<PAGE>

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

                                   FORM 10-QSB


(X)      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the quarterly period ended March 31, 2005

( )      Transition report pursuant of Section 13 or 15(d) of the Securities
         Exchange Act of 1939 for the transition period ____ to______

                        COMMISSION FILE NUMBER 000-32695

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

           Nevada                                         88-0490089
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

  112 Middle Road, #08-01 Midland House,  Singapore 188970 (011)(65) 6332 9287
--------------------------------------------------------------------------------
    (Address of Principal Executive Offices, including Registrant's zip code
                              and telephone number)

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 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 [ ]

The number of shares of the registrant's common stock as of April 20, 2005:
28,450,000 shares.

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


<PAGE>



                                TABLE OF CONTENTS

                                                                            PAGE

PART I. FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements                                   F-1

(a)      Consolidated Balance Sheets                                         F-2
(b)      Consolidated Statements of Operations                               F-3
(c)      Consolidated Statement of Shareholders' Equity (deficit)            F-4
(d)      Consolidated Statements of Cash Flows                               F-5
(e)      Notes to Consolidated Financial Statements                          F-6

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations                     3

Item 3.  Controls and Procedures                                              7

PART II. OTHER INFORMATION                                                    7

Item 1.  Legal Proceedings                                                    7

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds          7

Item 3.  Defaults On Senior Securities                                        7

Item 4.  Submission of Items to a Vote                                        7

Item 5.  Other Information                                                    7

Item 6.                                                                       8

(a) Exhibits (b) Reports on Form 8K

SIGNATURES AND CERTIFICATES                                                   10

                                        2

<PAGE>

PART I. FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

                                TABLE OF CONTENTS

Consolidated Balance Sheets..................................................F-2

Consolidated Statements of Operations........................................F-3

Consolidated Statement of Changes in Stockholders' Equity (Deficit)..........F-4

Consolidated Statements of Cash Flows........................................F-5

Notes to Consolidated Financial Statements...................................F-6

                                       F-1



<PAGE>
<TABLE>

                           AMARU, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


                                                              MARCH 31       DECEMBER 31,
                                                                2005            2004
                                                             -----------     -----------
<S>                                                          <C>             <C>
ASSETS
     Current assets
Cash and cash equivalents                                    $  753,629      $   644,319
Accounts receivable                                             516,952              239
Other receivable                                                540,000          680,737
Other current assets                                             36,226            5,576
                                                             -----------     -----------
     Total current assets                                     1,846,807        1,330,871

     Non current assets
Property and equipment, net                                     766,985         520,360
Product development, net                                        165,657         181,948
License                                                       2,420,227       2,420,227
                                                             -----------     -----------
     Total non current assets                                 3,352,869       3,122,535
                                                             -----------     -----------

     Total assets                                            $5,199,676      $4,453,406
                                                             ===========     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities
Accounts payable                                            $   601,830      $  126,345
Accounts payable-related parties                                     --         473,792
Line of credit                                                       --              --
Deferred tax liability                                          103,851          36,760
Advances from related parties                                   136,533         179,736
                                                             -----------     -----------
     Total current liabilities                                  842,214         816,633

Commitments                                                          --              --

     Shareholders' equity

Series A convertible preferred stock (par value $0.001)
  5,000,000 shares authorized: 0 shares issued and
  outstanding at March 31, 2005 and December 31, 2004,
  respectively                                                       --              --

Common stock (par value $0.001) 200,000,000 shares
  authorized; 27,400,000 shares issued and outstanding
  at March 31, 2005 and 27,200,000 at December 31, 2004          27,400          27,200
Paid in capital                                               3,477,176       2,932,751
Retained earnings                                               839,959         667,634
Comprehensive gain on currency translation                       12,927           9,188
                                                             -----------     -----------
     Total shareholders' equity                               4,357,462       3,636,773
                                                             -----------     -----------

     Total liabilities and shareholders' equity              $5,199,676      $4,453,406
                                                             ===========     ===========


                      The accompanying notes to financial statements
                          are an integral part of this statement

                                           F-2


</TABLE>
<PAGE>
<TABLE>
                                 AMARU, INC. & SUBSIDIARIES
                                   STATEMENTS OF OPERATIONS
                                         (UNAUDITED)


                                                            FOR THE             FOR THE
                                                       THREE MONTHS ENDED   THREE MONTHS ENDED
                                                         MARCH 31, 2005     MARCH 31, 2004
                                                          -------------     -------------
<S>                                                       <C>               <C>
Revenue:
  Licensing and advertising                               $    902,696      $  1,005,917
  Broadband consulting services                                500,000                --
  E-commerce                                                        --            11,979
  Other income                                                     527            18,625
                                                          ------------      ------------
    Total revenue                                            1,403,223         1,036,521

Cost of services
 (includes $0 and $68,404 of services
 purchased from related party during the
 three months ended March 31, 2005 and 2004
 respectively)                                                 878,014           116,034
                                                          -------------     -------------
Gross profit (loss)                                            525,209           920,487

Distribution costs                                              59,361             8,973
Administrative expenses                                        226,051           180,862
                                                          -------------     -------------
 Total expenses                                                285,412           189,835

                                                          -------------     -------------
Income from operations                                         239,797           730,652

Interest expenses                                                   --               454
Provision for Income taxes                                      67,472           159,172
                                                          -------------     -------------
Net income                                                $    172,325      $    571,026
                                                          =============     =============

Earnings per share - basic and diluted                    $       0.01      $       0.03
                                                          =============     =============
Weighted average number of common shares
  outstanding - basic and diluted                           27,234,444        19,088,384
                                                          =============     =============


                      The accompanying notes to financial statements
                          are an integral part of this statement

                                            F-3

</TABLE>
<PAGE>
<TABLE>
<S>     <C>
                                                    AMARU, INC. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                                            (UNAUDITED)


                       Series A Convertible
                          Preferred Stock          Common Stock
                       ---------------------   ----------------------
                                                                      Additional                                           Total
                       Number of  Par Value    Number of  Par Value    Paid-in    Subscribed   Retained   Translation  Stockholders'
                        Shares     ($0.01)      Shares     ($0.001)    Capital      stock      Earnings     gain          Equity
                       ---------  ---------  -----------  ---------  -----------  ----------   --------   -----------   -----------

Balance
  December 31, 2003           --  $      --   18,136,364  $  18,136  $   867,292  $  128,255   $160,696   $    32,917   $ 1,207,296

Shares issued for
  cash Feb. 10, 2004          --         --    1,363,636      1,364      414,636    (128,255)        --            --       287,745

Reverse acquisition      143,000        143      500,000        500      (27,347)         --         --            --       (26,704)

Stock issued for
  services                    --         --    1,000,000      1,000       49,000          --         --            --        50,000

Common stock issued
  for cash                    --         --      700,000        700    1,629,170          --         --            --     1,629,870

Stock converted         (143,000)      (143)   5,500,000      5,500           --          --     (5,357)           --            --

Net income                    --         --           --         --           --          --    512,295            --       512,295

Comprehensive loss
  on currency
  translation                 --         --           --         --           --          --         --       (23,729)      (23,729)
                                                                                                                        -----------
Comprehensive income          --         --           --         --           --          --         --            --       488,566
                       ---------  ---------  -----------  ---------  -----------  ----------   --------   -----------   -----------
Balance
  December 31, 2004           --         --   27,200,000     27,200    2,932,751          --    667,634         9,188     3,636,773

Common stock issued
  for cash                    --         --      200,000        200      544,425          --         --            --       544,625

Net income                    --         --           --         --           --          --    172,325            --       172,325

Comprehensive gain
  on currency
  translation                 --         --           --         --           --          --         --         3,739         3,739
                                                                                                                        -----------
Comprehensive income          --         --           --         --           --          --         --            --       176,064
                       ---------  ---------  -----------  ---------  -----------  ----------   --------   -----------   -----------
Balance
  March 31, 2005              --  $      --   27,400,000  $  27,400  $ 3,477,176  $       --   $839,959   $    12,927   $ 4,357,462
                       ---------  ---------  -----------  ---------  -----------  ----------   --------   -----------   -----------


                        The accompanying notes to financial statements are an integral part of this statement

                                                                 F-4

</TABLE>
<PAGE>
<TABLE>
                               AMARU, INC. & SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (UNAUDITED)


                                                       FOR THE              FOR THE
                                                   THREE MONTHS ENDED  THREE MONTHS ENDED
                                                    MARCH 31, 2005       MARCH 31, 2004
                                                     -----------           -----------
<S>                                                  <C>                   <C>
CASH FLOW FROM OPERATING ACTIVITIES
     Net income                                      $   172,325           $   571,026
     Adjustments to reconcile net income
       to cash and cash equivalents used
       or provided by operations:

     Amortization                                         33,751                29,205
     Depreciation                                          4,841                 3,021
     Acquisition of license in exchange for
       accounts receivable                                    --            (1,016,734)

   Changes in operation assets and liabilities
     Accounts receivable                                (516,713)                1,989
     Other receivables                                   140,737                20,554
     Other current assets                                (30,650)               14,669
     Accounts payable and accrued expenses                68,784                50,041
     Income tax payable                                       --               141,920
                                                     -----------           -----------
Net cash used in operating activities                   (126,925)             (184,309)

CASH FLOWS FROM INVESTING ACTIVITIES
     Software development cost                           (17,460)               (2,288)
     Acquisition of equipment                           (251,466)                 (731)
                                                     -----------           -----------
Net cash (used in)investing activities                  (268,926)               (3,019)

CASH FLOWS FROM FINANCING ACTIVITIES
     Payable to related party                            (43,203)                2,644
     Payments on line of credit                               --               (58,304)
     Recapitalization of M2B World Pte. Ltd.                  --               (26,704)
     Issuance of common stock for cash                   544,625               287,745
                                                     -----------           -----------
 Net cash provided by financing activities               501,422               205,381

Effect of exchange rate changes on cash and
cash equivalents                                           3,739                 9,799
                                                     -----------           -----------
Cash flow from all activities                            109,310                27,852

Cash and cash equivalents at beginning of period         644,319                60,307
                                                     -----------           -----------

Cash and cash equivalents at end of period           $   753,629           $    88,159
                                                     ===========           ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the period for:
        Interest                                     $        --           $       454
                                                     ===========           ===========
        Income taxes                                 $        --           $    17,535
                                                     ===========           ===========


                     The accompanying notes to financial statements
                         are an integral part of this statement

                                          F-5

</TABLE>

<PAGE>

                          AMARU INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FOR THE THREE MONTHS ENDED
                            MARCH 31, 2005 AND 2004
                                  (UNAUDITED)


1. BASIS OF PRESENTATION AND REORGANISATION
-------------------------------------------

DESCRIPTION OF BUSINESS
-----------------------

The Company through its wholly owned subsidiary, M2B World, is one of the
significant participants in the Broadband entertainment business. The Company is
the leading provider of interactive video-on-demand streaming and e-commerce
over Broadband channels, Internet portals and Third-Generation (3G) devices. It
has launched multiple Broadband TV and integrated shopping websites with over
100 channels of content designed and programmed to effectively target specific
viewer profiles and lifestyles of local and international audiences.

The Company controls substantial content libraries for aggregation, distribution
and syndication on Broadband and other media, sourced from Hollywood and major
content providers around the world.

The Company's business strategy is to be a diversified media company
specializing in the interactive media industry, using the latest broadband,
E-Commerce and communications technologies and access to international content
and programming.

The Company's goal is to provide on-line entertainment and education on-demand
on Broadband channels, Internet portals and 3G devices across the globe; for
specific and identified viewer lifestyles, demographics and interests; and to
tie the viewing experience to an on-line shopping experience. This is to enable
two leisure activities to be rolled into one for the ultimate convenience and
reaching out to a global viewing audience.

REORGANIZATION
--------------

As of February 25, 2004, an agreement was entered into which provides for the
reorganization of M2B World Pte. Ltd., a Singapore corporation with and into
Amaru, Inc. (Amaru), a Nevada corporation, with M2B World Pte. Ltd. (M2B),
becoming a wholly-owned subsidiary of Amaru. The agreement is for the exchange
of 100% of the outstanding Common Stock of M2B World Pte. Ltd. For 19,500,000
common shares and 143,000 Series A convertible preferred shares of Amaru, which
are each convertible into 38.461538 shares of Amaru common stock.

The exchange was accounted for as a reverse acquisition. Accordingly for
financial statement purposes, M2B World Pte. Ltd. was considered the accounting
acquiror and the related business combination was considered a recapitalization
of M2B World Pte. Ltd. rather than an acquisition by the Company. The historical
financial statements prior to the agreement will be those of M2B World Pte. Ltd.
and the name of the consolidated Company going forward will be Amaru, Inc. and
Subsidiary.

On this basis, the historical financial statements prior to February 28, 2004
have been restated to be those of the accounting acquirer M2B World Pte. Ltd.
the historical stockholders' equity prior to the reverse acquisition has been
retroactively restated (a recapitalization) for the equivalent number of shares
received in the acquisition after giving effect to any difference in par value
of the issuer's and acquirer's stock.


                                       F-6
<PAGE>


BASIS OF PRESENTATION
---------------------

The financial statements included herein is unaudited. However, such information
reflects all adjustments ( consisting solely of normal occurring adjustments )
which are, in the opinion of management, necessary for a fair statement of
results for the interim periods. The results of operations for the three months
ended March 31, 2005, are not necessarily indicative of the results to be
expected for the full year.

The accompanying financial statements do not include footnote and certain
financial presentation normally required under generally accepted accounting
principles, and, therefore, should be read in conjunction with the company's
Annual report on Form 10-KSB for the year ended December 31, 2004.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------

PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated financial statements include the accounts of Amaru Inc and its
wholly owned subsidiaries. All significant transactions among the consolidated
entities have been eliminated upon consolidation.


USE OF ESTIMATES
----------------
The preparation of financial statements in accordance with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Management has not made any subjective or complex judgments the application of
which would result in any material differences in reported results.


CONCENTRATION OF CREDIT RISK
----------------------------
The credit risk is primarily attributable to the Company's trade receivables.
The credit risk on liquid funds is limited because the counterparties are banks
with high credit ratings assigned by international credit-rating agencies.
Licensing and advertising revenues were concentrated with two customers totaling
100% of these related revenues for the three months ended March 31, 2005 and one
customer totaling 100% of these related revenues for the three months ended
March 31, 2004.

The Company's operations are conducted over the world wide web and some
purchases are made from locations outside of Singapore. However all transactions
are recorded in Singapore

                                                 For the three months
                                                    ended March 31
                                              --------------------------
                                                  2005          2004
                                              -----------    -----------

         Services purchased outside
         of Singapore                         $   878,014    $   68,404

No sales were made outside of Singapore for the three months ended March 31,
2005 and March 31, 2004.

CASH AND CASH EQUIVALENTS
-------------------------

Cash and cash equivalents are defined as cash on hand, demand deposits and
short-term, highly liquid investments readily convertible to cash and subject to
insignificant risk of changes in value.


                                        F-7

<PAGE>

Cash in banks and short-term deposits are held to maturity and are carried at
cost.

For the purposes of the cash flow statement, cash and cash equivalents consist
of cash on hand and deposits in banks, net of outstanding bank overdrafts.

REVENUES
--------

Subscription and related services revenues are recognized over the period that
services are provided. Advertising and sponsorship revenues are recognized as
the services are performed or when the goods are delivered. Licensing and
content syndication revenue is recognized as the content is delivered.
E-commerce commissions are recognized as received. Broad-band consulting
services and on-line turnkey solutions are recognized as earned.

To date the Company has only had revenues mainly from licensing and advertising
and content syndication.

COSTS OF SERVICES
-----------------

The cost of services pertaining to 1) advertising and sponsorship revenue and 2)
subscription and related services are cost of bandwidth charges, channel design
and alteration, copyright licensing, and hardware hosting and maintenance costs.
The cost of services pertaining to E-commerce revenue are channel design and
alteration, and hardware hosting and maintenance costs. All these costs are
accounted for in the period incurred.

LICENSING RIGHTS
----------------

Licensing rights refers to the rights to use the content. These rights are
purchased for a specific period as determined in the contract. The costs of
these rights are recognized in the accounts over the life of the contract on a
straight line basis. These contents are then streamed into the broad-band sites
and the revenue earned from advertising, sponsorship and subscription are then
recognized according to our policy on revenue.

TRADE AND OTHER RECEIVABLES
---------------------------

Trade receivables, which generally have 30 to 90 day terms, are recognized and
carried at the original invoice amount less an allowance for any uncollectible
amounts (if any). An estimate for doubtful debts is made when collection of the
full amount is no longer probable. Bad debts are written off as incurred.

The Company has reviewed trade and other receivables and determined that no
allowance for doubtful accounts is required.

PROPERTY AND EQUIPMENT
----------------------

Property and equipment is stated at cost. Expenditures for major improvements
are capitalized, while replacements, maintenance and repairs, which do not
significantly improve or extend the useful life of the asset, are expensed when
incurred.

Depreciation of property and equipment is computed using the straight-line
method over the estimated useful lives of the assets, which is three to
five years.

PRODUCT DEVELOPMENT
-------------------

The Company capitalized the development and building cost related to the
broad-band sites and infrastructure for the streaming system, most of which was
developed in 2002. The Company projects that these development costs will be
useful for up to five years before additional significant development needs to
be done


                                       F-8

<PAGE>

IMPAIRMENT OF LONG-LIVED ASSETS
-------------------------------

The Company reviews the carrying values of its long-lived and intangible assets
for possible impairment whenever events or changes in circumstances indicate
that the carrying amount of the assets may not be recoverable. No impairment
losses were recorded in the three months ended March 31, 2005 and the year ended
December 31, 2004.

ADVANCES FROM RELATED PARTY
----------------------------

Advances from related party are unsecured, non-interest bearing and payable on
demand.

FOREIGN CURRENCY TRANSLATION
----------------------------

Transactions in foreign currencies are measured and recorded in the functional
currency, Singapore dollars, using the exchange rate in effect at the date of
the transaction. The reporting currency is U.S. dollars. At each balance sheet
date, recorded monetary balances that are denominated in a foreign currency are
adjusted to reflect the rate at the balance sheet date and the income statement
accounts using the average exchange rates throughout the period. Translation
gains and losses are recorded in stockholders' equity as other comprehensive
income and realized gains and losses are reflected in operations.

ADVERTISING
-----------

The cost of advertising is expensed as incurred. For the three months ended
March 31, 2005 and 2004 the company incurred advertising expenses of $20,144 and
$334 respectively.

INCOME TAXES
------------

Deferred income taxes are reported using the liability method. Deferred tax
assets are recognized for deductible temporary differences and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. 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.

EARNINGS (LOSS) PER SHARE
-------------------------

In February 1997, the Financial Accounting Standards Board (FASB) issued FAS No.
128 "Earnings Per Share" which requires the Company to present basic and diluted
earnings per share, for all periods presented. The computation of earnings per
common share (basic and diluted) is based on the weighted average number of
shares actually outstanding during the period. The Company has no common stock
equivalents, which would dilute earnings per share.

FINANCIAL INSTRUMENTS
---------------------

The carrying amounts for the Company's cash, other current assets, accounts
payable, accrued expenses, notes payable, and other liabilities approximate
their fair value.

RECLASSIFICATIONS
-----------------

Certain amounts in the previous periods presented have been reclassified to
conform to the current years financial statement presentation.

                                        F-9

<PAGE>

3. PROPERTY AND EQUIPMENT
-------------------------

         Property and equipment consist of the following:

                                                 March 31,        December 31,
                                                  2005               2004
                                             --------------     --------------

         Office equipment                    $     116,544      $      65,078
         Film Library                              700,000            500,000
         Furniture, fixture and fittings             4,578              4,578
                                             --------------     --------------
                                                   821,122            569,656

         Accumulated depreciation                  (54,137)           (49,296)
                                             --------------     --------------

                                             $     766,985      $     520,360
                                             ==============     ==============

         Depreciation expense was $4,841 for the three months ended March 31,
         2005 and $3,021 for the three months ended March 31, 2004


4. PRODUCT DEVELOPMENT
----------------------

         Product development consists of the following:

                                                 March 31,       December 31,
                                                  2005               2004
                                             --------------     --------------

         Development expenditures            $     618,561      $     601,101

         Accumulated amortization                 (452,904)          (419,153)
                                             --------------     --------------

                                             $     165,657      $     181,948
                                             ==============     ==============

         Amortization expense was $33,751 for the three months ended March 31,
         2005 and $29,205 for the three months ended March 31, 2004.


5. LINE OF CREDIT
-----------------

The Company has a line of credit, $60,632 for three months ended March 31, 2005
and $61,267 for year ended December 31, 2004, repayable on demand, used to fund
the Group's short-term working capital requirements. The line of credit bears
interest at prime lending rate plus 1% per annum (6% at March 31, 2005 and
December 31, 2004). This line of credit is secured by a certificate of deposit
and interest is payable monthly. The outstanding balance was zero at both March
31, 2005 and December 31, 2004.


6. COMMITMENTS
--------------

         LEASES
         ------

         The Company renewed its lease with a larger office space of about 4,000
         square feet, at a monthly rental of $4,244. The new lease period is for
         three years, expiring on March 16, 2008.
         Rent expense totaled $7,781 for the three months ended March 31, 2005
         and $1,893 for the three months ended March 31, 2004.

         Minimum lease payments for the noncancellable operating leases for the
         years ending December 31,

      2005           2006           2007            2008            Total
 -------------- -------------- --------------- --------------- ---------------

    $ 38,196        $ 50,928       $ 50,928       $ 10,678        $ 150,730
 ============== ============== =============== =============== ===============


                                        F-10

<PAGE>

7. CAPITAL STOCK
----------------

COMMON STOCK
------------

On February 1, 2005, Amaru Inc issued 50,000 shares of common stock through
private placement at a price of $3.00 per share for a total amount of $150,000.

On March 31, 2005, Amaru Inc issued 150,000 shares of common stock through
private placement at a price of $3.00 per share for a total amount of $450,000.

Costs of $55,375 associated with the issuance of common stock were deducted from
additional paid-in capital during the quarter ended March 31, 2005.


8. INCOME TAXES
---------------

The Company files separate tax returns for Singapore and the United States of
America. Reconciliation of the differences between the statutory tax and the
effective income tax are as follows:

                                                     March 31,        March 31,
                                                      2005             2004
                                                 --------------   --------------

         U.S. Federal statutory tax                        --%              --%
         U.S. State taxes, net of federal tax              --%              --%
         Foreign statutory tax rate                     27.92%           21.78%
         Valuation allowance                               --%              --%
                                                 --------------   --------------
            Effective income tax rate                   27.92%           21.78%
                                                 ==============   ==============

         The components of income tax expense consist of the following:

                                                    For the three months ended
                                                 -------------------------------
                                                     March 31,        March 31,
                                                      2005             2004
                                                 --------------   --------------
         Current:

         Federal                                 $          --    $          --
         State                                              --               --
         Foreign                                        67,472          159,172
         Valuation allowance                                --               --
                                                 --------------   --------------
                                                 $      67,472    $     159,172
                                                 ==============   ==============


The Company operated primarily in Singapore and incurred no United States
federal or state income taxes as of March 31, 2005 and 2004.

The Company had available approximately $330,000 of unused Federal net operating
loss carry-forwards at March 31, 2005, that may be applied against future
taxable income. These net operating loss carry-forwards expire for Federal
purposes in 2025. There is no assurance that the Company will realize the
benefit of the net operating loss carry-forwards.

SFAS No. 109 requires a valuation allowance to be recorded when it is more
likely than not that some or all of the deferred tax assets will not be
realized. At March 31, 2005, a valuation allowance for the full amount of the
net deferred tax asset was established due to the uncertainties as to the amount
of the taxable income that would be realized.


                                        F-11

<PAGE>

9. SUBSEQUENT EVENT
--------------------
On April 4, 2005, the Company issued 100,000 shares of common stock through
private placement at a price of $3 per share for a total amount of $300,000.

On April 12, 2005, the Company issued 100,000 shares of common stock through
private placement at a price of $3 per share for a total amount of $300,000.

On April 14, 2005, the Company issued 750,000 shares of common stock through
private placement at a price of $3 per share for a total amount of $2,250,000.

On April 20, 2005, the Company issued 100,000 shares of common stock through
private placement at a price of $3 per share for a total amount of $300,000.

On May 3, 2005, the Company issued 80,000 shares of common stock through private
placement at a price of $3 per share for a total amount of $240,000.


                                        F-12

<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE
COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. PROSPECTIVE SHAREHOLDERS SHOULD
UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD - LOOKING STATEMENT
CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE
FORWARD - LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR
FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND
THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE
FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE
ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE
TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF
WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE
BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE
ASSUMPTIONS UNDERLYING THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN ARE
REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE,
THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD -
LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE
AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING, CAPITAL
EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE COMPANY'S
RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE
FORWARD - LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH
STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR ANY OTHER
PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

General

M2B World is in the business of broadband entertainment and education-on-demand,
streaming via computers, television sets, PDAs (Personal Digital Assistant) and
the provision of broadband services. Its business includes channel and program
sponsorship (advertising and branding); online subscriptions, channel/portal
development (digital programming services); content aggregation and syndication,
broadband consulting services, broadband hosting and streaming services and
E-commerce.

The following discussion should be read in conjunction with selected financial
data and the financial statements and notes to financial statements.


RESULTS OF OPERATIONS
---------------------

For the quarter ended March 31, 2005 compared with the quarter ended March 31,
2004

OVERVIEW

The key business focus of the Company is to establish itself as the leading
provider and creator of a new generation of Entertainment-on-Demand,
Education-on-Demand and E-Commerce Channels on Broadband, and 3G (Third
Generation) devices.

The Company owns exclusive rights in the broadband media for various content.
The Company intends to apply broadband technologies to facilitate its growth in
the broadband and internet sector.

For the broadband, the Company delivers both wire and wireless solutions,
streaming via computers, TV sets, PDAs and 3G hand phones.

At the same time the Company launches e-commerce channels (portals) that provide
on-line shopping but with a difference, merging two leisure activities of
shopping and entertainment. The entertainment channels are designed to drive and
promote the shopping portals, and vice versa.

The Company's business model in the area of broadband entertainment includes
both education on-demand and e-services, which would provide the Company with
multiple streams of revenue. Such revenues would be derived from channel and
program sponsorship (advertising and branding), on-line subscriptions, online
games micro-payments, channel/portal development (digital programming services),
content aggregation and syndication, broadband consulting services, on-line
shopping turnkey solutions, broadband hosting and streaming services, E-commerce
commissions and on-line dealerships.

                                        3

<PAGE>

The Company's Broadband Sites

As of March 31, 2005, the following Broadband sites have been set up both in the
United States and abroad to cater to different market segments.

1.       ENTERTAINMENT

         International sites:
         o        Star78.com - an advertising-based Family Entertainment site
         o        Shine8.com - an advertising-based Lifestyle site
         o        Jump29.com - an advertising-based Young Adults site
         o        Dreamstage7.com - an advertising & subscription-based Glamour
                  & Fashion site
         o        Dimension88.com - an advertising & subscription-based Movie
                  site
         o        Dragon78.com - an advertising & subscription-based Mandarin
                  Entertainment site

         US Sites:
         o        Dragon78.tv - an advertising & subscription-based Mandarin
                  Entertainment site

2. EDUCATION SITES

         International Sites:
         o        Wiz5.com - an advertising & subscription-based Business &
                  Corporate Training site

         US Sites:
         o        Wiz5.US - an advertising & subscription-based Business &
                  Corporate Training site

3. E-COMMERCE SITES

         International Sites:
         o        Starzmall, A One-Stop Shopping Paradise
         o        Trotteuse, A Second-Hand Branded Goods Mall

In fiscal 2005, the Company plans to restructure its operations to meet fully
its global expansion initiatives. Part of this plan has already been put in
place in the first quarter of 2005 when the business were reorganized under the
following undermentioned entities to spearhead the expansion of the Company's
business and focus on specific growth areas and territories.

                  M2B WORLD PTE LTD (SINGAPORE)

                  This subsidiary will continue to oversee the management and
                  operation of the company as a whole and oversee the Asian
                  business.

                  M2B WORLD INC.(USA)

                  M2B WORLD INC.(USA) was incorporated on January 24, 2005. This
                  subsidiary will handle and oversee the Company's business in
                  the USA. The company has leased a new office on Sunset
                  Boulevard, West Hollywood that comes into effect from April 1,
                  2005. The Company plans to complete the transfer of its US
                  broadband sites and some international sites to M2B World Inc
                  by second quarter of 2005.

                  M2B GAME WORLD PTE LTD (SINGAPORE)

                  M2B GAME WORLD PTE LTD (SINGAPORE) was incorporated on January
                  24, 2005. This company will function as a wholly owned
                  subsidiary company of M2B World Pte Ltd and will handle the
                  venture into online games. The Company has already secured an
                  online games franchise for six countries. The online games
                  platform and micro-payment gateway is expected to be
                  operational in Singapore by second quarter of 2005.

                  AMARU HOLDINGS LIMITED (BVI)

                  AMARU HOLDINGS LIMITED (BVI) was incorporated in the British
                  Virgin Islands on February 21, 2005. All rights and licenses
                  for the entertainment and education content (like movies,
                  dramas, lifestyles, corporate training, and others) will be
                  held under this company.

                                        4

<PAGE>

                  M2B COMMERCE LIMITED(BVI).

                  M2B World has a wholly owned subsidiary, M2B Commerce Limited,
                  registered in the British Virgin Islands. M2B World intends to
                  consolidate all its e-commerce operations and possibly launch
                  new "e-bay" type initiatives under M2B Commerce Limited. With
                  effect from January 11, 2005 ownership of this company has
                  been transferred from M2B World Pte Ltd to Amaru Inc. and is
                  wholly owned directly under Amaru Inc. New online e-commerce
                  malls are currently being designed and built; these new malls
                  are expected to be operational by third quarter of 2005.

                  A CHINA REPRESENTATIVE OFFICE has been set up in Shanghai.

                  This representative office will be under M2B World Pte Limited
                  and handle the Company's China business. The representative
                  office has leased office space in the Shui On Plaza on Huai
                  Hai Zhong Road in Central Shanghai with effect from March 15
                  2005.

                  M2B WORLD TRAVEL LIMITED (BVI)

                  M2B WORLD TRAVEL LIMITED (BVI) was recently incorporated in
                  the British Virgin Islands on May 3, 2005. This Company will
                  be used to launch a global online travel platform, which is
                  expected to be ready for operation by end of 2005.


REVENUE

The revenue for the three months ended March 31, 2005 was $1,403,223.

Revenue for the three months ended March 31, 2005 at $1,403,223 was higher than
revenue of $1,036,521 for the three months ended March 31, 2004 by $366,702 (
35%).

The revenue for the three months ended March 31, 2004 was primarily from
advertising ($1,005,917) which came from the new Chinese sites, movie sites,
business and corporate training sites with varied and attractive content which
comprised television dramas, movies, documentaries and corporate training
videos.

The Company continued to enhance its broadband sites and acquired varied and
rich mix of contents catering to diversified needs and different lifestyles of
its subscribers. Besides subscription, the enhanced broadband sites also
attracted $900,000 of advertising revenue for the three months ended March 31,
2005. Another $500,000 of revenue came from software services.

COST OF SALES

Cost of sales for the three months ended March 31, 2005 was $878,014 which
increased by $761,980 (657%) from $116,034 for the three months ended March 31,
2004.

As a proportion of revenue, the cost of sales for the three months ended March
31, 2005 was 63% (cost of sales at $878,014 and revenue at $1,403,223) as
compared to 11% for the three months ended March 31, 2004 (cost of sales at
$116,034 and revenue at $1,036,521).

The significant increase in cost of sales of $761,980 (657%) was mainly
attributed to the acquisition of contents license rights for the company's
broadband sites for the three months ended March 31, 2005. These acquisitions
enabled the Company to provide a varied and rich mix of contents which can cater
to the diversified needs and different lifestyles of its subscribers. These
acquisitions of contents license rights in the three months ended March 31, 2005
of $878,014 resulted in a high proportion of 63% of cost of sales over revenue.

                                        5

<PAGE>

The proportion of 63% for the three months ended March 31, 2005 compared to the
11% for the three months ended March 31, 2004 was high as the company did not
incur large expenditures on purchase of contents license rights for the three
months ended March 31, 2004 ($116,034). The acquisition of contents license
rights was low as much of the acquisitions were already done in the last two
quarters of 2003 in preparation for the launch of new broadband sites and
enhanced broadband sites towards the later half of 2003. This low cost coupled
with the large revenue from advertising for the three months ended March 31,
2004 resulted in the low proportion of 11%.


DISTRIBUTION EXPENSES

Distribution expenses for the three months ended March 31, 2005 at $59,361 was
higher by $50,388 (561%) as compared to the amount of $8,973 incurred for the
three months ended March 31, 2004.

The higher distribution expenses was attributed mainly to the marketing of M2B
network of broadband sites ($15,000) and staff traveling to open new markets and
develop new businesses ($33,334).


GENERAL AND ADMINISTRATIVE EXPENSES

Administration expenses for the three months ended March 31, 2005 at $226,051
was higher by $45,189 (25%) as compared to the amount of $180,862 incurred for
the three months ended March 31, 2004.

The increase was attributed mainly to staff costs from the increase in headcount
to support the growing business.

Net Income

For the three months ended March 31, 2005 net income was $172,325 which
decreased by $398,701 (70%) from $571,026 for the three months ended March 31,
2004.

The decrease in net income was due to the higher costs incurred in the three
months ended March 31, 2005.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash at $753,629 at March 31 2005 as compared to cash of
$644,319 at December 31, 2004.

The Company does not finance its operations through short-term bank credit,
long-term bank loans nor leasing arrangements with financial institutions as it
believes that cash generated from its operations will be able to cover its daily
running cost and overheads.

During the three months ended March 31, 2005, the Company had not entered into
any transactions using derivative financial instruments or derivative commodity
instruments nor held any marketable equity securities of publicly traded
companies. Accordingly the Company believes its exposure to market interest rate
risk and price risk is not material.

Cash generated from operations will not be able to cover the company's intended
growth and expansion. The Company has plans in 2005 to expand its broadband
coverage by launching new broadband sites in North America and Europe. The
Company also plans to open new subsidiaries in the last two quarters of 2005 in
Canada, United Kingdom and Australia.

The Company launched an entertainment site and a business training site in North
America, in 2004. In 2005, the Company intends to launch more broadband
entertainment and business training content sites. In the area of E-commerce,
the company plans to launch a new shopping mall for health and wellness products
online in the first half of 2005.

The Company has completed its prototype content for 3G (third generations)
mobile phones. The Company is working with telecommunication companies and
mobile operators on the possibility of launching this new content in the first
half of 2005.


                                        6

<PAGE>

The Company had secured an on-line games franchise for six countries in 2004.
The Company is in the process of developing on-line games sites which are
targeted for launch in the first half of 2005.

The Company is continuing to raise additional equity issues, to fund all
business expansions.

Over the last six months starting from October 2004 to March 2005 the Company
has already raised a total of $2,620,000 through the private placement of the
Company's common stock. Of this amount, $2,020,000, less $390,130 of costs
associated with the issuance, was raised in the fourth quarter of 2004 ended
December 31, 2004 and $600,000, less $55,375 of costs associated with the
issuance, was raised in the first quarter of 2005 ended March 31, 2005.

The Company believes that it can continue to raise more capital funds, through
private placements to fund its expansion growth and the success of its fund
raising efforts continued resulting in the Company raising $3,150,000 in the
month of April.

NEW CONTRACTS

There are two new contracts in the quarter ended March 31, 2005:

o    Contract with United Power of Japan signed on March 18, 2005. M2B will
     launch 8 broadband channels in Japan that will be available on television
     sets in Japanese households. The contract has an option for United Power to
     exercise within 6 months that will give M2B a minimum guarantee of 50,000
     subscribers for $1.2 million a year. Thereafter for every subscriber, M2B
     will be paid $2.50 per subscriber per month.

o    Contract with Sapphire Management, a company of Echelon Entertainment, a
     California company, signed on March 6, 2005 for distribution of DVDs
     worldwide. This is on a revenue sharing basis.

ITEM 3. Controls and Procedures

Our President and Treasurer/Chief Financial Officer (the "Certifying Officers")
are responsible for establishing and maintaining disclosure controls and
procedures and internal controls and procedures for financial reporting for the
Company. The Certifying Officers have designed such disclosure controls and
procedures and internal controls and procedures for financial reporting to
ensure that material information are made known to them, particularly during the
period in which this report was prepared. The Certifying Officers have evaluated
the effectiveness of the Company's disclosure controls and procedures and
internal controls and procedures for financial reporting as of March 31, 2005
and believes that the Company's disclosure controls and procedures and internal
controls and procedures for financial reporting are effective based on the
required evaluation. There have been no significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.


PART II. OTHER INFORMATION

Item 1.  Legal proceedings

No disclosures are required pursuant to Item 103 of Regulation S-B, taking into
account Instruction 1 to that Item.

Item 2. Unregistered sales of equity securities and use of proceeds

During the quarter ended March 31, 2005, the Company sold 200,000 "restricted"
shares of common stock of the Company in a private placement at $3.00 per share
to an "accredited investor", as that term is defined in Regulation D of the
Securities Act of 1933. The Company paid $55,375 in consulting fees in
connection with such sale. The proceeds of the sale were used for growth and
expansion of the business.

The shares of the Company's common stock were issued and sold in reliance upon
the exemption provided by Section 4(2) and Section 505 and/or 506 of Regulation
D of the Securities Act of 1933.

Item 3. Defaults on senior securities                         NONE

Item 4. Submission of items to a vote                         NONE

Item 5. Other information                                     NONE

                                        7

<PAGE>

Item 6.

(a) Exhibits
    --------

    Exhibit No.            Description
    -----------            -----------
    Exhibit 31             CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
                           FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT

    Exhibit 32             CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
                           FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT

b) Reports on 8K during the quarter:




SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   AMARU, INC.
Date: May 17, 2005
                               By /s/ Colin Binny
                                    --------------------------------------------
                                    President

                                  By /s/ Francis Foong
                                    --------------------------------------------
                                    Chief Financial Officer


                                        8