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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 31, 2003

OR

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the Transition Period from ______ to _____

Commission file number
000-29313

MOBILE REACH INTERNATIONAL,
INC.(Exact name of small business issuer as specified in its charter)

|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|DELAWARE
(State or other jurisdiction of
incorporation or organization) |  | 20-0121007
(I.R.S. Employer Identification No.)

8000 Regency Parkway, Suite 660 Cary, North Carolina 27511
(Address of principal executive offices)

(919) 469-6997
(Issuers telephone number)

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

As of October 31, 2003, 23,893,364 shares of Common Stock, par value $0.0001
were outstanding.





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PART 1 FINANCIAL INFORMATION

ITEM 1      FINANCIAL STATEMENTS

MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
BALANCE SHEET
OCTOBER 31, 2003
(UNAUDITED)

ASSETS

|                                     |                                            |                                            |         |            |            |  
|------------------------------------ | ------------------------------------------ | ------------------------------------------ | ------- | ---------- | ---------- | -
|CURRENT ASSETS                       |                                            |                                            |         |           
|                                     | Cash                                       |                                            | $       | 2,608      |           
|                                     | Accounts receivable                        |                                            |         | 17,955     |           
|                                     |                                            | TOTAL CURRENT ASSETS                       |         | $          | 20,563     |  
|                                     |                                            |                                            |         |           
|FIXED ASSETS                         |                                            |                                            |         |           
|                                     | Property and equipment                     |                                            | $       | 85,388     |           
|                                     | Less: Accumulated depreciation             |                                            |         | (45,140    | )         
|                                     |                                            | TOTAL FIXED ASSETS                         |         | $          | 38,248     |  
|                                     |                                            |                                            |         |           
|                                     |                                            | TOTAL ASSETS                               |         | $          | 58,811     |  
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|                                    
|CURRENT LIABILITIES                  |                                            |                                            |         |           
|                                     | Accounts Payable                           |                                            | $       | 182,734    |           
|                                     | Accrued wages                              |                                            |         | 246,879    |           
|                                     | Accrued payroll taxes and amounts withheld |                                            |         | 221,714    |           
|                                     | Accrued interest                           |                                            |         | 42,792     |           
|                                     | Current portion of long-term debt          |                                            |         | 4,075      |           
|                                     | Current portion of deferred revenue        |                                            |         | 612        |           
|                                     |                                            |                                            |         |           
|                                     |                                            | TOTAL CURRENT LIABILITIES                  |         | $          | 698,806    |  
|COMMITMENTS AND CONTINGENCIES        |                                            |                                            | 105,000 |           
|LONG-TERM DEBT                       |                                            |                                            |         |           
|                                     | Note payable  net of current portion      |                                            | $       | 435,248    |           
|                                     | Note payable                               |                                            |         | 555,321    |           
|                                     |                                            |                                            |         |           
|                                     |                                            | TOTAL LONG-TERM DEBT                       |         | $          | 990,569    |  
|STOCKHOLDERS EQUITY                 |                                            |                                            |         |           
|                                     | Common stock                               |                                            | $       | 3,571,288  |           
|                                     | Retained Earnings (deficit)                |                                            |         | (5,306,852 | )         
|                                     |                                            |                                            |         |           
|                                     |                                            | TOTAL STOCKHOLDERS EQUITY                 |         | $          | (1,735,564 | )
|                                     |                                            | TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY |         | $          | 58,811     |  





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MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENT OF REVENUE AND EXPENSES
For the three months ended October 31, 2003
and the ten months ended October 31, 2003
(UNAUDITED)

|                                                       |                            |                               |            |                    |         |                  |            |           |           | 
|------------------------------------------------------ | -------------------------- | ----------------------------- | ---------- | ------------------ | ------- | ---------------- | ---------- | --------- | --------- | 
|                                                       |                            |                               |            | Three months ended |         | Ten Months Ended
|                                                       |                            |                               |            | 10/31/03           |         | 10/31/03        
|                                                       |                            |                               |            |                    |         |                 
|NET REVENUES                                           |                            | $                             | 56,766     |                    |         | $                | 151,179    |          
|OPERATING EXPENSES:                                    |                            |                               |            |                    |         |                  |            |          
|                                                       | Cost of revenues           |                               |            | 144,819            |         |                  |            | 330,102   |          
|                                                       | Sales and marketing        |                               |            | 116,974            |         |                  |            | 355,932   |          
|                                                       | General and administrative |                               |            | 436,616            |         |                  |            | 1,852,871 |          
|                                                       | Depreciation               |                               |            |                    |         |                  |            |           |          
|                                                       |                            |                               |            |                    |         |                  |            |          
|                                                       |                            | Total operating expenses      |            |                    | 698,409 |                  |            |           | 2,538,905 | 
|                                                       |                            |                               |            |                    |         |                  |            |          
|NET REVENUE (LOSS) BEFORE INTEREST, TAXES DEPRECIATION |                            |                               | (641,643   | )                  |         |                  | (2,387,726 | )        
|                                                       |                            |                               |            |                    |         |                  |            |          
|OTHER (EXPENSES)                                       |                            |                               |            |                    |         |                  |            |          
|                                                       | Interest expense           |                               |            | 14,693             |         |                  |            | 48,977    |          
|                                                       | Income taxes               |                               |            | -0-                |         |                  |            | 1,386     |          
|                                                       | Depreciation               |                               |            | 4,905              |         |                  |            | 16,465    |          
|                                                       |                            |                               |            |                    |         |                  |            |          
|                                                       |                            | Total including other expense |            |                    | 19,598  |                  |            |           | 171,828   | 
|                                                       |                            |                               |            |                    |         |                  |            |          
|NET REVENUE (LOSS)                                     |                            | $                             | (661,241   | )                  |         | $                | (2,559,554 | )        
|                                                       |                            |                               |            |                    |         |                  |            |          
|NET LOSS PER SHARE  BASIC AND DILUTED                 |                            |                               | (.028      | )                  |         |                  | (.107      | )        
|WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING          |                            |                               | 23,893,364 |                    |         |                  |            |          





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MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENT OF RETAINED EARNINGS (DEFICIT)
OCTOBER 31, 2003
(UNAUDITED)

|                            |                                       |  |   |            |  
|--------------------------- | ------------------------------------- |  | - | ---------- | -
|RETAINED EARNINGS (DEFICIT) |                                       |  |   |           
|                            | Beginning balance  December 31, 2002 |  | $ | (2,747,268 | )
|                            | Net loss for the period               |  |   | (2,559,554 | )
|                            |                                       |  |   |           
|                            | Ending balance  October 31, 2003     |  | $ | (5,306,852 | )

MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS EQUITY
OCTOBER 31, 2003
(UNAUDITED)

|                            |                                                         |   |            |            |  
|--------------------------- | ------------------------------------------------------- | - | ---------- | ---------- | -
|CAPITAL STOCK:              |                                                         |   |            |           
|                            | Common Stock  issued and outstanding 23,893,364 shares |   | $          | 3,571,288  |  
|RETAINED EARNINGS (DEFICIT) |                                                         | $ | (5,306,852 | )         
|                            |                                                         |   |            |           
|                            | STOCKHOLDERS EQUITY                                    |   | $          | (1,735,564 | )
|                            | Earnings (loss) per share for the period ended 10/31/03 |   | $          | (.1071     | )

ITEM 2      MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

You should read the following discussion of our business and results of
operations in conjunction with the consolidated financial statements included
herein. The results shown in this 10-QSB are not necessarily indicative of the
results we will achieve in any future periods.

REVENUES

Our revenues primarily comprise of licensing and services fees, which we
recognize as revenue when the product or services are provided to the client.
The attached pro-forma consolidated financial data; is provided for comparative
purpose only and does not claim to be indicative of the actual financial
position or result of the Companys carry forward operations.

Total revenue for the three-month period ended October 31st, 2003 was
$55,442.00 thousand compared to $149,755 thousand reported for the ten month
ending period October 31, 2003. Total Net loss for the three-month period was $661,241.00,
or $.028 per diluted common share, compared to $.107 for the ten
month ending period October 31, 2003.





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The Cost of Sales associated with the delivery of our solutions is expected to
decrease as the repeatable model is implemented with future customers. As a
result, the company recognized an above average cost associated for the
three-months ended October 31st 2003.

Our sales and marketing expenses consist primarily of compensation and related
costs for ramping up efforts around sales, marketing, associated personnel,
travel and entertainment and other related costs. We expect sales and marketing
expenses to decrease as a percentage of sales as we continue to leverage our
reseller relationships and strategic clients to further our sales and marketing
initiatives.

SG&A for the three-month period ended October 31st 2003 was $553,590.00
consisting primarily of compensation, Professional fees including both legal
and accounting. We expect our general and administrative expenses to decrease
as a percentage of our annual revenues in the future if and as revenues
increase.

LIQUIDITY AND CAPITAL RESOURCES

At October 31st, 2003, the Company had current assets of $58,811.00 and
current liabilities of $698,806.00. Our independent auditors, who audited our
financial statements for the period ended July 31, 2003, have expressed
substantial doubt about our ability to continue as a going concern given our
recurring losses from operations, negative working capital and net
stockholders deficit. In addition, the Company must deal with the litigation
and claims described in Part II Item I of this Form 10-QSB under the heading
Legal Proceedings.

In response to these issues, the Company has raised $490,000.00 in additional
funds since August 1st, 2003. Since July 31, 2003, the additional capital has
not improved the Companys financial resources. Management believes it is
imperative that the Company raise additional funds, to fund the Companys
operations, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934, as amended, for itself and
its subsidiaries.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should
carefully consider the risks and uncertainties described below before you
purchase any of our common stock. These risks and uncertainties are not the
only ones we face. Unknown additional risks and uncertainties, or ones that we
currently consider immaterial, may also adversely affect our business
operations.

If any of these risks or uncertainties actually occurs, our business, financial
condition or results of operations could be materially adversely affected. In
this event, you could lose all or part of your investment.

We have a limited operating history and are not yet profitable.

We are a relatively new company that is not yet profitable. We expect to
continue to have substantial expenses before we earn significant income in
excess of our expenses. The establishment of any new business involves
expenses, difficulties, complications and delays. It is not possible for
anyone, including the company, to predict with certainty what all of these
expenses, complications and delays will be. The Company cannot guarantee that
it will be able to overcome these obstacles, and cannot guarantee that it will
ever be profitable.





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We continue to incur substantial losses

We incurred a loss in the quarter ending October 31st 2003 of $661,241.00, and
our cumulative losses as of October 31st 2003 was $2,559,554.00, we might
never be profitable.

We depend upon a limited number of customers.

We anticipate that a significant portion of our revenues in 2003 will be
derived from orders from a limited number of customers. In particular, we are
highly dependent on our relationship with Duke University Medical Center. The
timing of receipt, fulfillment and deployment of orders from Duke University
Medical Center and other significant customers is likely to cause significant
fluctuations in our operating results, especially on a quarterly basis.
Further, if we were to lose any of these customers there would be a significant
impact on our financial status

We are dependent on certain key personnel, including our Chief Executive
Officer, Michael Hewitt.

We are highly dependent on certain key individuals, including Michael Hewitt,
our Chief Executive Officer, for management and operation. Our operations would
suffer significantly if some or all of these individuals were to terminate
their relationship with the company for any reason. Retaining these
relationships will become even more important as we grow. We cannot assure you
that we would be able to replace a key individual who terminated his or her
relationship with the company. It would cost us more to replace a key
individual than it costs us to retain these relationships. There is strong
competition for recruitment of new technical personnel, in particular, and if
we are unable to attract qualified personnel, we will be unable to grow or
sustain its business. We do not have any key-man life insurance on our current
employees.

Unless an active trading market develops for our common stock, you may not be
able to sell your shares.

Although we are a reporting company and our common stock is listed on the
Over-the-Counter Bulletin Board, there is no active trading market for our
common stock. An active trading market may never develop or, if developed, it
may not be maintained even after we register the shares you purchase. Failure
to develop or maintain an active trading market will negatively affect the
price of our securities, you may be unable to sell your shares or such sales
may lower the market price, and therefore your investment would be a complete
or partial loss.

We are subject to the penny stock rules, and therefore you may find it more
difficult to sell your securities.

Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain rules adopted by the Securities and Exchange Commission.
Penny stocks generally are equity securities with a price of less than $5.00
(other than securities registered on certain national securities exchanges or
quoted on the NASDAQ Stock Market provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). The rules require that a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, deliver to
the buyer a standardized risk disclosure document that provides information
about penny stocks and the risks in the penny stock market. The broker-dealer
also must provide the customer with current bid and offer quotations for the
penny stock, the compensation of the broker-dealer and its salesperson in
connection with the transaction and monthly account statements showing the
market value of each penny stock held in the customers account. In addition,
the rules generally require that prior to a transaction in a penny stock; the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the





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transaction. These disclosure requirements may have the effect
of reducing the liquidity of penny stocks. Our securities are subject to the
penny stock rules, and thus investors in the offering may find it difficult to
sell their securities.

Our founders, officers and directors beneficially own approximately 34% of our
stock on a fully diluted basis; their interests could conflict with yours;
significant sales of stock held by any or all of them could have a negative
effect on our stock price; shareholders may be unable to exercise control.

As of October 31st, 2003, our founders, officers and directors beneficially
owned approximately 34% of our common stock on a fully diluted basis. In
addition, employees of the Company own additional shares and rights to acquire
shares. As a result, the founders, officers and directors will have significant
ability to:



| |  |  | elect or defeat the election of our directors;                                 
| | - |  | -------------------------------------------------------------------------------
|
| |  |  | amend or prevent amendment of our articles of incorporation or bylaws;         
|
| |  |  | effect or prevent a merger, sale of assets or other corporate transaction; and 
|
| |  |  | control the outcome of any other matter submitted to the stockholders for vote.

As a result of this ownership and position, our founders, officers and
directors are able to significantly influence all matters requiring stockholder
approval, including the election of directors and approval of significant
corporate transactions. In addition, sales of significant amounts of shares
held by any or all of our founders,
officers and directors, or the prospect of these sales, could adversely affect
the market price of our common stock. Stock ownership by our founders and
management may discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of us, which in turn could reduce our
stock price or prevent our stockholders from realizing a premium over our stock
price.

We do not expect to pay dividends. Therefore, you may not rely on your
ownership of our stock as a source of income.

We do not anticipate paying cash dividends in the foreseeable future.
Therefore, you may not rely on ownership of our stock as a source of income.

Employees

The Company has 22 employees. Of these, eight are in technology development,
three are mobility strategy consultants, five are in sales and marketing and
six are management and administrative. The Company owes its employees
approximately $114,000 of accrued salary. Raising capital and generating
revenue to pay accrued salary and future salaries of current and future
employees will be a necessary to retain and recruit the personnel the Company
requires to achieve its goals.





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PART II  OTHER INFORMATION

ITEM 1      LEGAL PROCEEDING

The Company is involved in various legal proceedings and claims incident to the
normal conduct of its business. The Company believes that such legal
proceedings and claims, individually and in the aggregate, are not likely to
have a material adverse effect on its financial position or results of
operations.

On August 27, 2003, Aquent Partners, Inc. filed a complaint against the Company
seeking damages for payment of $115,412.75 pursuant to a promissory note
entered into by MRT; this complaint is still in litigation.

The Company has received a demand letter from counsel for a former employee
requesting payment for services rendered by this former employee to MRT. This
matter is the subject to pending settlement negotiations.

The Company has also received a demand letter from the Administrative Receivers
for Advance Banking Solutions Limited, a United Kingdom company, for claims by
Advanced Banking Solutions against Asphalt Paving International, Inc. (API),
which claims were transferred to the Company when API merged into the Company
and are for certain license fees alleged to be owed by API in the amount of
65,000 (UK pounds), plus interest. With respect to the claim by Advance Banking
Solutions Limited, the Company has an indemnification agreement with certain
shareholders of API and has placed shares in escrow with the attorney for API
to cover any liability of the Company with respect to these claims.

In connection with the merger with API, The Company has also received an
unasserted claim for services from Hamilton Lehrer & Dargan PA, in connection
with the merger. The Company believes that such possible claims, individually
and in the aggregate, are not likely to have a material adverse effect on its
financial position or results of operations.

ITEM 2      CHANGE IN SECURITIES AND USE OF PROCEEDS

(c) Recent Sales of Unregistered Securities

The securities described below represent securities of Mobile Reach
International, Inc. sold by Mobile Reach International, Inc. during the
three-month period ended October 31, 2003, that were not registered under the
Securities Act of 1933, as amended (the Securities Act), all of which were
issued by the Company pursuant to the exemption under Securities Act Section
4(2) and Regulation D, Rule 506. Underwriters were not involved in these
transactions.

Private Placements of Common Stock

To obtain funding for our ongoing operations, we entered into a Private
Placement under a subscription agreement with five accredited investors for
the period ended October 31, 2003 for the sale of 1,244,688 shares of common
stock for aggregate consideration of $250,0000.00.





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ITEM 3      DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to the stockholders of the Company during the reporting
period.

ITEM 5      OTHER INFORMATION

None.

ITEM 6      EXHIBITS AND REPORTS ON FORM 8-K

31.     Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.     Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
Undersigned thereunto duly authorized.

|                        |  |                                      
|----------------------- |  | -------------------------------------
|Date: December 12, 2003 |  | /s/ Michael J. Hewitt                
|                        |  |                                      
|                        |  | Michael J. Hewitt,                   
|                        |  | President and Chief Executive Officer