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 January 31, 2006


                                       OR

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


          2054 Kildaire Farm Road. Suite 353 Cary, North Carolina 27511
                     --------------------------------------
                    (Address of principal executive offices)

                                 (919) 336-2500
                            -------------------------
                           (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 [ ]


               Class                     Outstanding as of January 31, 2006
   ------------------------------        ----------------------------------
   Common Stock, $.0001 par value                     6,134,952

<PAGE>

                                      INDEX


                Mobile Reach International, Inc. and Subsidiaries



   PART I.
   FINANCIAL
   INFORMATION                                                              Page
                                                                            ----
                     ITEM 1 CONSOLIDATED FINANCIAL STATEMENTS

                            Unaudited Condensed Consolidated Balance Sheet
                            as of January, 31, 2006                            2

                            Unaudited Condensed Consolidated Statement of
                            Operations Three Months ended January 31, 2006
                            three Months Ended January 31, 2005                3

                            Unaudited Condensed Consolidated
                            Statement of Cash Flows for the Period
                            ended January 31, 2006 and 2005                    4

                            Notes to Unaudited Condensed Consolidated
                            Financial Statements                               5

                     ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS               8

                     ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                            MARKET RISK                                       11

                     ITEM 4 CONTROLS AND PROCEDURES                           11



   PART II.
   OTHER INFORMATION


                     ITEM 1 LEGAL                                             11

                     ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS         12

                     ITEM 3 DEFAULTS UPON SENIOR SECURITIES                   12

                     ITEM 4 SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY      12
                            HOLDERS

                     ITEM 5 OTHER INFORMATION                                 12

                     ITEM 6 EXHIBITS AND REPORTS ON FORM 8K                   14

                                       i

<PAGE>


                          PART 1 FINANCIAL INFORMATION


ITEM 1      FINANCIAL STATEMENT


                MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)
                          PERIOD ENDED JANUARY 31, 2006



                                                                         THREE
                                                                         MONTHS
                                                                         ENDED
                                                                        31Jan06


    Current Assets
                                Cash                                      8,338
                                Allowance For Bad Debt
                                Accounts Receivable                      57,259
                                Other Current Assets                         37


Total Current Assets                                                     65,634


    Property and Equipment
                                Computer Equipment                       18,455
                                Furniture and Fixtures
                                Vehicles                                 66,388
                                Accumulated Depreciation                (45,038)

Total Fixed Assets                                                       39,805

                                Other Assets (Deposits)                     450


TOTAL ASSETS                                                            105,889

    LIABILITIES & EQUITY
                                Accounts Payable                        418,240
                                Accounts Payable Stockholder

    Current Liabilities
                                Other  Credit Cards                     36,321
                                Payroll Liabilities                     474,848
                                Current Portion  L/T Debt               23,038
                                Deferred Salaries                       103,773
                                Wages Payable                           139,365
                                Notes Payable                           221,087
                                Accrued Interest Payable                 66,820
                                Accrued Expenses                         43,475
                                Total Deferred Revenue                   58,243
                                Sales Tax Payable                           802
                                Contingencies (6)

Total  Current Liabilities                                            1,167,772

    Long Tern Liabilities
                                Notes Payable  L/T Debt                 39,099
                                Convertible Debentures                1,275,000
                                Notes Payable  L/T  Equipment

Total Long Term Liabilities                                           1,314,099


                                Total Liabilities                     2,900,111

    Equity
                                Retained Earnings                    (8,759,323)
                                Common Stock                          4,507,257
                                Paid in Capital  Common Stock        1,835,317

Net Income (LOSS)                                                      (377,473)

Total Equity                                                         (2,794,222)

TOTAL LIABILITIES & EQUITY                                              105,889


                 See Notes to consolidated financial statements

                                       2

<PAGE>


                MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
            THREE MONTH ENDED JANUARY 31, 2006 AND JANUARY 31, 2005.
                                   (UNAUDITED)




                                                    Three Months    Three Months
                                                        Ended           Ended
                                                       1/31/06         1/31/05
                                                      ------------------------
Revenue:
---------------------------------
     License Revenue                                    86,053          35,909
     License Maint. Revenue                             27,755          27,587
     Product Revenue                                    16,539           6,706
     Professional Services Revenue                      46,200          32,063
                                                      --------        --------
 Total Revenue                                         176,547         102,264

GOGS                                                    16,013         (27,296)
                                                      --------        --------
Gross Profit                                           160,534         129,560

Less:
      Sales & Marketing                                 51,015          51,778
      G & A                                            220,639         293,809
      Depreciation                                       4,821           9,674
      Bad Debt
                                                      --------        --------
Total Net Expenses                                     276,475         355,261
                                                      --------        --------
Other Expenses/Income:
      Interest Expense                                  14,378          28,135
      Loss On Sale of Property                           3,101           4,875
      Interest Income                                        0               0
      Other Income                                           0               0
                                                      --------        --------
Total Other Expense/Income                              17,479          33,010
                                                      --------        --------

Net Income/(Loss)                                     (133,420)       (258,711)
                                                      ========        ========


                 See Notes to consolidated financial statements

                                       3

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<CAPTION>


                                         MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                                                 CONSOLIDATED STATEMENT OF CASH FLOWS
                                          FOR THE PERIOD ENDED JANUARY 31, 2006 AND 2005
                                                            (UNAUDITED)


                                                                                               Three months          Three months
                                                                                                  ended                 ended
                                                                                                01/31/2006            01/31/2005


                          OPERATING ACTIVITIES
                                      <S>                                                        <C>                   <C>
                                      Net Income (loss)                                          (133,420)             (258,711)
                                      Net cash provided by Operating Activities:                  113,267               134,546





                          INVESTING ACTIVITIES
                          Net cash provided by Investing Activities                                29,078                14,549


                          FINANCING ACTIVITIES
                          Net cash provided by Financing Activities                               (19,746)               (4,200)

              Net cash increase (decrease) for period                                             (10,820)             (113,816)
              Cash at beginning of period                                                          19,158               134,892


Cash at end of period                                                                               8,338                21,076


                                          See Notes to consolidated financial statements

                                                                4

</TABLE>

<PAGE>


                          NOTES TO FINANCIAL STATEMENTS
                        for Period Ended January 31, 2006


Note 1 - Summary of Significant Accounting Policies:
----------------------------------------------------

Principles of consolidation:

For software arrangements with multiple elements, revenue is recognized using
the residual method prescribed by SOP 98-9, "Modification of SOP 97-2 `Software
Revenue Recognition' with Respect to Certain Transactions." Revenue applicable
to undelivered elements, principally software maintenance, training and
implementation services, is determined based on vendor specific objective
evidence ("VSOE") of the fair value of those elements. VSOE is established by
the price of the element when it is sold separately (i.e., the renewal rate for
software maintenance and normal prices charged for training and professional
services). Revenue applicable to elements for which VSOE of fair value is not
determinable is deemed equal to the remainder/residual amount of the fixed
arrangement price. Assuming none of the undelivered elements and VSOE of fair
value exists for all undelivered elements are essential to the functionality of
any of the delivered elements; the residual revenue attributed to the delivered
elements is recognized when all other criteria for revenue recognition for those
elements have been met.

The accompanying consolidated financial statements for the period ended January
31 2006 include the revenues from Mobile Reach Technologies, Inc. the Company's
only operating subsidiary, after elimination of inter-company accounts and
transactions.



Concentrations of Credit Risk:


The Company has no significant off-balance-sheet concentration of credit risk
such as foreign exchange contracts, options contracts or other foreign hedging
arrangements. The Company maintains its cash balances with multiple reputable
financial institutions in the form of demand deposits.


Note 2 - Going Concern:
-----------------------
As shown in the accompanying financial statements, the Company has sustained a
net loss of $133,420 during the three months ended January 31, 2006. As of the
same period, the Company is in default on certain notes, payroll taxes and other
payables. As a result, cash currently available is not sufficient to support the
Company's operations for the next year. In order to meet the cash requirements
for the remainder of the year, the Company needs to either raise additional
capital through public or private financing or acquire a suitable business as
another subsidiary to offset the cash needs. At the present time, the Company
does not know if additional financing will be available or, if available,

                                       5

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<CAPTION>


whether it will be available on attractive terms. If the Company is able to
raise capital in the future, it is probable that it will result in substantial
dilutions to stockholders interests. These factors create substantial doubt as
to the Company's ability to continue as a going concern.

The Company continues its efforts to complete the necessary steps in order to
meet its cash flow requirements throughout the fiscal year 2006. However, no
assurances can be given that the Company will continue as a going concern
without the successful completion of additional financing. The accompanying
consolidated financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.

Note 3 - Notes Payable:

Notes payable at January 31, 2006 consisted of the following:

   ------------------------------------------------------------------------------------------------------ -------------
<S>                                                                                                           <C>
   Note payable to a vendor dated February 2005; due in eighteen monthly installments of $1,007                 11,731
     including interest at six percent.
   ------------------------------------------------------------------------------------------------------ -------------
   Note payable to a vendor dated July 2005; due in eighteen monthly installments of $390 including              6,153
     interest at eight percent.
   ------------------------------------------------------------------------------------------------------ -------------
   Note payable to a vendor dated December 2004; due in six monthly installments of $2,836 including
     interest at eighteen percent, note is in default.                                                          17,027
   ------------------------------------------------------------------------------------------------------ -------------
   Note payable to former employee and former owner of Waves dated December 2004; bearing no interest
     and no specified repayment terms.                                                                           3,940
   ------------------------------------------------------------------------------------------------------ -------------
   Note payable for accrued wages; bearing interest at six percent; due and payable with interest at
     the earliest of (a) Company obtaining debt or equity funding greater than $1,000,000 in a quarter
     or (b) Company earns revenues of $1,000,000 in a quarter                                                   49,908
                                                                                                           -----------
   ------------------------------------------------------------------------------------------------------ --------------
                                                                                                           $    88,759
                                                                                                           -----------
   ------------------------------------------------------------------------------------------------------ --------------


Note 4 - Long-Term Debt:
------------------------

     Long-term debt at July 31, 2005 consisted of the following:

   --------------------------------------------------------------------------------------------------- -----------------
   Notes payable dated August and October 2003; due in sixty monthly installments of $1,873               $     86,305
                                                                                                           -----------
     including interest at 6.98 percent; secured by vehicles costing $120,747.
   --------------------------------------------------------------------------------------------------- -----------------
                                                                                                                86,305
   --------------------------------------------------------------------------------------------------- -----------------
   Less: current portion                                                                                       (23,038)
                                                                                                           -----------
   --------------------------------------------------------------------------------------------------- -----------------
                                                                                                          $     63,267
   --------------------------------------------------------------------------------------------------- -----------------


   At July 31, 2005, long-term debt is due in aggregate annual installments as follows:
   --------------------------------------------------------------------------------------------------- -----------------
   Year ending July 31,
   --------------------------------------------------------------------------------------------------- -----------------
   2006                                                                                                    $    23,038
   --------------------------------------------------------------------------------------------------- -----------------
   2007                                                                                                         24,699
   --------------------------------------------------------------------------------------------------- -----------------
   2008                                                                                                         26,480
   --------------------------------------------------------------------------------------------------- -----------------
   2009                                                                                                         12,088
   --------------------------------------------------------------------------------------------------- -----------------
   Thereafter                                                                                                      -
                                                                                                           -----------
   --------------------------------------------------------------------------------------------------- -----------------
                                                                                                                86,305
   --------------------------------------------------------------------------------------------------- -----------------

                                                           6

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<PAGE>

Note 5 - Convertible Debentures:
--------------------------------

In March 2004, the Company issued $525,000 of five percent convertible
debentures that mature on March 15, 2007. The debentures were convertible into
the Company's common stock at a conversion price of $0.16 per share. In an
effort to entice the debenture holders from this series of debentures to invest
in the second series mentioned later, the Company agreed to re-price the
conversion feature and the warrants of the March 2004 issuance to $0.01 per
share through a settlement agreement signed by all parties. All interest and
penalties accrued through March 2005 on the five percent debentures was treated
as additional paid-in capital on warrants issued with the March 2005 series
debenture mentioned below. See Note 11 for further details. Interest accrued on
debentures that are converted into common stock may be paid in cash or with
common stock (conversion price $0.01 per share). In connection with the issuance
of these debentures, the Company issued 12,202 common stock purchase warrants at
the original exercise price of $0.32 per share. However, as part of the
settlement agreement, these warrants were also re-priced to $0.01 per share. The
warrants expire March 31, 2006 and no warrants were exercised at January 31,
2006.

In March 2005, the Company began offering a second series of convertible
debentures. This series required investors from the March 2004 series to invest
a minimum of twenty percent over and above the value of their holdings in the
March 2004 series. This series of convertible debentures mature April 27, 2007
and have an interest rate of eight percent. The debentures are convertible into
the Company's common stock at a conversion price of $0.01 per share. Interest
accrues from March 17, 2005 and may be paid in cash or in the Company's common
stock at a conversion price of $0.01 per share. In connection with these
debentures, the Company issued to the holders of the March 2004 five percent
convertible debentures that invested additional funds an additional 202,046
common stock purchase warrants at an exercise price of $0.01 per share.
Subsequent investors were issued 608,766 common stock purchase warrants at an
exercise price of $0.0077 per share. These warrants expire April 27, 2010 and no
warrants were exercised at January 31, 2006.

Note 6 - Shares Outstanding:
----------------------------

For the period ended January 31, 2006, the Company's common stock issued and
outstanding was 6,134,952. During the period the company issued its shares as
follows:

Securities issued - 150,000 shares were granted to an officer of the Company,
during the period.

The balance of the Company's issuances for the period were made up of Warrants
from Debentures from the previous quarter in connection with an August 2005
convertible note at an exercise price of .0.617 per share expiring April 20,
2010.

Loss per share:
The Company calculates loss per share in accordance with SFAS No. 128, "Earnings
per Share", which requires the presentation of basic and diluted earnings per
share. Basic loss per share excludes dilution and is computed by dividing loss
by the weighted-average number of common shares outstanding for the period.
Diluted loss per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. Potential common shares are excluded from the
computation of diluted earnings per share when a loss exists because the effect
would be antidilutive.

Note 7 - Convertible Debentures:
--------------------------------

In August 2005, the Company received an additional $250,000 in funding on the
March 2005 eight percent convertible debentures. The additional debentures
included 405,844 in common stock purchase warrants with an exercise price of
$0.0077 per share expiring April 20, 2010.

Note 8 - Other Matters:
-----------------------

In August 2005, the Company executed an agreement and plan of merger with
Objective Spectrum, Inc. ("Objective"). The Company purchased all of Objective's
issued and outstanding common stock for 375,000 shares of the Company's
restricted common stock. At the date of the agreement, a current director and
officer of the Company owned approximately ninety-two percent of Objective's
common stock. As a result of the acquisition, the Company obtained intellectual
property rights to source code for use with the Company's Splitware product.

                                       7

<PAGE>


The Company is in default of completing and filing audited financials statements
for Objective Spectrum, Inc., as of October 15, 2005, however the Company's,
management believes since the acquired company has no revenues it does not
represent a significant portion or balance sheet change to impact its current
filing.


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 unaudited consolidated financial data; is provided for comparative purpose
only and does not claim to be indicative of the actual financial position or
results of the Company's carry forward operations.

Revenues for the period ended January 31, 2006 was $176,547 representing an
increase of 14% from $155,172 in the period ended October 31, 2005. The
Companies deferred Revenues for the same period decreased to $58,243 from $
68,428.

Total Net losses for the three-month period ending January 31, 2006 were
$133,420. compared to $244,054 for the previous three months ended October 31,
2005.

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

SG&A for the three-month period ended January 31, 2006 was $276,475 consisting
primarily of compensation, Professional fees including both legal and
accounting, costs associated with Securities agreements and compliance
reporting. 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

As of January 31, 2006, the Company had assets and liabilities of $105,889. Our
independent auditors, who audited our financial statements for the period ended
July 31, 2005, 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."

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.

                                       8

<PAGE>


Our financial results for the twelve-month fiscal year ending July 31, 2005 show
substantial losses and there is substantial doubt as to our ability to continue
as a going concern.
The financial statements for the twelve month period ended July 31, 2005 reflect
additional substantial losses due to the ramp up of sales and marketing as well
as the cost associated with the acquisition of Waves Consulting Group, Inc.
Specifically, however, the Company has sustained substantial operating losses in
the twelve months ended July 31, 2004 and the seven months ended July 31, 2003
of $3,142,860 and $1,898,316, respectively. The Company, as of October 1, 2005,
is in default on certain notes payable, payroll taxes and other payables. In
addition, the Company has used substantial amounts of working capital in its
operations. Further, at July 31, 2005, the Company's current liabilities exceed
current assets by $2,546,773, and the Company has an accumulated deficit of
$3,295,885.

Scharf Pera & Co., PLLC, our independent auditors, have expressed substantial
doubt about our ability to continue as a going concern given our recurring
losses from operations, negative working capital and net stockholder's deficit.
This opinion could materially limit our ability to raise additional funds by
issuing new debt or equity securities or otherwise. You should consider our
auditor's comments when determining if an investment in the Company is suitable.

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

We continue to incur substantial losses
We incurred a loss in the quarter ending January 31, 2006 of $133,420 compared
to a year over quarter of $258,711 for the same period ended January 31, 2005

In the past we depended upon a limited number of customers.
The Company use to depend upon a limited number of customers in the period ended
July 31, 2005, and prior. The Company has taken great strides to minimize that
risk during the period ending January 31, 2006 and going forward. The Company
anticipates that with the diverse customers within the sales channel referred to
as enterprise sales, it's able to withstand customer churn going forward.

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

                                       9

<PAGE>


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 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.

As of January 31, 2006, our founders, officers and directors beneficially owned
approximately 32% of our common stock on a fully diluted basis. In addition, our
employees own additional shares and rights to acquire shares. 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 a result, the founders, officers and directors will have
significant ability to: (1) elect or defeat the election of our directors; (2)
amend or prevent amendment of our articles of incorporation or bylaws; (3)
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 have not in the past and do not expect in the future 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:

During the fiscal year ended July 31, 2005 the Company re-aligned its employees
as part of both a cost cutting measure and subsidiary restructuring. The Company
reduced its workforce from 21 employees at the beginning of its Fiscal 2004 down
to 12 for the period ending July 31, 2005. For the period ended October 31, 2005
the Company did not make any full time employee changes, it however did
terminate the relationships it had with two consultants.

As of January 31, 2006, the Company has broken down each employee under the
following subsidiary below: Six work directly within Mobile Reach Technologies,
Inc., as follows:

     -    One in Management & Administrative
     -    One in Sales and Marketing
     -    Four in Development and Technology

The balance of the Company's employees (three), work for the parent Company,
Mobile Reach International, Inc. as executives and administrative.

                                       10

<PAGE>


The Company owes its employees approximately $210,260 of accrued salaries and
expenses. Raising capital and generating revenue to pay accrued salary and
future salaries of current and future employees will be necessary to retain and
recruit the personnel the Company requires to achieve its goals The Company
continues to raise capital and generate revenues to pay accrued salary and
future salaries of current and future employees as necessary to retain and
recruit the personnel the Company requires to achieve its goals.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Our chief executive officer and chief financial officer (our principal executive
officer and principal financial officer, respectively) have concluded, based on
their evaluation as of July 31, 2005 audited financials, October 31, 2005
unaudited financials and January 31, 2006 unaudited financials that the design
and operation of our "disclosure controls and procedures" (as defined in Rule
13a-15(e) under the Exchange Act), are effective to ensure that information
required to be disclosed by us in the reports filed or submitted by us under the
Exchange Act is accumulated, recorded, processed, summarized and reported to our
management, including our principal executive officer and our principal
financial officer, as appropriate to allow timely decisions regarding whether or
not disclosure is required.

During the quarter ended January 31, 2006 , there were no changes in our
"internal" controls over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act) that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.


                           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, could have a material adverse
effect on its financial position or results of operations.

During the year ended July 31, 2004, the Company had accrued $160,000 for
consulting fees representing a tentative settlement reached in arbitration with
a consultant. In April 2005, the claim went to arbitration and the Company was
found to have no liability to the consultant. As a result of the arbitration,
the Company recorded other income of $160,000 for the year ended July 31, 2005.

The Company has been in communication with and attempting to settle a claim from
a former employee for past due wages of approximately $49,900. The Company has
included the amount in notes payable for the years ended July 31, 2005 and 2004.

The Company has recorded an account payable at July 31, 2004 of $75,000 to
terminate a lease for office space entered into in September 2003. Additionally,
the Company recorded $34,000 of rent expense in the forfeiture of rental
security deposits in connection with this lease. The Company entered into an
agreement for termination of the lease in October 2004 and a settlement for the
related debt on June 20, 2005. The terms of the settlement agreement requires
the Company to pay $15,888 in past due expenses and issue 181,250 shares of the
Company's restricted common stock. At July 31, 2005, the $15,888 was included in
accounts payable.

The Company is delinquent with a number of unsecured creditors for which no
payment arrangements exist or for which no agreement to forestall collection
action has been agreed upon. Whenever feasible the Company negotiates with these
creditors to reach settlement agreements that are acceptable to the Company. As
a result of the delinquencies and defaults, the Company may be subject to
collection actions whenever agreements cannot be reached, including, but not
limited to, litigation, foreclosure and/or seizure of assets and bank accounts.

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During the fiscal year ended July 31, 2005, and July 31, 2006 the Company had
not had their interim financial statements, contained in forms 10-QSB, reviewed
by an independent certified public accountant as required by the Security and
Exchange Commission.

ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4    SUBMISSIONS 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

Subsequent Events of Operations

During the reported period, the Company's management team continued to operate
its core business and seek additional profitable businesses. As a result the
management and Board of Directors utilized such information as revenue
projections, capital needs and market analysis of its competitors. The company
had to make a determination of the company potentially accepting any further
liability and closing any one or all of its subsidiaries.

On February 1, 2006 the Company filed an 8K with the Commission in regards to a
Letter of Intent it entered into on January 26, 2006 with Crystal Hospitality
Holdings, Inc. The agreement calls for Mobile Reach International, Inc. to
acquire all the outstanding shares of Crystal Hospitality Holdings in exchange
for up to ten million shares of the registrant's common stock. The agreement
called for five million common shares to be issued at closing and an option five
million common shares under the following conditions.

If the transaction is consummated, the aggregate consideration for the Business
will be 5,000,000 shares of the Company's common stock, payable at closing. As
additional consideration for the Business to be purchased, Buyer shall deliver
into an escrow account (the "Escrow Account"), an additional 5,000,000 shares of
the Company's common stock issuable to Crystal which shall vest to Crystal
provided the Business meets any of the following vesting condition:

     A) If during the 2006 calendar year, the Business achieves minimum revenue
of $80,000,000, or a minimum EBITDA of $3,000,000, and then 5,000,000 shares of
the Company's common stock shall be released to Crystal;

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<PAGE>


     B) If during the 2006 calendar year, the Business fails to achieve the
amounts as provided in A above, and provided the business achieves a minimum
revenue of $50,000,000, and a minimum EBITDA of $1,500,000, then 2,500,000
shares of the Company's common stock shall be released to Crystal;

     C) If Crystal has not qualified for vesting of the full number of shares as
provided in Section A above, then during the 2007 calendar year, if the Business
achieves minimum revenue of $80,000,000, or a minimum EBITDA of $3,000,000, then
2,500,000 shares of the Company's common stock shall be released to Crystal.

The closing of the transaction is subject to the negotiation of a definitive
Stock Purchase Agreement and other closing conditions as set forth in the Letter
of Intent. As of the time of this report the Company has not completed the
Definitive Stock Purchase Agreement.

During the period ended January 31, 2006 the Company submitted a registration
withdrawal request to the Commission on February 2, 2006. The Company believes
its cash requirements will require additional fund raising that would have
affected the current registration statement terms. At the time of this report,
the Company continues to explore options for fund raising but has not raise
additional capital that would require registration requirements.

On March 10, 2006 ("Effective Date"), Mobile Reach Technologies, Inc., (the
"MRT"), a wholly-owned subsidiary of Mobile Reach International, Inc., and
Spectrum Mobile, Inc. ("Spectrum Mobile") entered into a License Agreement (the
"License Agreement") whereby MRT granted Spectrum Mobile the right to use,
sublicense and distribute the mobile software products owned by MRT. MRT will
receive a royalty payment of five percent for the first two years of the License
Agreement, with a sliding royalty for years three and four of the License
Agreement. Additionally, the License Agreement provides that MRT will receive a
portion of the proceeds of any sale of Spectrum Mobile or its assets based on
the length of time between the Effective Date and the sale. The portion of a
sale that MRT is entitled to receive in the event of a sale is capped at
$250,000.

Spectrum Mobile is owned by a group of former MRT employees. Each former
employee of MRT who is either an owner and/or an employee of Spectrum Mobile was
required as part of the License Agreement to enter into a Settlement and Release
Agreement (the "Settlement Agreement") whereby the Company and MRT are released
from all claims the individual might have.

The foregoing description is qualified in its entirety by the License Agreement
and the Settlement Agreement attached to the Company's 8K dated March 16, 2006.


Change In Company's Board and Management Team

At the conclusion of the quarter ending January 31, 2006 the Company received
the resignation of two of its Directors, Both Mr. Richard Rosenblum and Mr.
David Stefansky - successors were named and ratified during the same period and
filed with the commission on February 10, 2006. New Directors Mr. Hank Cohn and
Mr. Tony Soich will serve the Companies Board of Directors until its next annual
meeting or substitute is elected.

Certain Relationships and Related Transactions

From April 28, 2005 through August 15, 2005, the Company executed definitive
agreements for the purchase by institutional, accredited investors
(collectively, the "Investors") of $750,000 of principal amount of 8%
convertible promissory notes of we ("Note" or the "Notes"), maturing on April 1,
2006, convertible at the Investor's option, into shares of the Company's Common
Stock at a per share conversion price equal to the lesser of (i) 70% of the
average of the closing bid prices of the Common Stock as reported by Bloomberg,
L.P. for the principal trading market for the three trading days immediately
preceding the closing on April 28, 2005 (the "Closing Date Conversion Price"),

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or (ii) the average of the three lowest closing bid prices for the ten trading
days preceding the conversion date. In connection with the issuance of the
Notes, the Company issued to the Investors five-year common stock purchase
Warrants to purchase the number of shares of Common Stock which would be issued
on the closing date assuming the conversion of all of the outstanding Notes on
the closing date at the Closing Date Conversion Price. The exercise price of the
Warrants is equal to the Closing Date Conversion Price. Following the effective
date of the Registration Statement, discussed below, the Warrants shall provide
for cashless exercise. The conversion price of the Notes and the exercise price
of the Warrants are subject to adjustment for certain dilution events or in the
event of certain capital adjustments or similar transactions, such as a stock
split or merger. Subject to certain excepted issuances, the Investors have a
right of first refusal with respect to any proposed sale of Company securities
for a period of one year following the effective date of the Registration
Statement, discussed below.


From the entire transaction, the Company received gross proceeds of $750,000 and
net proceeds of approximately $635,000, after payment of offering related fees
and expenses.


Provided that the Company is not in default under the Notes or other transaction
documents, the Company will have the right, subject to the conversion rights of
the Investors under the Notes, to prepay the principal amount and accrued but
unpaid interest of the Notes at any time for an amount equal to 120% of the
original principal amount of the Notes.

The Company is obligated to pay liquidated damages to the Investor as the
Registration Statement has not declared effective by August 28, 2005, or if the
effectiveness of the Registration Statement is subsequently suspended for more
than certain specified permitted periods. As of the date of this filing, the
Company filed an amended Registration Statement on September 21, 2005 with
updated audit financials for the fiscal year ended July 31, 2005.


ITEM 6      EXHIBITS AND REPORTS ON FORM 8-K

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

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

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

32.2 Certification of 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: January 16, 2006                      /s/  Alan Christopher Johnson
                                            ----------------------------------
                                                 Alan Christopher Johnson,
                                                 Chief Executive Officer

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