -          |   | $ | -           |   |   |                       |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|                                                                                                |   |            |   |   |             |   |   |                       |  
|Transactions not involving cash                                                                 |   |            |   |   |             |   |   |                       |  
|Common shares issued for
      services                                                         |   | 451,875    |   |   | -           |   |   |                       |  
|Common shares issued for acquisition of
      BCH Beheer / Hallotel                             |   | 3,541,700  |   |   | -           |   |   |                       |  
|Common shares issued for
      finders fees for BCH Beheer / Hallotel acquisition               |   | 208,300    |   |   | -           |   |   |                       |  
|Common shares issued for finders fees for
      Arvana Networks acquisition                     |   | -          |   |   | 330,000     |   |   |                       |  
|Common shares issued for finders fees
      for Arvana Comunicacoes acquisition                 |   | -          |   |   | 43,500      |   |   |                       |  

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

F-4

---

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

|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   | Deficit     |   |   |                  |   |   |               |  
|------------------------------------------------------------------------------------------------------ | ------------ | - | - | ------ | - | - | --------------------- | - | - | ----------- | - | - | ----------- | - | - | ---------------- | - | - | ------------- | -
|                                                                                                       | Common Stock |   |   |        |   |   |                       |   |   | accumulated |   |   |             |   |   |                  |  
|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   | during the  |   |   | Accumlated other |   |   | Total         |  
|                                                                                                       |              |   |   |        |   |   | Additional            |   |   |             |   |   | development |   |   | comprehensive    |   |   | Stockholders' |  
|                                                                                                       | Shares       |   |   | Amount |   |   | Paid-in
      Capital |   |   | Deficit     |   |   | stage       |   |   | loss             |   |   | Equity        |  
|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   |             |   |   |                  |   |   |               |  
|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   |             |   |   |                  |   |   |               |  
|From inception to December 31, 2004                                                                    | 8,253,000    |   | $ | 8,253  |   | $ | 88,310                |   | $ | (95,331     | ) | $ | -           |   | $ | -                |   | $ | 1,232         |  
|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   |             |   |   |                  |   |   |               |  
|Contribution to
      capital                                                                          | -            |   |   | -      |   |   | 900                   |   |   | -           |   |   | -           |   |   | -                |   |   | 900           |  
|Return and cancellation of common
      stock - March 2005 (Note 7a)                                   | (1,350,000   | ) |   | (1,350 | ) |   | 1,350                 |   |   | -           |   |   | -           |   |   | -                |   |   | -             |  
|Issuance of common
      stock for cash at $0.10 - May 2005 (Note 7b)                                  | 3,000,000    |   |   | 3,000  |   |   | 5,997,000             |   |   | -           |   |   | -           |   |   | -                |   |   | 6,000,000     |  
|Issuance of common stock for cash
      at $1.25 - July 2005 (Note 7c)                                 | 400,000      |   |   | 400    |   |   | 911,600               |   |   | -           |   |   | -           |   |   | -                |   |   | 912,000       |  
|Return and cancellation
      of common stock - August 2005 (Note 7d)                                  | (1,017,000   | ) |   | (1,017 | ) |   | 1,017                 |   |   | -           |   |   | -           |   |   | -                |   |   | -             |  
|Issuance of common stock for cash
      at $1.25 - August 2005 (Note 7e)                               | 792,000      |   |   | 792    |   |   | 1,804,968             |   |   | -           |   |   | -           |   |   | -                |   |   | 1,805,760     |  
|Issuance of common
      stock for finders fee at $2.28 - August 2005 (Note 7f)                        | 330,000      |   |   | 330    |   |   | 752,070               |   |   | -           |   |   | -           |   |   | -                |   |   | 752,400       |  
|Issuance of common stock in transaction
      with Arvana Networks at $2.28 - August 2005 (Note 3, 7g) | 3,000,000    |   |   | 3,000  |   |   | 6,837,000             |   |   | -           |   |   | -           |   |   | -                |   |   | 6,840,000     |  
|Finders fees paid
      in cash - July, August, September 2005                                         | -            |   |   | -      |   |   | (164,000              | ) |   | -           |   |   | -           |   |   | -                |   |   | (164,000      | )
|Issuance of common stock for cash
      at $1.25 - October 2005 (Note 6h)                              | 440,000      |   |   | 440    |   |   | 1,002,760             |   |   | -           |   |   | -           |   |   | -                |   |   | 1,003,200     |  
|Issuance of common
      stock for finders fee at $2.28 - October 2005 (Note 6i)                       | 43,500       |   |   | 44     |   |   | 99,137                |   |   | -           |   |   | -           |   |   | -                |   |   | 99,181        |  
|Finders fees paid in cash - October
      2005                                                         | -            |   |   | -      |   |   | (54,750               | ) |   | -           |   |   | -           |   |   | -                |   |   | (54,750       | )
|Net operating loss
      for the year ended December 31, 2005                                          | -            |   |   | -      |   |   | -                     |   |   | -           |   |   | (16,492,608 | ) |   | -                |   |   | (16,492,608   | )
|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   |             |   |   |                  |   |   |               |  
|Balance December 31, 2005                                                                              | 13,891,500   |   | $ | 13,892 |   | $ | 17,277,362            |   | $ | (95,331     | ) | $ | (16,492,608 | ) | $ | -                |   | $ | 703,315       |  
|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   |             |   |   |                  |   |   |               |  
|Issuance of stock
      options, exercisable at $1.25 - June 2006                                      | -            |   |   | -      |   |   | 232,400               |   |   | -           |   |   | -           |   |   | -                |   |   | 232,400       |  
|Issuance of common stock for acquisition
      of BCH Beheer / Hallotel, including transaction fee     | 3,750,000    |   |   | 3,750  |   |   | 1,496,250             |   |   | -           |   |   | -           |   |   | -                |   |   | 1,500,000     |  
|Issuance of common
      stock for cash at $0.40                                                       | 2,625,000    |   |   | 2,625  |   |   | 1,047,375             |   |   | -           |   |   | -           |   |   | -                |   |   | 1,050,000     |  
|Issuance of common stock for debt
      settlement at $0.40                                            | 451,875      |   |   | 452    |   |   | 180,298               |   |   | -           |   |   | -           |   |   | -                |   |   | 180,750       |  
|Finders fees paid
      in cash                                                                        | -            |   |   | -      |   |   | (73,500               | ) |   | -           |   |   | -           |   |   | -                |   |   | (73,500       | )
|Net operating loss for the year
      ended December 31, 2006                                          | -            |   |   | -      |   |   | -                     |   |   | -           |   |   | (1,742,930  | ) |   | -                |   |   | (1,742,930    | )
|Foreign currency
      translation adjustment                                                          | -            |   |   | -      |   |   | -                     |   |   | -           |   |   | -           |   |   | (59,530          | ) |   | (59,530       | )
|                                                                                                       |              |   |   |        |   |   |                       |   |   |             |   |   |             |   |   |                  |   |   |               |  
|Balance December 31, 2006                                                                              | 20,718,375   |   | $ | 20,719 |   | $ | 20,160,185            |   | $ | (95,331     | ) | $ | (18,235,538 | ) | $ | (59,530          | ) | $ | 1,790,505     |  

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

F-5

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

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

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

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

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 Protocol (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.

Management identified a communications company in Germany that
is presently in the carrier pre-select and wholesale carrier business carrying
traffic to Turkey. On August 23, 2006, Arvana Inc. acquired this company through
BCH Beheer and its wholly-owned subsidiary Hallotel Deutschland GmbH. The
Company plans on expanding this business including VoIP and calling card
services. The Company had planned on developing its VoIP 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. 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. This business did not develop in accordance with our plan or
expectations and we decided to withdraw from the telecommunications market in
Brazil. The parties have since agreed with Gloinfo to terminate their agreement,
and the Company acquired 100% ownership of 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 December 31, 2006, the Company
has an accumulated deficit during the development stage of $18,235,538. To date,
the Company has generated no revenue from its VoIP business but now has revenues
through the acquisition of Hallotel and its carrier preselect and wholesale
carrier 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 2006, the Company completed private placements of its common stock raising
  $1,050,000 ($976,500 net of issuance costs) in cash for purposes of completing
  the BCH Beheer and Hallotel acquisition. As at December 31, 2006, it had $233,452
  to fund its operational costs and the remaining commitment for the acquisition.
  Management plans to raise up to $3,000,000 in additional equity capital over
  the next twelve months to finance the commitments regarding the acquisition
  of BCH Beheer, its operations and capital requirements of the Company for the
  remainder of 2007 and for 2008. 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.

- 20 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

|2. | Summary of Significant Accounting
      Policies
|-- | ------------------------------------------------
|   |                                                 
|a) | Basis of presentation                           

While the Company has begun to generate revenues as a result of
the acquisition of its German subsidiary its planned principal operations have
not yet commenced. The Companys target market segments and market strategies
for its planned principal operations are still in development. Consequently the
Company is currently in the development stage and presents its financial
statements in accordance with Statement of Financial Accounting Standard
(SFAS) No. 7, Accounting and Reporting by Development Stage Enterprises. The
Company expects to exit the development stage and enter the operating stage
during fiscal 2007. The Companys fiscal year end is December 31. The
accompanying consolidated financial statements of Arvana Inc. for the years
ended December 31, 2006 and 2005, and for the cumulative amounts from the
beginning of the development stage on January 1, 2005, through December 31,
2006, have been prepared in accordance with accounting principles generally
accepted in the United States for financial information with the instructions to
Form 10-KSB and Regulation S-B. 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.

|b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **Basis of consolidation**
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------
|These consolidated financial statements for the
      year ended December 31, 2006, include the accounts of the Company, its
      subsidiary Arvana Networks (including its wholly-owned subsidiary Arvana
      Par, Arvana Com and BCH Beheer (and its wholly-owned subsidiary Hallotel
      Deutschland GmbH). All significant inter-company transactions and balances
      have been eliminated.                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | **Estimates**             
|The preparation of consolidated financial
      statements in conformity with U.S. generally accepted accounting
      principles 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.

|d) | Foreign currency translation and
    transactions
|-- | -------------------------------------------------

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

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

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

- 21 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

The exchange rate prevailing at December 31, 2006, was 2.14,
stated in the Brazilian Real per one US dollar. The average exchange rate during
the twelve-month period ended December 31, 2006, was 2.18 stated in the
Brazilian Real per one US dollar. For the Euro, the exchange rate prevailing at
December 31, 2006, was .76 US dollars per Euro. The average exchange rate from
the BCH Beheer acquisition date of August 23, 2006 to December 31, 2006, was
..78.

|**e)**                                                                                                                                                                                                                 | Revenue recognition 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------
|The Company records revenues upon the completion
      of the services and where the ability to collect is reasonably assured.                                                                                        
|                                                                                                                                                                                                                       |                     
|**f)**                                                                                                                                                                                                                 | Comprehensive income
|The Company has adopted SFAS No. 130, Reporting
      Comprehensive Income, which establishes standards for reporting and
      presentation of comprehensive income, its components and accumulated
      balances.
|                                                                                                                                                                                                                       |                     
|**g)**                                                                                                                                                                                                                 | Cash equivalents    
|The Company considers all highly liquid
      investments, with terms to maturity of three months or less when acquired,
      to be cash equivalents.                                                                

|h) | Accounts receivable
|-- | -------------------

Trade and other accounts receivable are reported at face value
less any provisions for uncollectible accounts considered necessary. Accounts
receivable primarily includes trade receivables from customers. The Company
estimates doubtful accounts on an item-by-item basis and includes over aged
accounts as part of the allowance for doubtful accounts, which are generally
ones that are ninety days or greater overdue.

i)
    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
    3  5 yearsComputer hardware
    5 yearsSoftware
    1  4 years


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.

|j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **Impairment of long-lived assets and
      long-lived assets to be disposed of:**
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------
|Long-lived assets are reviewed for impairment
      whenever events or changes in circumstances indicate that the carrying
      amount of an asset may not be recoverable. Recoverability of assets to be
      held and used is measured by a comparison of the carrying amount of an
      asset to future net cash flows expected to be generated by the asset. If
      such assets are considered to be impaired, the impairment to be recognized
      is measured by the amount by which the carrying amount of the assets
      exceeds the fair value of the assets.

- 22 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

|Assets to be disposed of are reported at the
      lower of the carrying amount and the fair value less costs to sell. The
      Company has reviewed its long-lived assets and has determined that no
      impairment charges were necessary for the years ended December 31, 2006
      and 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Financial instruments of the Company are
      comprised of cash and cash equivalents, receivables, accounts payable and
      accrued liabilities, note payable, and amounts due to and from related
      parties. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Financial instruments that potentially subject
      the company to concentrations of credit risk consist principally of cash
      equivalents and trade accounts receivable. Trade accounts receivable in
      our operation in Germany consists of amounts from the carrier preselect
      customers and amounts from the wholesale carrier customers. The receivable
      from the carrier preselect customers is distributed among many customers.
      The receivable from the wholesale customers is considered a credit risk
      however with some customers, traffic is traded therefore the risk is
      mitigated by the accounts payable to those customers. 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.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|The Company records the fair value of an asset
      retirement obligation as a liability in the period in which it incurs a
      legal obligation associated with the retirement of tangible long-lived
      assets that result from the acquisition, construction, development, and/or
      normal use of the long-lived assets. The Company also records a
      corresponding asset which is amortized over the life of the asset.
      Subsequent to the initial measurement of the asset retirement obligation,
      the obligation is adjusted at the end of each period to reflect the
      passage of time (accretion expense) and changes in the estimated future
      cash flows underlying the obligation (asset retirement cost). The Company
      does not have any asset retirement obligations for the periods presented.                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|n)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Income taxes are provided in accordance with
      Statement of Financial Accounting Standards No. 109 "Accounting for
      Income Taxes". A deferred tax asset or liability is recorded for all
      temporary differences between financial and tax reporting and net
      operating loss carry-forwards. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|o)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|The Company accounts for all stock-based payments
      to employees and non-employees using the fair value based method. Under
      the fair value method, stock-based payments are measured at the fair value
      of the consideration received, or the fair value of the equity instruments
      issued, or liabilities incurred, whichever is more reliably measurable.
      The cost of stock-based payments to non-employees that are fully vested
      and non-forfeitable at the grant date is measured and recognized at that
      date.                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|p)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Basic loss per share is computed using the
      weighted average number of common shares outstanding during the year.
      Diluted loss per share is computed using the weighted average number of
      common shares and potentially dilutive common stock equivalents, including
      stock options and warrants. As at December 31, 2006, the Company had
      1,600,000 of potentially dilutive instruments that were excluded from the
      determination of diluted loss per share as they would be anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                            

- 23 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

|q)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **Recent accounting
      pronouncements**
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------
|In July, 2006, the FASB issued FIN 48,
      Accounting for Uncertainty in Income Taxes. FIN 48 clarifies the
      accounting and reporting for uncertainties in income tax law. FIN 48
      prescribes a comprehensive model for the financial statement recognition,
      measurement, presentation, and disclosure of uncertain tax positions taken
      or expected to be taken in income tax returns. FIN 48 is effective for
      fiscal years beginning after December 15, 2006. We are currently in the
      process of evaluating the impact of FIN 48 on our financial position and
      results of operations.                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|In September 2006, the SEC issued Staff
      Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior
      Year Misstatements when Quantifying Misstatements in Current Year
      Financial Statements. SAB No. 108 provides guidance on how prior year
      misstatements should be taken into consideration when quantifying
      misstatements in current year financial statements for purposes of
      determining whether the current years financial statements are materially
      misstated. SAB No. 108 is effective for fiscal years ending on or after
      November 15, 2006. The Company is in its first period of operations, so
      SAB No. 108 will have no impact on our financial position and results of
      operations.                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|In September 2006, the FASB issued SFAS No. 157,
      Fair Value Measurements.SFAS No. 157 establishes a framework for
      measuring the fair value of assets and liabilities. This framework is
      intended to provide increased consistency in how fair value determinations
      are made under various existing accounting standards which permit, or in
      some cases require, estimates of fair market value. SFAS No. 157 is
      effective for fiscal years beginning after November 15, 2007, and interim
      periods within those fiscal years. Earlier application is encouraged,
      provided that the reporting entity has not yet issued financial statements
      for that fiscal year, including any financial statements for an interim
      period within that fiscal year. The Company is currently in the process of
      evaluating the impact that SFAS No. 157 will have on its future financial
      position and results of operations

|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 the development of a technology platform and billing
system that would allow us to implement in multiple markets, developing business
plans and searching out appropriate local partners in order to launch VoIP
telephone services.

Arvana Networks had 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 was to provide termination services to Arvana Networks,
at its cost plus an administration fee not to exceed 13 percent.

As at December 31, 2006, the Company had not received the full
complement of assets to be acquired in connection with this transaction or other
consideration. Accordingly, the 1,500,000 shares are not reflected on our
financial statements as having been issued. The following agreement has been
reached with IPH with respect to this transaction:

|1. | IPH agreed to return to the Company for cancellation the
      1,500,000 common shares of Arvana Inc. issued to IPH in August, 2005.
      These shares were received and cancelled in early 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | IPH has contributed certain equipment and has developed
        certain software, some of which is recorded in Arvana Comunicações
        general ledger in the amount of $36,309. In recognition of the contribution
        of the aforementioned equipment and software architecture services from
        IPH to Arvana Inc. and Arvana Networks, Arvana Inc. and IPH have agreed
        to settle indebtedness of $150,000 to IPH. The balance due to IPH as at
        December 31, 2006, was $125,283 with an additional amount of $24,717 due
        as a result of payments in February 2007, providing a total due to IPH
        of $150,000.

- 24 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

|3. | For settlement of this indebtedness, Arvana Inc. will
        issue 500,000 common shares at a price of $0.30 per share.
|-- | ------------------------------------------------------------------------------------------------------------------------

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
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**
|-- | -------------------------------------

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.

In early 2006, management entered into negotiations with the
principals of Gloinfo with the intention of terminating the Investment Agreement
by mutual agreement. On October 31, 2006 the Company signed a definitive
agreement with Gloinfo pursuant to which the Investment Agreement was
terminated. The main terms of the termination of the Investment Agreement that
have been agreed to by Gloinfo are as follows:

|(a) | The terms of the Investment Agreement have been cancelled
      and Gloinfo transferred 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.     

- 25 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

|(c) | The employees that were to be transferred following the
      final closing will remain with Gloinfo.                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                    
|(d) | Employees that were hired for the project were terminated
      and the termination costs were shared 75% by Arvana Com and 25% by
      Gloinfo.                                                                                                  
|    |                                                                                                                                                                                                                                                    
|(e) | Arvana Com will obtain the Televoz branding and the
      website associated with this product from Gloinfo.                                                                                                                                     
|    |                                                                                                                                                                                                                                                    
|(f) | Arvana Com retained ownership and operating control of
      the technology platform used by Gloinfo to service their customers.
      Gloinfo has purchased and installed a new technology platform and will
      return the equipment to Arvana.

|5. | BCH Beheer and Hallotel Deutschland GmbH
      transaction
|-- | ----------------------------------------------------------

On August 9, 2006, Arvana Inc.,, 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 acquired 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 owned all of the
outstanding shares of Hallotel. The purchase price for the Acquisition was paid
by way of:

|(i)   | the issue of 3,541,700 shares of common stock of the
      Company, valued at $0.40 per share;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(ii)  | the payment of €500,000 ($639,700) in cash; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(iii) | the issuance of a promissory note in the principal amount
      of €250,000 ($329,815 as at December 31, 2006), 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 at the date of the Share Purchase
Agreement.

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

|(i)  | a payable to the Vendor in the amount of €80,932
      ($103,544) for the price actually paid by Hallotel for any telephone
      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) | a payable to the Vendor in the amount of €277,630
      ($355,200) for 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.                                  

Prior to the acquisition date, Arvana had paid $26,941 for
acquisition related expenses and this amount was included in the purchase price.
A transaction fee was paid by issuing 208,300 additional shares of common stock
of the Company, valued at $0.40 per share.

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.

- 26 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

The purchase price of the transaction, with a deemed value of
  $2,945,235 was allocated as to $105,659 in cash, $1,080,529 in accounts receivables,
  $15,371 in other current assets, $1,368,545 in accounts payable and accrued
  liabilities and, $2,605,499 to the value of monthly 16,500 subscribers held
  by Hallotel at the time of the acquisition. Equipment valued at $500,915 and
  software valued at $8,875 was held by Hallotel on the acquisition date.

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

|6. | Property and Equipment
|-- | ----------------------

|At December 31,
      2006 |   |         |  |   |              |  |   |                  | 
|-------------------------- | - | ------- |  | - | ------------ |  | - | ---------------- | 
|                           |   |         |  |   | Accumulated  |  |   | Net              | 
|                           |   | Cost    |  |   | Amortization |  |   | Book
      Value | 
|Equipment                  | $ | 205,099 |  | $ | 16,284       |  | $ | 188,815          | 
|Computer hardware          |   | 502,667 |  |   | 52,797       |  |   | 449,870          | 
|Software                   |   | 94,237  |  |   | 2,236        |  |   | 92,001           | 
|                           |   |         |  |   |              |  |   |                  | 
|                           | $ | 802,003 |  | $ | 71,317       |  | $ | 730,686          | 
|                           |   |         |  |   |              |  |   |                  | 
|At December 31, 2005:      |   |         |  |   |              |  |   |                  | 
|                           |   |         |  |   | Accumulated  |  |   | Net              | 
|                           |   | Cost    |  |   | Amortization |  |   | Book
      Value | 
|Equipment                  | $ | 45,092  |  | $ | 200          |  | $ | 44,892           | 
|Computer hardware          |   | 61,117  |  |   | -            |  |   | 61,117           | 
|Software                   |   | 12,680  |  |   | -            |  |   | 12,680           | 
|                           |   |         |  |   |              |  |   |                  | 
|                           | $ | 118,889 |  | $ | 200          |  | $ | 118,689          | 

The Company has not taken amortization on equipment if
utilization of the equipment has not yet begun. The net carrying amount of
equipment not yet placed in service was $111,096 as at December 31, 2006.



|7. | Related Parties
|-- | ---------------

- 27 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

During the year ended December 31, 2006 the Company issued
451,875 common shares to Directors of the Company as settlement for outstanding
debt. The shares were valued at the market price of the Companys stock on the
date of settlement.

At December 31, 2005, the Company was owed $27,998 from a
company with a director in common for debt paid on the companys behalf. This
amount was repaid subsequent to year-end.

At December 31, 2005, the Company owed $3,260 to a director for
reimbursement of expenses.

At December 31, 2005, the Company owed $17,500 to two directors
for services rendered during the year. This amount is to be paid in stock at a
future date with the number of common shares determined by the fair value of the
shares on the settlement date.

For the year ended December 31, 2005, $162,899 was incurred by
the Company for services rendered by directors, the President, the Chief
Financial Officer and the Corporate Secretary and the President and Corporate
Secretary of Arvana Networks. An additional amount of $60,451 was incurred by
Arvana Networks prior to acquisition for services rendered by its directors and
officers.

During the year ended December 31, 2005, the Company paid an
amount of $25,000 and issued 130,000 common shares to a director of the Company.
These shares were valued at $296,400 based on the market value at the date of
issue. The common shares were issued as a finders fee for the introduction of
IPH to Arvana Networks. This amount is included in the stock-based compensation
paid in the transaction with Arvana Networks.

In addition, as part of the finders fee relating to the
transaction with Arvana Networks, 90,000 restricted common shares were issued,
valued at $205,200 based on the market value at the date of issue to a company
with a common director. This amount is included in the stock-based compensation
resulting from the transaction with Arvana Networks.

In 2005, the Company issued 43,500 common shares, valued at
$99,181 based on the market value at the date of issue to a company with a
common director. The common shares were issued as a finders fee relating to the
private placements closed throughout the year.

|8. | Stockholders Equity
|-- | --------------------

(a) During the quarter ended December 31, 2006, the Company
issued shares for the settlement of debt owed to three directors for services
rendered during fiscal 2006. The Company issued 451,875 shares in settlement of
$180,750 in debt.

On October 31, 2006, the Company completed a private placement
with three investors of 2,625,000 shares of our common stock at a price of
US$0.40 per share for gross proceeds of US$1,050,000. A commission of US$73,500
was paid in connection with the private placement transaction. Net proceeds were
$976,500.

During the quarter ended September 30, 2006, the Company issued
3,541,700 shares for part of the consideration for the purchase of BCH Beheer
and its wholly-owned subsidiary Hallotel Deutschland GmbH. The Company also
issued 208,300 shares as a finders fee for the same transaction.

(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.

- 28 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

(c) The Company has a stock option plan in place under which
  it is authorized to grant options to executive officers and directors, employees
  and consultants enabling them to acquire up to 10% of the issued and outstanding
  common stock of the Company. Under the plan, the exercise price of each option
  equals the market price of the Company's stock as calculated on the date of
  grant. The options can be granted for a maximum term of 10 years. On June 5,
  2006, the Company granted 1,600,000 stock options to its directors and employees.
  Each option is exercisable into one common share until December 31, 2009 at
  an exercise price of $1.25. The options were valued at $1,424,000 using the
  Black-Scholes model,which will be expensed over the vesting period of the options.
  The Company recorded an expense of $232,400 in 2006 for the pro-rated portion
  of the full charge. The weighted average fair value of options granted during
  the year was $0.89.

As at December 31, 2006, the following incentive stock options
are outstanding:

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

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

|                                        |  |                  |  |   |          | 
|--------------------------------------- |  | ---------------- |  | - | -------- | 
|                                        |  |                  |  |   | Weighted | 
|                                        |  |                  |  |   | Average  | 
|                                        |  | Number           |  |   | Exercise | 
|                                        |  | of
      Options |  |   | Price    | 
|                                        |  |                  |  |   |          | 
|Balance, December 31, 2005              |  | -                |  | $ | -        | 
|Options granted                         |  | 1,600,000        |  |   | 1.25     | 
|Options expired                         |  | -                |  |   | -        | 
|Options
      exercised                 |  | -                |  |   | -        | 
|                                        |  |                  |  |   |          | 
|Balance, December 31, 2006              |  | 1,600,000        |  | $ | 1.25     | 
|                                        |  |                  |  |   |          | 
|Number of options currently exercisable |  | Nil              |  |   | N/A      | 

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

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


- 29 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

|9. | 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, $81,262
is located in North America, $30,837 is located in Brazil and $618,587 is
located in Germany. All of the Companys revenue was generated in Germany.

|10. | Deferred Income Taxes
|--- | ---------------------

Income tax benefits attributable to losses from United States
of America operations was $Nil for the years ended December 31, 2006 and 2005,
and differed from the amounts computed by applying the United States of America
federal income tax rate of 34 percent to pretax losses from operations as a
result of the following:

|                                                                      |   |            |   |   |             |  
|--------------------------------------------------------------------- | - | ---------- | - | - | ----------- | -
|                                                                      |   | 2006       |   |   | 2005        |  
|                                                                      |   |            |   |   |             |  
|Loss for the year                                                     | $ | (1,742,930 | ) | $ | (16,492,608 | )
|                                                                      |   |            |   |   |             |  
|Computed "expected" tax benefit                                       | $ | (592,596   | ) | $ | (5,607,487  | )
|Non deductible expenses                                               |   | 180,253    |   |   | 5,262,928   |  
|Lower effective income tax rate on loss of
      foreign subsidiaries |   | 34,841     |   |   | 8,162       |  
|Change in valuation allowance                                         |   | 377,502    |   |   | 336,397     |  
|                                                                      |   |            |   |   |             |  
|Income tax
      recovery                                             | $ | -          |   | $ | -           |  

The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax liabilities at
December 31, 2006 and 2005 are presented below:

|                                                   |   |          |   |   |          |  
|-------------------------------------------------- | - | -------- | - | - | -------- | -
|                                                   |   | 2006     |   |   | 2005     |  
|Deferred tax assets:                               |   |          |   |   |          |  
|Net operating
      loss carry forwards - US       | $ | 223,863  |   | $ | 149,562  |  
|Net operating
      loss carry forwards - Brazil   |   | 324,493  |   |   | 217,890  |  
|Net operating
      loss carry forwards  Barbados |   | 51,014   |   |   | 51,014   |  
|                                                   |   |          |   |   |          |  
|                                                   |   | 599,370  |   |   | 418,466  |  
|                                                   |   |          |   |   |          |  
|Valuation allowance                                |   | (599,370 | ) |   | (418,466 | )
|                                                   |   |          |   |   |          |  
|Net deferred tax assets                            |   | -        |   |   | -        |  
|                                                   |   |          |   |   |          |  
|Deferred tax liabilities:                          |   |          |   |   |          |  
|                                                   |   |          |   |   |          |  
|Property and
      equipment  Germany             |   | (59,159  | ) |   | -        |  
|                                                   |   |          |   |   |          |  
|Net deferred tax liabilities                       | $ | (59,159  | ) | $ | -        |  

The valuation allowance for deferred tax assets as of December
  31, 2006 and 2005 was $599,370 and $418,466, respectively. In assessing the
  realizability of deferred tax assets, management considers whether it is more
  likely than not that some portion or all of the deferred tax assets will not
  be realized. The ultimate realization of deferred tax assets is dependent upon
  the generation of future taxable income during the periods in which those temporary
  differences become deductible.

- 30 -

---

|ARVANA INC. AND SUBSIDIARIES                  
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
|For the Years Ended December 31, 2006 and 2005
|(expressed in US dollars)                     
|(Audited)                                     
|                                              

Management considers the scheduled reversal of deferred tax liabilities,
  projected future taxable income, and tax planning strategies in assessing the
  realizability of deferred tax assets. In order to fully realize the deferred
  tax asset attributable to net operating loss carryforwards, the Company will
  need to generate future taxable income of approximately $2,000,000 prior to
  the expiration of the net operating loss carryforwards. Of the $1,816,868 in
  operating loss carryforwards, $658,422 is attributable to the US, and expires
  between 2026 to 2027; $954,390 is attributable to Brazil and can be carried
  forward indefinitely. The remaining $204,056 is attributable to Barbados and
  will expire in 2016.

|11. | Subsequent Events
|--- | -----------------

On February 20, 2007, the Company received a no interest loan
from ValorInvest Ltd, a shareholder of the Company in the amount of 150,000
Euro. 80,000 Euro were used to pay down part of the payable to Brulex for the
BCH Beheer transaction and 65,000 was advanced to Hallotel for capital
expenditures and the development of the business.

|12. | Commitments
|--- | -----------

The Company has the following commitments:

|                        |   |        |  |   |        |  |   |        |  |   |       | 
|----------------------- | - | ------ |  | - | ------ |  | - | ------ |  | - | ----- | 
|                        |   | 2007   |  |   | 2008   |  |   | 2009   |  |   | 2010  | 
|Software platform lease | € | 14,856 |  | € | 14,856 |  | € | 10,523 |  | € | -     | 
|Vehicle leases          |   | 32,640 |  |   | 32,640 |  |   | 27,410 |  |   | 4,860 | 
|Office lease            |   | 17,880 |  |   | 1,490  |  |   | -      |  |   | -     | 
|                        |   |        |  |   |        |  |   |        |  |   |       | 
|Total in euros          | € | 65,376 |  | € | 48,986 |  | € | 37,933 |  | € | 4,860 | 

- 31 -

---

|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|------- | -------------------------------------------------------------------------------------------

Engagement of Dohan and Company

We engaged Dohan and Company, Certified Public Accountants, as
our principal independent registered public accounting firm effective January
25, 2006. Concurrent with this appointment, BDO Dunwoody LLP, Chartered
Accountants ("BDO Dunwoody"), resigned as our principal independent registered
public accounting firm effective January 25, 2006. The decision to change
principal independent registered public accounting firm was approved by our
board of directors.

During the period of BDO Dunwoodys engagement as our principal
independent registered public accounting firm from September 9, 2005 to January
25, 2006, there were no disagreements with BDO Dunwoody on any matter of
accounting principles or practices, financial statement disclosure or review
scope or procedures. BDO Dunwoody did not report on any of our financial
statements and BDO Dunwoody did not advise us of any reportable event or default
listed in paragraph (iv) of Regulation S-B Item 304(a)(1).

We provided BDO Dunwoody with a copy of the foregoing
disclosures and requested in writing that BDO Dunwoody furnish us with a letter
addressed to the Securities and Exchange Commission stating whether or not they
agree with such disclosures. We received the requested letter from BDO Dunwoody
wherein they have confirmed their agreement to our disclosures. A copy of BDO
Dunwoodys letter has been filed as an exhibit to our Current Report on Form 8-K
dated January 31, 2006.



|ITEM 8A. | 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 at
December 31, 2006, being the date of our most recently completed fiscal year.
This evaluation was carried out under the supervision and with the participation
of our Chief Executive Officer, Mr. Teyfik Oezcan, and our Acting Chief
Financial Officer, Ms Karen Engleson. Based upon that evaluation, our Chief
Executive Officer and the Acting 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 December 31, 2006, there were
no changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to affect, our internal control over
financial reporting during the quarter ended December 31, 2006.

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

- 32 -

---

|(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.

|ITEM 8B.        | OTHER INFORMATION.
|--------------- | ------------------
|                |                   
|Not applicable.



|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
  ACT.
|------- | ------------------------------------------------------------------------------------------------------------------------

Our current executive officers and directors are:

|Name                | Age | Position                                                
|------------------- | --- | --------------------------------------------------------
|                    |     |                                                         
|Sir John Baring (1) | 59  | Chairman of the Board of
      Directors                
|                    |     |                                                         
|Teyfik Oezcan       | 36  | Director and Chief Executive
      Officer              
|                    |     |                                                         
|Ross Wilmot (1)     | 63  | Director                                                
|                    |     |                                                         
|Karen Engleson      | 56  | Acting Chief Financial
      Officer/Corporate Secretary



|(1) | Member of our Audit Committee and our Compensation
      Committee
|--- | ------------------------------------------------------------------

Set forth below is a brief description of the background and
business experience of each of our executive officers and directors for the past
five years:

Sir John Baring was appointed Chief Executive Officer
and director to the board of directors (the Board) on May 26, 2005. Following
the appointment of Mr. Jervis as Chief Executive Officer on October 17, 2005,
Sir John was appointed Chairman of the board. Sir John brings more than 30 years
of banking and investing experience to management. Since June 2002, Sir John has
acted as a managing and founding member of Mercator Management LLC, a leading
fund management company.

Teyfik Oezcanwas appointed Director, President and
Chief Executive Officer on December 20, 2006 following the retirement of Mr.
Jervis. Mr. Oezcan has been involved in start-up companies since 1993. He
developed and managed a company from 1993 to 1997 that provided cleaning and
maintenance service. In 1998, he commenced the development of Hallotel and
started operations in the year 2000.

- 33 -

---

Mr. Oezcan has been involved in developing and managing the
business of Hallotel since the start-up of its operations in 2000.

Ross Wilmot was appointed director on August 19, 2005.
Mr. Wilmot is a Chartered Accountant and for the past ten years has provided
independent financial consulting services. In addition to serving on the board
of Arvana, Mr. Wilmot serves the following public companies, CTF Technologies
Inc., Orex Ventures Inc., Orko Gold Corporation, Avigo Resources Corp., and Verb
Exchange Inc. He is a director in all of the companies and Chief Financial
Officer in all but Verb Exchange. Mr. Wilmot is the Chairman of the audit
committee.

Karen Engleson joined the Company in July, 2005, and was
appointed Corporate Secretary in October, 2005. She is acting Chief Financial
Officer in the company and is the Chief Financial Officer of the subsidiary
company Arvana Networks. Ms. Engleson is presently the Chief Financial Officer
of Multivision Communications Corp., a company that provides subscription
television and wireless data services in the country of Bolivia. Ms. Engleson
was the Controller of Multivision Communications Corp. from 1996 to May 2005, at
which time she was appointed as Chief Financial Officer of Multivision
Communications. Prior to working with Multivision Communications, Ms. Engleson
was Controller of Financial Operations for Rogers Cable TV, a major cable-TV
operator in Canada. She was appointed Corporate Secretary on October 17, 2005.
Ms. Engleson has degree in Business Administration from Simon Fraser University
and a Certified General Accountants designation.

Set forth below is a brief description of the background and
  business experience of each of our former executive officers and directors for
  the past five years:

Michael Jerviswas appointed President and Chief Executive
  Officer on October 17, 2005. He was appointed a director on August 19, 2005.
  Mr. Jervis is an experienced telecommunications professional with a background
  in telephony and subscription television. Prior to this, Mr. Jervis held senior
  management positions in B.C. Telephone (now Telus), Premier Cablevision, Rogers
  Cable TV, and Multivision Communications Corp. Mr. Jervis was chief operating
  officer for Multivision Communications Corp. from 1997 until May 2001 at which
  time he then became an independent business consultant. In addition to serving
  on the board of Arvana, Mr. Jervis is on the board of Multivision Communications.
  Mr.Jervis submitted his resignation as President and Chief Executive Officer
  and as a director effective December 20, 2006.

Leonard Gordon was appointed Chief Financial Officer and
director on March 17, 2005. Mr. Gordon has been the Chief Executive Officer of
Commercial Scientific Corporation since 1994, a firm that provides consulting
services to development stage companies in the complex technology industries.
Prior to this, Mr. Gordon has accumulated 20 years experience in chief executive
and other senior management positions in the financial services, engineering and
high technology businesses. Mr. Gordon submitted his resignation as Chief
Financial Officer and as a director effective March 12, 2007.

Robert Russell was appointed director on August 19,
2005. Mr. Russell is President and Chief Executive Officer of IP Horizon, LLC, a
major shareholder of Arvana and Arvanas technology and termination partner. IP
Horizon is a division of Draper Holdings Business Trust (DHBT). Mr. Russell was
recruited in 1999 by DHBT, a company known for accomplishments in television and
radio broadcasting. As President of DHBTs Technology Division, Mr. Russell has
spent the past 5 years constructing a new wing of the 30-year-old
communications and media conglomerate. Mr. Russell submitted his resignation as
a director effective November 21, 2007.

Each of our directors, other than Mr. Oezcan, was appointed as
  a director at our annual meeting of shareholders on July 24, 2006. Each member
  of our board of directors is elected annually and holds office until the next
  annual meeting of shareholders or until his or her successor has been elected
  or appointed, unless his or her office is earlier vacated in accordance with
  our bylaws. Our officers serve at the discretion of our board of directors and
  are appointed annually.

- 34 -

---

Family Relationships

Ms. Engleson is married to Michael Jervis, former president and
chief executive officer.

Audit Committee and Audit Committee Financial Expert

Our board of directors has established an audit committee that
is comprised of Ross Wilmot, Chairman, and Sir John Baring.

Our board of directors has determined that Mr. Wilmot qualifies
as an audit committee financial expert, as defined by the rules of the SEC.
Our board of directors has further determined that Mr. Wilmot is independent
as that term is defined in Rule 121 of the American Stock Exchange (AMEX)
listing standards.

The audit committee recommends independent accountants to audit
its financial statements, discusses the scope and results of the audit with the
independent accountants, considers the adequacy of the internal accounting
controls, considers the audit procedures of the Company and reviews the
non-audit services to be performed by the independent accountants.

The audit committee currently consists of only two members as
the board of directors does not currently have more than two independent
directors. We are actively seeking an additional independent director to be
appointed to the board of directors and the audit committee.

Code of Ethics

We have adopted a Code of Ethics that applies to all the
Companys directors, officers and employees. A copy of our Code of Ethics is
incorporated by reference to this Annual Report on Form 10-KSB as an exhibit.

Significant Employees

We do not have any other significant employees, other than our
directors and executive officers named above.

Compliance with Section 16(a) of the Securities Exchange
Act

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who beneficially own more than ten percent
of our equity securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers, directors and greater
than ten percent shareholders are required by SEC regulation to furnish us with
copies of all Section 16(a) forms they file. Based on our review of the copies
of such forms received by us, we believe that during the fiscal year ended
December 31, 2006 all such filing requirements applicable to our officers and
directors were complied with, except as set forth below:

Name and Principal Position
    Number of Late Reports
    Transactions Not Timely
      Reported
    Known Failures to File a
      FormTeyfik Oezcan, CEO and
    One
    Nil
    One


- 35 -

---

Name and Principal Position
    Number of Late Reports
    Transactions Not Timely
      Reported
    Known Failures to File a
      FormDirectorMichael Jervis, former Director and former CEO
    Nil
    Nil
    NilLeonard Gordon, Director and former CFO
    Nil
    Nil
    NilRoss Wilmot, Director
    One
    Nil
    NilRobert Russell, Former Director
    One
    Nil
    NilKaren Engleson, Corporate Secretary and Acting CFO
    Nil
    Nil
    NilBrulex (Greater than 10% Shareholder)
    One
    Nil
    NilIP Horizon, LLC (Greater than 10% Shareholder)
    Nil
    Nil
    Nil


|ITEM 10. | EXECUTIVE COMPENSATION.
|-------- | -----------------------

Summary Compensation Table

The following table sets forth certain compensation information

- Mr. Teyfik Oezcan, our chief executive officer,
- Michael Jervis, our former director and former chief executive officer, and
- Leonard Gordon, our former chief financial officer.

No executive officer of the Company earned total annual salary
and bonus exceeding $100,000 during the fiscal year ended December 31, 2006.

Name and
      Principal Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock
      Awards ($)
    Option
      Awards ($)
    Non- Equity
      Incentive Plan Compen- sation
      ($)
    Non- qualified
      Deferred Compen- sation
      Earnings ($)
    All Other
      Compen- sation ($)
    Total
      ($)Teyfik Oezcan, Director,
    2006
    $6,500(1)
    Nil
    Nil
    Nil
    Nil
    Nil
    - (7)
    $


- 36 -

---

Name and Principal
      Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock
      Awards ($)
    Option
      Awards ($)
    Non- Equity
      IncentivePlan Compen- sation
      ($)
    Non- qualified
      **Deferred** Compen- sation
      Earnings ($)
    All Other
      Compen- sation ($)
    Total
      ($)President, and Chief Executive
      Officer(1)Michael 
        Jervis, Former Director and
      Chief Executive 
        Officer(2)
      2006
      $65,857(4)
      Nil
      Nil
      $222,500(6)
      Nil
      Nil
      - (7)
      $Leonard 
        Gordon, Former Chief Financial
      Officer and Director(3)
      2006
      $60,000(5)
      
        $66,750 (6)


|(1) | Mr. Oezcan was appointed president and chief executive
      officer on December 20, 2006. His contract calls for an annual salary of
      180,000 euro. The pro-rated amount he was paid for the period until the
      end of the year was 5000 euro ($6,500 USD).                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                    
|(2) | Mr. Jervis was appointed as our chief executive officer
      on August 19, 2005 and resigned due to retirement on December 20,
    2006.                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                    
|(3) | Mr. Gordon was appointed director and chief financial
      officer in March 2005.                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                    
|(4) | Mr. Jervis salary for 2006 was $73,500 Canadian dollars
      ($65,857 USD). Of this amount, $45,500 Canadian dollars were paid in cash
      and as at December 31, 2006, he was owed $28,000 Canadian dollars ($24,026
      USD).                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                    
|(5) | In December 2006, Mr. Gordon was issued 156,250 shares of
      our common stock at a deemed price of $.40 per share in settlement of
      outstanding board and consulting fees. For further details, please refer
      to Debt Settlement with Directors below.                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                    
|(6) | Represents the dollar amount recognized for financial
      statement reporting purposes with respect to the 2006 fiscal year for the
      fair value of stock options granted to the executive officer, in 2006 and
      prior years, in accordance with SFAS 123R. See Note 8 for the assumptions
      made in valuation of the stock options.

- 37 -

---

|(7) | The aggregate amount of All Other Compensation paid to
      each individual was less than $10,000.00 .
|--- | ---------------------------------------------------------------------------------------------------------

Employment and Consulting Contracts

We have entered into an employment agreement with Mr. Teyfik
Oezcan, our president and chief executive officer in which he receives and
annual salary of 180,000 Euro. Mr. Oezcan is also entitled to expense
reimbursements and certain incentives as they are approved by the Board. In
addition, Mr. Oezcan is entitled to a company vehicle in which the company pays
for all operating costs including lease costs, insurance, maintenance, gas and
oil.

Mr. Michael Jervis, our former president and chief executive
officer, had a consulting agreement that provided for an initial base consultant
fee at the annual rate of $84,000 Canadian. Mr. Jervis was entitled to expense
reimbursements and certain incentives as they are approved by the Board.

Option Grants

The options granted to our named executive officers disclosed
in the Summary Compensation Table were granted on June 5, 2006 and vest as to
one-third on each of January 1, 2007, January 1, 2008 and January 1, 2009. The
options are exercisable until December 31, 2009 at a price of $1.25 per shares.
All such options were granted pursuant to our 2006 Stock Option Plan.

Outstanding Equity Awards as of December 31, 2006

The following table summarizes the outstanding equity awards as
of December 31, 2006 for each of our named executive officers:

Option Awards
    Stock AwardsName
      Number of Securities Underlying Unexercised
      Options (#) Exercisable
      Number of Securities Underlying Unexercised
      Options (#) Unexercisable
      Equity Incentive Plan Awards: Number of
      Securities Underlying Unexercised
      Unearned Options (#)
      Option Exercise Price ($)
      Option Expiration Date
      Number of Shares or Units of Stock
      That Have Not Vested
      (#)
      Market Value of Shares or
      Units of Stock That
      Have Not Vested ($)
      Equity Incentive
      Plan Awards: Number of
      UnearnedShares, Units or
      Other Rights That HaveNot
      Vested (#)
      Equity Incentive
      Plan Awards: Market or Payout
      Value of **Unearned** Shares,
      Units or Other Rights **That
      Have** Not Vested ($)Teyfik 
        Oezcan
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/AMichael 
        Jervis
      Nil
      250,000(1)
      N/A
      $1.25
      December 
        31, 2009
      N/A
      N/A
      N/A
      N/ALeonard 
        Gordon
    Nil
    75,000(1)
    N/A
      $1.25
    December 31, 2009
    N/A
    N/A
    N/A
    N/A


(1) Unvested options vest as to one-third on each of January 1,
2007, January 1, 2008 and January 1, 2009.

- 38 -

---

No share purchase options were exercised by our named executive
officers during our fiscal year ended December 31, 2006.

Long-Term Incentive Plans

We do not have any long-term incentive plans, pension plans, or
similar compensatory plans for our directors or executive officers.

Change of Control Agreements

We are not party to any change of control agreements with any
of our directors or executive officers.

Compensation of Directors

The following table summarizes the compensation of our
companys directors for the year ended December 31, 2006:

Name(1)
      Fees Earned or
      Paid in Cash ($)
      Stock Awards ($)
      Option Awards(2) ($)
      Non- Equity
      Incentiv e Plan Compen -sation
      ($)
      Non- qualified
      Deferred Compen- sation
      Earnings ($)
      All Other Compen- sation ($)
      Total ($)Sir John 
        Baring
      $60,000(3)
      $0
      $133,500
      $0
      $0
      $0
      $193,500Ross 
        Wilmot
      $63,900(4)
      $0
      $133,500
      $0
      $0
      $0
      $197,400Robert 
        Russell(5)
      $0
      $0
      $66,750
      $0
      $0
      $0
      $66,750


|1) | Leonard Gordon, Michael Jervis and Teyfik Oezcan are not
      included in this table as they are reported as officers or former officers
      of the Company and did not receive additional compensation for their
      service as directors.                      
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                       
|2) | Represents the dollar amount recognized for financial
      statement reporting purposes with respect to the 2006 fiscal year for the
      fair value of stock options granted to the executive officer, in 2006 and
      prior years, in accordance with SFAS 123R.
|   |                                                                                                                                                                                                                                                                       
|3) | Sir John Baring was paid $5,000 in cash and the balance
      owing was settled by the issuance of shares in December 2006 at a value of
      $.40 per share as described in further detail below.                                                                   
|   |                                                                                                                                                                                                                                                                       
|4) | Mr. Wilmot was paid $10,650 in cash and the balance owing
      was settled by the issuance of shares in December 2006 at a value of $.40
      per share as described in further detail below.                                                                       
|   |                                                                                                                                                                                                                                                                       
|5) | Robert Russell resigned from the board on November 1,
      2006.                                                                                                                                                                                                     

- 39 -

---

The Companys standard compensation arrangement for directors
consists of $5,000 per month payable 50% in cash and 50% in shares. Subsequent
to the debt settlement in December 2006, the Company deferred all cash and share
payments to directors until receipt of additional financing.

Outstanding Equity Awards as of December 31, 2006

The following table summarizes the outstanding equity awards as
of December 31, 2006 for each of our directors:

Option Awards
    Stock AwardsName
    Number of
      Securities Underlying Unexercised
      Options (#) Exercisable
    Number of
      Securities Underlying Unexercised
      Options (#) Unexercisable
    Equity
      Incentive Plan Awards: Number of
      Securities Underlying Unexercised
      Unearned Options (#)
    Option
      Exercise Price ($)
    Option
      Expiration Date
    Number
      of Shares or Units of Stock
      That Have Not Vested
      (#)
    Market
      Value of Shares or
      Units of Stock That
      Have Not Vested ($)
    Equity Incentive
      Plan Awards: Number of
      UnearnedShares, Units or
      Other Rights That HaveNot
      Vested (#)
    Equity Incentive
      Plan Awards: Market or Payout
      Value of **Unearned** Shares,
      Units or Other Rights **That
      Have** Not Vested ($)Sir 
        John Baring
      N/A
      150,000(1)
      N/A
      N/A
      December 
        31, 2009
      N/A
      N/A
      N/A
      N/ARoss Wilmot
      Nil
      150,000(1)
      N/A
      $1.25
    December 31, 2009
      N/A
      N/A
      N/A
      N/ARobert Russell (5)
      Nil
      75,000(1)
      N/A
      $1.25
    December 
        31, 2009  N/A
      N/A
      N/A
      N/A


|1) | Leonard Gordon, Michael Jervis and Teyfik Oezcan are not
      included in this table as they are reported as officers or former officers
      of the Company and did not receive additional compensation for their
      service as directors.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                 
|2) | Unvested options vest as to one-third on each of January
      1, 2007, January 1, 2008 and January 1, 2009.                                                                                                                                    

No share purchase options were exercised by our named executive
officers during our fiscal year ended December 31, 2006.

Debt Settlement with Directors

In December 2006, we issued an aggregate of 451,875 shares of
common stock to certain of our directors as payment in full and as settlement of
outstanding director and consulting fees. The shares were issued at a deemed
price of $0.40 per share.

- 40 -

---

|ITEM 11. | SECURITY OWNERSHIP OF
      CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT.
|-------- | ---------------------------------------------------------------------------

Security Ownership

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as at March 24, 2007
by: (i) each of our directors, (ii) each of our executive officers, (iii) our
executive officers and directors as a group, and (iv) each beneficial
shareholder known to us to own more than 5% of our outstanding common stock.
Unless otherwise indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.

Title of Class
    Name and Address of Beneficial
      Owner
    Number of Common Shares
    Percentage of Common
      Shares(1)Directors and OfficersCommon Stock
    Teyfik Oezcan Kurt-Tucholsky  Str. 21
      Egelsbach, Germany 63329
    Nil
    NilCommon Stock
    Michael Jervis(2) 207 4350
      Ponderosa Drive Peachland B.C. V0H 1X5
    203,333
    0.9%Common Stock
    Sir John Baring (3) 328 Arcadia
      Drive Ancramdale, New York 12503
    342,500
    1.6%Common Stock
    Ross Wilmot(4) 13548 19thAvenue South Surrey B.C. V4A 6B4
    333,125
    1.5%Common Stock
    Leonard Gordon(5) 1880 Century
      Park East, Ste 1402 Los Angeles CA 90067
    181,250
    0.8%Common Stock
    Robert Russell (6) c/o 808
      Priscilla Street Salisbury Maryland 21804
    25,000
    .1%Common Stock
    Karen Engleson(7) 207 4350
      Ponderosa Drive Peachland B.C. VOH 1X5
    133,333
    0.6%


- 41 -

---

Title of Class
    Name and Address of Beneficial
      Owner
    Number of Common Shares
    Percentage of Common
      Shares(1)Common Stock
    All Directors and Executive Officers
      as a Group (6 persons)
    1,218,542
    5.6%5%
      ShareholdersCommon Stock
    Brulex-Consultadoria Economica E Marketing
      Ltda. (8) Rua da Alfandega 13 9000  059 Funchal
      Maderia, Portugal
    3,541,700
    17.1%Common Stock
    Pensbreigh Holdings Ltd.(9)
      Chancery House High Street Bridgetown, Barbados
    1,067,000
    5.2%


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the persons actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding on March 12, 2007. The percentage calculations
      are based on the aggregate of 20,702,375 shares issued and outstanding as
      at March 12, 2007 plus 266,667 options that are eligible to be exercised
      on January 1, 2007 for a total of 21,920,917 shares.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(2) | Includes 120,000 common shares held in the name of
      Michael Jervis, 83,333 shares issuable pursuant to the Companys stock
      option plan exercisable within 60 days of March 28, 2007. Mr. Jervis is
      married to Karen Engleson. See footnote 7. Mr. Jervis resigned from his
      position on December 20, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(3) | Includes 292,500 common shares held in the name of Sir
      John Baring, and 50,000 shares issuable pursuant to the Companys stock
      option plan exercisable within 60 days of March 28, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(4) | Includes 283,125 common shares held in the name of Ross
      Wilmot, and 50,000 shares issuable pursuant to the Companys stock option
      plan exercisable within 60 days of March 28, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(5) | Includes 156,250 commons shares held in the name of
      Leonard Gordon, and 25,000 shares issuable pursuant to the Companys stock
      option plan exercisable within 60 days of March 28,
2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|(6) | Includes 25,000 common shares issuable to Robert Russell
      pursuant to the Companys stock option plan exercisable within 60 days of
      March 28, 2007.                                                                                                      
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                     
|(7) | Includes 100,000 common shares held in the name of Karen
      Engleson, and 33,333 shares issuable pursuant to the Companys stock
      option plan exercisable within 60 days of March 28, 2007. Ms. Engleson is
      married to Michael Jervis. See footnote 2.
|    |                                                                                                                                                                                                                                                                     
|(8) | The beneficial owner of Brulex-Consultadoria Economica E.
      Marketing Ltda is Mr. Bayram Yildizoglu.                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                     
|(9) | The beneficial owner of Pensbreigh Holdings Ltd. is Mr.
      Katsumi Sato.                                                                                                                                                                                         

Change of Control

We are not aware of any arrangement that might result in a
change in control in the future.

Equity Compensation Plan Information as at December 31, 2006

Plan Category
    Number of securities to
      be issued upon exercise of outstanding options.
    Exercise price
    Number of securities remaining
      available for future issuance under equity
      compensation plansEquity compensation plan approved by security holders
    1,600,000
    $1.25
    1,400,000Equity compensation plans not approved by security holders
    N/A
    N/A
    N/A1,600,000
    $1.25
    1,400,000


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|ITEM 12. | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS.
|-------- | -----------------------------------------------------

Except as described below, none of the following persons has
any direct or indirect material interest in any transaction to which we were or
are a party during the past two years, or in any proposed transaction to which
we propose to be a party:

|(A) | any director or officer;                                                                                                                                                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                       
|(B) | any proposed nominee for election as a
director;                                                                                                                                                      
|    |                                                                                                                                                                                                       
|(C) | any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our common
      stock; or                                              
|    |                                                                                                                                                                                                       
|(D) | any relative or spouse of any of the foregoing persons,
      or any relative of such spouse, who has the same house as such person or
      who is a director or officer of any parent or
subsidiary.

Executive Compensation

For the year ended December 31, 2006, we incurred $161,847 for
services rendered by directors, the President, the Chief Financial Officer and
the Corporate Secretary of Arvana, Inc. and the President and Corporate
Secretary of Arvana Networks.

Accounts Payable and Accrued Liabilities

At December 31, 2006, accounts payable and accrued liabilities
included $41,187 owed by us to directors and officers and companies controlled
by directors and officers of the Company.

Debt Settlement with Directors

On December 20, 2006, we completed the issuance of an aggregate
of 451,875 shares of our common stock to certain of our directors, as provided
below, as payment in full and as settlement of outstanding debt owed by us to
the directors on account of accrued but unpaid directors and consulting fees
based on a per share price of $0.40 per share:

Director
    Unpaid Fees
    Number of shares Issued:Sir John Baring
    $65,000
    162,500Leonard Gordon
    $62,500
    156,250Ross Wilmot
    $53,250
    133,125TOTAL
    $180,750
    451,875


Brulex  Consultadoria Economica E Marketing Ltda.

On August 9, 2006, we entered into a share purchase agreement
with Brulex and Hallotel (the Share Purchase Agreement) pursuant to which we
acquired control over Hallotel through the acquisition of all of the outstanding
shares of BCH Beheer, a subsidiary that owns all of the outstanding shares of
Hallotel. The purchase price for the acquisition was paid by way of:

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- the issue of 3,541,700 shares of our common stock, valued at $0.40 per
  share;
- the payment of €500,000 ($639,700) in cash; and
- the issuance of a promissory note in the principal amount of €250,000
  ($319,850)

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

- a payable to Brulex in the amount of €80,932 ($103,544) for the price
  actually paid by Hallotel for any telephone 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
- a payable to Brulex in the amount of €277,630 ($355,200) for 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.

Prior to the acquisition date, Arvana had paid $26,941 for
acquisition related expenses and this amount was included in the purchase price.
A transaction fee was paid by issuing 208,300 additional shares of our common
stock, valued at $0.40 per share.

Brulex has agreed that it will not sell or transfer any of the
shares issued as part of the consideration for the acquisition (or any interest
therein) until one year after the closing date of the acquisition, being August
23, 2007. In addition, Brulex has agreed to deposit the shares in escrow with us
to be released from escrow twelve months after the closing date, except in the
event of a claim made by us under the Share Purchase Agreement, in which case
the shares will be released on a final resolution of the claim.

The purchase price of the transaction, with a deemed value of
$2,945,235 was allocated as to:

- $105,659 in cash,
- $1,080,529 in accounts receivable,
- $15,371 in other current assets,
- $1,368,545 in accounts payable and acrrued liabilities and,
- $2,605,499 to the value of monthly 16,500 subscribers held by Hallotel at
  the time of the acquisition.

Equipment valued at $500,915 and software valued at $8,875 was
held by Hallotel on the acquisition date.

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|ITEM 13. | EXHIBITS
|-------- | --------

The following exhibits are included with this Annual Report on
Form 10-KSB:

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 (5)10.5
      Termination Agreement between
        Arvana Inc., Gloinfo 500 Soluções EM Telemática Ltda.,
        Paulo Santos Messina and Lucia Sangiacomo Messina, Arvana Participações
        S.A., Arvana Comunicações do Brasil S. A. and Arvana Networks
        Inc. dated October 31, 2006. (6)14.1
      Code of Ethics (4)31.1
      Certification
        of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange
        Act (7)31.2
      Certification of Chief
        Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act (7)32.1
      Certification
        of Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange
        Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
        the Sarbanes-Oxley Act of 2002 (7)32.2
      Certification of Chief
        Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002 (7)


|(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.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

- 46 -

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|(2) | Previously filed with the SEC as an exhibit to the
      Companys Current Report on Form 8-K filed with the SEC on August 19,
      2005.       
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                  
|(3) | Previously filed with the SEC as an exhibit to the
      Companys Quarterly Report on Form 10-QSB filed with the SEC on December
      14, 2005.
|    |                                                                                                                                                  
|(4) | Previously filed with the SEC as an exhibit to the
      Companys Annual Report on Form 10-KSB filed with the SEC on March 31,
      2006.      
|    |                                                                                                                                                  
|(5) | 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.       
|    |                                                                                                                                                  
|(6) | Previously filed with the SEC as an exhibit to the
      Companys Current Report on Form 8-K filed with the SEC on August 15,
      2006.       
|    |                                                                                                                                                  
|(7) | Filed as an exhibit to this Annual Report on Form
      10-KSB.                                                                                  

|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

The following table sets forth information regarding the amount
billed to us by our independent auditor, Dohan & Company, CPAs, P.A.,for
our last fiscal year and for the previous fiscal year ended December 31, 2005
and our prior independent auditor, BDO Dunwoody LLP, for the previous fiscal
year ended December 31, 2005:

Years ended
      December 312006
    2005Audit Fees:
    $38,400
    $77,000Audit Related Fees:
    $20,006
    $53,036Tax Fees:
    $Nil
    $NilAll Other Fees:
    $Nil
    $NilTotal:
    $58,406
    $130,036


Audit Fees

Audit Fees are the aggregate fees billed by our independent
auditor for the audit of our consolidated annual financial statements, reviews
of interim financial statements and attestation services that are provided in
connection with statutory and regulatory filings or engagements.

Audit-Related Fees

Audit-Related Fees are fees charged by our independent auditor
  for assurance and related services that are reasonably related to the performance
  of the audit or review of our financial statements and are not reported under
  "Audit Fees." This category comprises fees billed for independent accountant
  review of our interim financial statements and management discussion and analysis,
  as well as advisory services associated with our financial reporting.

- 47 -

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Policy on Pre-Approval by Audit Committee of Services Performed
  by Independent Auditors

Our Audit Committee pre-approves all audit services to be
provided to us by our independent auditors. Our Audit Committees policy
regarding the pre-approval of non-audit services to be provided to us by our
independent auditors is that all such services shall be pre-approved by the
Audit Committee. Non-audit services that are prohibited to be provided by our
independent auditors may not be pre-approved. In addition, prior to the granting
of any pre-approval, our Audit Committee must be satisfied that the performance
of the services in question will not compromise the independence of the
independent auditors.

- 48 -

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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/ Teyfik Oezcan*                                        | 
|----- | ---------------------------------------------------------- | 
|      | Teyfik Oezcan, President and
      Chief Executive Officer | 
|      |                                                            | 
|Date: | April 13, 2007                                             | 

In accordance with the Securities Exchange Act, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|By:   | */s/ Teyfik Oezcan*                                        | 
|----- | ---------------------------------------------------------- | 
|      | Teyfik Oezcan, President and Chief
      Executive Officer
|      | (Principal Executive Officer)                             
|      | Director                                                  
|      |                                                           
|Date: | April 13, 2007                                            

|By:   | */s/ Karen Engleson*                                                 | 
|----- | -------------------------------------------------------------------- | 
|      | Karen Engleson, Acting Chief
      Financial Officer                
|      | (Principal Financial Officer and
      Principal Accounting Officer)
|      |                                                                     
|Date: | April 13, 2007                                                      

|By:   | */s/ Sir John Baring* | 
|----- | --------------------- | 
|      | Sir John Baring      
|      | Director             
|      |                      
|Date: | April 13, 2007       

|By:   | */s/ Ross Wilmot* | 
|----- | ----------------- | 
|      | Ross Wilmot      
|      | Director         
|      |                  
|Date: | April 13, 2007   

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