ARVANA INC - Annual Report: 2008 (Form 10-K)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 0-30695

ARVANA INC.
(Exact name of registrant as specified in its charter)

Suite 2610, 1066 West Hastings Street, Vancouver, BC V6E 3X2
(Address of principal executive offices) (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [   ]    No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [   ]    No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]    No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange
Act. (Check one):

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

The aggregate market value of the common stock held by nonaffiliates of the registrant (20,546,750 shares) based on the $0.01
closing price of the registrant's common stock as reported on the OTCBB on June 30, 2008, was approximately $205,468. For
purposes of this computation, all officers, directors and 10% beneficial owners of the registrant are deemed to be affiliates.
Such determination should not be deemed to be an admission that such officers, directors or 10% beneficial owners are, in fact,
affiliates of the registrant.

As of April 28, 2009, there were 21,202,375 outstanding shares of the registrant's common stock.

ITEM 1.        DESCRIPTION OF BUSINESS.

FORWARD-LOOKING STATEMENTS

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

Overview

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

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

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:

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 were 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. We are no longer pursuing business in the telecommunications industry and Arvana Networks and its subsidiaries are considered to be inactive.

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”), its subsidiary BCH Beheer, and its subsidiary Hallotel Deutschland GmbH (“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 Brulex.

On December 7, 2007, we entered into a settlement and share purchase agreement with Brulex to sell Hallotel back to Brulex. Under the terms of the agreement Brulex returned to the Company for cancellation the 3,541,700 of its common shares issued for the acquisition of BCH Beheer and Hallotel. The shares were valued at $283,336 based on our common share price of $0.08 on December 7, 2007. The amounts due to Brulex under the terms of the original Acquisition were reduced by $447,116 to €225,000. We also wrote off a receivable due from Hallotel in the amount of $74,913 as well as software retained by Hallotel in the amount of $64,104. The net effect of the transactions resulted in a loss of $2,239,014 upon disposal of Hallotel. With the sale of Hallotel we had exited the telecommunications industry.

On December 30, 2008, the Company entered into a sale and purchase agreement with Nazleal S.A. to dispose of the Company’s subsidiary, BCH Beheer. Under the terms of the agreement, Nazleal S.A. will assume all debts, obligations, and guarantees of BCH Beheer as of December 30, 2008, totaling €40,334 ($56,145) and the Company will reimburse Nazleal S.A. €20,000 ($27,840) for assuming all of BCH Beheer’s liabilities. The Company also wrote off $8 in cash. The net effect of the above transactions resulted in a gain of $28,297 upon disposal of BCH Beheer.

Our Plan of Operations

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

We will not be able to pursue any new business opportunities without additional financing. Our board of directors and management are actively pursuing obtaining financing in order to maintain operations while we evaluate potential businesses. Since December 31, 2008 we have obtained loans totaling $25,000 to provide operating capital. We estimate that this provides sufficient cash to operate through June 30, 2009.

In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $200,000 during 2009. We had cash in the amount of $738 and a working capital deficit of $1,297,734 as at December 31, 2008. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.

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

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

Management Team

Teyfik Oezcan, the Chief Executive Officer of Hallotel, was invited to join the Arvana board and was appointed President and Chief Executive Officer on December 20, 2006. With the sale of Hallotel to Brulex, he resigned as CEO and a director of Arvana and its subsidiaries on December 7, 2007. Leonard Gordon resigned as Chief Financial Officer effective March 12, 2007. Karen Engleson, our Corporate Secretary, was appointed Acting Chief Financial Officer effective March 12, 2007. Ms Engleson resigned as an officer and secretary on May 8, 2007.

Wayne Smith was appointed Chief Financial Officer, Corporate Secretary and Treasurer on May 8, 2007 and Acting Chief Executive Officer on December 7, 2007 with the resignation of Mr. Oezcan. Mr. Smith is a self-employed financial consultant. In addition to his position with Arvana Inc, Mr. Smith was the Chief Financial Officer, Secretary, Treasurer and a Director from February 2, 2007 until December 15, 2008 of Xeno Transplants Corporation. Xeno is a company engaged in the research and development of xenotransplantation in the biotechnology industry that was publicly traded on the OTC Bulletin Board and is currently traded on the Pink Sheets. Previously, Mr. Smith was the Chief Operating Officer and Chief Financial Officer of Visiphor Corporation from July 2003 through January 2007. Visiphor is a software development and consulting services company that was publicly traded on the OTC Bulletin Board and the TSX Venture Exchange. Prior to those positions, he served as Visiphor’s Chief Financial Officer from September 2002 to July 2003. Since 1997, Mr. Smith has been a partner of TelePartners Consulting Inc., a consulting services company that provides management and financial consulting services. Mr. Smith holds a Chartered Accountant designation in Canada.

Research and Development Expenditures

The Company has not incurred any research and development expenditures during 2008 or 2007.

ITEM 2.        DESCRIPTION OF PROPERTIES.

We rent approximately 1300 square feet of office space at 1066 West Hastings Street in Vancouver, British Columbia, Canada, on a month-to-month basis that we use for our principal executive offices. Our monthly rent payments total $2,500 Canadian dollars.

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, 2008.

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 AVNI 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:

FRANKFURT (in Euros):

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 April 28, 2009, we had 21,202,375 shares of common stock issued and outstanding and there were 55 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.

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:

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

Recent Sales of Unregistered Securities

During the quarter ended December 31, 2008, there were no sales of securities.

Small Business Issuer Purchases of Equity Securities

During the quarter ended December 31, 2008, there were no purchases of equity securities effected by the Company or any affiliated purchasers.

ITEM 7.        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, 2008 should be read in conjunction with our audited consolidated financial statements and related notes for the year ended December 31, 2008.

Presentation of Financial Information

Our financial statements for the year ended December 31, 2008 include the accounts of:

• Arvana Networks;
• Arvana Par;
• Arvana Com;
• BCH Beheer up to the disposal date of December 30, 2008;
• Hallotel Deutschland GmbH up to the disposal date of December 7, 2007.

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 30, 2008 for BCH Beheer and December 7, 2007 for Hallotel. Our results of operations presented below do not include the results of operations of BCH Beheer after December 30, 2008 or Hallotel after December 7, 2007.

Results of Operations

References in the discussion below to 2008 are to our fiscal year ended December 31, 2008. Similarly, references to 2007 are to our fiscal year ended December 31, 2007. References to 2009 are to our current fiscal year that will end December 31, 2009.

Our operations for the years ended December 31, 2008 and 2007 are summarized below. The results of operations for the year ended December 31, 2007 are from our telecommunications industry business. We are no longer in the telecommunications industry.

Revenues

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

Cost of Sales

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

Gross Profits

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

Sales and Promotion Expenses

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

Administration Expenses

Administrative expenses are comprised of costs associated with management compensation, office overhead including rent, legal fees, and consulting services. The decrease in our administrative expenses for the year ended December 31, 2008 compared to December 31, 2007 is due to the disposal of Hallotel which generated a majority of our previous general and administrative expenses.

Foreign Exchange Gains (Losses)

Foreign exchange gains and losses are associated with exchange rate changes affecting the Company’s payables and loans that are based in Euros and Canadian dollars.

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 have recorded an expense of $1,424,000 in stock-based compensation expense over the vesting period of the options. The Company recorded an expense of $528,800 in 2008 and $662,800 in 2007 for the pro-rated portion of the full charge.

Loss on the write-off of equipment

In fiscal 2007, we recorded a loss on the write-off of equipment in the amount of $37,196 which was attributable to the net write-off of equipment owned by Arvana Comunicacoes.

Loss on disposal of Hallotel

On December 7, 2007, the Company entered into a settlement and share purchase agreement with Brulex to dispose of the Company’s subsidiary, Hallotel. Under the terms of the agreement Brulex returned to the Company for cancellation the 3,541,700 of its common shares issued for the acquisition of BCH Beheer and Hallotel. The shares were valued at $283,336 based on the Company’s common share price of $0.08 on December 7, 2007. The amounts due to Brulex under the terms of the original Acquisition were reduced by $447,116, which consisted of accounts payable of $338,236 and note payable of $108,880, to €225,000. The Company wrote off a receivable due

from Hallotel in the amount of $74,913 as well as software retained by Hallotel in the amount of $64,104. The original investment in Hallotel by the Company of $2,948,003 was adjusted by the effect of Hallotel’s operations from acquisition to disposal resulting in a net decrease in the Company’s retained earnings of $74,455 and an accumulated other comprehensive loss of $43,099. The net effect of the above transactions resulted in a loss of $2,239,014 upon disposal of Hallotel.

Gain on disposal of BCH Beheer

On December 30, 2008, the Company entered into a sale and purchase agreement with Nazleal S.A. to dispose of the Company’s subsidiary, BCH Beheer. Under the terms of the agreement, Nazleal S.A. will assume all debts, obligations, and guarantees of BCH Beheer as of December 30, 2008, totaling €40,334 ($56,145) and the Company will reimburse Nazleal S.A. €20,000 ($27,840) for assuming all of BCH Beheer’s liabilities. The Company also wrote off $8 in cash. The net effect of the above transactions resulted in a gain of $28,297 upon disposal of BCH Beheer.

Net Loss for the Period

We incurred a net loss of $709,500 for the year ended December 31, 2008 compared with a net loss of $3,375,390 in 2007. The majority of the loss in 2007 was related to the loss on disposal of our Hallotel business.

Liquidity and Capital Resources

As at December 31, 2008, we had cash of $738 and a working capital deficit of $1,297,734. This compares to cash of $2,913 and working capital deficit of $1,117,333 as at December 31, 2007.

Plan of Operations

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

We will not be able to pursue any new business opportunities without additional financing. Our board of directors and management are actively pursuing obtaining financing in order to maintain operations while we evaluate potential businesses. Since December 31, 2008 we have obtained loans totaling $25,000 to provide operating capital. We estimate that this provides sufficient cash to operate through June 30, 2009.

In order to maintain operations while we evaluate new businesses we anticipate that we will need additional funding of approximately $200,000 during 2009. We had cash in the amount of $738 and a working capital deficit of $1,297,734 as at December 31, 2008. If we are successful in identifying a new business opportunity we will require funding in order to pursue that opportunity. The amount of funding required will depend on the opportunity and is not determinable at this time.

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

Cash Used in Operating Activities

We used cash in operations in the amount of $240,129 during fiscal 2008, as compared to $616,700 during fiscal 2007. Cash used in operations for the two periods is not considered to be comparable due to the significant difference in the operations of the Company during the two periods. Cash used in operations during the year ended December 31, 2008 was attributable primarily to payments for administrative expenses.

Cash Used in Investing Activities

We did not use cash in investing activities during the year ended December 31, 2008. In the year ended December 31, 2007 cash of $139,354 was used by our former subsidiary Hallotel. Of this amount, $89,920 was attributable to the acquisition of equipment, a recovery of $3,702 from proceeds of the sale of equipment and $53,136 was cash held by Hallotel at the date of disposal.

Cash Flows from Financing Activities

The Company obtained $237,954 from financing activities during fiscal 2008. The Company received $230,975 from unsecured loans bearing 6% interest per annum. The Company also increased its indebtedness to related parties during the year by $6,979. In fiscal 2007 the Company received $360,672 from unsecured loans bearing 6% interest per annum and received advances of $150,966 from related parties.

Amounts due to IP Horizon LLC

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.

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 were not reflected on our financial statements as having been issued. In 2007 the following agreement was reached with IPH with respect to this transaction:

IPH returned to the Company for cancellation the 1,500,000 common shares of Arvana issued to IPH in August 2005.

IPH had contributed certain equipment to, and had developed certain software for, the Company, with an agreed upon value of $150,000. In settlement of the debt due from the contribution of the aforementioned equipment and software architecture services from IPH to Arvana and Arvana Networks, we entered into a Regulation D Debt Conversion Agreement dated effective March 28, 2007 with Arvana Networks Inc. and IPH, a copy of which was filed with our current report on Form 8-K filed with the SEC on May 4, 2007. Our board of directors approved the issuance of the 500,000 new shares to IPH on May 1, 2007, which shares are subject to a two year contractual hold period. Due to a delay in processing, the original 1,500,000 shares were returned to treasury and cancelled during the third quarter of fiscal 2007 and the 500,000 debt settlement shares were issued during the third quarter of fiscal 2007.

Going Concern

For the year ended December 31, 2008, the Company incurred a loss from operations of $709,500. At December 31, 2008, the Company had a working capital deficiency of $1,297,734. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Since inception of the Company 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

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

Our financial statements include the accounts of the Company, its wholly-owned subsidiaries Arvana Networks, Arvana Par, Arvana Com and its former wholly owned subsidiaries BCH Beheer up to December 30, 2008 and Hallotel up to December 7, 2007. All significant inter-company transactions and balances have been eliminated.

Foreign currency translation and transactions

Our functional currency is the United States dollar.

The Company uses the temporal method when translating the Brazilian subsidiary operations. Long-term assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate in effect on the transaction date. Revenue and expenses are translated at the average rates of exchange prevailing during the periods.

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

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

Estimates

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

Stock-based Compensation Expense

The Company accounts for all stock-based payments to employees and non-employees under SFAS No.123R, “Accounting for Stock-Based Compensation,” using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date. We granted stock options in June 2006 and have recorded an expense of $1,424,000 in stock-based compensation expense over the vesting period of the options. The Company recorded an expense of $528,800 in 2008 and $662,800 in 2007 for the prorated portion of the full charge.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.

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

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

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

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets or FSP FAS 142-3. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The intent of the position is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the intangible asset. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. We are assessing the potential impact that the adoption of FSP FAS 142-3 may have on our consolidated financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles or SFAS No. 162. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP. This statement shall be effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. We do not believe that implementation of this standard will have a material impact on our consolidated financial position, results of operations or cash flows.

In June 2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities,” (FSP EITF 03-6-1). FSP EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. Management has determined that the adoption of FSP EITF 03-6-1 will not have an impact on the Financial Statements.

The Company does not expect that the adoption of these new accounting pronouncements will have a significant effect on its financial statements.

ITEM 8.        FINANCIAL STATEMENTS.

Our audited financial statements for the year ended December 31, 2008, as set forth below, are included with this Annual Report on Form 10-K. 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.

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of
Arvana, Inc. and subsidiaries (A Development Stage Company)

We have audited the accompanying consolidated balance sheets of Arvana, Inc. and subsidiaries (A Development Stage Company) as at December 31, 2008 and 2007 and the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficiency) and cash flows for the years then ended and for the period from the beginning of the development stage on January 1, 2005 to December 31, 2008. 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. 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 the Company as at December 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended and for the period from the beginning of the development stage on January 1, 2005 to December 31, 2008 in conformity with generally accepted accounting principles in the United States of America.

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 has minimal assets is dependent upon financing to continue operations has suffered recurring losses from operations and has working capital deficit as of December 31, 2008. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regards to these matters are discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
1200 – 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y 1G6 
Telephone (604) 687-0947 Fax (604) 687-6172

 ARVANA INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN US DOLLARS)

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

ARVANA INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(EXPRESSED IN US DOLLARS)

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

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

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

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

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

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

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

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

These consolidated financial statements for the year ended December 31, 2008 include the accounts of the Company, its subsidiary Arvana Networks (including its wholly-owned subsidiaries Arvana Par and Arvana Comunicações do Brasil S. A. (“Arvana Com”) and its formerly-owned subsidiary BCH Beheer B.V. up to its date of disposal on December 30, 2008 (and its formerly wholly-owned subsidiary Hallotel Deutschland GmbH up to its date of disposal on December 7, 2007). The Company has ceased all operations in its subsidiary companies, and has written-off or disposed of all assets in the subsidiary companies, consequently they are now all considered to be inactive subsidiaries.

These consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. For the year ended December 31, 2008, the Company incurred a loss from operations of $709,500. At December 31, 2008, the Company had a working capital deficiency of $1,297,734. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

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

2. Summary of Significant Accounting Policies

a) Basis of presentation
The Company began to generate revenues as a result of the acquisition of Hallotel during the final four months of 2006. In 2007 the Company commenced its planned principal operations and determined its target market segments and market strategies. Consequently, the Company exited the development stage during early 2007. The Company then disposed of Hallotel in December 2007 and ceased all operations in its subsidiary companies. The Company is again in the process of evaluating business opportunities and has returned to the development stage and presents its financial statements in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises”. The Company’s fiscal year end is December 31. The accompanying consolidated financial statements of Arvana Inc. for the years ended December 31, 2008 and 2007, and for the cumulative amounts from the beginning of the development stage on January 1, 2005, through December 31, 2008, have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for financial information with the instructions to Form 10-K and Regulation S-K. 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
Included in the financial statements are the accounts of the Company, its wholly-owned subsidiaries Arvana Networks, Arvana Par, and Arvana Com. The accounts of the Company’s formerly wholly-owned subsidiary, BCH Beheer, are included up to the date of its disposal on December 30, 2008. The accounts of the Company’s formerly wholly-owned subsidiary, Hallotel, are included up to the date of its disposal on December 7, 2007. All significant inter-company transactions and balances have been eliminated.

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

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 Company used the current rate method when translating its former Dutch subsidiary BCH Beheer and its former German subsidiary Hallotel. All assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate in effect on the balance sheet date. Revenue and expenses are translated at the average rates of exchange prevailing during the periods.

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.

The exchange rate prevailing at December 31, 2008, was 2.3145, stated in the Brazilian Real per one US dollar. The average exchange rate during the twelve-month period ended December 31, 2008, was 1.8402 stated in the Brazilian Real per one US dollar. For the Euro, the exchange rate prevailing at December 31, 2008, was 1.3920 US dollars per Euro and the average exchange rate during the twelvemonth period ended December 31, 2008, was 1.4713 US dollars per Euro.

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:

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.

k) Financial instruments
Financial instruments of the Company are comprised of cash, accounts payable and accrued liabilities, note payable, amounts due to and from related parties, and loans payable. 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) Concentration of credit risk
Financial instruments that potentially subject the company to concentrations of credit risk consists of cash. 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) Asset retirement obligations
The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. The Company also records a corresponding asset which is amortized over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement cost). The Company does not have any asset retirement obligations for the periods presented.

n) Income taxes
Income taxes are provided in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss 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) Stock-based compensation
The Company accounts for all stock-based payments to employees and non-employees under SFAS No. 123R, “Accounting for Stock-Based Compensation,” using the fair value based method. Under the fair value method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.

p) Net loss per share
Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted loss per share is computed using the weighted average number of common shares and potentially dilutive common stock equivalents, including stock options and warrants. As at December 31, 2008, 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.

q) Reclassifications
Certain of the comparative figures for the prior year have been reclassified to conform with the presentation adopted in the current year.

r) Recent accounting pronouncements
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.

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

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

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

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets or FSP FAS 142-3. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The intent of the position is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the intangible asset. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. We are assessing the potential impact that the adoption of FSP FAS 142-3 may have on our consolidated financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles or SFAS No. 162. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP. This statement shall be effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. We do not believe that implementation of this standard will have a material impact on our consolidated financial position, results of operations or cash flows.

In June 2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities,” (FSP EITF 03-6-1). FSP EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. Management has determined that the adoption of FSP EITF 03-6-1 will not have an impact on the Financial Statements.

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 of which are described below) of Arvana Networks were exchanged for an equal number of shares in Arvana Inc.

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.

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 were not reflected on our financial statements as having been issued. In 2007 the following agreement was reached with IPH with respect to this transaction:

4. Arvana Comunicações Transaction

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

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 were as follows:

During 2007 the Company determined that an advance of $58,411 that it had made to Gloinfo was uncollectible and wrote it off as bad debt expense. During 2007 the Company also wrote-off $37,196 in property and equipment held by Gloinfo that the Company determined was unrecoverable.

5. BCH Beheer and Hallotel Deutschland GmbH Transactions

On August 9, 2006 the Company, Brulex – Consultadoria Economica E Marketing Ltda. (“Brulex”) 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:

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

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 purchase price of the transaction, with a value of $2,948,003 was allocated as to $105,659 in cash, $1,080,529 in accounts receivables, $15,371 in other current assets, $1,368,845 in accounts payable and accrued liabilities and, $2,605,499 to the value of monthly 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.

On December 7, 2007, the Company entered into a settlement and share purchase agreement with Brulex to dispose of the Company’s subsidiary, Hallotel. Under the terms of the agreement Brulex returned to the Company for cancellation the 3,541,700 of its common shares issued for the acquisition of BCH Beheer and Hallotel. The shares were valued at $283,336 based on the Company’s common share price of $0.08 on December 7, 2007. The amounts due to Brulex under the terms of the original Acquisition were reduced by $447,116, which consisted of accounts payable of $338,236 and note payable of $108,880, to €225,000. The Company wrote off a receivable due from Hallotel in the amount of $74,913 as well as software retained by Hallotel in the amount of $64,104. The original investment in Hallotel by the Company of $2,948,003 was adjusted by the effect of Hallotel’s operations from acquisition to disposal resulting in a net decrease in the Company’s retained earnings of $74,455 and an accumulated other comprehensive loss of $43,099. The net effect of the above transactions resulted in a loss of $2,239,014 upon disposal of Hallotel.

On December 30, 2008, the Company entered into a sale and purchase agreement with Nazleal S.A. to dispose of the Company’s subsidiary, BCH Beheer. Under the terms of the agreement, Nazleal S.A. will assume all debts, obligations, and guarantees of BCH Beheer as of December 30, 2008, totaling €40,334 ($56,145) and the Company will reimburse Nazleal S.A. €20,000 ($27,840) for assuming all of BCH Beheer’s liabilities. The Company also wrote off $8 in cash. The net effect of the above transactions resulted in a gain of $28,297 upon disposal of BCH Beheer.

6. Property and Equipment

7. Related Parties and Loans Payable

On February 20, 2007, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of 150,000 Euros ($208,800 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $23,776 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On June 1, 2007, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $35,000 CAD ($28,735 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $2,807 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On November 6, 2007, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of 75,000 Euros ($104,400 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $7,616 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On March 26, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $50,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $2,298 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On March 26, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $5,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $230 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On March 31, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $50,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $2,258 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On April 7, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $50,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $2,200 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On April 9, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $45,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $1,965 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On June 26, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $3,000 CAD ($2,463 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $75 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On July 4, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $10,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $294 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On July 10, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $2,500 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $71 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On August 12, 2008, the Company received an unsecured, non-interest bearing loan from an unrelated party in the amount of $6,300 CAD. The Company repaid $2,000 CAD of this loan on October 16, 2008, leaving a loan balance of $4,300 CAD ($3,530 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company.

On September 12, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $5,000 CAD ($4,105 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $74 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On October 16, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $2,000 CAD ($1,642 USD). Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $21 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On October 21, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $5,000 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $59 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

On November 13, 2008, the Company received an unsecured, 6% interest per annum loan from a shareholder of the Company in the amount of $3,500 USD. Repayment of the loan is due on closing of any future financing arrangement by the Company. Accrued interest of $28 has been recorded in accounts payable and accrued liabilities for the year ended December 31, 2008.

At December 31, 2008, the Company had amounts due to related parties in the amount of $196,482 (December 31, 2007 - $198,517). This amount includes $136,100 (December 31, 2007 - $136,100) payable to three directors for services rendered during 2007. This amount is to be paid part in cash and part in stock at a future date with the number of common shares determined by the fair value of the shares on the settlement date. The amounts owing bear no interest, are unsecured, and have no fixed terms of repayment.

For the year ended December 31, 2008, $83,671 (December 31, 2007 $26,707) was incurred in general and administrative expenses by the Company for services rendered by the current Chief Executive Officer, Chief Financial Officer and Corporate Secretary of the Company. At December 31, 2008, $6,979 (December 31, 2007 $Nil) was owed to the current Chief Executive Officer, Chief Financial Officer and Corporate Secretary of the Company. At December 31, 2008, $16,420 (December 31, 2007 $20,176) was owed to the former Chief Financial Officer and Corporate Secretary and $22,988 (December 31, 2007 $28,246) was owed to the former President / Chief Executive Officer. The Corporate Secretary of Arvana Networks Inc. was owed $13,995 at December 31, 2008 (December 31, 2007 $13,995). The amounts owing bear no interest, are unsecured, and have no fixed terms of repayment.

For the year ended December 31, 2007, $26,707 (December 31, 2006 $NIL) was incurred in general and administrative expenses by the Company for services rendered by the current Chief Financial Officer and Corporate Secretary of the Company. At December 31, 2007, $20,176 (December 31, 2006 $17,200) was owed to the former Chief Financial Officer and Corporate Secretary and $28,246 (December 31, 2006 $24,080) was owed to the former President / Chief Executive Officer. The Corporate Secretary of Arvana Networks Inc. was owed $13,995 at December 31, 2007 (December 31, 2006 $6,364). The amounts owing bear no interest, are unsecured, and have no fixed terms of repayment.

8. Share Capital

(a) During the year ended December 31, 2007, 3,541,700 shares were to be returned to the Company and cancelled as part of the Brulex Settlement Agreement entered into on December 7, 2007, see Note 5. These shares had not yet been cancelled at December 31, 2008 and have been recorded as treasury stock at a value of $283,336 until they are cancelled.

During the year ended December 31, 2007, the Company cancelled and returned to treasury 16,000 common shares at a par value of $0.001 per share. These shares had been held as unissued by the Company’s legal counsel.

During the year ended December 31, 2007, the Company issued 500,000 common shares at a price of $0.15 per share in settlement of debt, see Note 3.

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

(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, and have been expensed over the vesting period of the options. The Company recorded an expense of $528,800 in 2008 ($662,800 - 2007) for the balance of the full charge. The weighted average fair value of options granted during 2006 was $0.89.

As at December 31, 2008, the following incentive stock options are outstanding:

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

9. Segmented Information

The Company has no reportable segments. All of the Company’s equipment at December 31, 2008, and December 31, 2007, was located in North America.

10. Deferred Income Taxes

Income tax benefits attributable to losses from United States of America operations was $Nil for the years ended December 31, 2008 and 2007, 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:

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2008 and 2007 are presented below:

The valuation allowance for deferred tax assets as of December 31, 2008 and 2007 was $387,492 and $295,099, 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.

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 $1,140,000 prior to the expiration of the net operating loss carryforwards.

11. Subsequent Events

Subsequent to December 31, 2008, the Company has received a loan from a shareholder of the Company totaling $25,000. The loan is unsecured, payable on demand and bears interest at the rate of 6% per annum.

ITEM 9.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Engagement of Davidson and Company

We engaged Davidson and Company, Chartered Accountants, as its principal independent registered public accounting firm effective May 9, 2007. Concurrent with this appointment, Dohan and Company, Certified Public Accountants ("Dohan and Company") resigned as the principal independent registered public accounting firm of the Company effective May 9, 2007. The decision to change the Company’s principal independent registered public accounting firm has been approved by the Company’s board of directors.

During the period of Dohan and Company’s engagement as our principal independent registered public accounting firm from January 25, 2006 to May 9, 2007, there were no disagreements between the Company and Dohan and Company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to the satisfaction of Dohan and Company would have caused them to make reference thereto in their report on the Company’s audited consolidated financial statements.

We provided Dohan and Company with a copy of the foregoing disclosures and requested in writing that Dohan and Company furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not they agree with such disclosures. The Company received the requested letter from Dohan and Company wherein they have confirmed their agreement to the Company’s disclosures. A copy of Dohan and Company’s letter has been filed as an exhibit to our Current Report on Form 8-K dated May 8, 2007.

ITEM 9A(T).   CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2008 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

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

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2008 fairly present our financial condition, results of operations and cash flows in all material respects.

Management's Annual Report on Internal Control over Financial Reporting

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

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

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

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

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

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

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

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

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

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

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.

Changes in internal control over financial reporting

As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2008 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the effectiveness of controls and procedures

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

ITEM 9B.      OTHER INFORMATION.

Not applicable.

ITEM 10.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Our current executive officers and directors are:

(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.

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 Minerals Inc., Orko Silver Corp., and Verb Exchange Inc. He is a director in all of the companies and Chief Financial Officer in Orex Minerals Inc. and Orko Silver Corp. Mr. Wilmot is the Chairman of the audit committee.

Wayne Smith has been the Chief Financial Officer since May 8, 2007, and the Chief Executive Officer since December 7, 2007. Prior to working for the Company, Mr. Smith worked for Visiphor Corporation as Chief Operating Officer and Chief Financial Officer from July 2003 through January 2007. Prior to that time, he served as Visiphor’s Chief Financial Officer from September 2002 to July 2003, and began with Visiphor in May 2002. Since 1997, Mr. Smith has also been a partner of TelePartners Consulting Inc., a consulting services company that provides management and financial consulting services. From May 2002 to September 2002, Mr. Smith served as comptroller of International Portfolio Management. From October 2001 to May 2002, Mr. Smith was a risk management advisor of Peter Reimer & Associates. From 1997 to July 2001 Mr. Smith was an Audit Senior of Amisano Hanson Chartered Accountants. Mr. Smith holds a Chartered Accountant’s designation in Canada.

Each of our directors 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.

Audit Committee and Audit Committee Financial Expert

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

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 and Sir John are “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 was incorporated by reference in our previously filed Form 10-KSB for fiscal 2007 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, 2008 all such filing requirements applicable to our officers and directors were complied with, except as set forth below:

ITEM 11.      EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth certain compensation information for:

• Teyfik Oezcan, our former chief executive officer,
• Wayne Smith, our chief executive officer and chief financial officer,
• Karen Engleson, our former chief financial officer and former corporate secretary,

One former executive officer of the Company earned total annual salary and bonus exceeding $100,000 during the fiscal year ended December 31, 2007.

Outstanding Equity Awards as of December 31, 2008

The following table summarizes the outstanding equity awards as of December 31, 2008 for each of our named executive officers:

(1)      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 granted to or exercised by our named executive officers during our fiscal year ended December 31, 2008.

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, 2008:

Outstanding Equity Awards as of December 31, 2008

The following table summarizes the outstanding equity awards as of December 31, 2008 for each of our directors:

No share purchase options were granted to or exercised by our directors during our fiscal year ended December 31, 2008.

ITEM 12.      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 April 28, 2009 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.

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, 2008

ITEM 13.      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:

Amounts Due to Related Parties

At December 31, 2008, amounts due to related parties included $63,600 owed by us to Ross Wilmot and $60,000 owed by us to Sir John Baring, both directors of the Company. A former director of the Company was owed $12,500 by us. Wayne Smith, the Company’s CEO and CFO, was also owed $6,979. At December 31, 2008, $16,420 was owed to the former Chief Financial Officer and Corporate Secretary and $22,988 was owed to the former President / Chief Executive Officer. The Corporate Secretary of Arvana Networks Inc. was owed $13,995 at December 31, 2008. These amounts are unsecured, non-interest bearing and payable on demand.

Brulex – Consultadoria Economica E Marketing Ltda.

On August 9, 2006 the Company, Brulex – Consultadoria Economica E Marketing Ltda. (“Brulex”) 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:

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

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 purchase price of the transaction, with a deemed value of $2,948,003 was allocated as to $105,659 in cash, $1,080,529 in accounts receivables, $15,371 in other current assets, $1,368,845 in accounts payable and accrued liabilities and, $2,605,499 to the value of monthly 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.

On December 7, 2007, the Company entered into a settlement and share purchase agreement with Brulex to dispose of the Company’s subsidiary, Hallotel. Under the terms of the agreement Brulex returned to the Company for cancellation the 3,541,700 of its common shares issued for the acquisition of BCH Beheer and Hallotel. The shares were valued at $283,336 based on the Company’s common share price of $0.08 on December 7, 2007. The amounts due to Brulex under the terms of the original Acquisition were reduced by $447,116 to €225,000. The Company wrote off a receivable due from Hallotel in the amount of $74,913 as well as software retained by Hallotel in the amount of $64,104. The original investment in Hallotel by the Company of $2,948,003 was adjusted by the effect of Hallotel’s operations from acquisition to disposal resulting in a net decrease in the Company’s retained earnings of $74,455 and an accumulated other comprehensive loss of $43,099. The net effect of the above transactions resulted in a loss of $2,239,014 upon disposal of Hallotel.

ITEM 14.      PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth information regarding the amount billed to us by our independent auditor, Davidson & Company, LLP, for our last fiscal year and our prior independent auditor, Dohan and Company CPA's PA, for the previous fiscal year ended December 31, 2007:

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.

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.

ITEM 15.      EXHIBITS

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

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.

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.