**U.
      S. SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM 10-KSB**





x
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934.****OR****o**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE ACT OF 1934.****For
                the fiscal year ended July 31,
                2007**




**Commission
      File No.: 000-29313**




**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC.**


(Exact
      name of Registrant as specified in its charter)





**Delaware**
            **20-0121007**(State
                of incorporation)
            (I.R.S.
                Employer Identification No.)**2160
                Headquarters Plaza**
              **10****th****Floor**
              **Morristown,**
              **New
                Jersey**
            **07960**(Address
                of principal executive offices)
            (Zip
                Code)




Registrant’s
      telephone number, including area code: **(973)
      644-0900**




Securities
      registered pursuant to Section 12(b) of the Act: **Common
      Stock, $.0001 par value**




Securities
      registered pursuant to Section 12(g) of the Act: **None**




Name
      of
      each exchange on which registered: **OTC
      Electronic Bulletin Board**




Check
      whether the issuer is not required to file reports pursuant to Section 13
      or 15(d) of the Securities Exchange Act of 1934. o




Check
      whether the Registrant (1) has filed all reports required to be filed by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
      past 12 months (or for such shorter period that the Registrant was required
      to
      file such reports), and (2) has been subject to such filing requirements
      for the past 90 days. Yes **** x **** No 
o




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB.  x




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




The
      Registrant’s revenue for fiscal year ended **July
      31, 2007** was
      $ **6,628**




As
      of
      November 12, 2007, the aggregate market value of the shares of common stock
      held
      by non-affiliates of the Registrant issued and outstanding on such date was
      $376,723. This figure is based on the closing sales price of $0.0115 a share
      of
      the Registrant’s common stock on November 12, 2007.









The
      number of shares outstanding of each of the Registrant’s classes of common
      equity, as of the last practicable date.





**Common
                Stock, $.0001**
            **41,578,553**(Class)
            (Outstanding
                at November 12, 2007)




Transitional
      Small Business Disclosure Format    No **** x




Documents
      Incorporated by Reference: None









**Statements
      contained in this Annual Report on Form 10-KSB include forward looking
      statements within the meaning of the Private Securities Litigation Reform Act
      of
      1995 and involve substantial risks and uncertainties that may cause actual
      results to differ materially from those indicated by the forward looking
      statements. All forward looking statements in the Annual Report on
      Form 10-KSB, including statements about our strategies, expectations about
      new and existing products, market demand, acceptance of new and existing
      products, technologies and opportunities, market size and growth, and return
      on
      investments in products and market, are based on information available to us
      on
      the date of this document and we assume no obligation to update such forward
      looking statements.**




**PART I**




**Item
      1** **.** **Business** **.**




**BUSINESS**




**Company
      History**




We
      were
      incorporated in the State of Delaware in November 13003. At the time of
      incorporation, we were a wholly-owned subsidiary of Asphalt Paving
      International, Inc. ("API"), a company incorporated in the State of Florida
      in
      January 1998. API's shares were publicly traded. However, API conducted no
      active business.




Immediately
      following our incorporation, API merged into us and the shareholders of API
      owned all of our stock. As a result of the merger, we were the surviving
      corporation in the merger, the state of incorporation of the corporate entity
      owned by API's shareholders was changed to Delaware. On August 6, 2003, our
      shares became publicly traded on the Over-the-Counter Bulletin Board, under
      the
      symbol MBRI.




Immediately
      after the merger with API, we acquired all outstanding shares of Mobile Reach
      Technologies, Inc. ("MRT"), a North Carolina corporation, in a share
      exchange with all the shareholders of MRT. As a result of the share exchange,
      MRT became a wholly owned subsidiary of ours.




On
      December 17 2003, Mobile Reach International, Inc. entered into an
      Agreement of Plan of Merger with Waves Consulting Group, Inc. by and
      between MRI Acquisitions Corp. As a result, Waves Consulting Group became a
      wholly owned subsidiary of ours.




We
      conduct all our business through our subsidiaries, IntelliFaxes, Ltd, Platinum
      Hospitality Holdings, Inc., MRT and Mobile Reach Solutions, Inc., formally
      Waves Consulting Group, Inc.




On
      August 23, 2005, we acquired all outstanding shares of Objective Spectrum,
      Inc. for 375,000 shares of our Common Stock. On April 17, 2006, we
      acquired all outstanding shares of Crystal Hospitality Holdings, Inc. Shortly
      thereafter, on May 19, 2006, we changed our name to Crystal International
      Travel Group, Inc. and began trading under the symbol CINT.




**General
      Description of Our Business**




Crystal
      International Travel Group, Inc. is a development stage company.




We
      hope
      to operate as a diversified multi-asset travel company. We seek to provide
      multiple travel products and services including but not limited to air, car,
      cruise, hotel reservations, tours, excursions, and travel documentation
      assistance. We also hope to develop and offer products and services to provide
      price stability to consumers in the travel industry with a focus on higher
      income, frequent predictable, leisure travelers. Additionally, we hope to merge
      the knowledge, reliability and human touch of a sales team of travel
      professionals with technology while striving to offer excellent customer service
      and the ease, speed and flexibility of online travel. We have assembled a
      management team of professionals with extensive experience in the travel
      industry, finance and marketing to grow and manage the business.




Our
      team
      has on average over 30 years of professional experience in various industries.
      Mr. Peter Dugan’s resume includes being the Founder and Chairman of DVC Group, a
      promotion marketing company for Fortune 100 companies.
      Mr. Fabrizzio P. Busso-Campana's resume includes senior level
      positions for Club Med, Celebrity Cruises, Royal Caribbean Cruise Lines and
      MGM
      Grand Corporation. Mr. Peter Gallic’s resume includes 20+ Years Consumer Goods
      and Financial Industry as President CCPC, Arch Financial, Tymarc Children’s RTA
      Furniture. Ms. Teresa Rae Hanneman’s resume includes MGM Grand Corporation, and
      senior level positions within Club Med, and rounding out the team is Mr. Robert
      H. Troni, a former senior executive at American Airlines with a career spanning
      over 37 years with them.




Our
      business plan is two fold. First: we intend to establish and expand a brick,
      mortar and click presence in the travel industry via the purchase of established
      travel agencies. We have already completed one such transaction in 2006, and
      have recently entered into a stock purchase agreement to add a second travel
      agency to the company’s portfolio of travel assets. At this point is unclear
      whether the acquisition will close.. The travel agency presence gives the
      company (i) operating entities with customers who are actively buying travel
      products; (ii) fully licensed travel agencies to handle negotiations and
      contracts with industry suppliers, as well as day to day operations including,
      but not limited to, issuing tickets, booking hotels and car rental, and customer
      service; (iii) a diversified product offering of travel products; and (iv)
      a vehicle through which we incubate new products by interacting with and
      analyzing consumers and suppliers. Second: we intend to grow through the
      creation and distribution of travel products; IntelliFaresTM, which is also being
      marketed as i-FaresTM, is the first such product. A service that provides five
      years of air travel at a fixed price, -i-FaresTM is based on a fixed pricing
      model which enables consumers to engage in multi-year marketing programs with
      travel product retailers. We are negotiating with air carriers to obtain long
      term contracts which will enable us to offer attractive rates to support the
      i-FaresTM product model. Our plan calls for an implementation of aggressive sales
      and marketing initiatives. We intend to utilize existing travel agents and
      distributors currently active in the market to sell IntelliFaresTM as well as
      time share developers, time share exchanges and vacation clubs. We expect to
      attract these individuals by offering revenue share and benefits
      programs.




2





We
      are
      negotiating with air, car and hotel providers to obtain long term contracts
      which will enable us to offer attractive rates and packaged tours for our
      traditional, brick, mortar and click business. Additionally, we are in the
      process of launching our new patent pending travel product service, i-FaresTM
which has been specifically designed for what the company has identified via
      extensive market studies as Predictive Pattern Traveler (PPT®). PPT’s are
      recurring travel consumers such as time-share sellers, vacation clubs owners,
      college students, etc. PPT’s seek flexibility in their travel planning,
      opportunities and choice in their travel options and simultaneously seek
      significant savings in their purchasing habits. As mentioned above, i-FaresTM is
      designed to offer fixed airfare prices whereby companies and or consumers may
      purchase blocks of travel by identifying two city pairs for a specific travel
      week, repeatable over five years. i-FaresTM will only be sold via authorized
      distributors. Based on our analysis and pricing model, travelers can achieve
      on
      average a 15% - 20% savings over the course of the 5 years. Our plan calls
      for
      an implementation of aggressive sales and marketing initiatives. We intend
      to
      utilize existing travel agents currently active in the market to sell our
      product as well as time share developers, time share exchanges and vacation
      clubs. We expect to attract distributors and resellers to the company by
      offering attractive sales incentives, revenue share and benefits
      programs.




**Business
      Strategy**




Our
      business strategy centers around integrating modern financial disciplines,
      marketing and sales tools and techniques with traditional service elements
      currently found in the travel sector. We use traditional brick and mortar and
      internet vehicles to capture potential customer attention, then directing the
      prospective clients to our call centers to use travel specialists to close
      on
      sales as well as to authorized distributors of our IntelliFaresTM service. Our
      business philosophy places a high value on personal interaction with
      customers.




Our
      business strategy is as follows:




·  
Expand
      and leverage our
      existing travel agency assets; and




·  
Build
      upon and expand our
      i-FaresTM suite of service and product offerings through the introduction of new
      travel products; and




·  
Expand
      our operations to
      include Groups, Meetings & Incentives, Special Event Planning and
      Corporate Travel Businesses;




**Expand
      and leverage our existing travel assets.** The
      Travel House was established over 30 years ago in old Bridge, New Jersey
      and is the company’s initial entry in the traditional travel agency structure.
      The agency allows us to have a presence in the Northeast which is one of our
      core markets in for analysis of new travel products. We have recently entered
      into a Stock Purchase Agreement with Flying Dutchmen Travel in Santa Rosa,
      California. Flying Dutchmen Travel has been in business for 33+ years and  
is a premier travel agency serving Northern California.




FDT
      is a
      member of the Signature Travel Network. The agency is noted for creating themed
      travel events for such notables as John Tesh, and popular listener cruises
      for
      many of radio stations.  We believe that by focusing our efforts on
      customer services as well as an ongoing series of promotions geared specifically
      towards these customers based upon their travel habits, industry trends and
      behavior patterns we will be able to expand the current product offerings and
      geographical footprint of both agencies.




**Build
      upon and expand our i-FaresTM suite of service and product offerings through the
      introduction of new travel products.** We
      believe a majority of our revenues will come from transactions involving the
      sale of our i-FaresTM suite of products. Through extensive market research, we
      have determined that consumers have a high level of interest in multi-year
      service products that feature price stability and savings over the current
      offerings available in the market. i-FaresTM was developed to address the results
      of this research. i-FaresTM is a service wherein travelers who participate in
      predictable, recurring travel patterns, such as timeshare, second homeowners,
      college students, business travelers and the like contract with us for the
      future purchase of five years of future air travel at or below comparable open
      market air ticket prices, and fix that price for the five year period. We are
      currently planning to expand the product in the hotel and cruise segments of
      the
      industry.





**Expand
      our operations to include Affinity Groups, Meetings & Incentive,
      Special Event Planning and Corporate Travel Businesses.** As
      sellers of leisure travel, we have the ability to offer attractive packages
      to
      affinity groups, and corporations for meeting, incentive, and special event
      programs through leveraged bulk buying. We formally structure ad Groups,
      Meeting & Incentive and Corporate Travel Services division. The
      Meeting & Incentive Groups will be offered via a corporate sales force
      and will be fulfilled through in-house sales agents.




3




We
      believe the corporate travel, groups and, meeting and incentive sectors of
      the
      industry represent a large opportunity for organic growth. This growth will
      be
      attempted though the offering of services to medium and large size corporations,
      where we will provide customized packaged solutions designed to fulfill their
      specific needs. The packages could include any combination of travel and hotel
      arrangements, the booking of conference and catering facilities, and other
      special interest events tailored specifically for company specific
      interests.




To
      effectively expand this segment of our business, we will require the
      establishment of a solid clientele ranging from medium and large size affinity
      associations as well as companies as well as specific contractual agreements
      with industry vendors to address this type of client's travel needs.
      Additionally, there is a great deal of competition from other more established
      vendors.




**Relationships
      with Travel Suppliers**




We
      will
      strive to deliver value to our travel suppliers through a wide range of
      innovative, targeted promotional strategies designed to increase their revenue,
      while reducing their marketing transaction and customer service costs. We plan
      to implement a group of strategic account managers who work directly with travel
      suppliers to increase the marketing of their travel products through their
      association with us.




As
      we are
      a small company, in order to establish and maintain these relationships
      effectively, we will begin with a small number of suppliers with specific
      benchmarks which we will need to hit therefore allowing us to become established
      and build upon.




**Marketing
      and Promotions**




We
      intend
      to develop marketing programs to build and maintain the value of our various
      brands, drive retail and corporate consumer business and increase conversion
      (calls to booking) through its brands and businesses, while lower ongoing
      traveler acquisition costs (associated costs of obtaining new customers) and
      strategically position our brands in relation to one another. Our long-term
      success depends
      on our continued ability to increase the overall number of traveler transactions
      in a cost-effective manner as well as successfully launching new travel products
      and achieving market penetration.




Our
      marketing channels will include direct and/or personalized traveler
      communications, search engine marketing and online and offline advertising
      as
      well as coop advertising with our distributors. Our marketing programs and
      initiatives will also include promotional offers such as coupons and gift cards,
      frequent traveler club, early booking discounts, etc.





**Operations
      and Technology**




Our
      systems infrastructure and web and database servers are hosted by third-party
      web hosting suppliers in various locations, in the United States, which provide
      communication links, as well as 24-hour monitoring and engineering support.
      The
      internet hosting facilities have their own generators and multiple back-up
      systems. Significant amounts of our computer hardware for operating the websites
      are also located at these facilities. As we grow and resources become available,
      we plan to invest significantly in our websites and technology platforms over
      the next years and will ultimately host in-house all processes.




To
      successfully implement the operational and technological platform, we will
      need
      to integrate various third party software packages and systems, as well as
      develop our own legacy processes in order to effectively achieve our
      goals.





**Competition**




Our
      competition, which is strong and increasing, includes online and offline travel
      companies that target leisure and corporate travelers including travel agencies,
      tour operators, travel supplier direct websites and their call centers,
      consolidators and wholesalers of travel products and services and other
      companies offering travel search engines including meta-search engines in each
      case, on a local, regional, national and/or international basis.




We
      believe that maintaining and enhancing our brands is a critical component of
      our
      efforts to compete. We will differentiate our brands from competitors primarily
      on the fact that while they are moving away from the traditional industry models
      of the stand alone travel agency reselling travel products towards online brick
      and click retailing and wholesale, we are focusing on traditional, personalized
      travel services, Groups, Corporate Travel, and Meetings and Incentives to sell
      tour packages, stand alone travel products and corporate travel services on
      a
      national basis. Additionally we have high emphasis on product development and
      establishing a national distribution network of such products. Our strategy
      hinges on offering qualified travel products to reflect and support the
      strategic alliances that are both in place and being sought. The selection
      criteria of travel product centers on experiential data garnished from the
      travel agent and hospitality community. Primary qualification is geared towards
      suppliers that offer high-quality amenities and service and have a sterling
      reputation for consistency.




**Regulation**




We
      must
      comply with laws and regulations relating to the travel industry and the
      provision of travel services, including registration in various states as
      "sellers of travel" and compliance with certain disclosure requirements and
      participation in state restitution funds. In addition, our vendors are subject
      to regulation by the U.S. Department of Transportation, Federal Aviation
      Administration, and our business is subject to multiple state specific licensing
      bodies (such as the California Sellers of Travel licenses) and must comply
      with
      various rules and regulations governing the provision of air transportation,
      including those relating to the Federal Communication Commission's advertising
      and accessibility rules.




4




As
      we
      continue to expand our product line up and the reach of our brands into
      international markets, we may increasingly be subject to laws and regulations
      applicable to travel agents in those markets.





**Employees**




Since
      August 1, 2006 to July 31, 2007, we completed the re-alignment of our core
      business and made further changes to our overall employee head
      count.




As
      of
      July 31, 2007 we have eight employees.





**Item
      2** **.** **Properties** **.**




**DESCRIPTION
      OF PROPERTY**




We
      do not
      own any real property. Our corporate offices are located at 2160 Headquarters
      Plaza from Crystal Capital Partners, Inc., which is owned and controlled by
      Peter Gallic, Peter Dugan and Fabrizzio Busso Campana, each of whom are
      directors and officers of the Company, and comprised approximately 1,679 square
      feet. The sublease provides for monthly payments of $3,777.75 and shall continue
      through a term of five years from the date of commencement which is expected
      to
      occur on November 1, 2006, with an option to extend for an additional five
      year.




We
      occupy
      approximately 950 square feet of retail space in Old Bridge New Jersey. Our
      wholly-owned subsidiary, Platinum Hospitality Holdings Inc. which acquired
      JRM, Inc. d/b/a the Travel House conducts its day to day operation from
      this location. The Travel House occupies the space under a lease which provides
      for monthly payments of $1,400, which continues up and until August 2007. We
      have an option to renew such lease for an additional three year
      period.




**Item
      3** **.** **Legal
      Proceedings** **.**




**LEGAL
      PROCEEDINGS**




From
      time
      to time we are subject to litigation which, if successful, could exceed
      applicable insurance coverage. With the exception of the below, we are not
      currently a party to any legal proceedings which are not incidental to our
      routine business or that we believe will have a material adverse affect on
      our
      results of operations.




On
      November 136, 2006 in the United States District Court for the Middle District
      of Florida, Michael J. Hewitt, a former Chief Executive Officer of ours, filed
      a
      Complaint and Demand for Jury Trial against us alleging that on or about
      August 4, 2004 he was terminated by us without just cause. Mr. Hewitt
      is seeking approximately $1.1 million in damages. We believe this suit to
      be without merit and plan to defend it vigorously.




**Item
      4** **.** **Submission
      of Matters to a Vote of Security Holders** **.**




There
      were no matters submitted to a shareholder vote during the fourth quarter of
      the
      fiscal year ended July 31, 2007.




**PART II**




**PRICE
      RANGE OF OUR COMMON STOCK**




Our
      Common Stock is traded on the OTC Electronic Bulletin Board of the National
      Association of Securities Dealers, Inc., Automated Quotation System under
      the symbol “CINT”. Prior to May 19, 2006, our Common Stock was quoted under
      the symbol “MOBR”. Although trading in our Common Stock has occurred on a
      relatively consistent basis, the volume of shares traded has been sporadic.
      There can be no assurance that an established trading market will develop,
      that
      the current market will be maintained or that a liquid market for our Common
      Stock will be available in the future. Investors should not rely on historical
      stock price performance as an indication of future price performance.




5




**HI******
            
            **LOW******Fiscal
                year ending July 31, 2005First
                quarter
            
            7.60
            
            2.40Second
                quarter
            
            
            7.20
            
            
            2.40Third
                quarter
            
            
            3.20
            
            
            0.68Fourth
                quarter
            
            
            2.80
            
            
            0.72Fiscal
                year ended July 31, 2006(1)First
                quarter
            
            
            3.00
            
            
            1.20Second
                quarter
            
            
            1.18
            
            
            0.60Third
                quarter
            
            
            1.20
            
            
            0.65Fourth
                quarter
            
            
            1.30
            
            
            0.25Fiscal
                year ended July 31, 2007First
                quarter (Aug-Oct)
            
            
            0.33
            
            
            0.09Second
                quarter (Nov-Jan)
            
            
            0.14
            
            
            0.03Third
                quarter (Feb-Apr)
            
            
            0.07
            
            
            0.02Fourth
                quarter (May-Jul)
            
            
            0.06
            
            
            0.02







(1) On
      November 139, 2005, we affected an eighty-for-one reverse split of our Common
      Stock in an attempt by our Board of Directors to encourage greater interest
      in
      us from the financial community and investing public.




As
      of
      October 31, 2007, there were approximately 650 holders of record of our
      Common Stock. We believe that an insignificant number of shares of our Common
      Stock are held in either nominee name or street name brokerage accounts,
      consequently, we are unable to determine the exact number of beneficial owners
      since the effective reverse of our common stock.




We
      declared no dividends for the period ended July 31, 2007 and have no immediate
      plans to do so.




**Item
      6** **.**  **** **** **Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations** **.**




You
      should read the following discussion of the Company’s business and results of
      operations in conjunction with the consolidated financial statements attached
      herein. The results shown in this 10-KSB are not necessarily indicative of
      the
      results it will achieve in any future periods.




**Financial
      Discussion**




On
      April
      17, 2006, we completed a reverse merger with Crystal Hospitality Holdings,
      Inc.
      The shareholders of Crystal Hospitality acquired approximately 60.4% of our
      voting shares. As discussed in the Liquidity and Capital Resources section
      below, the new management has arranged for short term financing. No other equity
      in the Company has been sold. We have been able to stabilize the operations
      of
      the Company such that no new defaults on existing Mobile Reach debts have
      occurred. However, we have an outstanding bridge loan due to mature on November
      30, 2007 in the amount of $200,000.00 and have notified the lender we will
      not
      be able to pay. Management is confident we will be able to negotiate an
      extension of the terms of the note prior to its maturity. Additional significant
      market risk exists as a result of our previously existing financial issues,
      the
      change in ownership and the change in business focus.




On
      July
      31, 2007 we entered into a Stock Purchase Agreement with Advanced Connections,
      Inc. (“ACI”) to sell all of the outstanding shares of Crystal Hospitality
      Holdings, Inc. The terms of the agreement call for the assumption of all Crystal
      Hospitality’s liabilities by ACI as well as payments of $2,500 each month for
      the next sixty months, payable monthly to Crystal International Travel Group,
      Inc. The company will continue to operate those components of the SunTrips
      assets included in the sale (specifically the web site) for a indeterminate
      period of time and receive its payment from ACI through revenue generated
      thereof, plus the retainage of expenses associated with the operation of the
      site. Currently, the site generates a net cash flow in excess of $5,000 per
      month, which management believes will continue into the foreseeable future,
      and
      is sufficient for the purchaser to meet its payment obligations. As of the
      date
      of the purchase, Crystal Hospitality Holdings, Inc. had net liabilities of
      $7,255,731, all of which were assumed by ACI.




At
      the
      time of the sale, we had not gained complete control over the intangible assets
      associated with Crystal’s purchase of FS Suntours’ Suntrips intellectual
      property and management believed that we would not be able to. The customer
      database has not been delivered; the phone numbers and the trademarks are still
      in control of FS Suntours. Our lack of complete control over the Suntrips assets
      had a material impact on our business plan relating to the use of these assets.
      We were only able to operate and derive marginal revenue from the web portal
      and
      instead focused the company’s resources in the development efforts of incubating
      the IntelliFaresTM / I-FaresTM product.




We
      have
      recently executed a Stock Purchase Agreement to purchase Flying Dutchmen Travel
      in Santa Rosa. California. This acquisition will allow the company to achieve
      revenues immediately pursuant the closing of the transaction as they are a
      viable, operating travel agency with a historical yearly book of business of
      $11,000,000. Although we are still conducting due diligence, we expect that
      this
      number not to significantly change following the closing of the transaction.
      As
      of this date, we have been unable to close this transaction, the closing
      contingent, in part, upon financing, which the Company has yet to secure. If
      the
      Company is unable to secure the additional financing for this transaction,
      we
      may either renegotiate or abandon the contemplated acquisition.




6




Our
      main
      focus over the past nine months has been the development of our IntelliFaresTM
product. IntelliFares, Ltd is a company registered in the Democratic Republic
      of
      Ireland, headquartered at Ulysses House, Foley Street, Dublin 1 and is a wholly
      owned subsidiary of the Company. Initially, income will be realized from the
      commercialization of a suite of products marketed under the brand names
      IntelliFaresTM and i-FaresTM. The products are derived from a business methodology
      described more fully in both United States and International Patent Applications
      entitled “Subscription Management For Periodic Travel Services” USPTO #:
      11/467,517 and Int’l #: PCT/USOC/34087 respectively. i-FaresTM is a service
      wherein travelers who participate in predictable, recurring travel patterns,
      such as timeshare, second homeowners, college students, business travelers
      and
      the like will be able to contract with us for the future purchase of five years
      of air travel at or below comparable open market air ticket prices, and fix
      that
      price for the five year period. This is done by contracting with IntelliFares,
      LTD to provide as a service the purchase of airfare on their behalf.
      IntelliFares, LTD then deposits the full five years of payments which will
      be
      managed through a depository relationship with UBS AG. Subsequent to July 31,
      2007, the Company engaged the firm Alex Picot Trust Company Limited of Jersey,
      the Channel Islands, for the purposes of forming a trust to retain and manage
      the deposits of its IntelliFares customers at UBS to further support its
      financial management methodology.




As
      of the
      date of this filing, the Company has received a Letter of Intent (LOI) from
      MKS
      Group LLC, a Bedminster New Jersey transportation, business logistics and
      consulting firm, to become an IntelliFares Development Partner. The LOI provides
      for a six-month development period commencing November 15, 2007 wherein the
      Company and MKS will create and develop commercial applications and services
      based on the IntelliFares patent pending advanced payment methodology for the
      international shipping business segment, which is a new business segment for
      IntelliFares.




Revenue
      for i-FaresTM will be recognized from the assessment of an initial service
      activation fee, an account administration fee (3% of the initial 5 year
      deposit), and various exception fees, including cancellation charges if
      applicable through the duration of the service agreements. It is intended that
      the future growth in air ticket prices, if any, will be offset by income derived
      from the depository relationship with UBS. It is believed that similar dynamics
      will apply in the international freight business segment. As of the date of
      this
      report, no revenue has been realized from the IntelliFares business and the
      Company has been conducting limited copy testing and e-mail marketing for the
      Mexican and Hawaii timeshare markets. Consumer and distributor features and
      benefits are now available on the company’s website at http://www.intellifares.com .
      The
      product will be sold exclusively through distributors; as such consumers will
      be
      able to purchase it through traditional travel agents and time share operators
      (developers, vacation clubs, and exchanges). The first such distributors that
      have entered into a distribution agreement with IntelliFares, LTD are Flying
      Dutchmen Travel of California and www.purchaseIFARES.com of New Jersey. Purchase
      Ifares is owned and operated by a relative of the CFO of the Company. The
      company can make no assurances at present that it will be successful in its
      market testing, or secure the financial resources necessary to support its
      distributors in the marketplace.




**Sources
      of Revenue**




On
      March
      10, 2006, Mobile Reach Technologies, Inc., the predecessor of the Company,
      entered into a License Agreement with Spectrum Mobile, Inc. whereby it licensed
      certain of its assets to Spectrum Mobile, including, but not limited to, it’s
      Splitwave Server, Splitwave Server Plug-In Modules, and Splitwave Client for
      Blackberry, Splitwave Client for Windows and Pocket PC and Split Forms Wizard.
      The License Agreement provides for a sliding scale of 5% of license fees
      received by Spectrum Mobile for the first two years of the License Agreement,
      4%
      of licenses fees for the third year of the License Agreement and 3% of licenses
      fees for the fourth year of the License Agreement. Due to unclear payment terms
      in the original agreement and the belief that we can obtain better financial
      terms from Spectrum Mobile, we renegotiated the License Agreement and executed
      and amended agreement on June 15, 2007. This amended agreement improves the
      overall terms potentially allowing the company to recover its prior investments
      in developing the software.




The
      License Agreement with Spectrum Mobile had the effect of significantly reducing
      our revenue as well operating expenses relating to the Mobile Reach Technology
      assets. Prior to the License Agreement, we received all of the license revenue
      associated with sales to customers. Under the terms of the License Agreement
      described above, we receive a much smaller percentage of the license revenues.
      However, we are not responsible for any of the operating costs associated with
      delivery of products and services to Spectrum Mobile customers.




Revenues
      for the year period August 1, 2006 to July 31, 2007 were generated from the
      sale
      of travel and travel related products and Mobile Reach International licensing
      activity. Ongoing licensing revenue, if any, will be recognized as per the
      terms
      of the amended agreement referenced above.




Our
      revenue stream for the travel operations are derived from commissions on sales
      of travel components (for example air tickets, hotel rooms, car rental, etc.),
      margins built into packages (for example air plus hotel plus transfers plus
      excursions), and production overrides from travel product supplier sales and
      service fees. Once sales begin on the i-FaresTM service product, we will derive
      revenue from the assessment of an initial service activation fee, an account
      administration fee (3% of the initial 5 year deposit), and various exception
      fees, including cancellation charges if applicable through the duration of
      the
      service agreement.




7




**CRITICAL
      ACCOUNTING POLICIES:**




In
      preparing the consolidated financial statements in conformity with accounting
      principles generally accepted in the United States, we make estimates,
      assumptions and judgments that can have a material impact on its net revenue,
      operating income and net income (loss), as well as on the value of certain
      assets on our consolidated balance sheet. We believe that the estimates,
      assumptions and judgments involved in the accounting policies described herein
      have the greatest potential impact on our consolidated financial statements.
      We
      consider these to be its critical accounting policies. The policies described
      herein are not intended to be a comprehensive list of all our accounting
      policies. In many cases, the accounting treatment of a particular transaction
      is
      specifically dictated by generally accepted accounting principles, with no
      need
      for management judgment in their application. There are also areas in which
      management judgment in selecting any available alternative would not produce
      a
      materially different result. Our audited consolidated financial statements
      and
      notes thereto contain significant accounting policies and other disclosures
      required by generally accepted accounting principles. The accounting policies
      that are considered critical to an understanding of the consolidated financial
      statements are highlighted below.




**Results
      of Operations**




Revenues
      and expenses presented on the consolidated statement of income for July 31,
      2007, represent the results of operations for Crystal International, Crystal
      Hospitality Holdings and Mobile Reach Technologies for the period August 1,
      2006
      through July 31, 2007, and the results of operations for the Travel House from
      August 4, 2006 and July 31, 2007. Development costs for IntelliFares Limited
      are
      included, and will be reported as the consolidation of a foreign subsidiary
      after IntelliFares exits the development stage.




**REVENUES:**




Our
      revenues for the year ending July, 2007 were $159,995.00, including $138,605.00
      for travel and $21,390.00 licensing. For the comparable period, year ending
      July
      31 2006, revenues were $6,628.00 including $0.00 for travel and $6,628.00
      licensing. In addition, we had a one time gain on the sale of Crystal
      Hospitality Holdings of $5,625,863.00 resulting in a net income before taxes
      of
      $544,969.00 or $0.03 per share vs. a pre tax loss of ($8,550,024.00) for the
      year ended July 31, 2006 or ($0.96) on a per share basis. The 2006 loss included
      a ($4,896,666.00) loss on impairment of intangibles which represented the
      goodwill acquired in the reverse merger with Crystal Hospitality Holdings.
      With
      the elimination of the one time gain in the current year and asset impairment
      in
      the prior year the year over year income would be ($5,080,894.00 or 0.28) per
      share in the 2007 period vs. ($3,653,358.00 or 0.41) per share in the 2006
      period. Consolidated financial data is provided for comparative purpose only
      and
      does not claim to be indicative of our results of operations going forward.




**GENERAL
      AND ADMINISTRATIVE EXPENSES:**




Combined
      general and administrative expenses of Crystal for the year ended were
      $2,136,896.00 representing a decrease of $18,873 or 1_% over the twelve-month
      period ended July 31, 2006. General and administrative consisted primarily
      of
      compensation, Professional fees including both legal and accounting, costs
      associated with Securities agreements and compliance reporting. The decrease
      in
      general and administrative reflects the change in the mix of professional fees
      associated with the salaries of personnel, professional and legal fees
      associated with litigation, and development costs associated with IntelliFaresTM,
      vs. similar expenses to operate Mobile Reach. The Company has been accruing
      compensation expenses for its executives since March 1, 2007, including
      associated taxes, to preserve cash and maintain critical operations, and
      believes it will continue to do so until additional financing, if any, is made
      available (see Liquidity and Capital Resources below.)




**LIQUIDITY
      AND CAPITAL RESOURCES:**




As
      of
      July 31, 2007, we had an accumulated deficit of $10,482,366.00 and a working
      capital deficit of $5,902,941.00 Our independent auditors, who audited our
      financial statements for the period ended July 31, 2006, expressed substantial
      doubt about our ability to continue as a going concern given our recurring
      losses from operations, negative working capital and net stockholders'
      deficit.




We
      are
      currently burning $150,000 per month, in both cash and accrued expenses, and
      our
      goal is to begin generating sufficient revenues to support operations within
      the
      next quarter. This goal will only be obtainable as the result of a positive
      outcome of our initial IntelliFares marketing efforts, the results of which
      will
      not be available to management until calendar year end 2007. Additionally,
      the
      months of October through April are traditionally months of both heavy travel
      and heavy booking, although the level of either is not currently quantifiable.
      Even if this occurs, we will anticipate we will need an additional $2 to $3
      million debt or equity financing to implement our business plan over the next
      six to eighteen months, particularly to resource the marketing and distribution
      efforts supporting IntelliFares. We cannot be certain of the terms and
      conditions under which such capital could become available, if at all.




**OTHER
      SIGNIFICANT MATTERS:**




On
      July
      3, 2006 the
      Company executed a financing agreement whereby the company issued notes
      convertible into Company’s common shares and warrants for additional common
      shares of the Company .
      The
      agreement provided for a total investment of $2,000,000 of which $700,000 was
      received by the Company on July 3, 2006, and an additional $600,000 was received
      by the Company on August 3, 2006. The Company has filed a registration statement
      which includes the shares issue able by the Company upon conversion of the
      outstanding notes which became effective on January 19, 2007. The Company
      received the remaining balance of $700,000 on February 1, 2007. On July 2,
      2007,
      the Company executed a financing agreement whereby the company issued notes
      convertible into Company’s common shares and warrants for additional common
      shares of the Company. The agreement provided for an additional investment
      of
      $335,000 which was received by the company on July 2, 2007.




8




On
      September 26 th ,
      2007,
      the Company executed a financing agreement whereby the company issued notes
      convertible into Company’s common shares and warrants for additional common
      shares of the Company. The agreement provided for an additional investment
      of
      $300,000 which was received by the company on October 4th, 2007.




9





**RISK
      FACTORS**




INVESTING
      IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY
      CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW BEFORE YOU PURCHASE ANY
      OF
      OUR COMMON STOCK. IF ANY OF THESE RISKS OR UNCERTAINTIES ACTUALLY OCCURS, OUR
      BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY
      ADVERSELY AFFECTED. IN THIS EVENT YOU COULD LOSE ALL OR PART OF YOUR
      INVESTMENT.




**Our
      financial results for the twelve-month fiscal year ending July 31, 2006
      show substantial losses and there is substantial doubt as to our ability to
      continue as a going concern.**




The
      financial statements for the twelve month period ended July 31, 2007
      reflect substantial losses.




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





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




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




**We
      operate in a very competitive environment and faces increasing competition
      from
      a variety of companies with respect to its products and services
      offerings(s).**




The
      market for the services we offer is intensely competitive. We will compete
      with
      both established and emerging online and traditional sellers of travel services
      with respect to each of the services it offers. Many competitors, including
      travel suppliers such as airlines and hotels, may offer services and products
      on
      more favorable terms such as no transaction fees and with unique access to
      loyalty programs, such as points and miles. These competitors, such as airlines,
      hotel and rental car companies, are also focusing on driving online demand
      to
      their own websites in lieu of third-party distributors like us. For instance,
      many low cost airlines, which are having increasing success in the marketplace,
      distribute their inventory exclusively through their own websites. Suppliers
      who
      sell on their own websites typically do not charge a processing fee, and, in
      some instances, offer advantages such as bonus miles or loyalty points, which
      could make their offerings more attractive to consumers than models like ours.
      Increased competition may result in reduced operating margins, as well as loss
      of travelers, transactions and brand recognition. We cannot assure you that
      it
      will be able to compete successfully against current, emerging and future
      competitors or provide differentiated products and services to its traveler
      base. Increased competition could result in reduced operating margins, loss
      of
      segment share and damage to the brand. There can be no assurance that we will
      be
      able to compete successfully against current and future competitors or that
      competition will not have a material adverse effect on the core business,
      results of operations and financial condition.




**Our
      revenues are highly dependent on the travel and transportation industries,
      and
      particularly on airlines, and a prolonged substantial decrease in travel volume
      could adversely affect it as well as declines or disruptions in the travel
      industry, such as those caused by terrorism, war, inclement weather, health
      concerns, and/or general economic downturns**




Travel
      expenditures are sensitive to business and personal discretionary spending
      levels and tend to decline during general economic downturns. Our revenues
      increase and decrease with the level of travel and transportation activity
      and
      is therefore highly subject to declines in or disruptions to travel and
      transportation due to factors entirely out of its control. Factors that may
      adversely affect travel and transportation activity, which are beyond our
      control, include: global security issues, political instability, acts or threats
      of terrorism, hostilities or war,


·  
increased
          airport security that
          could reduce the convenience of air travel,
  ·  
natural
          disasters, such as the
          hurricanes that occurred in the Gulf Coast and Cancun/Mayan Riviera in
          the Fall
          of 2005,


· 
        travelers' perception of the occurrence of travel-related
        accidents,


· 
        travelers' concerns about exposure to contagious diseases and pandemics,
        such as
        SARS or the Avian Influenza (commonly referred to as bird
        flu),


·


· 
        general economic conditions in the United States and
        worldwide,


· 
        political issues in the Middle East, Asia, Latin America and
        elsewhere,


· 
        the financial condition of travel suppliers


· 
        the possibility of further terrorist attacks, hostilities and war, the resulting
        heightened security measures at airports, and




10


· 
        the financial instability of many of the air carriers may continue to adversely
        affect the travel industry.




With
      respect to our product distribution business, vendors may reduce the number
      of
      components they offer, making fewer offerings available to our package
      distribution businesses and resulting in a decline in the volume of overall
      transactions.




Our
      product distribution business depends on a relatively small number of "key"
      vendors for a significant portion of our revenues. Several major airlines have
      experienced liquidity problems, some (including U.S. Airways, Inc., ATA
      Holdings Corporation, Delta Air Lines, Inc. and Northwest Airlines
      Corporation) and have sought bankruptcy protection and still others may consider
      bankruptcy relief.




Travelers'
      perceptions of passenger security or airlines' financial stability that are
      negative may have an adverse effect on demand. The financial instability of
      airlines or a prolonged substantial decrease in travel volumes could have an
      adverse impact on our financial performance, operations, liquidity, or capital
      resources and could impair our ability to recover the carrying value of certain
      of our assets, including capitalized software, other intangible assets and
      goodwill.




**We
      depend on its relationships with travel suppliers and vendors and any adverse
      changes in these relationships could adversely affect our business, financial
      condition and results of operations.**




An
      important component of our business success depends on the ability to maintain
      it's existing, as well as build new, relationships with travel suppliers and
      vendors. Adverse changes in existing relationships, or our inability to enter
      into new arrangements with these parties on favorable terms, if at all, could
      reduce the amount, quality and breadth of attractively priced travel products
      and services that we are able to offer, which could adversely affect the
      business, financial condition and results of operations.




Travel
      suppliers are increasingly seeking to lower their travel distribution costs
      by
      promoting direct online bookings through their own websites. In some cases,
      supplier direct channels offer advantages to consumers, such as loyalty programs
      or lower transaction fees. In addition, travel suppliers may choose not to
      make
      their travel products and services available through our distribution channels.
      To the extent that consumers continue to increase the percentage of their travel
      purchases through supplier direct websites and/or if travel suppliers choose
      not
      to make their products and services available to us, our business may
      suffer.




**We
      will rely on the performance of highly skilled personnel and, if we are unable
      to retain or motivate key personnel or hire, retain and motivate qualified
      personnel, our business would be harmed.**




Our
      performance will be largely dependent on the talents and efforts of highly
      skilled individuals. Our future success depends on our continuing ability to
      identify, hire, develop, motivate and retain highly skilled personnel for all
      areas of our organization. In particular the contributions of Peter Dugan,
      our
      Chief Executive Officer and President, will be necessary as he brings expertise
      in the areas of strategic and market planing and management.





In
      addition, our future success will depend on the performance of our senior
      management and key employees, many of whom joined us recently. If we do not
      succeed in attracting well-qualified employees or retaining or motivating
      existing employees, our business would be adversely affected.




**Our
      proposed expansion will place a significant strain on our management, technical,
      operational and financial resources.**




Through
      both internal growth and acquisitions, we hope to rapidly and significantly
      expand our operations and anticipate expanding further to pursue growth of
      our
      product and service offerings and customer base. Such expansion increases the
      complexity of our business and places a significant strain on our management,
      operations, technical performance, financial resources, and internal financial
      control and reporting functions.




There
      can
      be no assurance that we will be able to manage its expansion effectively. Our
      current and planned personnel, systems, procedures and controls may not be
      adequate to support and effectively manage our future operations, especially
      as
      we employ personnel in multiple geographic locations. We may not be able to
      hire, train, retain, motivate and manage required personnel, which may limit
      our
      growth. If any of this were to occur, it could damage our reputation, limit
      our
      growth, negatively affect our operating results, and hurt our
      business.




**We
      may experience operational and financial risks in connection with any
      acquisitions. We cannot assure you that we will be able to successfully
      integrate recent and any future acquisitions or that such acquisitions will
      have
      the anticipated impact on our earnings and results of operations. In addition,
      some of the businesses we acquire may incur significant losses from operations
      or experience impairment of carrying value.**




Our
      future growth may depend, in part, on acquisitions. To the extent that we
      continue to grow through acquisitions, we may face the operational and financial
      risks that commonly accompany that strategy. We would also face operational
      risks, such as failing to assimilate the operations and personnel of the
      acquired businesses, disrupting their ongoing businesses, impairing management
      resources and their relationships with employees and travelers as a result
      of
      changes in their ownership and management Further, the evaluation and
      negotiation of potential acquisitions, as well as the integration of an acquired
      business, will divert management time and other resources. Some acquisitions
      may
      not be successful and their performances may result in the impairment of their
      carrying value.




11




**Changing
      laws, rules and regulations and legal uncertainties may adversely affect our
      business, financial condition and results of operations.**




Our
      business, financial condition and results of operations could be adversely
      affected by unfavorable changes in or interpretations of existing, or the
      promulgation of new laws, rules and regulations applicable to us and our
      businesses, including those relating to the internet and online commerce,
      consumer protection and privacy, escheat and sales, use, occupancy, value-added
      and other taxes, could decrease demand for products and services, increase
      costs
      and/or subject us to additional liabilities. For example, there is, and will
      likely continue to be, an increasing number of laws and regulations pertaining
      to the internet and online commerce, which may relate to liability for
      information retrieved from or transmitted over the internet, user privacy,
      taxation and the quality of products and services. Furthermore, the growth
      and
      development of online commerce may prompt calls for more stringent consumer
      protection laws that may impose additional burdens on online businesses
      generally.




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




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




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




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




**The
      large number of shares underlying the derivative securities we issued in our
      private placement over the past two and half years may be available for future
      sale and the sale of these shares may depress the market price of our common
      stock.**




The
      issuance of common stock to the investors in our recent private placement upon
      the conversion or exercise of the derivative securities that they hold may
      cause
      downward pricing pressure and will dilute our stockholders’ percentage of
      ownership. In addition, the sale of the common stock issued upon the exercise
      of
      the related warrants issued to the investors will also place downward pricing
      pressure on our common stock.




We
      also
      expect to pay 6% to 8% annual interest on the convertible promissory notes,
      payable in shares of our common stock. This will further dilute our stockholders
      ownership and put additional downward pricing pressure on the common
      stock.




**We
      have increased the amount of our secured indebtedness as a result of our recent
      private placement of convertible secured promissory notes.**




All
      of
      our material assets have been pledged as collateral for the various notes that
      we sold in our recent private placements. In addition to the security interest
      in our assets, the promissory notes carry substantial covenants that impose
      significant requirements on us, including, among others, requirements
      that:




·
            we
                pay principal and other charges on the promissory
                notes;





·
            we
                use the proceeds from the sale of the promissory notes only for permitted
                purposes;





·
            while
                the promissory notes are outstanding, if we issue equity or equity
                linked
                securities at a price lower than the conversion price then the conversion
                price of the promissory notes will be reduced to the same price.
                If we
                issue any variable priced equity securities or variable price equity
                linked securities, then the conversion price of the promissory notes
                will
                be reduced to the lowest issue price applied to those
                securities;




12




·
            the
                conversion price is also subject to adjustment upon the occurrence
                of
                certain specified events, including stock dividends and stock splits,
                pro
                rata distributions of equity securities, evidences of indebtedness,
                rights
                or warrants to purchase common stock or cash or any other asset,
                mergers
                or consolidations, or certain issuances of common stock at a price
                below
                the initial conversion price, subject to adjustment as set forth
                above;
                and





·
            we
                keep reserved out of our authorized shares of common stock sufficient
                shares to satisfy our obligation to issue shares on conversion of
                the
                promissory notes and the exercise of the related warrants issued
                in
                connection with the sale of the promissory
                notes.





Our
      ability to comply with these provisions may be affected by changes in our
      business condition or results of our operations, or other events beyond our
      control. The breach of any of these covenants could result in a default under
      the promissory notes, permitting the holders of the promissory notes to
      accelerate their maturity and to sell the assets securing them. Such actions
      by
      the holders of the promissory notes could cause us to cease operations or seek
      bankruptcy protection.




**Our
      founders, officers and directors beneficially own approximately 26.33% of our
      stock on a fully diluted basis; their interests could conflict with yours;
      significant sales of stock held by any or all of them could have a negative
      effect on our stock price; stockholders may be unable to exercise
      control.**




As
      of
      July 31, 2007, our founders, officers and directors beneficially owned
      approximately 26.33% of our common stock on a fully diluted basis. In addition,
      employees own additional shares and rights to acquire shares. As a result,
      the
      founders, officers and directors will have significant ability to:




·  
        elect or defeat the election of our directors;


·


· 
        effect or prevent a merger, sale of assets or other corporate transaction;
        and


· 
        control the outcome of any other matter submitted to the stockholders for
        vote.




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




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




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




13


**CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**
 **(FORMERLY
        MOBILE REACH INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**INDEX
      TO FINANCIAL STATEMENTS**


**JULY
      31, 2007**





PagesINDEX
            F1INDEPENDENT
                AUDITORS’ REPORT
            F2FINANCIAL
                STATEMENTS:Consolidated
                Balance Sheet
            F3Consolidated
                Statements of Income
            F4Consolidated
                Statement of Changes in Stockholders’ Deficit
            F5
                - F6Consolidated
                Statements of Cash Flows
            F7
                - F9Notes
                to Consolidated Financial Statements
            F9
                - F25





F-1




Scharf
                Pera & Co., PLLC
              Certified
                Public Accountants
              4600
                Park Road
              Suite
                112
              Charlotte,
                North Carolina 28209
              704-372-1167
              Fax:
                704-377-3259




To
      the
      Stockholders’


Crystal
      International Travel Group, Inc.


Chatham,
      New Jersey




**INDEPENDENT
      AUDITORS’ REPORT**




We
      have
      audited the accompanying consolidated balance sheet of Crystal International
      Travel Group, Inc. and Subsidiaries (a development stage company) as of July
      31,
      2007, and the related consolidated statements of income, stockholders’ deficit,
      and cash flows for the period December 8, 2005 (date of inception) to July
      31,
      2007. These financial statements are the responsibility of the Company’s
      management. Our responsibility is to express an opinion on these financial
      statements based on our audit.




We
      conducted our audit in accordance with the Public Company Accounting Oversight
      Board (United States). Those standards require that we plan and perform the
      audit to obtain reasonable assurance about whether the financial statements
      are
      free of material misstatement. An audit includes examining, on a test basis,
      evidence supporting the amounts and disclosures in the financial statements.
      An
      audit also includes assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. We believe that our audit provides a reasonable basis
      for our opinion.




In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Crystal International Travel Group,
      Inc. and Subsidiaries as of July 31, 2007, and the results of its operations
      and
      its cash flows for December 8, 2005 (date of inception) to July 31, 2007, in
      conformity with accounting principles generally accepted in the United States
      of
      America.




The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 2 to the financial
      statements, the Company has suffered recurring losses from operations and has
      net stockholders’ deficit, which raise substantial doubt about its ability to
      continue as a going concern. Management’s plans regarding these matters are also
      included in Note 2. The financial statements do not include any adjustments
      that
      might result from the outcome of this uncertainty.




Scharf
      Pera & Co., PLLC




Charlotte,
      North Carolina


____,
      2007




F-2


**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**


**(FORMERLY
      MOBILE REACH INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**CONSOLIDATED
      BALANCE SHEET**


**JULY
      31, 2007**




**ASSETS****CURRENT
                ASSETS:**Cash
            
            $
            51,806Current
                portion notes receivable
            
            
            20,784Prepaid
                expenses
            
            
            700Total
                current assets
            
            
            
            
            
            73,290**PROPERTY
                & EQUIPMENT -**net
                of accumulated depreciation
            
            
            
            
            
            39,176**OTHER
                ASSETS:**Notes
                receivable
            
            
            102,405Other
                assets
            
            
            11,856114,261$
            226,727


**LIBILITIES
                & STOCKHOLDERS’ EQUITY****CURRENT
                LIABILITIES:**Current
                portion long-term debt
            
            $
            30,000Current
                portion debentures
            
            
            125,500Short-term
                notes payable
            
            
            320,473Accounts
                payable
            
            
            705,691Accounts
                payable - related party
            
            
            72,130Notes
                payable - related parties
            
            
            309,041Accrued
                liabilities
            
            
            1,228,294Total
                current liabilities
            
            
            
            
            
            2,791,129**LONG
                TERM LIABILITIES:**Convertible
                debentures
            
            
            3,338,5393,338,539**STOCKHOLDERS’
                EQUITY:**Preferred
                stock; $.0001 par value; 100,000,000 shares authorized
            
            
            0Common
                stock; par value $.001; 500,000,000 shares authorized, 25,891,463
                issued
                and outstanding, 2,724,463 shares to be issued
            
            
            24,690Paid-in
                capital
            
            
            4,554,735Deficit
                accumulated during development stage
            
            
            (10,482,366
            )(5,902,941
            )$
            226,727





**See
        Notes to Consolidated Financial Statements**
  F-3


**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**


**(FORMERLY
      MOBILE REACH INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENT OF INCOME**


**PERIOD
      ENDED JULY 31, 2007**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION)TO JULY 31, 2006
      AND**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION) TO JULY 31,
      2007**




Year
                Ended July 31, 2007
            
            Period
                from December 8, 2005 (date of inception) to July 31, 2006
            
            Cumulative
                from December 8, 2005 (date of inception) to July 31, 2007**REVENUE:**Sales
            
            $
            138,605
            
            $
            0
            
            $
            138,605License
                and fees
            
            
            21,390
            
            
            6,628
            
            
            28,018159,995
            
            
            6,628
            
            
            166,623**COST
                AND EXPENSES:**Cost
                of goods sold
            
            
            74,259
            
            
            0
            
            
            74,259General
                and administrative expenses
            
            
            2,502,128
            
            
            2,155,770
            
            
            4,657,898Depreciation
                and amortization expense
            
            
            28,990
            
            
            126,235
            
            
            155,225Loss
                on impairment of intangible assets
            
            
            100,711
            
            
            4,896,666
            
            
            4,997,3772,706,088
            
            
            7,178,671
            
            
            9,884,759**OPERATING
                LOSS**
            
            
            (2,546,093
            )
            
            (7,172,043
            )
            
            (9,718,136
            )**OTHER
                INCOME (EXPENSES):**Interest
                expense
            
            
            (2,947,984
            )
            
            (1,377,982
            )
            
            (4,325,966
            )Gain
                on sale of equity investment
            
            
            6,033,963
            
            
            0
            
            
            6,033,963Other
                income
            
            
            5,083
            
            
            0
            
            
            5,0833,091,062
            
            
            (1,377,982
            )
            
            1,713,080**NET
                LOSS BEFORE INCOME TAXES**
            
            
            544,969
            
            
            (8,550,025
            )
            
            (8,005,056
            )**INCOME
                TAX (EXPENSE) BENEFIT**
            
            
            0
            
            
            0
            
            
            0**NET
                INCOME (LOSS)**
            
            $
            544,969
            
            $
            (8,550,025
            )
            $
            (8,005,056
            )**Income
                (loss) per common share:**Basic
            
            $
            0.03
            
            $
            (0.96
            )Diluted
            
            $
            0.01
            
            $
            (0.96
            )Weighted
                average number of shares used in computing income (loss) per common
                shares:Basic
            
            
            18,103,556
            
            
            8,918,989Diluted
            
            
            69,566,493
            
            
            8,918,989





**See
        Notes to Consolidated Financial Statements**
  F-4


**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**


**(FORMERLY
      MOBILE REACH INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ DEFICIT**


**PERIOD
      ENDED JULY 31, 2007, PERIOD FROM DECEMBER 8, 2005 (DATE OF INCEPTION)TO JULY
      31,
      2006 AND**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION) TO JULY 31,
      2007**




Shares
            
            Amount
            
            Paid-in
                Capital
            
            Deficit
                Accumulated during Development Stage
            
            TotalBalance
                at December 8, 2005 (Date of inception)
            
            
            0
            
            $
            0
            
            $
            0
            
            $
            0
            
            $
            -Common
                shares issued in formation of Crystal Hospitality Holdings,
                Inc.
            
            
            200
            
            
            23,012
            
            
            0
            
            
            0
            
            
            23,012Shares
                exchanged for common shares of Mobile Reach International,
                Inc.
            
            
            (200
            )
            
            0
            
            
            0
            
            
            0
            
            
            -Common
                shares issued to Crystal Hospitality Holdings, Inc
                stockholders
            
            
            7,100,000
            
            
            0
            
            
            0
            
            
            0
            
            
            -Common
                shares owned by Mobile Reach International, Inc.
                stockholders
            
            
            4,743,276
            
            
            0
            
            
            0
            
            
            0
            
            
            -Liabilities
                in excess of assets received on reverse merger
            
            
            0
            
            
            0
            
            
            0
            
            
            (2,477,311
            )
            
            (2,477,311
            )Fair
                market value of warrants attached to short-term debt
                issued
            
            
            0
            
            
            0
            
            
            68,000
            
            
            0
            
            
            68,000Fair
                market value of beneficial conversion feature of convertible
                debentures
            
            
            0
            
            
            0
            
            
            1,990,711
            
            
            0
            
            
            1,990,711Net
                loss
            
            
            0
            
            
            0
            
            
            0
            
            
            (8,550,024
            )
            
            (8,550,024
            )Balance
                at July 31, 2006
            
            
            11,843,276
            
            $
            23,012
            
            $
            2,058,711
            
            $
            (11,027,335
            )
            $
            (8,945,612
            )





**See
      Notes to Consolidated Financial Statements**




F-5


**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**


**(FORMERLY
      MOBILE REACH INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ DEFICIT**


**PERIOD
      ENDED JULY 31, 2007, PERIOD FROM DECEMBER 8, 2005 (DATE OF INCEPTION)TO JULY
      31,
      2006 AND**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION) TO JULY 31,
      2007**


**(Continued)**




Shares
            
            Amount
            
            Paid-in
                Capital
            
            Deficit
                Accumulated during Development Stage
            
            Total**Balance
                at July 31, 2006**
            
            
            11,843,276
            
            $
            23,012
            
            $
            2,058,711
            
            $
            (11,027,335
            )
            $
            (8,945,612
            )Share
                based deferred compensation agreements
            
            
            0
            
            
            0
            
            
            32,160
            
            
            0
            
            
            32,160Common
                shares issued in connection with bridge financing
            
            
            1,000,000
            
            
            100
            
            
            89,900
            
            
            0
            
            
            90,000Fair
                market value of beneficial conversion feature of convertible
                debt
            
            
            0
            
            
            0
            
            
            1,665,360
            
            
            0
            
            
            1,665,360Shares
                issued in connection with conversion of debentures
            
            
            10,321,918
            
            
            1,033
            
            
            372,147
            
            
            0
            
            
            373,180Shares
                issued in connection with conversion of interest on
                debentures
            
            
            180,732
            
            
            18
            
            
            14,873
            
            
            0
            
            
            14,891Fair
                market value of warrants attached to short-term debt
                issued
            
            
            0
            
            
            0
            
            
            16,480
            
            
            0
            
            
            16,480Common
                shares issued as compensation
            
            
            1,000,000
            
            
            100
            
            
            34,900
            
            
            0
            
            
            35,000Commons
                shares issued for services
            
            
            1,000,000
            
            
            100
            
            
            56,900
            
            
            0
            
            
            57,000Common
                shares issued for employees accrued wages
            
            
            1,300,000
            
            
            130
            
            
            47,633
            
            
            0
            
            
            47,763Common
                shares issued in settlement of litigation
            
            
            500,000
            
            
            50
            
            
            14,745
            
            
            0
            
            
            14,795Common
                shares issued in settlement of short-term debt to related
                party
            
            
            1,000,000
            
            
            100
            
            
            99,900
            
            
            0
            
            
            100,000Common
                shares issued in settlement of debt to a former employee
            
            
            350,000
            
            
            35
            
            
            30,998
            
            
            0
            
            
            31,033Common
                shares issued on option exercise
            
            
            120,000
            
            
            12
            
            
            20,028
            
            
            0
            
            
            20,040Net
                income
            
            
            0
            
            
            0
            
            
            0
            
            
            544,969
            
            
            544,969**Balance
                at July 31, 2007**
            
            
            28,615,926
            
            $
            24,690
            
            $
            4,554,735
            
            $
            (10,482,366
            )
            $
            (5,902,941
            )




**See
        Notes to Consolidated Financial Statements**
  F-6


**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES (FORMERLY MOBILE REACH
      INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENT OF CASH FLOWS**


**PERIOD
      ENDED JULY 31, 2007,**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION)TO JULY 31, 2006
      AND**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION)TO JULY 31,
      2007**




Year
                Ended July 31, 2007
            
            Period
                from December 8, 2005 (date of inception) to July 31, 2006
            
            Cumulative
                from December 8, 2005 (date of inception) to July 31, 2007**Net
                income (loss)**
            
            $
            544,969
            
            $
            (8,550,025
            )
            $
            (8,005,056
            )**Adjustments
                to reconcile net income to net cash used in operating
                activities:**Gain
                on sale of subsidiary stock
            
            
            (6,033,963
            )
            
            0
            
            
            (6,033,963
            )Interest
                on warrants
            
            
            0
            
            
            68,000
            
            
            68,000Interest
                on bridge financing
            
            
            90,000
            
            
            0
            
            
            90,000Fair
                value of warrants attached to short term financing
            
            
            16,480
            
            
            0
            
            
            16,480Beneficial
                conversion feature on convertible debt
            
            
            2,449,576
            
            
            1,039,661
            
            
            3,489,237Loss
                on impairment of intangibles
            
            
            100,710
            
            
            4,896,666
            
            
            4,997,376Convertible
                debt issued for service
            
            
            0
            
            
            250,000
            
            
            250,000Stock
                issued for employee compensation
            
            
            87,199
            
            
            0
            
            
            87,199Stock
                issued for services
            
            
            24,000
            
            
            0
            
            
            24,000Depreciation
                and amortization
            
            
            28,990
            
            
            126,235
            
            
            155,225Changes
                in operating assets and liabilities:Increase
                in notes receivable
            
            
            (123,189
            )
            
            0
            
            
            (123,189
            )Increase
                in intangible assets
            
            
            (120,827
            )
            
            0
            
            
            (120,827
            )Increase
                in other current assets
            
            
            217,411
            
            
            (132,002
            )
            
            85,409Increase
                in other assets
            
            
            (11,856
            )
            
            0
            
            
            (11,856
            )Increase
                in accounts payable
            
            
            551,670
            
            
            407,996
            
            
            959,666Increase
                (decrease) in accrued expenses
            
            
            410,737
            
            
            813,445
            
            
            1,224,182Total
                adjustments
            
            
            (2,313,062
            )
            
            7,470,001
            
            
            5,156,939**Net
                cash used in operating activities**
            
            
            (1,768,093
            )
            
            (1,080,024
            )
            
            (2,848,117
            )**Cash
                flows used in investing activities:**Cash
                paid for purchase of property and equipment
            
            
            (32,053
            )
            
            (17,230
            )
            
            (49,283
            )**Net
                cash used in investing activities**
            
            
            (32,053
            )
            
            (17,230
            )
            
            (49,283
            )**Cash
                flows provided by financing activities:**Proceeds
                from short-term notes
            
            
            435,740
            
            
            500,000
            
            
            935,740Payments
                on short-term notes
            
            
            (217,390
            )
            
            (400,000
            )
            
            (617,390
            )Proceeds
                from convertible debentures
            
            
            1,665,360
            
            
            723,097
            
            
            2,388,457Payments
                on convertible debentures
            
            
            (2,017
            )
            
            
            
            
            (2,017
            )Proceeds
                from related party advances
            
            
            18,352
            
            
            377,513
            
            
            395,865Payments
                on related party advances
            
            
            (83,582
            )
            
            (90,879
            )
            
            (174,461
            )Proceeds
                from sale of stock
            
            
            0
            
            
            23,012
            
            
            23,012**Net
                cash provided by financing activities**
            
            
            1,816,463
            
            
            1,132,743
            
            
            2,949,206**Net
                increase in cash**
            
            $
            16,317
            
            $
            35,489
            
            $
            51,806**Cash
                - Beginning of period**
            
            
            35,489
            
            
            -
            
            
            -**Cash
                - End of period**
            
            $
            51,806
            
            $
            35,489
            
            $
            51,806


**See
        Notes to Consolidated Financial Statements**
  F-7


**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES (FORMERLY MOBILE REACH
      INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**SUPPLEMENTAL
      DISCLOSURES OF CASH FLOWS**


**PERIOD
      ENDED JULY 31, 2007,**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION)TO JULY 31, 2006
      AND**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION) TO JULY 31,
      2007**





Year
                Ended July 31, 2007
            
            Period
                from December 8, 2005 (date of inception) to July 31, 2006
            
            Cumulative
                from December 8, 2005 (date of inception) to July 31, 2007**Non-cash
                activities:**Exchange
                of debt for intangible assets
            
            $
            0
            
            $
            5,021,307
            
            $
            5,021,307Refinancing
                of short-term debt to convertible debt
            
            
            0
            
            
            100,000
            
            
            100,000Discount
                on convertible debt
            
            
            0
            
            
            951,050
            
            
            47,763Conversion
                of debentures to common stock
            
            
            369,181
            
            
            0
            
            
            369,181Conversion
                of interest on debentures to common stock
            
            
            18,890
            
            
            0
            
            
            18,890Stock
                issued for accrued wages
            
            
            47,763
            
            
            0
            
            
            47,763Settlement
                of litigation for common stock
            
            
            42,948
            
            
            0
            
            
            42,948Refinancing
                short-term debt to related party for stock
            
            
            100,000
            
            
            0
            
            
            100,000Stock
                issued in settlement of debt to former employee
            
            
            40,834
            
            
            0
            
            
            40,834


**Acquisition
      of Mobile Reach International and Subsidiaries:**


Assets
                assumed:Cash
            
            $
            0
            
            $
            262
            
            $
            262Liabilities
                assumed:Accounts
                payable
            
            
            0
            
            
            408,527
            
            
            408,527Accrued
                expenses
            
            
            0
            
            
            507,859
            
            
            507,859Short-term
                debt
            
            
            0
            
            
            294,169
            
            
            294,169Long-term
                and convertible debt
            
            
            0
            
            
            1,267,018
            
            
            1,267,0180
            
            
            2,477,573
            
            
            2,477,573Net
                liabilities exceeding net assets
            
            $
            0
            
            $
            (2,477,311
            )
            $
            (2,477,311
            )




**Acquisition
                of Travel House, Inc.:**Purchase
                price
            
            $
            123,500
            
            $
            0
            
            $
            123,500Add:Cash
            
            
            1,132
            
            
            0
            
            
            1,132Subtract:Accounts
                payable
            
            
            (3,804
            )
            
            0
            
            
            (3,804
            )$
            120,828
            
            $
            0
            
            $
            120,828




**See
        Notes to Consolidated Financial Statements**
  F-8


**CRYSTAL
      INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**


**(FORMERLY
      MOBILE REACH INTERNATIONAL, INC.)**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**PERIOD
      ENDED JULY 31, 2007, PERIOD FROM DECEMBER 8, 2005 (DATE OF INCEPTION)TO JULY
      31,
      2006 AND**


**PERIOD
      FROM DECEMBER 8, 2005 (DATE OF INCEPTION) TO JULY 31,
      20076**




**Note
      1 - Business Combinations:**




On
      April
      17, 2006, effective April 29, 2006, Crystal International Travel Group, Inc.
      and
      Subsidiaries (formerly Mobile Reach International, Inc.) (the "Company")
      completed a share exchange with the stockholders of Crystal Hospitality
      Holdings, Inc., a Delaware corporation ("CHH"), pursuant to a Share Exchange
      Agreement (the "Exchange Agreement"), by and among the Company, CHH and the
      holders of the outstanding capital stock of CHH (the "CHH Stockholders"). As
      a
      result, CHH was wholly owned subsidiary of the Company. The Company has
      accounted for this share exchange using the purchase method of accounting as
      prescribed by Statement of Financial Accounting Standards ("SFAS") No. 141,
      "Business Combinations". The share exchange has been treated as a reverse
      acquisition of the Company by CHH, due to the stockholders of CHH receiving
      60.4
      percent of the voting rights of the combined entity. The Company did not record
      any amount for goodwill on this share exchange; the Company did record an
      adjustment to stockholder’s equity of $2,477,311, representing the amount that
      Mobile Reach International, Inc.'s (“MRI”) liabilities exceeded assets on April
      29, 2006. Subsequent to the share exchange, Mobile Reach International, Inc.
      changed its name to Crystal International Travel Group, Inc.




On
      July
      27, 2007, the Company sold all of its ownership interest in CHH for cash and
      a
      five year note totaling $150,000 (Note 4). The consolidated financial statements
      include the results from operations for CHH from December 8, 2005 (date of
      inception) through July 27, 2007, and the results from operations for Mobile
      Reach International, Inc. for April 30, 2006 through July 31, 2007.




During
      the year ended July 2007, the Company established a subsidiary named Platinum
      Hospitality Holdings, Inc. (“PHH”), a Delaware corporation. Effective August 1,
      2006, PHH purchased all of the outstanding stock of JRM, Inc. dba The Travel
      House (“TH”) for $123,500. TH is a New Jersey corporation that has been
      operating as a full service travel agency. The Company purchased TH in order
      to
      establish a direct retail outlet for the travel products it is developing or
      plans to develop. The Company accounted for this acquisition as prescribed
      by
      SFAS No. 141, “Business Combinations”. The Company recorded $83,268 in goodwill
      for this acquisition. The consolidated financial statements include the results
      of operations for TH from August 4, 2006 to July 31, 2007.




**Note
      2 - Going Concern:**




The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States of America, which
      contemplates continuation of Crystal International Travel Group, Inc. and
      subsidiaries as a going concern. However, as a result of the merger discussed
      in
      Note 1, the Company has acquired debt on certain notes payable that are in
      default, payroll taxes and other payables owed by the acquired company.
      Additionally, the Company has used substantial amounts of working capital in
      start-up operations and has generated an operating loss leading to an
      accumulated stockholders’ deficit of $10,205,139 for the period from December 8,
      2005 (date of inception) through July 31, 2007. Further, at July 31, 2007,
      the
      Company’s current liabilities exceeded current assets by $2,556,342. Based on
      these factors, the Company may not be able to continue as a going
      concern.




F-9




With
      the
      merger discussed in Note 1, the Company’s management has taken over management
      of the acquired company and is changing the acquired company’s focus of
      operations. Plans include licensing out all software development and
      concentrating on the Company’s core business of providing travel packages to
      individuals. Management is financing its current activities through the issuance
      of convertible debentures. These activities have included streamlining the
      administrative functions of the Company. Management has also been working to
      establish a new travel products to offer to individual and corporate consumers.
      In pursuit of this goal, management has established a separate subsidiaries
      to
      handle the sales and administrative functions of the Company’s planned major
      product. However, no assurance can be given that the Company will continue
      as a
      going concern without the successful completion of additional financing and
      the
      commencement of management’s planned changes in operations. The accompanying
      financial statements do not include any adjustments that might be necessary
      if
      the Company is unable to continue as a going concern.




As
      a
      result of delinquencies and defaults, the Company may be subject to collection
      actions whenever agreements cannot be reached, including, but not limited to,
      litigation, foreclosure and/or seizure of assets and bank accounts.




**Note
      3 - Summary of Significant Accounting Policies:**




**Organization
      and principles of consolidation:**




The
      Company was originally organized to develop and sell mobility software products
      and services in the United States and Europe. Its offices were located in Cary,
      North Carolina until the Exchange Agreement discussed in Note 1. Since the
      effective date of the Exchange Agreement, the Company moved its operations
      and
      is currently located in Morristown, New Jersey. The principal focus of
      operations has been the development of travel products and services for sale
      to
      the general public in the United States through the utilization of registered
      agents and internet website booking services.




The
      accompanying consolidated financial statements include the accounts of Crystal
      International Travel Group, Inc. and all of its subsidiaries, which are wholly
      owned. All material inter-company balances and transactions have been eliminated
      in consolidation.




**Development
      stage operations:**




Since
      December 8, 2006 (date of inception), the majority of the Company’s time and
      effort have been concentrated on raising capital, acquiring operating assets,
      developing new markets and new travel related products. At the beginning of
      this
      fiscal year end, the Company purchased an existing travel agency with
      established sales. As of July 31, 2007, revenues from this subsidiary has not
      been significant. As defined by SFAS No. 7 “Accounting and Reporting by
      Development Stage Enterprises,” the Company is a development stage company.
      Under SFAS No. 7, a development stage enterprise is subject the same accounting
      principles as a normal enterprise but are required to present a cumulative
      income statement showing revenues and expenses from inception.




F-10




**Cash
      and cash equivalents:**




The
      Company considers all highly liquid investments having an original maturity
      of
      three months or less to be cash equivalents. Amounts invested may exceed
      federally insured limits at any given time.




**Property
      and equipment:**




Property
      and equipment are recorded at cost and depreciated using the straight-line
      method over the estimated useful lives of the assets ranging from two to five
      years. Maintenance and repairs are charged to operations and betterments are
      capitalized. The cost of property sold or otherwise disposed of and the
      accumulated depreciation are removed from the accounts and any resulting gain
      or
      loss is included in the statement of operations.




**Intangible
      assets:**




Intangible
      assets are recorded at cost. Intangible assets subject to amortization include
      a
      purchased customer database which is being amortized on a straight-line basis
      over the estimated useful life of the asset. Intangible assets with an
      indefinite life are not subject to amortization and include trademark names.
      These costs are evaluated annually for impairment. At July 31, 2007, these
      intangibles were fully impaired.




**Notes
      receivable:**




Notes
      receivable consists primarily of a single note from a entity that purchased
      the
      stock of one of the Company’s former subsidiaries. The note is recorded net of
      interest imputed. At the time the note was executed, the Company entered into
      a
      operating agreement with the entity that the Company continue operating the
      subsidiary while remitting revenues net of all amounts due on the note back
      to
      the entity. Based on the operating agreement, no reserve for doubtful accounts
      was deemed necessary.




**Income
      taxes:**




The
      Company accounts for income taxes utilizing the asset and liability approach
      which requires the recognition of deferred tax assets and deferred tax
      liabilities for the expected future consequences of temporary differences
      between the carrying amounts and the tax bases of assets and liabilities. These
      temporary differences will result in taxable or deductible amounts in future
      years when the reported amounts of the assets or liabilities are recovered
      or
      settled. The deferred tax assets are reviewed periodically for recoverability
      and valuation allowances are provided as necessary.




F-11




**Revenue
      recognition:**




The
      Company follows the guidance of the Securities and Exchange Commission’s (“SEC”)
      Staff Accounting Bulletin (“SAB”) No. 104 for revenue recognition. In general,
      the Company records revenue when persuasive evidence of any agreement exists,
      services have been rendered, and collectibility is reasonably assured,
      therefore, revenue is recognized when the Company invoices customers for
      services at contracted rates and terms.




**Advertising,
      research and development expenses:**




Advertising,
      research and development expenses are charged to expense when
      incurred.




**Loss
      per share:**




The
      Company presents “basic” earnings (loss) per share and, if applicable, “diluted”
earnings per share pursuant to the provisions of SFAS No. 128, “Earnings per
      Share”. Basic earnings (loss) per share is calculated by dividing net income or
      loss by the weighted average number of common shares outstanding during each
      period. Contingently issuable shares (Note 11) are included in weighted-average
      number of shares. The calculation of diluted earnings per share is similar
      to
      that of basic earnings per share, except that the denominator is increased
      to
      included the number of additional common shares that would have been outstanding
      if all potentially dilutive common shares, such as those issuable upon the
      exercise of stock options and warrants, and the conversion of outstanding
      convertible debentures, were issued during the period and the treasury stock
      method had been applied to the proceeds from the exercise of the options and
      warrants and net income or loss was adjusted for interest on the convertible
      debentures.




**Use
      of accounting estimates:**




The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of certain assets and liabilities and disclosures.
      Accordingly, the actual amounts could differ from those estimates. Any
      adjustments applied to estimated amounts are recognized in the year in which
      such adjustments are determined.




**Fair
      value of financial instruments:**




The
      Company’s financial instruments include cash, notes receivable, accounts
      payable, accrued liabilities, credit facilities and long-term debt. The carrying
      amounts of these financial instruments approximate fair value due to their
      short
      maturities and variable rates of interest. The carrying amounts of long-term
      debt approximate their fair values based upon current rates available for
      similar types of instruments.




The
      Company did not have any outstanding financial derivative
      instruments.




F-12




**Segment
      reporting:**




The
      Company follows SFAS No. 131 “Disclosure about Segments of an Enterprise and
      Related Information”. Due to size and lack of operations, the Company is
      reporting on a consolidated basis as a single segment and will evaluate
      additional segment disclosure requirements if it expands its
      operations.




**Concentrations
      of credit risk:**




The
      Company has no significant off-balance sheet concentration of credit risk such
      as foreign exchange contracts, option contracts or other foreign hedging
      arrangements. The Company maintains its cash balances with a reputable financial
      institutions in the form of demand deposits. Some of these cash balance accounts
      are maintained at foreign institutions and are not insured under the Federal
      Deposit Insurance Corporation.




**Foreign
      currency translation:**




The
      Company has an established a subsidiary in Ireland which maintains some of
      its
      assets for operational purposes in Euro denominations. The functional and
      reporting currency for the Company and all of its subsidiaries are U.S. dollars.
      Assets and liabilities of the Company and its subsidiaries which are reported
      in
      currencies other than U.S. dollars are translated at exchange rates as of the
      balance sheet date. Gains and losses from foreign currency transactions are
      included in net income (loss). Foreign currency transaction gains and losses
      were not significant during the year ended July 31, 2007.




**Recent
      pronouncements:**




Management
      does not believe that any recently issued, but not yet effective accounting
      pronouncements, if adopted, would have a material effect on the accompanying
      financial statements.




**Note
      4 - Sale of Equity Investment:**




In
      July
      2007, the Company entered into an agreement for sale its equity investment
      in
      CHH. Under the terms of the agreement, the Company sold its common shares of
      CHH
      stock for cash and the note receivable discussed in Note 7. As a result, the
      Company was able to remove approximately $7,219,400 in net liabilities from
      its
      consolidated books. The liabilities consisted of approximately $473,328 in
      accounts payable, $5,021,307 in long-term debt and approximately $287,500 in
      accrued interest related to an intangible that was written off in the prior
      year. Also included in the liabilities were approximately $1,044,100 in
      inter-company expenses for which the Company has adjusted against the gain.
      The
      net gain on the transaction amounted to $6,033,963.




Prior
      to
      the Company’s selling its investment in CHH, CHH had accumulated debt in
      accounts payable for consulting and legal services. Subsequent to CHH’s purchase
      in April 2006 of the intangible asset “FS Suntours” from One Travel, Inc. One
      Travel, Inc. was forced into bankruptcy. In conjunction with One Travel’s
      bankruptcy, CHH was named in several lawsuits as a third-party beneficiary
      resulting from the intangible purchase. In the course of defending against
      the
      various lawsuits, CHH had incurred approximately $450,000 in legal fees.
      Management has determined that there is a remote possibility that there may
      be
      claims made against the Company resulting from CHH’s stock purchaser’s failure
      to settle the accounts payable debt. In the case a claim is made, management
      intend to defend the Company against the claim.




F-13




**Note
      5 - Property and Equipment:**




The
      principal categories and estimated useful lives of property and equipment are
      as
      follows:




July
                31, 2007
            
            Estimated
                Useful LivesOffice
                and computer equipment
            
            $
            50,586
            
            
            3
                to 7 yearsLess:
                accumulated depreciation
            
            
            (11,410
            )$
            39,176




**Note
      6 - Intangible Assets:**




In
      March
      2006, the Company purchased intangible assets for debt discussed in Note 9
      from
      another company valued at $5,021,666. Assets with a definite estimated useful
      included a customer database valued at $1,375,000 net of accumulated
      amortization of $125,000. Assets with an indefinite estimated useful life
      included registered trademarks valued at $3,521,666. Management capitalized
      these assets in accordance with FASB No. 142 “Goodwill and Other Intangibles”.




In
      July
      2006, management completed impairment testing under FASB No. 144 “Accounting for
      the Impairment or Disposal of Long-Lived Assets” as required under FASB No. 142.
      As of July 2006, the Company has not gained complete control over the intangible
      assets. The customer database had not been delivered and the phone number and
      websites associated with the trademarks purchased were still in control of
      the
      party who sold the assets. Therefore, the Company recorded an asset impairment
      charge of $4,896,666 in relation to the write down of these
      intangibles.




In
      August
      2006, the Company purchased all the outstanding shares of a fully operational
      travel agency for $123,500 in cash. At the time of the purchase, the Company
      was
      seeking to expedite the regulatory licensing process for travel agencies by
      purchasing an already licensed agency. In the exchange, the Company received
      an
      established customer database. Management valued the database at $40,232 by
      discounting the estimated cash flow from commissions on sales to repeat
      customers. This customer database is amortized over an estimated useful life
      of
      twenty-four months. The remaining $83,268 was booked as goodwill on the
      purchase.




In
      July
      2007, the Company observed that revenues from commissions generated from repeat
      customers were not meeting the estimated cash flow projections mentioned above.
      This in conjunction with the Company’s primary focus on development of new
      travel products and the establishment of another subsidiary to service those
      products, management re-evaluated the intangibles purchased in August 2006.
      In
      accordance with FASB No. 142 “Goodwill and Other Intangibles” and as required
      under FASB No. 144 “Accounting for the Impairment or Disposal of Long-Lived
      Assets” management wrote down the value of the those intangibles assets to zero
      and recorded an impairment charge of $100,711.




F-14




Amortization
      expense amounted to $20,117
      and $125,000 for the years ended July 31, 2007 and 2006, respectively. For
      the
      period from December 8, 2005 (date of inception) through July 31, 2007,
      amortization expense was $145,117.




**Note
      7 - Note Receivable:**




In
      July
      2007, the Company entered into an agreement for sale its equity investment
      in
      Crystal Hospitality Holdings, Inc. Under the terms of the agreement, the Company
      is to cash and a note receivable for sixty payments of $2,500 totaling $150,000.




Total
      future receipts of the $150,000 note discounted at eight percent are as
      follows:




2008
            
            $
            20,7842009
            
            
            22,6252010
            
            
            24,5032011
            
            
            26,5372012
            
            
            28,740Total
                receipts
            
            
            123,189Less:
                current portion
            
            
            (20,784
            )$
            102,405




In
      conjunction with the sale of CHH’s stock, the Company entered into a side
      agreement to operate for the purchaser, the website owned by CHH. The Company
      is
      to maintain the website and on a monthly basis remit all receipts to the
      purchaser of CHH net of monies due to the Company for the note receivable.




**Note
      8 - Accrued Liabilities:**




At
      July
      31, 2007, accrued expenses consisted of the following items:




Salary
                and wages payable
            
            $
            392,686Accrued
                and withheld taxes
            
            
            517,146Accrued
                interest
            
            
            273,433Accrued
                legal fees
            
            
            44,227Other
                accrued expenses
            
            
            802Total
                accrued expenses
            
            $
            1,228,294




F-15




Accrued
      and withheld taxes primarily consist of delinquent payroll taxes withheld and
      accrued on employees of MRI. Penalties and interest calculated through July
      31,
      2007 are included.




**Note
      9 - Short-Term Notes Payable:**




The
      balances on short-term notes at July 31, 2006 are as follows:




Note
                payable due to a vendor dated February 2005; due in eighteen monthly
                installments of $1,007 including interest at ten percent; note is
                in
                default
            
            $
            5,524Note
                payable for accrued wages dated August 2002; bearing interest at
                six
                percent; due and payable with interest at the earliest of (a) Company
                obtaining debt or equity funding greater than $1,000,000 in a quarter
                or
                (b) Company earns revenues of $1,000,000 in a quarter; note is in
                default.
            
            
            49,908Note
                payable to a vendor dated December 2004; due in six monthly installments
                of $2,836 including interest at eighteen percent; note is in
                default.
            
            
            17,027Note
                payable to former employees for accrued wages and expenses dated
                February
                and March 2005;bearing
                no interest and due and payable at the earliest of (a) Company obtaining
                debt or equity funding greater than $1,000,000 in a quarter or (b)
                Company
                earns revenues of $1,000,000 in a quarter; note is in
                default.
            
            
            24,000Note
                payable to a vendor dated March 2005; bearing no interest due in
                four
                equal monthly payments of $14,000; note is in default.
            
            
            56,000Note
                payable to former employee dated April 2005; bearing no interest
                and due
                in six monthly installments of $5,000; note is in default.
            
            
            30,000Note
                payable to a vendor dated July 2005; due in eighteen monthly installments
                of $390 including interest at eight percent; note is in
                default.
            
            
            6,243Note
                payable to former employee dated April 2007; bearing no interest
                and no
                specified repayment terms.
            
            
            40,893Note
                payable to vendor dated July 2005; due in eleven monthly installments
                of
                $1,500; note is in default.
            
            
            15,888Notes
                payable to former employee dated April 2006; due in a single payment
                on
                June 30, 2006; note is in default.
            
            
            15,000Notes
                payable to former employees dated March 2006; due in a single payment
                on
                June 30, 2006; notes are in default.
            
            
            14,449Note
                payable to former employee dated April 2007; bearing no interest
                and no
                specified repayment terms.
            
            
            9,801Note
                payable to former employee dated February 2007; due in four equal
                installments of $10,914; in May 2007 the note accrued an additional
                $3,000
                in penalties; interest on the note is fifteen percent; note is in
                default.
            
            
            35,740Total
                short-term notes payable
            
            $
            320,473




F-16


At
      July
      31, 2007, interest included in accrued expenses for short-term notes payable
      is
      approximately $26,500.




**Note
      10 - Convertible Debentures:**




At
      July
      31, 2007, the Company had a balance of $125,500 remaining of the $475,000 five
      percent convertible debentures from March 2004 assumed in the Exchange Agreement
      discussed in Note 1. The debentures matured on March 15, 2007 and were
      convertible into the Company's common stock at a conversion price of $0.16
      per
      share. In an effort to entice the debenture holders from this series of
      debentures to invest in the second series offered by MRI in March 2005, the
      conversion price and attached warrants were re-priced to $0.01 per share in
      March 2005. This was done through a settlement agreement signed by all parties.
      All interest and penalties accrued through March 2005 on the five percent
      debentures was treated as additional paid-in capital on warrants issued with
      the
      March 2006 series debenture discussed below. Interest accrued on debentures
      that
      are converted into common stock may be paid in cash or with common stock
      (conversion price $0.01 per share). As of July 31, 2007, these debentures were
      in default due to the fact that maturity date was March 15, 2007.




In
      June
      2006, the Company began offering another series of secured convertible
      debentures. The series of convertible debentures has an interest rate of six
      percent and matures three years from the date of the actual issuance of each
      debenture note in the series. This series has a variable conversion price that
      is fifty-five percent of the average of the three lowest daily trading prices
      for twenty trading days prior to the trading day before the day of conversion.
      Interest accrues from the date of issuance and may be paid in cash or in the
      Company’s common stock.




As
      a
      result of the June 2006 debenture issuance, the Company recorded $1,990,711
      in
      five percent convertible debentures. As required by Emerging Issues Task Force
      Issue (“EITF”) No. 98-5 “Accounting for Securities with Beneficial Conversion
      Features or Contingently Adjustable Conversion Ratios”, the Company recognized
      $1,039,660 in interest expense and recorded $951,051 as a discount on the
      debentures issued. As required by EITF 98-5, the intrinsic value of the
      conversion feature embedded in the debentures was calculated as the difference
      between the fair value of the debenture if converted on the commitment date
      and
      the conversion price as stated in the agreement. Accounting for this feature
      using EITF 98-5 resulted in the total value of the June 2006 debenture issue
      of
      $1,990,711 being recorded as interest expense and correspondently paid-in
      capital for the period ended July 31, 2006.




During
      the year ended July 31, 2007, the Company issued $1,665,360 of its six percent
      secured convertible debentures. As required by Emerging Issues Task Force Issue
      (“EITF”) No. 98-5 “Accounting for Securities with Beneficial Conversion Features
      or Contingently Adjustable Conversion Ratios”, the Company recognized $1,523,525
      in interest expense and recorded $141,835 as a discount on the debentures
      issued. The intrinsic value of the conversion feature embedded in the debentures
      was calculated as the difference between the fair value of the debenture if
      converted on the commitment date and the conversion price as stated in the
      agreement. Accounting for this feature using EITF 98-5 resulted in the total
      value of the debenture issue of $1,665,360 being recorded as interest expenses
      and correspondently paid-in capital.




F-17




The
      future maturities of these debentures as of July 31, 2007, are as
      follows:




2008
            
            $
            125,5002009
            
            
            2,449,0142010
            
            
            1,035,3602011
            
            
            0Thereafter
            
            
            03,609,874Less:
                Discount
            
            
            (141,835
            )3,468,039Less:
                current portion
            
            
            (125,500
            )Non-current
                portion
            
            $
            3,342,539




During
      the year, the following debenture conversions took place:




Conversion
                Date
            
            Issuance
            
            Value
            
            Conversion
                Price
            
            Common
                Shares Issued8/6/06
            
            
            6%
                Series
            
            $
            9,000
            
            $
            0.180
            
            
            50,0008/10/06
            
            
            5%
                Series
            
            
            199,500
            
            
            0.800
            
            
            249,3758/17/06
            
            
            6%
                Series
            
            
            3,000
            
            
            0.012
            
            
            25,0008/25/06
            
            
            6%
                Series
            
            
            3,000
            
            
            0.071
            
            
            42,2538/29/06
            
            
            6%
                Series
            
            
            4,335
            
            
            0.049
            
            
            73,4739/26/06
            
            
            6%
                Series
            
            
            5,000
            
            
            0.049
            
            
            101,01012/12/06
            
            
            6%
                Series
            
            
            4,445
            
            
            0.041
            
            
            123,47912/13/06
            
            
            6%
                Series
            
            
            2,400
            
            
            0.041
            
            
            100,0001/6/07
            
            
            6%
                Series
            
            
            3,690
            
            
            0.036
            
            
            123,0001/17/07
            
            
            6%
                Series
            
            
            15,133
            
            
            0.180
            
            
            589,2331/19/07
            
            
            6%
                Series
            
            
            5,000
            
            
            0.029
            
            
            259,1401/23/07
            
            
            6%
                Series
            
            
            3,500
            
            
            0.025
            
            
            200,0001/30/07
            
            
            6%
                Series
            
            
            1,500
            
            
            0.015
            
            
            100,0002/5/07
            
            
            6%
                Series
            
            
            7,800
            
            
            0.015
            
            
            600,0002/6/07
            
            
            6%
                Series
            
            
            2,447
            
            
            0.015
            
            
            177,9872/7/07
            
            
            6%
                Series
            
            
            3,800
            
            
            0.015
            
            
            250,0002/15/07
            
            
            6%
                Series
            
            
            3,800
            
            
            0.015
            
            
            250,0003/5/07
            
            
            6%
                Series
            
            
            3,625
            
            
            0.014
            
            
            250,0003/12/07
            
            
            6%
                Series
            
            
            3,625
            
            
            0.014
            
            
            250,0003/19/07
            
            
            6%
                Series
            
            
            3,600
            
            
            0.014
            
            
            250,0003/22/07
            
            
            6%
                Series
            
            
            3,525
            
            
            0.014
            
            
            250,0003/22/07
            
            
            6%
                Series
            
            
            500
            
            
            0.013
            
            
            40,0003/29/07
            
            
            6%
                Series
            
            
            3,200
            
            
            0.013
            
            
            250,0004/13/07
            
            
            6%
                Series
            
            
            256
            
            
            0.012
            
            
            21,885


4/13/07
            
            
            6%
                Series
            
            
            3,470
            
            
            0.010
            
            
            346,4084/13/07
            
            
            6%
                Series
            
            
            6,400
            
            
            0.011
            
            
            594,8044/20/07
            
            
            6%
                Series
            
            
            6,000
            
            
            0.011
            
            
            555,5564/23/07
            
            
            6%
                Series
            
            
            6,939
            
            
            0.040
            
            
            173,4795/10/07
            
            
            6%
                Series
            
            
            3,840
            
            
            0.016
            
            
            240,0005/16/07
            
            
            6%
                Series
            
            
            6,873
            
            
            0.016
            
            
            429,5455/30/07
            
            
            6%
                Series
            
            
            5,000
            
            
            0.017
            
            
            303,0306/8/07
            
            
            6%
                Series
            
            
            5,000
            
            
            0.014
            
            
            454,5457/9/07
            
            
            6%
                Series
            
            
            3,020
            
            
            0.013
            
            
            239,6537/11/07
            
            
            6%
                Series
            
            
            5,000
            
            
            0.012
            
            
            454,5457/23/07
            
            
            6%
                Series
            
            
            3,568
            
            
            0.011
            
            
            323,5007/23/07
            
            
            6%
                Series
            
            
            4,564
            
            
            0.014
            
            
            326,0007/25/07
            
            
            6%
                Series
            
            
            5,000
            
            
            0.012
            
            
            454,5457/27/07
            
            
            6%
                Series
            
            
            8,824
            
            
            0.012
            
            
            800,000$
            369,179
            
            
            
            
            
            10,321,445


F-18




Under
      the
      Security Agreement attached to the debentures issued in June 2006, all of the
      Company’s assets are pledged as collateral.




Subsequent
      to July 31, 2007, the Company issued an additional $300,000 in debentures.
      The
      series of convertible debentures has an interest rate of eight percent and
      matures three years from the date of the actual issuance of each debenture
      note
      in the series. This series has a variable conversion price that is fifty-five
      percent of the average of the three lowest daily trading prices for twenty
      trading days prior to the trading day before the day of conversion. Interest
      accrues from the date of issuance and may be paid in cash or in the Company’s
      common stock.




**Note
      11 - Stockholders’ Equity:**




The
      Company was organized in December 2005 with 10,000 shares of zero par value
      common stock being authorized. As discussed in Note 1, all shares were exchanged
      for 7,100,000 shares of the common stock of MRI. At the date of the Exchange
      Agreement, stockholders of MRI held 4,743,276 shares of common stock.




In
      November 2006, the Company issued 1,000,000 shares of restricted common stock
      in
      conjunction with short-term bridge financing maturing March 2007.




In
      February 2007, the Company issued 4,050,000 shares of its common stock settling
      various claims worth $238,591 against the Company. Of this, 350,000 shares
      were
      issued along with a separate note payable of $9,801 (Note 8) to settle $40,834
      in debt to a former officer. Another 500,000 shares were issued along with
      a
      separate note payable of $40,893 (Note 8) to settle debt and a lawsuit from
      a
      former employee. The Company issued another 2,200,00 shares to settle debt
      with
      a vendor of $45,000 and to settle accrued wages with employees of $47,763.
      The
      final 1,000,000 shares were issued to settle short term notes payable to a
      related party of $100,000 (Note 15).




F-19




Also
      in
      February 2007, options for 120,000 shares of restricted common stock were
      exercised (Note 12).




In
      March
      2007, the Company recorded expenses for services from consultants for investor
      relations fees of $12,000 in exchange for 100,000 shares of restricted common
      stock.




In
      May
      2007, a wholly owned subsidiary of the Company entered into a two year
      employment contract with an individual. As part of compensation, the Company
      is
      to issue to the individual 1,600,000 restricted shares of common stock. The
      first 400,000 shares were issued upon signing the contract. The remaining
      1,200,000 shares are to be issued in two installments during the first year
      of
      employment. The first installment of 600,000 shares was issued in July 2007.
      The
      Company determined that the stock offered as compensation had a value of $56,000
      based on the Company’s common stock trading price at the date of
      grant.




As
      mentioned in Note 10, throughout the year the Company converted $369,179 of
      its
      convertible debentures and $18,890 in related accrued interest into 10,321,918
      and 180,732 shares of the Company’s common stock, respectively.




The
      Company is authorized to issue 100,000,000 shares of preferred stock. As of
      July
      31, 2007, no shares were issued or outstanding.




**Note
      12- Stock Options and Warrants:**




In
      May
      2006, the Company issued 250,000 warrants at an exercise price of $0.75 per
      share and 250,500 warrants at an exercise price of $1.00 per share. These
      warrants were issued in connection with the issuance of short-term notes payable
      bearing an interest rate of nine percent. Using the Black-Scholes pricing model
      and thirty percent volatility factor, the Company valued the warrants and
      recorded interest expense of $68,000 for the grant of these warrants for the
      period ending July 31, 2006.




As
      part
      of the agreement for the June 2006 convertible debenture offering, the Company
      issued 15,528,553 detachable warrants with an exercise price of $0.50 per share.
      Using the Black-Scholes pricing model and thirty percent volatility factor,
      the
      Company valued the warrants at $1,664,661. However, due to the beneficial
      conversion feature (Note 10) being equal to the total amount of the debentures
      issued, no expense has been recognized for the warrants in the period ended
      July
      31, 2006.




During
      the year ended July 31, 2007, the Company issued options to an employee of
      a
      wholly owned subsidiary of the Company as part of an employment contract. The
      Company granted options totaling 400,000 shares of common stock with an option
      price of $.26 per share. The Company determined that the options issued had
      a
      value of $37,200 using the Black-Scholes pricing model and a thirty percent
      volatility factor at the date of grant. The options become vested over a period
      of three years and expire five years after the agreement date. Compensation
      expense related to these options is recorded in the period in which the holder
      becomes vested. For the year ended July 31, 2007, $11,160 of compensation
      expense was recorded related to options of 120,000 shares which had vested
      and
      were exercised, the remaining balance of 280,000 was forfeited.




F-20




As
      part
      of the agreement for the June 2006 convertible debenture offering, during the
      year ended July 31, 2007, the Company issued 10,600,000 detachable warrants
      that
      expire in seven years. Six hundred thousand warrants had an exercise price
      of
      $0.20 per share and the remaining had an exercise price of $0.025. Using the
      Black-Scholes pricing model and a volatility factor of fifteen to thirty
      percent, the Company valued the warrants at $207,760. However, due to the
      beneficial conversion feature being equal to the total amount of the debentures
      issued (Note 10), no expense has been recognized for the warrants.




On
      November 27, 2006, as part of short-term financing mentioned in Note 8, the
      Company issued 400,000 detachable warrants with an exercise price of $0.10
      per
      share. Using the Black-Scholes pricing model and a volatility factor of thirty
      percent, the Company valued the warrants and recorded interest expense of
      $16,480 for the grant of these warrants.




The
      following is a summary of common stock warrants:




Number
            
            Weighted-Average
                Exercise PriceOutstanding
                July 31, 2006
            
            
            16,793,118
            
            $
            0.4976Issued
            
            
            11,000,000
            
            
            0.0373Exercised
            
            
            0
            
            
            0.0000Expired
                or cancelled
            
            
            400,000
            
            
            0.8750Outstanding
                July 31, 2007
            
            
            27,393,118
            
            
            0.3072




F-21




**Note
      13 - Income (Loss) Per Share:**




Presented
      below are the calculations for basic and diluted earnings per
      share:




Year
                Ended July 31, 2007
            
            Period
                from December 8, 2005 (date of inception) to July 31, 2006**Basic
                EPS:**Income
                available to common shareholders
            
            $
            544,969
            
            $
            (8,550,024
            )Weighted-average
                number of common shares outstanding
            
            
            17,986,844
            
            
            8,918,989Contingent
                issuable shares
            
            
            600,000
            
            
            0Basic
                weighted average shares
            
            
            18,586,844
            
            
            8,918,989**Basic
                Earnings Per Share**
            
            $
            .03
            
            
            (
                .96
            )





**Diluted
                EPS:**Income
                available to common shareholders
            
            $
            544,969
            
            $
            (8,550,024
            )Effect
                of assumed conversions:Interest
                on convertible debentures
            
            
            181,185
            
            
            0Adjusted
                income available to common shareholders
            
            $
            726,154
            
            
            (8,550,024
            )Weighted-average
                number of common shares outstanding
            
            
            17,986,844
            
            
            8,918,989Effect
                of debenture conversions treated as if converted at beginning of
                period
            
            
            7,062,715
            
            
            025,049,559
            
            
            8,918,989Effect
                of assumed conversions:Contingently
                issuable shares
            
            
            116,712
            
            
            0Dilutive
                warrants
            
            
            117,876
            
            
            0Convertible
                debentures
            
            
            44,282,346
            
            
            044,516,934
            
            
            069,566,493
            
            
            8,918,989**Diluted
                Earnings Per Share**
            
            $
            0.01
            
            
            (0.96
            )




F-22




**Note
      14 - Income Taxes:**




Deferred
      income taxes are provided in recognition of temporary differences in reporting
      certain revenues and expenses for financial statement and income tax
      purposes.




Net
      deferred tax assets (liabilities) consisted of the following components as
      of
      July 31, 2007:




Current
            
            Long-Term
            
            TotalPeriod
                ended July 31, 2007:Deferred
                tax assets:Net
                operating loss carryover
            
            $
            1,661,851
            
            $
            0
            
            $
            1,661,851Intangible
                asset impairment
            
            
            0
            
            
            36,513
            
            
            36,5131,661,851
            
            
            36,513
            
            
            1,698,364Valuation
                allowance
            
            
            (1,661,851
            )
            
            (36,513
            )
            
            (1,698,364
            )Net
                deferred tax asset
            
            $
            0
            
            $
            0
            
            $
            0




The
      ultimate realization of these assets is dependent upon the generation of future
      taxable income sufficient to offset the related deductions and loss carryover
      within the applicable carryover period. The valuation allowance is based on
      the
      uncertainty of the Company’s ability to generate sufficient taxable income in
      future years to fully utilize the net operating loss carryover.




The
      income tax provision differs from the amount of income tax determined by
      applying the U.S. Federal and state income tax rate to pretax income for the
      year ended July 31, 2007 and period ending July 31, 2006 due to the
      following:




Year
                Ended July 31, 2007
            
            Period
                from December 8, 2005 (date of inception) to July 31, 2006Computed
                “expected” tax expense
            
            $
            210,467
            
            $
            (3,302,019
            )Increase
                (decrease) in income tax benefit resulting from:Temporary
                differences
            
            
            (809,636
            )
            
            2,506,564Permanent
                differences
            
            
            599,169
            
            
            795,455$
            0
            
            $
            0




Permanent
      differences consists primarily of non-deductible interest expense from
      beneficial conversion feature of convertible debentures and non-deductible
      warrants and options. Temporary differences consists primarily of net operating
      losses and amortization of intangibles.




The
      Company files its tax returns as a consolidated entity. As of July 31, 2007,
      the
      Company had not filed income tax return. The Company has estimated operating
      loss carry forwards of approximately $4,300,000 stemming prior year operating
      losses that from will begin to expire in 2022.




F-23




The
      Tax
      Reform Act of 1986 contains provisions which limit the ability to utilize net
      operating loss, capital loss, and various tax credit carryovers in the case
      of
      certain events including significant changes in ownership interest. If the
      Company’s tax carryovers are limited, and the Company has taxable income which
      exceeds the permissible yearly net operating loss carryover, the Company would
      incur a federal income tax liability even though these loss carryovers would
      be
      available in future years.




**Note
      15 - Related Party Transactions:**




During
      the period ended July 31, 2007, a corporation that is a stockholder in the
      Company made periodic advances to the Company. These advances have been in
      the
      form of cash advances made directly to the Company’s operating account or
      expenses paid by the stockholder on behalf of the Company. For cash advances,
      repayment terms are such that principal and interest of five percent is due
      on
      each advance one year from the date of the advance. In February 2007, $100,000
      worth of these advances were converted to the Company’s common stock as
      discussed in Note 11. The balance of these cash advances at July 31, 2007
      totaled $109,041. Interest accrued on these advances through July 31, 2007
      was
      $10,603. For expenses paid on behalf of the Company, the Company records the
      expenses as they are incurred and books a payable to the stockholder. At July
      31, 2007, the balance of the amount included in accounts payable as due to
      this
      stockholder was $72,130.




Interest
      of $10,603 for related party notes mentioned above for the year ended July
      31,
      2007 was waved and is included in other income.




As
      mentioned in Note 11, in November 2006, the Company issued short-term debt
      holders 1,000,000 shares of common stock. The stock issuance was treated as
      additional interest of $90,000 on the short-term financing agreement for
      $400,000 maturing March 31, 2007 with twelve percent interest. The balance
      remaining on these notes is $200,000. At July 31, 2007, the notes were in
      default.




In
      August
      2006, the Company began paying the corporate stockholder mentioned above for
      use
      of its offices. No sublet contract exists nor are there any guarantees on the
      part of the Company for the stockholder’s leasing agreement. Total rents paid by
      the Company for the period ended July 31, 2007 were approximately
      $30,093.




During
      the year ended July 31, 2007, the Company incurred $85,000 of marketing and
      consulting fees from a firm wholly owned by an officer and shareholder of the
      Company.




**Note
      16 - Pro-Forma Financial Information:**




The
      following pro-forma data summarized the results of operations for the year
      ended
      July 31, 2007, as if the sale of Crystal Hospitality Holdings, Inc. had been
      completed August 8, 2005 (date of inception):




Year
                Ended
              July
                31, 2007
            
            Period
                from December 8, 2005 (date of inception) to July 31, 2006Net
                revenues
            
            $
            544,258
            
            $
            6,628Operating
                loss
            
            
            (2,130,158
            )
            
            (359,909
            )Basic
                income (loss) per share
            
            
            0.05
            
            
            (0.19
            )Diluted
                income (loss) per share
            
            
            0.02
            
            
            (0.19
            )






F-24




**Note
      17 - Other Matters:**




**Commitments
      and contingencies:**




Prior
      to
      the Exchange agreement discussed in Note 1, several vehicles owned by MRI were
      repossessed and sold at auction in order to settle outstanding debt on those
      vehicles. The Company has recorded $30,000 in current note payables as a
      contingency for any balance remaining on the debt owed.




On
      July
      2, 2007, the Company’s subsidiary Platinum Hospitality Holdings, Inc. entered
      into a purchase agreement with Look Out We’re Traveling, Inc. dba Flying
      Dutchman Travel (“FDT”). In consideration for all of FDT’s common stock, the
      Company will pay $425,000 in cash and issue 7,00,000 shares of its common stock
      to the stockholders of FDT. The stock purchase agreement is subject to several
      closing conditions including the requirement that the Company close on an equity
      investment of between $2 million and $3 million in net proceeds prior to the
      closing of the deal.




**Legal
      proceedings:**




In
      July
      2006, a former officer of MRI filed suit against the Company alleging breach
      of
      contract. Management and counsel are in the process of reviewing the claim
      and
      intend to defend their position vigorously.




**Subsequent
      Events:**




As
      mentioned in Note 10, the Company issued an additional $300,000 in its eight
      percent convertible debentures.




**Unsecured
      creditors of the company:**




The
      Company is delinquent with a number of unsecured creditors for which no payment
      arrangements exist or for which no agreement to forestall collection action
      has
      been agreed upon. Whenever feasible the Company negotiates with these creditors
      to reach settlement agreements that are acceptable to the Company.




As
      a
      result of the delinquencies and defaults, the Company may be subject to
      collection actions whenever agreements cannot be reached, including, but not
      limited to, litigation, foreclosure and/or seizure of assets and bank
      accounts.




F-25




**Item
      8 A** . **Controls
      and Procedures**




(a) We
      carried out an evaluation under the supervision and with the participation
      of
      our management, including our Chief Executive Officer and Principal Accounting
      Officer, of the effectiveness of our disclosure controls and procedures (as
      defined in Rules 13a-14(c) and 15d-14c of the Securities Exchange Act
      of 1934 (the “Exchange Act”)) as of the end of the period covered by this
      report. Based upon that evaluation, the Chief Executive Officer and the
      Principal Accounting Officer concluded that our disclosure controls and
      procedures are effective in ensuring that information required to be disclosed
      by us under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified under the Exchange Act rules and
      forms.




(b) There
      were no significant changes in our internal control over financial reporting
      or
      in other factors that could significantly affect our internal control over
      financial reporting subsequent to the evaluation date, nor any significant
      deficiencies or material weaknesses in such disclosure controls, internal
      controls and procedures requiring corrective actions. As a result, no corrective
      actions were taken.




**PART III**




**Item
      9** . **Directors,
      Executive Officers, Promoters and Control Persons; Compliance with
      Section 16(a) of the Exchange Act**





**DIRECTORS,
      EXECUTIVE OFFICERS AND CONTROL PERSONS**




The
      members of the board of directors and executive officers of the Company,
      together with their respective ages are set forth below. Officers are elected
      by, and serve at the designation and appointment of, the Board of
      Directors.




**Name**
            
            **Age******
            
            **Position******Peter
                Dugan
            
            53
            
            Director,
                Chief Executive Officer and PresidentPeter
                Gallic
            
            41
            
            Director,
                Chief Financial OfficerFabrizzio
                Busso-Campana
            
            42
            
            Director,
                Chief Operating OfficerHank
                Cohn
            
            38
            
            DirectorFrank
                Salerno
            
            48
            
            DirectorAnthony
                Soich
            
            47
            
            Director




**Peter
      Dugan**


**Director,
      Chief Executive Officer and President**




Mr. Dugan
      has served as a director since April 2006 and as our Chief Executive
      Officer and President since November 13007 and from November 2006 to present
      has
      served as Managing Director of IntelliFares Limited, Crystal’s wholly owned
      Irish subsidiary. From January 2004 until now, he has been a principal at
      Crystal Capital Partners, Inc. which focuses on investments in the
      telecommunications, real estate, transportation and hospitality sectors. He
      is
      also Executive Vice President and Secretary of Crystal Capital Partners
      Corporation, a New Jersey investment banking and business advisory services
      company. Mr. Dugan was Director of Global Business Development of DVC
      Worldwide from 2000 to 2003; a 1,400 person integrated marketing communications
      company which did branding and promotional marketing programming for Fortune
      100
      companies. He is also on the advisory board of Cornell Dubilier Electronics
      of
      Liberty, SC, and a Trustee of the Morristown Memorial Hospital
      Foundation.




**Fabrizzio
      Busso Campana**


**Director,
      Chief Operating Officer**




Mr. Busso-Campana
      has served as a director and our Chief Operating Officer since November 13007.
      From April 2006 until November 13007 he served as our Chief Executive Officer
      and President. From January 2004 until now, he has been a principal at
      Crystal Capital Partners, Inc. which focuses on investments in the
      telecommunications, real estate, transportation and hospitality sectors. From
      2002 until November 13003, he was the general manager of the MGM Grand in Las
      Vegas and New York, New York hotel and casino. From 2001 and 2002, he acted
      as a
      private consultant to various businesses. He attended University of Miami's
      Executive MBA program, as well as Florida International University for his
      undergraduate work in Political Sciences/International Studies and Developmental
      Economics, Nova University for Hospitality and Management.




**Peter
      Gallic**


**Director,
      Chief Financial Officer**




Mr. Gallic
      has served as a director and our Vice President since April 2006. From
      January 2004 until now, he has been a principal at Crystal Capital
      Partners, Inc. which focuses on investments in the telecommunications, real
      estate, transportation and hospitality sectors. From 2001 to 2004, he was the
      President and Chief Executive Officer of Global Link Technologies, Inc.,
      which is a consumer electronics distributor. Mr. Gallic holds a BS in
      Economics from the Ateneo de Manila in the Philippines.




14




**Hank
      Cohn**


**Director**




Mr. Cohn
      has served as a director since February 2006. Mr. Cohn is Executive VP
      at Galaxy Ventures, LLC. Galaxy is closely held family fund with a multi-pronged
      investment strategy concentrating in two areas, bond trading and early stage
      technology investments. Mr. Cohn acts as Portfolio Manager for investments.
      Prior to joining Galaxy Ventures full time in 2003, Mr. Cohn worked at
      Atlas Capital, an investment banking boutique in New York. At Atlas
      Mr. Cohn in the capacity of Vice President worked on sourcing and
      structuring PIPE (Private Investment in Public Equities) for Atlas's proprietary
      fund and a few select clients including Galaxy Ventures. Mr. Cohn graduated
      with an MBA in finance and investments from Baruch College in 1999.




**Frank
      Salerno**


**Director**




Mr. Salerno
      has served as a director since April 2006. From October 2005 until
      now, he has been engaged in private investing. In February 2004,
      Mr. Salerno retired from Merrill Lynch Financial Services, where he had
      been a Managing Director and its Chief Operating Officer since 1999.
      Mr. Salerno sits on the board of directors of K-Sea Transportation
      Partners, L.P., a public company. Mr. Salerno received a B.A. from Syracuse
      University in 1981 and an MBA from New York University in 1986.




**Anthony
      Soich**


**Director**




Mr. Soich
      has served as a director since February 2006. Mr. Soich is an
      independent consultant for a number of leading investment banks and private
      and
      publicly held companies. From June 2002 to April 2005, Mr. Soich
      acted as a Managing Director in the Investment Banking Division of Ladenburg
      Thalmann & Co. Inc. Prior to joining Ladenburg, Mr. Soich was
      an independent consultant from November 2001 to June 2002.
      Mr. Soich has been a member of the Board of Directors of RAMP Corporation,
      a public company, since November 13004 and the Chairman of the Board since
      May 2005. Mr. Soich holds a BSBA, MBA, and JD, with honors, from Drake
      University and an LLM, in Taxation, from New York University. Mr. Soich is
      a Certified Public Accountant in Iowa and attorney in New York and
      Iowa.




**Item
      10.** **** **Executive
      Compensation** **.**





**EXECUTIVE
      COMPENSATION**





**Long
                Term**
            
            **Compensation****Securities****Stock**
            
            **Underlying****Name
                and Principal Position**
            
            **Fiscal
                Year******
            
            **Salary******
            
            **Awards(1)******
            
            **Options******Peter
                Dugan(1)
              Director,
                Chief Executive Officer and President
            
            
            2007
              2006
              2005
            
            $
            150,000
              —
              —
            
            
            —
              —
              —
            
            
            —
              —
              —Fabrizzio
                Busso-Campana
              Director
                and Chief Operating Officer
            
            
            2007
              2006
              2005
            
            $
              $
            150,000
              120,000
              —
            
            
            —
              —
              —
            
            
            —
              —
              —Peter
                Gallic
              Director
                and Chief Financial Officer
            
            
            2007
              2006
              2005
            
            $$
            150,000
              120,000
              —
            
            
            —
              —
              —
            
            
            —
              —
              —





(1)
            Mr.
                Dugan was appointed Chief Executive officer and President on July
                16,
                2007.  Messrs. Dugan, Busso-Campana and Gallic have been deferring
                salary since January 2007.




**OPTION
      GRANTS IN LAST FISCAL YEAR**




During
      the fiscal year ending July 31, 2006, we did not issue any new option
      grants.




**Aggregated
      Option Exercises in Last Fiscal Year and Fiscal Year-End Option
      Values**





There
      are
      no outstanding options to purchase shares of Common Stock with respect to the
      Named Executive Officers as of July 31, 2007.


15




**Item
      11.** **** **Security
      Ownership of Certain Beneficial Owners and Management** **.**




The
      following table sets forth the beneficial ownership of Common Stock by each
      person (including any “group” as that term is used in Section 13(a)(3) of
      the Exchange Act of 1934) known to the Company to beneficially own 5% or more
      of
      the outstanding Common Stock, each of the Company’s directors and nominees, each
      of the Company’s executive officers and each of the Company’s directors and
      executive officers as a group. The calculation of the percentage of the
      Company’s Common Stock beneficially owned as of July 14, 2006 is based on
      11,582,928 shares of Common Stock issued and outstanding as of that date post
      reverse effectiveness.




In
      accordance with the rules promulgated by the Securities and Exchange Commission
      (the “Commission”), the ownership includes shares currently owned as well as
      shares that the named person has the right to acquire beneficial ownership
      of
      within 60 days, including through the exercise of options, warrants or
      other rights, or through the conversion of a security. Accordingly, more than
      one person may be deemed to be beneficial owner of the same securities. Except
      as otherwise indicated, each stockholder listed below has sole voting and
      investment power of the shares beneficially owned by that person.





**Name
                of****Beneficial
                Owner**
            
            **Number
                of Shares**
              **Beneficially
                Owned******
            
            **Percentage
                of**
              **Outstanding******Fabrizzio
                Busso Campana(1)
            
            
            3,204,334
            
            
            7.61
            %Peter
                Gallic(2)
            
            
            2,203,333
            
            
            4.63
            %Peter
                Dugan(3)
            
            
            3,566,333
            
            
            7.19
            %Crystal
                Capital Partners Corporation
            
            
            1,960,000
            
            
            5.85
            %Hank
                Cohn
            
            
            0
            
            
            0
            %Frank
                Salerno(4)
            
            
            350,000
            
            
            1.04
            %Anthony
                Soich
            
            
            0
            
            
            0
            %Officers
                and Directors as a group (5)
            
            
            8,820,000
            
            
            26.33
            %





(1)
            The
                number shares beneficially owned by Crystal Capital Partners Corporation
                are controlled equally by Peter Gallic, Fabrizzio Busso Campana and
                Peter
                Dugan. Total shares include one third of shares owned by Crystal
                Capital
                Partners Corporation.




(2)
            The
                number shares beneficially owned by Crystal Capital Partners Corporation
                are controlled equally by Peter Gallic, Fabrizzio Busso Campana and
                Peter
                Dugan. Total shares include one third of shares owned by Crystal
                Capital
                Partners Corporation.




(3)
            The
                number shares beneficially owned by Crystal Capital Partners Corporation
                are controlled equally by Peter Gallic, Fabrizzio Busso Campana and
                Peter
                Dugan. Total shares include one third of shares owned by Crystal
                Capital
                Partners Corporation.




(4)
            The
                number of shares beneficially owned by Mr. Salerno are held by
                Hillcrest Financial LLC of which Mr. Salerno has voting
                control.




(5)
            The
                number of shares beneficially owned by all officers and directors
                as a
                group includes 1,960,000 shares of common stock owned by Crystal
                Capital Partners Corporation.




**Item
      12** . **Certain
      Relationships and Related Transactions** .




We
      recently accepted the resignation from Mr. Peter Dugan from his management
      position as Vice President, Business Development, however, Mr. Dugan
      remains on the Board of Directors. We expect to execute a Consulting Agreement
      with Mr. Dugan by the end of our second fiscal quarter whereby he will
      continue to provide service and support for the Company’s ongoing marketing
      efforts.




During
      the period ended July 31, 2007, Crystal Capital Partners, LLC, which is
      controlled by Peter Dugan, one of our directors, Peter Gallic, our Chief
      Financial Officer and one of our directors, and Fabrizzio Busso-Compana, our
      Chief Executive Officer and one of our directors, made advances to Crystal
      Hospitality Holdings, Inc., a wholly-owned subsidiary of ours. As of July 31,
      2007 the balance of the advances, including all principal and interest, is
      $291,709. The advances bear interest at 5% and each advance is due one year
      from
      issuance.




16




**Item
      13** **.** **Exhibits
      and Reports on Form 8-K** **.**




(a) 
      Exhibits - The following exhibits are attached to this report on Form 10KSB
      or are incorporated by reference:





**Incorporated
                by Reference To****Exhibit**
              **No.**
            
            **Description**
            
            **Company’s**
              **Form**
            
            **Filed**
            
            **Exhibit**
              **Number**
            
            **Filed**
              **Herewith**2.1
            
            Agreement
                and Plan of Merger dated August 23, 2005 by and among the Company,
                Objective Spectrum, Inc., and the shareholders of Objective
                Spectrum, Inc.
            
            8-K
            
            08/25/05
            
            2.12.2
            
            Agreement
                and Plan of Merger dated April 17, 2005 by and among the Company,
                Crystal Hospitality Holdings, Inc., MRI Acquisition Corp II, and the
                shareholders of Crystal Hospitality, Inc.
            
            8-K
            
            04/21/06
            
            2.23.1
            
            Certificate
                of Incorporation of Company.
            
            8-K
            
            08/14/03
            
            3.13.2
            
            Bylaws
                of Company.
            
            8-K
            
            08/14/03
            
            3.24.1
            
            Form of
                Securities Purchase Agreement dated June 30, 2006 among the Company
                and certain investors
            
            8-K
            
            07/07/06
            
            4.14.2
            
            Form of
                Stock Purchase Warrant dated June 30, 2006 issued by the Company to
                certain investors
            
            8-K
            
            07/07/06
            
            4.24.3
            
            Form of
                Registration Rights Agreement dated June 30, 2006 among the Company
                and certain investors
            
            8-K
            
            07/07/06
            
            4.34.4
            
            Form of
                Callable Secured Convertible Note dated June 30, 2006 issued by
                the Company to certain investors
            
            8-K
            
            07/07/06
            
            4.44.5
            
            Form
                of Common Stock Purchase Warrant dated May 2, 2006 issued by the
                Company to certain investors
            
            8-K
            
            05/09/06
            
            4.54.6
            
            Form
                of Common Stock Purchase Warrant dated May 2, 2006 issued by the
                Company to certain investors
            
            8-K
            
            05/09/06
            
            4.610.1
            
            2003
                Equity Compensation Plan of Company.
            
            8-K
            
            08/14/03
            
            10.110.2
            
            Form of
                Security Agreement dated June 30, 2006 among the Company and certain
                investors
            
            8-K
            
            07/07/06
            
            10.210.3
            
            Form of
                Intellectual Property Security Agreement dated June 30, 2006 among
                the Company and certain investors
            
            8-K
            
            07/07/06
            
            10.323.1
            
            Consent
                of Scharf Pera & Co., PLLC
            
            
            
            
            
            23.1
            
            X31.1
            
            Section 302
                Certification of Principal Executive Officer
            
            
            
            
            
            
            
            X31.2
            
            Section 302
                Certification of Principal Financial and Accounting
                Officer
            
            
            
            
            
            
            
            X32.1
            
            Section 906
                Certifications
            
            
            
            
            
            
            
            X




(b) Reports
      on Form 8-K. No reports on Form 8-K were filed during the last quarter
      of the period covered by this report except.




**Item
      14.**  **Principal
      Accounting Fees and Services** **.**




***Audit
      Fees***




We
      incurred fees of $25,000 from Scharf Pera & Co., PLLC for the audit of our
      annual financial statements for the fiscal year ending July 31,
      2007.




***Audit
      Related Fees***




There
      were no fees billed by our auditors in our last two fiscal years for
      professional services rendered in connection with assurance and related services
      that are reasonably related to the performance of an audit or review of our
      financial statements.




***Tax
      Fees***




There
      were no fees billed by our auditors in our last two fiscal years for tax
      compliance, tax advice, or any tax planning.




***All
      Other Fees***




There
      were no fees billed by our auditors in our last two fiscal years for products
      and services other than those reported above.




17




**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the
      registrant caused this Report to be signed on its behalf by the undersigned,
      thereunto duly authorized.





Dated:
                November 16, 2007
            **CRYSTAL
                INTERNATIONAL**
              **TRAVEL
                GROUP, INC.**By:
            /s/
                Peter DuganPeter
                DuganChief
                Executive Officer and President




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the registrant and in the
      capacities and on the dates indicated.





**Signature**
            
            **Title**
            
            **Date**/s/
                Peter Dugan
              Peter
                Dugan
            
            Chief
                Executive Officer and Director (Principal Executive
                Officer)
            
            November
                16, 2007/s/
                Hank Cohn
              Hank
                Cohn
            
            Director
            
            November
                16, 2007/s/
                Fabrizzio Busso-Campana
              Fabrizzio
                Busso-Campana
            
            Director
            
            November
                16, 2007/s/
                Peter Gallic
              Peter
                Gallic
            
            Chief
                Financial Officer and Director (Principal Financial
                Office)
            
            November
                16, 2007/s/
                Frank Salerno
              Frank
                Salerno
            
            Director
            
            November
                16, 2007/s/
                Anthony Soich
              Anthony
                Soich
            
            Director
            
            November
                16, 2007




18