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

                                   FORM 10-QSB


     [X]  Quarterly Report pursuant Section 13 or 15(d) of the Securities
                              Exchange Act of 1934


                 For the quarterly period ended October 31, 2006


      [ ] Transition report pursuant section 13 or 15(d) of the Securities
                              Exchange Act of 1934


                                   333-111696
                                   ----------
                             Commission file number


                            YZAPP INTERNATIONAL INC.
                            ------------------------
        (Exact name of small business issuer as specified in its charter)

                                     Nevada
                                     ------
                          (State or other jurisdiction)

                                     Pending
                                     -------
                 (IRS Employer of incorporation or organization
                              Identification No.)


         Suite 500 666 Burrard Street, British Columbia, Canada V6C 3P6
         --------------------------------------------------------------
                    (Address of principal executive offices)

                                  604 868 0264
                                  ------------
                           (Issuer's telephone number)
-


                  (Former Name, Address and Former Fiscal Year,
                         if Changed Since Last Report)


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 [ ]


Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ]  No [X]


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


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:


Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ]  No [ ]


Common Stock of 50,000,000 authorized at $0.001 par value, 11,746,041 shares
were outstanding as of December 12, 2006.

<PAGE>






                            YZAPP INTERNATIONAL INC.

                                   FORM 10-QSB

                                      INDEX

PART I. FINANCIAL INFORMATION                                               Page


Item 1. Financial Statements                                                 F-1

        Consolidated Balance Sheets at October31, 2006 (Unaudited) and
        July 31, 2006 (Audited)                                              F-1

        Consolidated  Statements of Operations (Unaudited) for the three
        months ended October 31, 2006 and 2005                               F-2

        Consolidated  Statements of Cash Flows (Unaudited) for the three
        months ended October 31, 2006 and 2005                               F-3

        Notes to Consolidated Financial Statements                           F-4

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

Item 3. Controls and Procedures                                                5

PART II. OTHER INFORMATION                                                     5

Item 4. Legal Proceedings                                                      5

Item 5:  Subsequent Events                                                     5

Item 6. Exhibits and Reports on Form 8-K                                       6

Signatures                                                                     6



<PAGE>
<TABLE>
<CAPTION>

                            YzApp International Inc.
                          (A Development Stage Company)
                           Consolidated Balance Sheets
                           (expressed in U.S. dollars)

                                                                       October 31, 2006   July 31, 2006
                                                                          (unaudited)       (Audited)
                                                                        --------------    -------------
                                     ASSETS

<S>                                                                     <C>               <C>
Current Assets
Cash                                                                    $       15,354    $      14,979
Other receivables - taxes                                                        8,619            8,502
                                                                        --------------    -------------
Total Current Assets                                                            23,973           23,481

Property and Equipment (Note 3)                                                  9,061            9,669
Software Development Costs (Note 2 (j))                                         38,649           38,306
                                                                        --------------    -------------

Total Assets                                                            $       71,683    $      71,456
                                                                        ==============    =============


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable and accrued liabilities (Note 4)                       $       74,143    $     293,109
Advances payable (Note 5)                                                       18,754            9,835


Due to related parties (Note 6 (b))                                                 --           32,772
                                                                        --------------    -------------
Total Current Liabilities                                                       92,897          335,716


                       STOCKHOLDERS' DEFICIT

Preferred Stock:
  1,000,000 authorized, $0.001 par value
  nil shares issued and outstanding                                                 --               --

Common Stock: (Note 8)
  50,000,000 shares authorized, $0.001 par value                                11,546           11,546
  11,546,041 shares issued and outstanding,

Additional Paid-in Capital                                                     769,159          769,159


Share subscription received                                                     20,000               --

Donated Capital (Note 6 (a))                                                   147,152          142,152


Deficit Accumulated During the Development Stage                              (907,052)      (1,127,083)


Accumulated Other Comprehensive Loss                                           (62,019)         (60,034)
                                                                        --------------    -------------

Total Stockholders' Deficit                                                    (21,214)        (264,260)
                                                                        --------------    -------------

Total Liabilities and Stockholders' Deficit                             $       71,683    $      71,456
                                                                        ==============    =============
</TABLE>



                                       F-1


<PAGE>

<TABLE>
<CAPTION>
                            YzApp International Inc.
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                           (expressed in U.S. dollars)
                                   (unaudited)

                                                                                     Accumulated from
                                                        Three Months Ended             24-Aug-00
                                                            October 31,          (Date of Inception) to
                                                       2006             2005        October 31, 2006

                                                   ------------    ------------    --------------------
<S>                                                <C>             <C>             <C>
REVENUE                                            $         --    $         --    $             16,940
                                                   ------------    ------------    --------------------
EXPENSES
Automobile                                                   --              11                  15,247
Bank charges and interest                                   922             730                  53,069
Depreciation                                                693             964                  29,107
Feasibility study                                            --              --                  11,814
Interest on long term debt                                   --              --                   2,608
Loss on disposal of equipment                                --              --                   2,017
Management fees (Note 6)                                  5,000          12,000                 201,334
Marketing                                                    --              --                  32,479
Office and general                                          317           2,317                  76,284
Professional fees                                        10,390           4,036                 126,117
Public listing costs                                      3,000              --                   6,522
Sales and marketing consulting                               --              --                 264,289
Software development costs                                   --              --                 278,334
Technical support                                            --              --                  18,136
Travel                                                       --              --                  28,915
Wages and benefits                                           --              --                  10,554
Website hosting and server                                   --              --                  40,227
                                                   ------------    ------------    --------------------
TOTAL EXPENSES                                           20,322          20,058               1,202,053


Less expense recoveries                                      --              --    $            (34,919)
Less interest and other                                      --              --    $             (2,789)
                                                   ------------    ------------    --------------------

                                                         20,322          20,058               1,164,345
                                                   ------------    ------------    --------------------

OTHER INCOME (LOSS)
Gain on forgiveness of debt
                                                        240,353              --                 240,353

NET INCOME (LOSS)                                  $    220,031    $    (20,058)   $           (907,052)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment            $     (1,985)   $    (11,193)   $            (62,019)
                                                   ------------    ------------    --------------------

COMPREHENSIVE INCOME (LOSS)                        $    218,046    $    (31,251)   $           (969,071)
                                                   ------------    ------------    --------------------

Net  Income (Loss) Per Share - Basic and Diluted   $       0.02    $      (0.00)
                                                   ------------    ------------

Weighted Average Common Shares Outstanding           11,546,041      11,406,000
</TABLE>


                                      F-2

<PAGE>

<TABLE>
<CAPTION>


                            YzApp International Inc.
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                           (expressed in U.S. dollars)
                                   (unaudited)


                                                                          Accumulated from
                                                   Three Months Ended     24-Aug-00 (Date
                                                       October 31,        of Inception) to
                                                   2006          2005     October 31, 2006

                                                 ---------    ---------    --------------
<S>                                              <C>          <C>          <C>
CASH FLOWS TO OPERATING ACTIVITIES
Net Income (loss)                                $ 220,031    ($ 20,058)   ($     907,052)
Adjustments to reconcile net loss to net cash:
  Depreciation                                         693          964            29,107
  Donated services                                   5,000       12,000           147,152
  Loss on disposal of equipment                         --           --             2,017
  Gain on forgiveness of debt                     (240,353)          --          (240,353)
  Expenses paid with common stock                       --           --           169,245
  Debt settled with common stock                        --           --            10,500
Change in operating assets and liabilities:
  Accounts receivable                                   --           --             1,019
  Other receivables - taxes                            (42)         546            (6,422)
  Prepaid expenses                                      --           --               480
  Accounts payable                                   6,198      (12,527)          225,345
  Due to related parties                                --
                                                        --        1,368            12,185
                                                 ---------    ---------    --------------

Net Cash Used In Operating Activities               (8,473)     (17,707)         (556,777)
                                                 ---------    ---------    --------------

CASH FLOWS TO INVESTING ACTIVITIES
  Software development costs                            --           --           (29,687)
  Purchase of property and equipment                    --           --           (34,420)
                                                 ---------    ---------    --------------

Net Cash Used In Investing Activities                   --           --           (64,107)
                                                 ---------    ---------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in advances payable
                                                     8,919       21,250            35,190
Net decrease in long-term debt                          --           --              (588)
Proceeds from issue of common stock                     --           --           599,251
                                                 ---------    ---------    --------------

Net Cash Provided By Financing Activities            8,919       21,250           633,853
                                                 ---------    ---------    --------------

Effect of Exchange Rate Changes on Cash                (71)        (147)            2,385
                                                 ---------    ---------    --------------


NET INCREASE (DECREASE) IN CASH                     15,354
                                                                    375             3,396

CASH - BEGINNING OF PERIOD                          14,979          274                --
                                                 ---------    ---------    --------------

CASH - END OF PERIOD                                15,354    $   3,670            15,354
                                                 ---------    ---------    --------------

Supplemental Disclosures
  Interest paid                                  $     882    $     621    $        8,660
  Income taxes paid                                     --           --                --
                                                 ---------    ---------    --------------

Non-Cash Financing Activities
  Common shares issued for services                     --           --    $      169,245
  Common shares issued for debt settlement       $  20,000           --    $       30,500
                                                 ---------    ---------    --------------
</TABLE>

                                      F-3

<PAGE>



                            YzApp International Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           (expressed in U.S. dollars)
                                   (unaudited)
                                October 31, 2006

1.   Nature of Operations and Continuance of Business

     YzApp International Inc. (the "Company") was incorporated in the State of
     Nevada on December 26, 2002. Effective October 15, 2003, the Company
     acquired all the outstanding common stock of YzApp Solutions Inc.
     ("Solutions"), a Company under common control. Prior to the acquisition the
     Company was a non-operating shell corporation with nominal net assets. The
     acquisition is a capital transaction in substance and therefore has been
     accounted for as a reverse acquisition (See Note 7).

     The Company is based in Vancouver, British Columbia, Canada and its
     principal business is the development of software allowing the Company to
     act as an application service provider acting as a conduit between
     retailers and financial institutions.

     The Company is in the development stage and planned principal activities
     have commenced, but there has been no revenue generated therefrom. In a
     development stage company, management devotes most of its activities to
     developing a market for its products and services. These financial
     statements have been prepared on a going concern basis, which implies the
     Company will continue to realize its assets and discharge its liabilities
     in the normal course of business. The Company has not generated revenue and
     has never paid any dividends. The Company is unlikely to pay dividends or
     generate earnings in the immediate or foreseeable future. The continuation
     of the Company as a going concern and the ability of the Company to emerge
     from the development stage is dependent upon the continued financial
     support from its shareholders, the ability of the Company to obtain
     necessary equity financing to continue operations and to generate
     significant revenue. There is no guarantee that the Company will be able to
     raise any equity financing or generate profitable operations. As at October
     31, 2006, the Company has a working capital deficiency of $68,924 and has
     accumulated losses of $907,052 since inception. These financial statements
     do not include any adjustments to the recoverability and classification of
     recorded asset amounts and classification of liabilities that might be
     necessary should the Company be unable to continue as a going concern.
     These factors raise substantial doubt regarding the Company's ability to
     continue as a going concern.

     On August 23, 2005, the Company had its SB-2 Registration Statement
     declared effective by the United States Securities and Exchange Commission,
     which allowed the Company to sell 3,000,000 shares of common stock at $0.50
     per share to raise approximate net proceeds of $1,350,000 after all
     offering costs. In February 2006, pursuant to the SB-2 Registration, the
     Company raised $70,000 through the issuance of 140,000 shares at $0.50.

     On October 25, 2006 the company received clearance from the NASD to begin
     trading on the OTC Bulletin Board and Pinksheets. The Company trades on the
     Pink Sheets under the symbol YZPI.


2.   Summary of Significant Accounting Policies

     The financial statements have, in management's opinion, been properly
     prepared within reasonable limits of materiality and within the framework
     of the significant accounting policies summarized below:

     (a) Basis of Presentation

         These consolidated financial statements are prepared in conformity with
         accounting principles generally accepted in the United States and are
         presented in U.S. dollars. All significant intercompany transactions
         and balances have been eliminated. The Company has not produced
         significant revenue from its principal business and is a development
         stage company as defined by Statement of Financial Accounting Standard
         ("SFAS") No. 7 "Accounting and Reporting by Development Stage
         Enterprises".

     (b) Year End

         The Company's fiscal year end is July 31.


                                      F-4

<PAGE>



                            YzApp International Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           (expressed in U.S. dollars)
                                   (unaudited)
                                October 31, 2006


2.   Summary of Significant Accounting Policies (continued)


     (c)  Use of Estimates

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States requires management
          to make estimates and assumptions that affect the reported amounts of
          assets and liabilities and disclosure of contingent assets and
          liabilities at the date of the financial statements and the reported
          amounts of revenues and expenses during the periods. Actual results
          could differ from those estimates.

     (d)  Basic and Diluted Net Income (Loss) per Share

          The Company computes net income (loss) per share in accordance with
          SFAS No. 128, "Earnings per Share", which requires presentation of
          both basic and diluted earnings per shares (EPS) on the face of the
          income statement. Basic EPS is computed by dividing net income (loss)
          available to common shareholders (numerator) by the weighted average
          number of common shares outstanding (denominator) during the period.
          Diluted EPS gives effect to all dilutive potential common shares
          outstanding during the period including stock options, using the
          treasury stock method, and convertible preferred stock, using the
          if-converted method. In computing Diluted EPS, the average stock price
          for the period is used in determining the number of shares assumed to
          be purchased from the exercise of stock options or warrants. Diluted
          EPS excludes all dilutive potential common shares if their effect is
          anti-dilutive.

     (e)  Foreign Currency Translation

          The Company's functional currency is the Canadian dollar. The
          financial statements of the Company are translated to United States
          dollars under the current rate method in accordance with SFAS No. 52
          "Foreign Currency Translation". Under the current rate method, all
          assets and liabilities are translated at the current rate, while
          stockholders' equity accounts are translated at the appropriate
          historical rate. The revenues and expenses that occur evenly over the
          period are translated at the weighted-average rate for the period. The
          cumulative translation adjustments balance is reported as a component
          of accumulated other comprehensive income.

     (f)  Comprehensive Loss

          SFAS No. 130, "Reporting Comprehensive Income," establishes standards
          for the reporting and display of comprehensive income and its
          components in the financial statements. At July 31, 2006 and 2005, the
          only component of comprehensive loss was foreign currency translation
          adjustments.

     (g)  Financial Instruments and Concentrations of Risk

          The Company's financial instruments consist of cash, other receivables
          - taxes, accounts payable, accrued liabilities, due to related parties
          and the current portion of long-term debt. It is management's opinion
          that the Company is not exposed to significant interest, currency or
          credit risks arising from these financial instruments. The fair value
          of these financial instruments approximates their carrying values. The
          Company does ongoing credit evaluations of customers and establishes
          reserves for credit losses. The Company did not experience any
          material credit loss in the year.

          Virtually all of the Company's software development costs were
          incurred to one subcontractor. The Company's business could be
          adversely affected should a modification to the software be required
          and the subcontractor is no longer in business.

          The Company is dependent on one major customer to market its software
          to Canadian recreational equipment dealers.



                                      F-5


<PAGE>
                            YzApp International Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           (expressed in U.S. dollars)
                                   (unaudited)
                                October 31, 2006


2.   Summary of Significant Accounting Policies (continued)

     (h)  Property and Equipment

          Property and equipment are capitalized at original cost and amortized
          over their estimated useful lives at the following annual bases and
          rates:

          Computer equipment                             30% declining balance
          Furniture and fixtures                         20% declining balance
          Equipment under capital lease                  30% declining balance

          One-half the normal amortization is taken in the year of acquisition.

     (i)  Long-Lived Assets

          In accordance with Financial Accounting Standards Board ("FASB") SFAS
          No. 144, "Accounting for the Impairment or Disposal of Long-Lived
          Assets", the carrying value of intangible assets and other long-lived
          assets is reviewed on a regular basis for the existence of facts or
          circumstances that may suggest impairment. The Company recognizes
          impairment when the sum of the expected undiscounted future cash flows
          is less than the carrying amount of the asset. Impairment losses, if
          any, are measured as the excess of the carrying amount of the asset
          over its estimated fair value.

     (j)  Software Development Costs

          SFAS No. 86, "Accounting for the Costs of Computer Software to be
          Sold, Leased or Otherwise Marketed", requires the capitalization of
          certain software development costs subsequent to the establishment of
          technological feasibility. Based on the Company's product development
          process, technological feasibility is established upon the completion
          of a working model. Amortization of these costs will commence when the
          product is ready for release to customers.

          Total software development costs incurred are as follows:
<TABLE>
<CAPTION>

                                                               Three Months     Three Months   Period from August
                                                                   Ended            Ended       24, 2000 (Date of
                                                                October 31,      October 31,   Inception) to July
                                                                   2006             2005            31, 2006
                                                                     $                $                 $

<S>                                                                                                   <C>
           Software development costs incurred by others                -               -            308,866

           Less:  Software development costs capitalized                -               -             30,532
           --------------------------------------------------------------------------------------------------------

           Software development costs expensed                          -               -            278,334
           ========================================================================================================
</TABLE>

          Software development costs capitalized on the balance sheet are
          $38,649. The difference of $8,117 from the above table is a result of
          changes in the foreign exchange rate between the Canadian and U.S.
          dollars.

     (k)  Revenue Recognition

          The Company recognizes revenue from the sale of products and services
          in accordance with Securities and Exchange Commission Staff Accounting
          Bulletin No. 104 ("SAB 104"), "Revenue Recognition in Financial
          Statements." Revenue consists of software licensing and is recognized
          only when the price is fixed or determinable, persuasive evidence of
          an arrangement exists, the service is performed, and collectibility is
          reasonably assured. Licensing revenue consists of revenue from
          licensing the Company's software and is recognized when the software
          has been delivered and there are no significant remaining obligations.
          The Company recognizes revenue from licensing its software products in
          accordance with AICPA Statement of Position No. 97-2, as amended,
          "Software Revenue Recognition" and SAB 104.


                                      F-6



<PAGE>
                            YzApp International Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           (expressed in U.S. dollars)
                                   (unaudited)
                                October 31, 2006

2.   Summary of Significant Accounting Policies (continued)

     (l)  Income Taxes

          Potential benefits of income tax losses are not recognized in the
          accounts until realization is more likely than not. The Company has
          adopted SFAS No. 109 "Accounting for Income Taxes" as of its
          inception. Pursuant to SFAS No. 109 the Company is required to compute
          tax asset benefits for net operating losses carried forward. Potential
          benefit of net operating losses have not been recognized in these
          financial statements because the Company cannot be assured it is more
          likely than not it will utilize the net operating losses carried
          forward in future years.

     (m)  Recent Accounting Pronouncements

          In May 2005, the Financial Accounting Standards Board (FASB) issued
          SFAS No. 154, "Accounting Changes and Error Corrections - A
          Replacement of APB Opinion No. 20 and SFAS No. 3". SFAS 154 changes
          the requirements for the accounting for and reporting of a change in
          accounting principle and applies to all voluntary changes in
          accounting principle. It also applies to changes required by an
          accounting pronouncement in the unusual instance that the
          pronouncement does not include specific transition provisions. SFAS
          154 requires retrospective application to prior periods' financial
          statements of changes in accounting principle, unless it is
          impracticable to determine either the period-specific effects or the
          cumulative effect of the change. The provisions of SFAS No. 154 are
          effective for accounting changes and correction of errors made in
          fiscal years beginning after December 15, 2005. The adoption of this
          standard is not expected to have a material effect on the Company's
          results of operations or financial position.

          In December 2004, the FASB issued SFAS No. 123R, "Share Based
          Payment". SFAS 123R is a revision of SFAS No. 123 "Accounting for
          Stock-Based Compensation", and supersedes APB Opinion No. 25,
          "Accounting for Stock Issued to Employees" and its related
          implementation guidance. SFAS 123R establishes standards for the
          accounting for transactions in which an entity exchanges its equity
          instruments for goods or services. It also addresses transactions in
          which an entity incurs liabilities in exchange for goods or services
          that are based on the fair value of the entity's equity instruments or
          that may be settled by the issuance of those equity instruments. SFAS
          123R focuses primarily on accounting for transactions in which an
          entity obtains employee services in share-based payment transactions.
          SFAS 123R requires a public entity to measure the cost of employee
          services received in exchange for an award of equity instruments based
          on the grant-date fair value of the award (with limited exceptions).
          That cost will be recognized over the period during which an employee
          is required to provide service in exchange for the award - the
          requisite service period (usually the vesting period). SFAS 123R
          requires that the compensation cost relating to share-based payment
          transactions be recognized in financial statements. That cost will be
          measured based on the fair value of the equity or liability
          instruments issued. Public entities that file as small business
          issuers will be required to apply SFAS 123R in the first interim or
          annual reporting period that begins after December 15, 2005. The
          adoption of this standard is not expected to have a material effect on
          the Company's results of operations or financial position.

          In March 2005, the SEC staff issued Staff Accounting Bulletin No. 107
          ("SAB 107") to give guidance on the implementation of SFAS 123R. The
          Company will consider SAB 107 during implementation of SFAS 123R.

          In December 2004, FASB issued SFAS No. 153, "Exchanges of Nonmonetary
          Assets - An Amendment of APB Opinion No. 29". The guidance in APB
          Opinion No. 29, "Accounting for Nonmonetary Transactions", is based on
          the principle that exchanges of nonmonetary assets should be measured
          based on the fair value of the assets exchanged. The guidance in that
          Opinion, however, included certain exceptions to that principle. SFAS
          No. 153 amends Opinion No. 29 to eliminate the exception for
          nonmonetary exchanges of similar productive assets and replaces it
          with a general exception for exchanges of nonmonetary assets that do
          not have commercial substance. A nonmonetary exchange has commercial
          substance if the future cash flows of the entity are expected to
          change significantly as a result of the exchange. The provisions of
          SFAS No. 153 are effective for nonmonetary asset exchanges occurring
          in fiscal periods beginning after June 15, 2005. Early application is
          permitted and companies must apply the standard prospectively. The
          adoption of this standard is not expected to have a material effect on
          the Company's results of operations or financial position.

          The FASB has also issued SFAS No. 151 and 152, but they will not have
          any relationship to the operations of the Company therefore a
          description and its impact for each on the Company's operations have
          not been disclosed.



                                      F-7

<PAGE>
                            YzApp International Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           (expressed in U.S. dollars)
                                   (unaudited)
                                October 31, 2006


2.   Summary of Significant Accounting Policies (continued)

     (n)  Stock-Based Compensation

          The Company records stock-based compensation in accordance with SFAS
          No. 123, "Accounting for Stock-Based Compensation". All transactions
          in which goods or services are the consideration received for the
          issuance of equity instruments are accounted for based on the fair
          value of the consideration received or the fair value of the equity
          instrument issued, whichever is more reliably measurable. Equity
          instruments issued to employees and the cost of the services received
          as consideration are measured and recognized based on the fair value
          of the equity instruments issued.

     (o)  Interim Financial Statements

          These interim unaudited financial statements have been prepared on the
          same basis as the annual financial statements and in the opinion of
          management, reflect all adjustments, which include only normal
          recurring adjustments, necessary to present fairly the Company's
          financial position, results of operations and cash flows for the
          periods shown. The results of operations for such periods are not
          necessarily indicative of the results expected for a full year or for
          any future period.

3.   Property and Equipment
<TABLE>
<CAPTION>

                                                                October 31,      July 31,
                                                                    2006           2006
                                                Accumulated     Net Carrying   Net Carrying
                                        Cost    Depreciation       Value           Value
                                          $          $               $               $

<S>                                    <C>         <C>             <C>            <C>
     Computer equipment                12,036      9,661           2,375          2,545
     Furniture and fixtures             5,209      3,747            1462          1,526
     Equipment under capital lease     27,022     21,798           5,224          5,598
     --------------------------------------------------------------------------------------

                                       44,267     35,206           9,061          9,669
     ======================================================================================
</TABLE>


4.   Accounts Payable

     On October 31, 2006, the Company completed a settlement with Inglenet
     Solutions Inc. ("Inglenet") for the full amount owing of $236,728 which
     included accrued interest. The debt was incurred for development of the
     Company's software. Pursuant to the agreement, the Company issued 200,000
     shares and paid $8,920 (CAD$10,000) cash. For accounting purposes the value
     of the shares were recorded at a deemed price of $0.10 per share. Inglenet
     forgave the balance and released the source code and related materials to
     the Company.

5.   Advances Payable

     At October 31, 2006, the Company owed $18,754 (July 31, 2006 - $9,835) to
     shareholders for cash advances. The amounts are non-interest bearing,
     unsecured and due on demand.

6.   Related Party Transactions

     (a) In the three months ended October 31, 2006, the Company incurred
         management fees for ongoing management of the Company's affairs to a
         director and officer of the Company of $5,000 (2005 - $12,000), all of
         which was waived and recognized as donated services. This amount was
         recorded at the exchange amount.

     (b) At October 31, 2006, the Company owed $Nil (July 31, 2006- $32,772) to
         the President of the Company for advances and expenses paid on behalf
         of the Company. On October 31, 2006, the President forgave the entire
         balance owing to him.

                                      F-8


<PAGE>



                            YzApp International Inc.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           (expressed in U.S. dollars)
                                   (unaudited)
                                October 31, 2006

7.   Capital Transaction - Reverse Acquisition

     On October 15, 2003, the Company acquired 100% of the issued and
     outstanding shares of Solutions by the issuance of 9,520,000 common shares
     on a one share for two shares owned basis. Solutions was incorporated under
     the Company Act of British Columbia on August 24, 2000 and continued into
     federal jurisdiction under the Canada Business Corporations Act on October
     15, 2001. The principal business of Solutions is operating as an
     application service provider acting as a conduit between retailers and
     financial institutions. Prior to the reverse acquisition, the Company was a
     non-operating shell company with nominal net assets. Therefore, this
     acquisition is a capital transaction in substance, rather than a business
     combination, and has been accounted for as a reverse acquisition using the
     purchase method of accounting. Because Solutions is deemed to be the
     acquirer for accounting purposes, the financial statements are presented as
     a continuation of Solutions and include the results of operations of
     Solutions since incorporation on August 24, 2000, except that all share
     issuances of Solutions have been adjusted to reflect the 1 for 2 share
     exchange on the acquisition.

8.   Common Stock

     (a)  The Company's issued common shares were split 50:1 in October, 2001.
          All share amounts presented have been retroactively adjusted to
          reflect this stock split.
     (b)  During the year ended July 31, 2005, the Company issued 30,000 common
          shares to settle debt of $10,500.
     (c)  During the year ended July 31, 2006, the Company issued 140,000 common
          shares for cash proceeds of $70,000.
     (d)  On October 31, 2006 the Company settled its outstanding debt with
          Inglenet for cash and 200,000 shares at a deemed price of $0.10 per
          share. The shares were issued subsequent to the end of the period and
          are recorded as subscription received of $20,000.

9.   Stock Option Plan

     During the year ended July 31, 2004, the Company instituted a stock option
     plan. Under the terms of the plan, the Company may award options to
     purchase common shares of the Company, not to exceed 2,000,000 shares. To
     date, no options have been granted under the plan.

10.  Subsequent event

     On November 15, 2006 the Company issued 200,000 shares in accordance with
     the debt settlement agreement with Inglenet.







                                      F-9



<PAGE>





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

When used herein, the words "may", "will", "expect", "anticipate", "continue",
"estimate", "project", "intend", "plan" and similar expressions are intended to
identify forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, regarding events, conditions and
financial trends that may affect YZAPP INTERNATIONAL INC'S (YZAPP or the
Company) future plans of operations, business strategy, operating results and
financial position. All statements, other than statements of historical facts,
included or incorporated by reference in this Form 10-QSB which address
activities, events or developments which the Company expects or anticipates will
or may occur in the future, including such things as future capital expenditures
(including the amount and nature thereof), business strategy, expansion and
growth of the Company's business and operations, and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future developments as
well as other factors it believes are appropriate in the circumstances. Such
statements are not guarantees of future performance and are subject to risks and
significant uncertainties and that actual results may differ materially from
those included within the forward-looking statements as a result of various
factors. The occurrence of any unanticipated events may cause actual results to
differ from those expressed or implied by the forward-looking statements
contained herein. You are cautioned not to place undue reliance on these
statements, which speak only as of the date of this report.

Overview

Our operation activities have been related primarily to the research,
development and marketing of our interactive credit application called the
Intelligent Credit Application or "ICA". There are two versions of this
application, one for use by retailers and financial institutions and another
simplified version for consumers or those unfamiliar with computers or software.
These two versions are called the ICA Business Office also known as SalesMax and
the ICA Weblink respectively. We are no longer conducting research as our user
acceptance testing was completed on August 31, 2004. The results of the testing
indicated that the dealers could connect with, and use as intended, the
Intelligent Credit Application. The dealers requested a number of enhancements
so that the software would be easier to use and could print additional
documents. The full results of the user acceptance testing and desired
enhancements are contained in a document that is ready for programmers to use in
programming the required modifications. Our marketing activities are conducted
by Brian Jaggard and Douglas Dunn on a voluntary basis.

Along with the efforts of our own staff, we rely on a third party to market and
sell our products. We currently maintain an agreement with a third-party The
Sawka Group, regarding the marketing and distribution of our software. The
contractual agreement gives the Sawka group exclusive rights to market the
SalesMax version of the Intelligent Credit Application to recreational equipment
dealers in Canada. In return, YzApp may collect user and administration fees for
the use of the software from Sawka dealers who would use the Intelligent Credit
Application. We anticipate that sales after our launch will begin cash flow
within 12 months. We currently have no sales commitments, however we continue to
work with the Sawka Group on several marketing options and strategies. As we
develop different markets further modification of the software may be required.
We have been working in the past quarter and expect to continue to develop the
Modification Requirements document.

We will not begin enhancements outlined in the Version 2 document of the
existing software until we raise additional funds. In the interim we continue to
seek new clients for both our existing software and customized versions. We will
not customize the software for any customers unless we receive an advance for
the cost of the customization. Once the advance is received for the
customization, we expect to enter into an agreement to provide the customized
version exclusively to that customer for a non-recreational equipment market. We
will retain the right to market other versions of the software for
non-recreational equipment markets and for recreational equipment markets
outside Canada.

Highlights of the Quarter

Revenues

With no other active operation, there has been no revenue to report for the
current quarter or for the same quarter last year. Changes in revenue are
explained as debt forgiveness.


                                       3

<PAGE>



Expenses

General and administrative expenses (excluding management fees) for the quarter
ended October 31, 2006 were $15,322 compared to $8,058 for the same quarter in
2005. The increase relates primarily to increased professional fees and public
listing costs of $3,000 incurred in connection with the listing application and
approval process with the NASD.

Included in this quarter were Management fees of $5,000 which were due to the
President and waived by the President and professional fees of $10,390 which
include accounting, corporate administration and auditor review expenses
incurred in the quarter. The Management fees that have been waived by the
President are recognized as donated services. Effective November 1, 2006 the
Company began accruing management fees of $48,000 per annum due to the
President. These fees are not expected to be waived.

Depreciation and amortization expense for the three months ended October 31,
2006 was $693 compared to $964 for the same period last year.

Net Income (Loss)

The income for the three months ended October 31, 2006 was $220,031 compared to
a loss of $20,058 for three months ended October 31, 2005. The income is due
primarily to the debt forgiven by Inglenet Solutions Inc. ("Inglenet"). On
October 31, 2006, the Company completed a settlement with Inglenet Solutions
Inc. for the full amount owing of $236,728 which included accrued interest. The
debt was incurred for development of the Company's software. Pursuant to the
agreement, the Company issued 200,000 shares and paid $8,920 (CAD$10,000) cash.
For accounting purposes the value of the shares were recorded at a deemed price
of $0.10 per share. Inglenet forgave the balance and released the source code
and related materials to the Company. Also contributing to the income was debt
forgiven by the President of $32,882 for advances and expenses paid by him on
behalf of the company.

Liquidity and Capital Resources

Any company such as ours faced with liquidity pressures can be expected to make
internal adjustments to maximize near-term cash flow. Management has reduced
costs by carrying out the following. Waiver of first quarter executive
compensation, obtaining, at no charge, the expertise of current shareholders,
friends and family in several areas of the business. We are reducing capital
expenditures by delaying the purchase of equipment such as additional servers
and other hardware.

Our auditors have issued a going concern opinion. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business
for the next twelve months unless we obtain additional capital to pay our bills.
This is because we have not generated any revenues with our basic product
offering and no revenues are anticipated until we complete the development of
our website and source out customers to buy our products. We believe the
technical aspects of our software are sufficiently developed to use for our
operations at present. Additional customized versions can be available within 90
days from raising additional capital.

In the event that the commercial introduction of the software is delayed or
other problems occur, we must raise cash from sources other than operations. Our
only other sources for cash at this time include shareholder advances and the
issuance of shares. We must raise cash to implement our project and continue our
operations.

We rely heavily on the support of our software outsourcing company, Inglenet
Solutions. To secure our indebtedness to them, they held the source code. As at
October 31, 2006, through a $8,920 cash payment and 200,000 common shares issued
to Inglenet, the outstanding debt has been completely satisfied. This means that
we are now able make significant changes in the software without their
participation.

If we are unable to secure a suitable arrangement with a software outsourcing
firm for upgrades and customization or enough customers willing to buy the
products at higher than the cost of our fixed and variable expenses, we may need
to find alternative sources, like a second public offering, a private placement
of securities, or loans from our officers or others in order for us to maintain
our operations. At the present time, we have not made any arrangements to raise
additional cash. If we need additional cash and cannot raise it we will either
have to suspend operations until we do raise the cash, or cease operations
entirely.

The Company requires additional capital to develop its operations. Other than
the methods of funding discussed above, we have no other financing plans.


                                       4

<PAGE>



Item 3. Controls and Procedures

The Company's principal executive and financial officers have evaluated our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934) as of October 31, 2006. They have
determined that such disclosure controls and procedures are effective to ensure
that information required to be disclosed in our filings under the Securities
Exchange Act of 1934 with respect to the Company is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and is accumulated and communicated to our
management, including the Company's principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosures.

The Company has made no significant changes in its internal controls over
financial reporting during the most recent fiscal quarter covered by this Report
that materially affected or are reasonably likely to materially affect our
internal controls over financial reporting.

PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

There were no new legal proceedings during the quarter ended October 31, 2006.


Item 2.  Changes in Securities: During the fiscal quarter ended October 31,
2006, the Company issued 200,000 unregistered common shares valued at $0.10 per
share to Inglenet Solutions in settlement of the Company's debt.

With respect to the unregistered sales made, the Company relied on Section 4(2)
of the Securities Act of 1933, as amended. No advertising or general
solicitation was employed in offering the securities. The securities were
offered to sophisticated investors and existing shareholders who were provided
all of the current public information available on the Company.


Item 3. - Default Upon Senior Securities:     There are no defaults to report.

Item 4. - Submission of Matters to a Vote of Security Holders:    None.

Item 5.  Other Information:    None




                                       5

<PAGE>



Item 6.   Exhibits and Reports On Form 8-K

          (a)  Exhibits.

               31   -- Certifications of CEO and CFO pursuant to Section 302 of
                    the Sarbanes-Oxley Act of 2002

               32   -- Certifications of CEO and CFO pursuant to 18 U.S.C.
                    Section 1350, as adopted pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002


          (b)  Reports on Form 8-K

     The Company filed no reports on Form 8K during the quarter ended October
31, 2006.


                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the Company has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: December 12, 2006           YZAPP INTERNATIONAL INC.
                                       (Registrant)

                              By: /s/ Brian Jaggard
                                  --------------------------------------
                              Brian Jaggard,
                              Chief Financial Officer, President and CEO






                                       6

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