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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2008

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT

For the transition period

Commission file number 333-111696

YzApp International
Inc.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | N/A                                 
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

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

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

N/A(Former name, former 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 a shell company
(as defined in rule 12b-2 of the Exchange Act). Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

There were 11,746,041 shares of common stock issued and
outstanding as of March 24, 2008.

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

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- 2 -

PART 1  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying interim balance sheets of YzApp International
Inc. at January 31, 2008 and the interim statement of operations and interim
statement of cash flow for the three months ended January 31, 2008 and 2007 have
been prepared by our management in conformity with United States accounting
principles generally accepted.

It is the opinion of management that the interim financial
statements for the quarter ended January 31, 2008 include all adjustments
necessary in order to ensure that the interim financial statements are not
misleading.

---

|YzApp International Inc.     
|-----------------------------
|(A Development Stage Company)
|                             
|January 31, 2008             

|Index                                                |    
|---------------------------------------------------- | ---
|                                                     |    
|Consolidated Balance Sheets                          | F-2
|                                                     |    
|Consolidated Statements
      of Operations          | F-3
|                                                     |    
|Consolidated Statements
      of Cash Flows          | F-4
|                                                     |    
|Notes to the Consolidated
      Financial Statements | F-5

F-1



---



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

|                                                       |  | January 31, |   |  | July 31,   |  
|------------------------------------------------------ |  | ----------- | - |  | ---------- | -
|                                                       |  | 2008        |   |  | 2007       |  
|                                                       |  | $           |   |  | $          |  
|                                                       |  | (unaudited) |   |  |            |  
|ASSETS                                                 |  |             |   |  |            |  
|Current Assets                                         |  |             |   |  |            |  
|Cash                                                   |  | 5,290       |   |  | 467        |  
|Total Assets                                           |  | 5,290       |   |  | 467        |  
|                                                       |  |             |   |  |            |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                  |  |             |   |  |            |  
|Current Liabilities                                    |  |             |   |  |            |  
|Accounts payable                                       |  | 45,913      |   |  | 26,318     |  
|Accrued liabilities                                    |  | 1,918       |   |  | 449        |  
|Loans payable (Note 3)                                 |  | 62,537      |   |  | 46,706     |  
|Current liabilities of discontinued operations         |  | 33,602      |   |  | 31,394     |  
|Total Current Liabilities                              |  | 143,970     |   |  | 104,867    |  
|Going Concern (Note 1)                                 |  |             |   |  |            |  
|STOCKHOLDERS DEFICIT                                  |  |             |   |  |            |  
|Preferred Stock:                                       |  |             |   |  |            |  
|1,000,000 authorized, $0.001 par value;                |  |             |   |  |            |  
|Nil shares issued and outstanding                      |  | -           |   |  | -          |  
|Common Stock:                                          |  |             |   |  |            |  
|50,000,000 shares authorized,
      $0.001 par value;  |  |             |   |  |            |  
|11,746,041 shares issued and outstanding               |  | 11,746      |   |  | 11,746     |  
|Additional Paid-in Capital                             |  | 788,959     |   |  | 788,959    |  
|Donated Capital (Note 4)                               |  | 182,299     |   |  | 179,799    |  
|Deficit Accumulated During the
      Development Stage |  | (1,060,338  | ) |  | (1,025,766 | )
|Accumulated
      Other Comprehensive Loss             |  | (61,346     | ) |  | (59,138    | )
|Total Stockholders Deficit                            |  | (138,680    | ) |  | (104,400   | )
|Total Liabilities
      and Stockholders Deficit      |  | 5,290       |   |  | 467        |  

(The accompanying notes are an integral part of these consolidated
  financial statements) 
  F-2

---

|YzApp International Inc.             
|-------------------------------------
|(A Development Stage Company)        
|Consolidated Statements of Operations
|(expressed in U.S. dollars)          
|(Unaudited)                          

|                                                 |  |                  |   |  |                    |   |  |               |   |  |            |   |  | Accumulated |  
|------------------------------------------------ |  | ---------------- | - |  | ------------------ | - |  | ------------- | - |  | ---------- | - |  | ----------- | -
|                                                 |  |                  |   |  |                    |   |  |               |   |  |            |   |  | from        |  
|                                                 |  |                  |   |  |                    |   |  |               |   |  |            |   |  | August 24,  |  
|                                                 |  |                  |   |  |                    |   |  |               |   |  |            |   |  | 2000        |  
|                                                 |  |                  |   |  |                    |   |  |               |   |  |            |   |  | (Date of    |  
|                                                 |  | Six Months Ended |   |  | Three Months Ended |   |  | Inception) to |  
|                                                 |  | January 31,      |   |  | January 31,        |   |  | January 31,   |  
|                                                 |  | 2008             |   |  | 2007               |   |  | 2008          |   |  | 2007       |   |  | 2008        |  
|                                                 |  | $                |   |  | $                  |   |  | $             |   |  | $          |   |  | $           |  
|Revenue                                          |  | -                |   |  | -                  |   |  | -             |   |  | -          |   |  | -           |  
|                                                 |  |                  |   |  |                    |   |  |               |   |  |            |   |  |             |  
|Expenses                                         |  |                  |   |  |                    |   |  |               |   |  |            |   |  |             |  
|General and administrative (Note 4)              |  | 33,238           |   |  | 36,319             |   |  | 23,555        |   |  | 16,037     |   |  | 562,215     |  
|Total Expenses                                   |  | 33,238           |   |  | 36,319             |   |  | 23,555        |   |  | 16,037     |   |  | 562,215     |  
|Loss before Other Income (Expense)               |  | (33,238          | ) |  | (36,319            | ) |  | (23,555       | ) |  | (16,037    | ) |  | (562,215    | )
|Other Income (Expense)                           |  |                  |   |  |                    |   |  |               |   |  |            |   |  |             |  
|Gain on debt forgiveness/settlements             |  | -                |   |  | 244,016            |   |  | -             |   |  | 3,663      |   |  | 201,726     |  
|Interest expense                                 |  | (1,334           | ) |  | (127               | ) |  | (750          | ) |  | (87        | ) |  | (4,391      | )
|Interest income                                  |  | -                |   |  | -                  |   |  | -             |   |  | -          |   |  | 2,789       |  
|Loss
      on disposal of property and equipment |  | -                |   |  | -                  |   |  | -             |   |  | -          |   |  | (2,017      | )
|Income (Loss) from Continuing Operations         |  | (34,572          | ) |  | 207,570            |   |  | (24,305       | ) |  | (12,461    | ) |  | (364,108    | )
|Loss from Discontinued
      Operations          |  | -                |   |  | (37,559            | ) |  | -             |   |  | (37,559    | ) |  | (696,230    | )
|Loss for the Period                              |  | (34,572          | ) |  | 170,011            |   |  | (24,305       | ) |  | (50,020    | ) |  | (1,060,338  | )
|Comprehensive Income (Loss)                      |  |                  |   |  |                    |   |  |               |   |  |            |   |  |             |  
|Foreign currency translation adjustment          |  | (2,208           | ) |  | 3,900              |   |  | 1,487         |   |  | 5,885      |   |  | (61,346     | )
|Comprehensive Loss                               |  | (36,780          | ) |  | 173,911            |   |  | (22,818       | ) |  | (44,135    | ) |  | (1,121,684  | )
|Net Earnings (Loss) Per Share                    |  |                  |   |  |                    |   |  |               |   |  |            |   |  |             |  
|Continuing Operations - Basic and Diluted        |  | (0.01            | ) |  | 0.02               |   |  | (0.01         | ) |  | -          |   |  |             |  
|Discontinued Operations - Basic and Diluted      |  | -                |   |  | -                  |   |  | -             |   |  | -          |   |  |             |  
|                                                 |  | (0.01            | ) |  | 0.02               |   |  | (0.01         | ) |  | -          |   |  |             |  
|Weighted Average Common Shares                   |  |                  |   |  |                    |   |  |               |   |  |            |   |  |             |  
|Outstanding                                      |  | 11,746,041       |   |  | 11,630,000         |   |  | 11,746,041    |   |  | 11,713,000 |   |  |             |  

(The accompanying notes are an integral part of these consolidated
  financial statements) 
  F-3

---

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

|                                                                                  |  | Six Months Ended |  
|--------------------------------------------------------------------------------- |  | ---------------- | -
|                                                                                  |  | January 31,      |  
|                                                                                  |  | 2008             |  
|                                                                                  |  | $                |  
|Operating Activities                                                              |  |                  |  
|Net income (loss)                                                                 |  | (34,572          | )
|Adjustments to reconcile net loss to net cash used in operating
      activities: |  |                  |  
|Depreciation                                                                      |  | -                |  
|Donated services                                                                  |  | 2,500            |  
|Gain on settlement of debt                                                        |  | -                |  
|Impairment of property and equipment                                              |  | -                |  
|Impairment of software development
      costs                                    |  | -                |  
|Changes in operating assets and liabilities:                                      |  |                  |  
|Amounts receivable                                                                |  | -                |  
|Accounts
      payable and accrued liabilities                                    |  | 21,118           |  
|Net Cash Used In Operating Activities                                             |  | (10,954          | )
|Financing Activities                                                              |  |                  |  
|Proceeds from loans payable                                                       |  | 12,702           |  
|Net Cash Provided
      By Financing Activities                                   |  | 12,702           |  
|Effect of Exchange Rate Changes on Cash                                           |  | 3,075            |  
|Increase (Decrease) In Cash                                                       |  | 4,823            |  
|Cash - Beginning Of Period                                                        |  | 467              |  
|Cash - End Of Period                                                              |  | 5,290            |  
|Non-cash Investing and Financing Activities                                       |  |                  |  
|Common
      shares issued for to settle debt                                     |  | -                |  
|Supplemental Disclosures                                                          |  |                  |  
|Interest paid                                                                     |  | -                |  
|Income taxes paid                                                                 |  | -                |  

(The accompanying notes are an integral part of these consolidated
  financial statements) 
  F-4

---

|YzApp International Inc.                      
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(expressed in U.S. dollars)                   
|January 31, 2008                              

|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, by issuing
        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 was a capital transaction in substance, rather
        than a business combination, and was accounted for as a reverse acquisition
        using the purchase method of accounting. Because Solutions was 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 its incorporation on August 24, 2000, except that all
        share issuances of Solutions were adjusted to reflect the 1 for 2 share
        exchange on the acquisition.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is based in Vancouver, British
        Columbia, Canada and prior to January 31, 2007 its principal business
        was the development of software allowing the Company to act as an application
        service provider acting as a conduit between retailers and financial institutions.
        As at January 31, 2007, the Company decided to discontinue its business
        of developing software.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 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 generated minimal revenue since inception and has never
        paid any dividends and is unlikely to pay dividends or generate earnings
        in the immediate or foreseeable future. The continuation of the Company
        as a going concern is dependent upon the continued financial support from
        its shareholders, the ability of the Company to obtain necessary equity
        financing to continue operations and the attainment of profitable operations.
        As at January 31, 2008, the Company had a working capital deficiency of
        $138,680 and has accumulated losses of $1,060,338 since inception. These
        factors raise substantial doubt regarding the Company's ability to continue
        as a going concern 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.                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company estimates that it needs approximately
        $41,500 to fund its operations and approximately $140,000 to fund
        its working capital deficiency for the next twelve months. Management's
        intention is to generate sufficient financing through the sale of common
        stock. There is no certainty that these sources will provide the additional
        funds required for the next twelve months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-5

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|YzApp International Inc.                      
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(expressed in U.S. dollars)                   
|January 31, 2008                              

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | (c)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   | (d)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   | (e)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   | (f)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | (g)                                                           
|   |                                                               
|   |                                                               

F-6

---

|YzApp International Inc.                      
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(expressed in U.S. dollars)                   
|January 31, 2008                              

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | (h)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   | (i)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   | (j)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | (k)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               

F-7

---

|YzApp International Inc.                      
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(expressed in U.S. dollars)                   
|January 31, 2008                              

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | (k)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | (l)                                                           
|   |                                                               
|   |                                                               
|   |                                                               
|3. | Loans Payable                                                 
|   |                                                               
|   | (a)                                                           
|   |                                                               
|   | (b)                                                           
|   |                                                               
|   | (c)                                                           

F-8

---

|YzApp International Inc.                      
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(expressed in U.S. dollars)                   
|January 31, 2008                              

|4. | Related Party Transactions                                                                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                  
|   | During the six months ended January 31, 2008, the Company
        incurred management fees for ongoing management of the Company's affairs
        to the President of the Company of $2,500 (2007 - $5,000), all of which
        was waived and recognized as donated services.

F-9

---

- 3 -

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements which
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors", that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Financial information contained in this quarterly report and in
our unaudited interim financial statements is stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
unaudited interim financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this quarterly report, particularly in the section entitled "Risk
Factors".

As used in this quarterly report and unless otherwise
indicated, the terms "we", "us", "our" and "YzApp International" means YzApp
International Inc.

Corporate History

YzApp International Inc. was originally incorporated in the
State of Nevada on December 26, 2002. Effective October 15, 2003, we acquired
all the outstanding common stock of YzApp Solutions Inc., a company under common
control. Prior to the acquisition, our company was a non-operating shell
corporation with nominal net assets. The acquisition was a capital transaction
in substance and therefore was accounted for as a reverse acquisition.

Business Overview

Our company is based in Vancouver, British Columbia, Canada.
Following incorporation, we commenced business as a company engaged in
developing software which allowed us to act as an application service provider
acting as a conduit between retailers and financial institutions.

We were not successful in implementing our business plan as an
application service provider. As management of our company investigated
opportunities and challenges in the business of being an application service
provider, management realized that the business did not present the best
opportunity for our company to realize value for our shareholders. Although we
have not abandoned our current business as an application service provider, we
are focused on the identification of suitable businesses with which to enter
into a business opportunity or business combination.

---

- 4 -

PLAN OF OPERATION

You should read the following discussion of our financial
condition and plan of operations together with the unaudited financial
statements and the notes thereto included elsewhere in this report. This
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ materially from those anticipated
in these forward-looking statements. Factors that could cause or contribute to
such differences include those discussed in this report, particularly in the
section entitled Risk Factors.

As of January 31, 2008, our company had cash of $5,290 and a
working capital deficit of $138,680. We estimate our operating expenses and
working capital requirements for the next twelve month period to be as
follows:

Estimated Expenses For the Next Twelve Month Period

|Operating Expenses                   |   |        | 
|------------------------------------ | - | ------ | 
|Professional Fees                    | $ | 20,000 | 
|Employee and Consultant Compensation | $ | 15,000 | 
|General and Administrative Expenses  | $ | 6,500  | 
|Total                                | $ | 41,500 | 

Professional Fees

We expect to incur on-going legal expenses to comply with our
reporting responsibilities as public company under the United States Securities
Exchange Act of 1934, as amended. We estimate our legal and accounting expenses
for the next fiscal year to be approximately $20,000.

Employee and Consultant Compensation

Given the uncertainties related to our future business, we
intend to continue to outsource our professional and personnel requirements by
retaining consultants on an as needed basis. We estimate that our consultant and
related professional compensation expenses for the next twelve month period will
be approximately $15,000. As of January 31, 2008, Brian Jaggard and Douglas Dunn
were our sole employees. However, our company did not pay salaries or bonuses to
such individuals during this time.

General and Administrative Expenses

We anticipate spending $6,500 on general and administrative
costs in the next twelve month period. These costs primarily consist of expenses
such as office supplies and office equipment.

Liquidity and Capital Resources

Our companys principal cash requirements are for operating
expenses which we anticipate will rise as we proceed to conduct due diligence on
suitable entities with which to enter into a business opportunity or
combination.

Capital Resources

As of January 31, 2008, we had $5,290 in cash and a working
capital deficit of $138,680. We have suffered recurring losses from inception.
The ability of our company to meet our financial liabilities and commitments is
primarily dependent upon the continued financial support of our directors and
shareholders, the continued issuance of equity to new shareholders, and our
ability to enter into a suitable and successful business opportunity or
combination.

Management believes that our companys cash and cash
equivalents and cash will not be sufficient to meet our working capital
requirements for the next twelve month period. We estimate that we will require
$180,000 over the next twelve month period to fund our plan of operations and
eliminate our working capital deficiency. Our company plans to raise the capital
required to satisfy our immediate short-term needs and additional capital
required to meet our estimated funding requirements for the next twelve months
primarily through the private placement of our

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- 5 -

equity securities. There is no assurance that our company will
be able to obtain further funds required for our continued working capital
requirements.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon obtaining
further long-term financing, successful identification and consummation of a
business opportunity or combination and, finally, achieving a profitable level
of operations. The issuance of additional equity securities by us could result
in a significant dilution in the equity interests of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on our audited consolidated
financial statements for the period ended July 31, 2007, our independent
auditors included an explanatory paragraph regarding substantial doubt about our
ability to continue as a going concern. Our statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

Capital Expenditures

As of January 31, 2008, our company did not have any material
commitments for capital expenditures and management does not anticipate that our
company will spend additional material amounts on capital expenditures in the
near future.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.

SIGNIFICANT ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities.

We believe that the estimates, assumptions and judgments
involved in the accounting policies described below have the greatest potential
impact on our financial statements, so we consider these to be our critical
accounting policies. Because of the uncertainty inherent in these matters,
actual results could differ from the estimates we use in applying the critical
accounting policies. Certain of these critical accounting policies affect
working capital account balances, including the policies for revenue
recognition, allowance for doubtful accounts, inventory reserves and income
taxes. These policies require that we make estimates in the preparation of our
financial statements as of a given date.

Within the context of these critical accounting policies, we
are not currently aware of any reasonably likely events or circumstances that
would result in materially different amounts being reported.

Going Concern

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on the annual financial
statements for the year ended July 31, 2007, our independent auditors included
an explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosures
describing the circumstances that lead to this disclosure by our independent
auditors.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon obtaining
further financing. The issuance of additional equity securities by us could
result in a

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- 6 -

significant dilution in the equity interests of our current
stockholders. Commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further
funds required for our continued operations or to locate and consummation a
suitable business opportunity or combination. We are pursuing various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we will not be able to meet our other obligations as they become due.

Stock-based Compensation

Our company records stock-based compensation in accordance with
SFAS No. 123R "Share Based Payments", using the fair value method.

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.

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board
("FASB") issued SFAS No. 159, "The Fair Value Option for Financial Assets and
Financial Liabilities - Including an Amendment of FASB Statement No. 115". This
statement permits entities to choose to measure many financial instruments and
certain other items at fair value. Most of the provisions of SFAS No. 159 apply
only to entities that elect the fair value option. However, the amendment to
SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities"
applies to all entities with available-for-sale and trading securities. SFAS No.
159 is effective as of the beginning of an entitys first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the beginning
of a fiscal year that begins on or before November 15, 2007, provided the entity
also elects to apply the provision of SFAS No. 157, "Fair Value Measurements".
Our company is evaluating the impact of this statement on our company's future
reported financial position or results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin
("SAB") No. 108, "Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements." SAB No. 108
addresses how the effects of prior year uncorrected misstatements should be
considered when quantifying misstatements in current year financial statements.
SAB No. 108 requires companies to quantify misstatements using a balance sheet
and income statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for periods ending after November
15, 2006. Our companys adoption of this statement did not have a material
effect on our reported financial position or results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans  an
amendment of FASB Statements No. 87, 88, 106, and 132(R). This statement
requires employers to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This statement also requires an employer to
measure the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. The provisions of SFAS No. 158 are
effective for employers with publicly traded equity securities as of the end of
the fiscal year ending after December 15, 2006. The adoption of this statement
is not expected to have a material effect on our company's future reported
financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. The objective of SFAS No. 157 is to increase consistency and
comparability in fair value measurements and to expand disclosures about fair
value measurements. SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally

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accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements.
The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. Our company is evaluating the impact of this statement on our company's future reported financial position or results of
operations.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes by
prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and second, measuring that tax position to determine the amount of benefit to be recognized in the financial statements.
FIN 48 provides guidance on the presentation of such positions within a classified statement of financial position as well as on de-recognition, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. Our company is evaluating the impact of this statement on our company's future reported financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement
requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in
earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks
inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective for an
entity's first fiscal year beginning after September 15, 2006. Our company is evaluating the impact of this statement on our company's future reported financial position or results of operations.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments - an amendment of FASB Statements No. 133 and 140", to simplify and make more consistent the accounting for certain financial instruments. SFAS No.
155 amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", to permit fair value re-measurement for any hybrid financial instrument with an embedded derivative that otherwise would require bifurcation, provided that the
whole instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the Impairment or Disposal of Long-Lived Assets", to allow a qualifying special-purpose entity to hold a derivative financial instrument that
pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 applies to all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006,
with earlier application allowed. Our company is evaluating the impact of this statement on our company's future reported financial position or results of operations.

RISK FACTORS

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward-looking statements". Such forward-looking statements include any projections or estimates made by us and our management in
connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will
almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward-looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual
results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward-looking statements". Prospective investors should consider carefully the risk factors set out below.

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We have not generated revenues to date and if we are not able to obtain further financing we may be forced to cease operations and our business operations may fail.

To date we have not generated any revenues from operations and we have been dependent on sales of our equity securities to meet the majority of our cash requirements. As at January 31, 2008, we had cash of $5,290 and a working capital deficiency
of $138,680. We do not expect to generate any revenues in the near future until we locate and enter into a suitable business opportunity or combination with another viable pre-existing business. We estimate that we will require approximately
$3,500 per month to fund our operations for the next twelve month period. Because we cannot anticipate when or if we will enter into a suitable business opportunity or combination with another entity, we will need to raise additional funds to
continue to fund our operations. If we are not able to raise such funds, we may be forced to cease operations and our business may fail.

We have a limited operating history. If we cannot successfully manage the risks normally faced by start-up companies, we may not achieve profitable operations and ultimately our business may fail.

We have a limited operating history. Our operating activities since our incorporation have not met with much success. As a result, we are seeking business opportunities with other viable businesses. Our prospects are subject to the risks and
expenses encountered by start up companies, such as uncertainties regarding our level of future revenues and our inability to budget expenses and manage growth accordingly and our inability to access sources of financing when required and at rates
favorable to us. Our limited operating history makes it difficult or impossible to predict future results of our operations which may result in the loss of some or all of your investment in our common stock.

The fact that we have not succeeded in our business plan raises substantial doubt about our ability to continue as a going concern, as indicated in our independent auditors report in connection with our audited consolidated financial
statements.

Due in part to the lack of our operating history at January 31, 2008, our independent auditors report includes an explanatory paragraph about our ability to continue as a going concern. We will, in all likelihood, continue to incur operating
expenses without revenues until we succeed at our current business or we determine to enter into a business opportunity or combination with a pre-existing business entity. Our primary source of funds has been the sale of our common stock. We cannot
assure that we will be able to generate enough interest in our company. If we are unable to raise funds to cover our operating costs, or obtain adequate future financing, our business will fail and you may lose some or all of your investment in our
common stock. These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent auditors report on the financial statements for the period ended July 31,
2007.

We will need to raise additional funds in the near future. If we are not able to obtain future financing when required, we might be forced to scale back or cease operations or discontinue our business.

We do not currently have any arrangements for financing and we can provide no assurance to investors we will be able to find such financing when such funding is required. Obtaining additional financing would be subject to a number of factors,
including investor acceptance of our business model. Furthermore, there is no assurance that we will not incur further debt in the future, that we will have sufficient funds to repay our future indebtedness or that we will not default on our future
debts, thereby jeopardizing our business viability. Finally, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to maintain our operations, which might result in the
loss of some or all of your investment in our common stock. Our company anticipates that our funds will not be sufficient to satisfy our cash requirements for the next twelve month period. Also, there is no assurance that actual cash requirements
will not exceed our estimates.

We will depend almost exclusively on outside capital to pay for the continued operation of our business. Such outside capital may include the sale of additional stock, shareholder advances and/or commercial borrowing. There can be no assurance that
capital will continue to be available if necessary to meet these continuing development costs or, if the capital is available, that it will be on terms acceptable to us. The issuance of additional equity securities by us will result in a significant
dilution in the equity interests of our current stockholders. Obtaining

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commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Our officers are engaged in other business activities and accordingly may not devote sufficient time to our business affairs, which may affect our ability to conduct operations and generate revenues.

Our officers are involved in other business activities. Brian Jaggard, our president, chief executive officer, chief financial officer and director spends approximately 25 hours a month, or 15%, of his business time on the management of our company
and Douglas Dunn, our chief operations officer, Secretary and director, spends approximately 12 hours, or 10%, of his business time on the management of our company. As a result of their other business endeavours, Mr. Jaggard and Mr. Dunn may not be
able to devote sufficient time to our business affairs, which may negatively affect our ability to conduct our ongoing operations and our ability to generate revenues. In addition, the management of our company may be periodically interrupted or
delayed as a result of Mr. Jaggards or Mr. Dunns other business interests.

All of our assets and all of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or
officers.

All of our assets are located outside the United States and we do not currently maintain a permanent place of business within the United States. In addition, all of our directors and officers are nationals and/or residents of countries other than
the United States, and all or a substantial portion of such persons assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our
officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under U.S. federal
securities laws against them.

Because our officers, directors and principal shareholders control a large percentage of our common stock, such insiders have the ability to influence matters affecting our shareholders.

Our officers and directors, in the aggregate, beneficially own 53% of the issued and outstanding shares of our common stock. As a result, they have the ability to influence matters affecting our shareholders, including the election of our directors,
the acquisition or disposition of our assets, and the future issuance of our shares. Because our officers, directors and principal shareholders control such shares, investors may find it difficult to replace our management if they disagree with the
way our business is being operated. Because the influence by these insiders could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the
value of your investment in our common stock.

Because we can issue additional common shares, purchasers of our common stock may incur immediate dilution and may experience further dilution.

We are authorized to issue up to 50,000,000 common shares and 1,000,000 preferred shares, of which 11,746,041 common shares and no preferred shares are issued and outstanding. Our board of directors has the authority to cause our company to issue
additional shares of common stock without the consent of any of our shareholders. Consequently, our shareholders may experience more dilution in their ownership of our company in the future.

RISKS ASSOCIATED WITH OUR COMMON STOCK

Because we do not intend to pay any dividends on our common shares, investors seeking dividend income or liquidity should not purchase shares.

We do not currently anticipate declaring and paying dividends to our shareholders in the near future. It is our current intention to apply net earnings, if any, in the foreseeable future to increasing our working capital. Prospective investors
seeking or needing dividend income or liquidity should, therefore, not purchase our common stock. We currently have no revenues and a history of losses, so there can be no assurance that we will ever have

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sufficient earnings to declare and pay dividends to the holders of our shares, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors, who currently do not intend to pay any dividends on our
common shares for the foreseeable future.

Our stock is a penny stock. Trading of our stock may be restricted by the Securities and Exchange Commissions penny stock regulations which may limit a stockholders ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines penny stock to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers
and accredited investors. The term accredited investor refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customers account. The bid and offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customers confirmation. In addition, the penny stock rules require that prior to
a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to
the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the
ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholders ability to buy and sell our stock.

In addition to the penny stock rules promulgated by the Securities and Exchange Commission the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will
not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on
the market for our shares.

ITEM 3. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer, principal
financial and accounting officer) to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of January 31, 2008 and of the first quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president of the effectiveness of the design and operation of our

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disclosure controls and procedures. Based on the foregoing, our president concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

There have been no significant changes in our internal controls over financial reporting that occurred during the quarter ended January 31, 2008 that have materially affected or are reasonably likely to materially affect, our internal controls over
financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5 OTHER INFORMATION

None.

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ITEM 6 EXHIBITS

|Exhibit |                                                  
|------- | -------------------------------------------------
|Number  | Description                                      
|3.1     | Articles of
      Incorporation(1)               
|3.2     | Bylaws(1)                                        
|4.1     | Form of Common Stock
      Certificate(1)        
|10.1    | Agreement and Plan of
      Reorganization(1)    
|10.2    | Inglenet Professional Services
      Agreement(1)
|10.3    | Sawka Group Agreement(2)                         
|10.4    | Waiver of Compensation by Brian
      Jaggard(4) 
|10.5    | Subscription Agreement(3)                        
|14.1    | Code of Ethics(5)                                
|31.1*   | Section 302 Certification
      of Brian Jaggard 
|32.1*   | Section
      906 Certification of Brian Jaggard 

* Filed herewith

|(1) | Previously filed with Form SB-2 on January 2,
  2004                     
|--- | -------------------------------------------------------------------------
|(2) | Previously filed with Form SB-2 Amendment No. 2 on July
      8, 2004    
|(3) | Previously filed with Form SB-2 Amendment No. 4 on
      January 28, 2005
|(4) | Previously filed with Form SB-2 Amendment No 5 on April
      26, 2005   
|(5) | Previously filed with Form 10-KSB on November 20,
    2007               

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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.

YZAPP INTERNATIONAL INC.

*/s/ Brian Jaggard*
  By:
Brian Jaggard, President, Chief Executive Officer Chief Financial Officer
and Director (Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer)Dated: March 24, 2008

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