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




**WASHINGTON,
      D.C. 20549**




**FORM 10-KSB/A**





**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,
                2006**




**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,
      2006** was
      $ **6,628**




As
      of
      October 31, 2006, the aggregate market value of the shares of common stock
      held by non-affiliates of the Registrant issued and outstanding on such date
      was
      $558,700. This figure is based on the closing sales price of $0.085 a share
      of
      the Registrant’s common stock on November 13, 2006.




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





**Common
                Stock, $.0001**
            **12,347,946**(Class)
            (Outstanding
                at October 31, 2006)




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 July 2003. 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, Crystal 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 Holidays, 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**




We
      are a
      development stage business.




We
      are a
      hospitality company that provides multiple travel products and services to
      including but not limited to air, car, cruise and hotel reservations, tours
      and
      excursions, travel documentation assistance. Our goal is to merge the knowledge,
      reliability and human touch of a sales team of travel professionals with
      technology available, while striving to offer excellent customer service and
      ease, speed and flexibility of online travel. We have assembled a management
      team of professionals with extensive experience in the travel industry to grow
      and manage the business.




This
      team
      has on average over 20 years of experience in the industry.
      Mr. Fabrizzio P. Busso-Campana’s resume includes senior level
      positions for Club Med, Celebrity Cruises, Royal Caribbean Cruise Lines and
      MGM
      Grand Corporation. Ms. Teresa Rae Hanneman’s resume includes MGM Grand
      Corporation, CheapSeats, and senior level positions within Club Med. Mr. Peter
      Wright’s resume includes senior level positions with The CMI Network, and Apple
      Vacations. Mr. Richard Sardiello’s resume includes senior level positions with
      ATA airlines and Club Med.




Our
      business plan is two fold. We are assembling three key components of a travel
      company. These include (i) the creation of a nationally recognized
      hospitality brand with customers who are actively buying travel products;
      (ii) a fully licensed travel agency 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, customer service,
      and (iii) a diversified product offering of travel products. Second, we
      intend to grow organically through the expansion of travel products. Through
      the
      acquisition of SunTrips’ brand name and other intellectual property, we came
      into possession of a well recognized travel brand with 29 years of history
      and a
      potential customer database of 270,000 members.




2




In
      August, 2006, we purchased for $125,000 in cash all of the outstanding stock
      of
      a licensed travel agency doing business as The Travel House, located in Old
      Bridge, New Jersey, which now serves as an established call center for the
      fulfillment of the travel sales. 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. We are in the process of launching a new travel
      product specifically designed for recurring travel consumers and has created
      a
      division that will serve the Meetings, Incentives and Corporate Travel segments.
      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 its products. We expect to attract these individuals to the
      company by offering attractive commission and benefits programs.




Integral
      to our plan is a focus on personal interaction with our customers. We place
      emphasis on offering a high service level to customers to counter the current
      industry trend of moving towards online sales.




Prior
      to
      the purchase of the SunTrips assets by the Crystal Hospitality
      Holdings, Inc., SunTrips was owned by FS SunTours and was a large tour
      operator in the United States based in San Jose, California serving the Northern
      California market. FS SunTours suspended SunTrips’ tour operation in February of
      2006 due to a variety of operational issues. Specifically, the management of
      FS
      SunTours failed to implement a fuel surcharge in 2005 despite rapidly increasing
      fuel costs. To avoid the same pitfalls that were experienced by Suntrips, we
      intend to closely monitor all costs and expenses associated with travel
      products, as well as monitor the market for changes in customer buying patterns,
      and lastly be proactive to changes in the supply chain form vendors. We intend
      to leverage the SunTrips intellectual property (brand name, database, sales
      access points) and believes that it will be able to recapture SunTrips
      historical business.




**Business
      Strategy**




Our
      business strategy centers around integrating modern marketing and sales tools
      and techniques with traditional service elements currently found in the travel
      sector. We use internet vehicles to capture potential customer attention, then
      directing the prospective clients to our call centers and use travel specialists
      to close on sales. This approach is contrary to the industry’s online booking
      model prevalent in the market today. Our business philosophy places a high
      value
      on personal interaction with customers.




Our
      business strategy is as follows:




·
            Leverage
                the current SunTrips brand;




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




·
            Expand
                our product and service offerings worldwide through the introduction
                of
                new travel products and
                destinations.




**Leverage
      the Current SunTrips Brand.** SunTrips was established over 29 years ago in San Jose, California. Prior
      to discontinuing operations last year, during the fiscal years 2001 through
      2004
      it had flown an average of 135,000 passengers per year on charter tour packages
      to The Azores, Costa Rica, Mexico and Hawaii. During its existence and up to
      the
      time of our purchase of the intellectual property, SunTrips has flown over
      4,000,000 passengers to date, and SunTrips’ active customer list consists of
      270,000 passengers who regularly buy travel either through the call center
      or
      via the web site. Last year, 56% of SunTrips travelers bought two or more
      vacations per year.




We
      believe that the failure of SunTrips was caused by its prior managements change
      to the selling of discounted air fare as a stand alone product rather than
      focusing its efforts on selling complete tour packages to its customers,
      including air fare, hotel and ground transportation. The selling of air fare only
      products became a significantly higher percentage of SunTrips’ business and
      caused it to lose margin obtained from the sale of an entire tour package.
      In
      addition, the failure to increase the pricing for air fare only products during
      a period of rapidly escalating operating cost, caused by increase fuel
      surcharges, led to significant operating losses for SunTrips. SunTrips has
      not
      been operational as a tour operator since March 2006 and only has third
      party tour package products available. We have had only limited sales of such
      products but have not obtained material revenue from any such sales, averaging
      less than $2,500 per month.




3




The
      Suntrips intellectual property includes the following:




**Toll
      Numbers:** (800) 357-2400, (800) 464-0529, (800) 464-2719,
      (800) 497-3117, (800) 497-3171, (800) 497-8990,
      (800) 786-1785, (800) 786-1809, (800) 786-1810,
      (800) 786-2729, (800) 786-3279, (800) 786-3293,
      (800) 786-4357, (800) 786-4477, (800) 786-7253,
      (800) 786-8288, (800) 786-8747, (800) 786-8818,
      (800) 786-8820, (800) 786-8828, (800) 786-8890,
      (866) 438-6786, (866) 558-3696, (877) 561-5403,
      (877) 561-5404, (877) 561-5405, (877) 786-1847
      (877) 786-4292, (877) 786-4294, (877) 786-4777,
      (877) 834-6937, (877) 834-6940, (888) 238-0524,
      (888) 238-0525, (888) 266-5847 (888) 786-1388,
      (888) 786-3293, (888) 786-4733, (888) 786-5484
      (888) 786-8818, (888) 847-7737, (888) 888-5019,
      (888) 888-5024 (888) 888-5026, (888) 888-5030




**URL / Domain
      Names: www.suntrips.com, www.snow-trips.com, www.snow-trips.net,
      www.snowtrips.net, www.oturl.com, www.oturl.net, www.oturl.biz, www.oturl.info,
      www.suntripsodyssey.com, www.suntripsodysseymagazine.com, www.suntripspass.com,
      www.suntripspass.net, www.suntripspass.org, Registered
      Brands / Trademarks: SUNTRIPSTM, NOBODY BEATS SUNTRIPSTM, VAMONOSTM, BOOK
‘EM FARESTM, SLIP INTO SOMETHING A LITTLE MORE COMFORTABLETM, PIPELINE TO
      PARADISETM, HOT DEALS UNDER THE SUNTM, SNOWTRIPSTM, SUNSATIONALTM, GO
      MONTM**




To
      capitalize on the SunTrips intellectual property, we are initiating a strategic
      sales and marketing push into the Northern California market via the its
      database of SunTrips customers, as well as supporting the travel agents
      community through its preferential agreements with industry suppliers. The
      initial focus will be to the following destinations; Mexico and Hawaii as well
      as gradually expanding to destinations in the Caribbean, Asia/Pacific and
      seasonal markets like Costa Rica and Azores to follow. Unlike SunTrips’ prior
      operations, the product offering will focus on supplying travel packages using
      preferential and contracted rates on preferred suppliers rather than via charter
      aircraft. Other proprietary product offerings such as airline and rental car
      packages catered to time share transfers will be directed initially to this
      database of customers and will be designed with around there traditional travel
      purchases.




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
      overcome any objections that stem from the failure of Suntrips’ former
      owners.




**Expand
      our operations to include Meetings & Incentive, Special Event Planning
      and Corporate Travel Businesses.** As
      sellers of leisure travel, we have the ability to offer attractive packages
      to
      corporations for meeting, incentive, and special event programs by leveraging
      its bulk buying power. We have formed a Meeting & Incentive and
      Corporate Travel Services division and have hired an industry professional
      to
      establish and grow this segment of the business. The Meeting &
Incentive Groups will be offered via a corporate sales force and will be
      fulfilled through in-house sales agents.




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 corporation,
      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.




4




To
      effectively expand this segment of our business, we will require the
      establishment of a solid corporate clientele ranging from medium and large
      size
      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.




**Expand
      our Product and Service Offerings.** We
      believe a majority of our revenues will come from transactions involving the
      sale of airline tickets and the booking of hotel reservations, either as
      stand-alone products or as part of package transactions. We are working to
      expand our packaged product line as these sales results in higher revenue per
      transaction, and we also seek to continue diversifying our revenue mix beyond
      core air and hotel products to car rental, destination services, cruise and
      other offerings.




We
      intend
      to continue investing in and growing our domestic points of sale. We anticipate
      launching an innovative Home Based Agent (HBA) program to support our strategy
      of returning to the traditional travel agent model. These Home Based Agents
      will
      operate full service travel agencies from remote locations. Our program will
      allow for travel agents to work from their home office or a satellite office
      and
      have full access to the IT infrastructure that the company has established
      (telecommuting) as well as all administrative support. HBA’s will be provide all
      travel products to include (but not limited to) transportation, hotel
      accommodations, packaged tours and cruises that are branded with either the
      company’s own “Sun Trips” brand or with other travel vendors, for instance i.e.
      cruise operators. Our plan combines the strength of the traditional store front
      setting with an extensive sales force of seasoned travel experts in the field
      focusing on the grassroots market.




Future
      launches may occur through internal growth or through acquisition of third
      party
      brands and businesses. We currently do not have additional planned acquisitions,
      however should attractive candidates arise we we will evaluate an acquisition
      at
      that time, including whether we have adequate resources, including cash, to
      effectively integrate and operate an acquisition.




To
      induce
      these agents to join the Crystal team, we will need to develop and execute
      an
      innovative compensation plan that encompasses salary, commissions and other
      benefits as well as ongoing product education, and infrastructural
      administrative support. Our goal is to have 50 HBAs in place by the end of
      2007.




**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.




5




Our
      marketing channels will primarily include direct and/or personalized traveler
      communications, search engine marketing and online and offline advertising.
      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 its website and technology platform 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 its brands is a critical component of
      our
      efforts to compete. We will differentiate its brands from competitors primarily
      on the fact that it is moving away from the traditional industry models of;
      the
      stand alone travel agency, the traditional charter operator, and the corporate
      travel, meetings and incentives house towards a horizontally integrated group
      of
      companies that will sell tour packages, stand alone travel products and
      corporate travel services on a national basis. An overall redirect of the
      marketing efforts has been implemented to develop a strong corporate brand
      identity to communicate a “look and fell” that will effectively be spread
      throughout the family of companies. Our strategy to offer a limited selection
      of
      scheduled air and hotel packages in which only certain hotel chains will be
      offered (qualified inventory) reflects the strategic alliances that are both
      in
      place and being sought. The selection criteria of the hotels centers on
      experiential data garnished from the travel agent and hospitality community.
      Primary qualification is to be for a 3-4 star hotels that offer high-quality
      amenities and service and have a sterling reputation for consistency. The target
      customer for this segment is mid-income level consumer looking for a vacation
      that is superior to first-rate but at a value.




**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 (DOT), Federal Aviation
      Administration (FAA), 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.




6




As
      we
      continues to expand 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
      July 31, 2005 to July 31, 2006, we completed the re-alignment of our
      core business and made further changes to our overall employee head
      count.




As
      of
      July 31, 2006 we have broken down our employee under the
      following:




Five
      work
      directly within CINT.




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




**DESCRIPTION
      OF PROPERTY**




We
      do not
      own any real property. Our corporate offices are located at in temporary space
      at 2100 Headquarters Plaza, 10 th Floor,
      Morristown, NJ 07960, and are comprised of approximately 1,500 square feet.
      We currently have fulfilled our sub-lease requirements and now are sub-leasing
      month by month at $2,850 per month. We believe that this facility is sufficient
      to meet our current requirements, until completion of new office space within
      the same building.




Upon
      completion of the build out, we plan to sublease approximately 1,679 square
      feet
      of space 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 of the Company. The
      sublease will provide 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
      July 26, 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.




On
      September 20, 2006 in the Circuit Court of the Seventh Judicial Circuit in
      and for St. Johns County, Florida, Paige Bendixsen, a former executive
      officer of ours, filed a Summons for a demand for jury trial alleging that
      from
      the period beginning is 2003 to date, we have breached a number of agreements
      between Mr. Bendixson and us, including an agreement and plan of merger, an
      employment agreement and a settlement agreement. Mr. Bendixsen is seeking
      no less than $75,000 in damages. We believe this suit is 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, 2006.




7




**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.





**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
            
            
            0.25







(1)  On
      July 29, 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, 2006, there were approximately 600 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, 2006 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 the Company completed a reverse merger with Crystal Hospitality
      Holding, Inc. (Crystal).  The shareholders of Crystal acquired
      approximately 50% of the voting shares of the Company.  As discussed in the
      Liquidity and Capital Resources section above, the new management has arranged
      for short term financing and is actively working to complete a new equity
      offering.  No other equity in the Company has been sold.  Management
      of the Company has been able to stabilize the operations of the Company and
      no
      new defaults on existing Mobile Reach debts have occurred.  Significant
      market risk exists as a result of the previously existing financial issues
      of
      the Company and the change in ownership and business focus.





As
      of the
      date of this Annual Report, we have not gained complete control over the
      intangible assets associated with our purchase of FS SunTours’ intellectual
      property. The customer database has not been delivered; the phone numbers and
      the trademarks are still in control of FS SunTours. Therefore, we recorded
      an
      asset impairment charge of $4,896,666 in relation to these assets for the year
      ended July 31, 2006. Our lack of complete control over the SunTrips assets
      has
      had a material impact on our business plan relating to the use of these assets.
      We have been able to operate and derive marginal revenue from the web portal.
      We
      are attempting to secure complete control of the intangible assets. On December
      8, 2006, the United States Bankruptcy Court of the Western District of Texas
      entered an order requiring the return of the SunTrips assets in question, which
      we expected to occur no later than December 31, 2006 but due to the complexity
      of the bankruptcy case this has not yet occurred. It is difficult to estimate
      when the assets will be returned. As of the date of this filing we have serious
      concerns as to whether we will be able to acquire any of the additional assets.
      In the event the assets are not returned, our operations will continue to be
      materially adversely affected and it increases the likelihood we will not
      continue as a going concern.





Due
      to
      the asset impairment and in attempt to maximize shareholder value, we have
      been
      developing a product we call “IntelliFares”. IntelliFares is owned by
      IntelliFares Limited, a registered company in the Democratic Republic of Ireland
      and is a wholly-owned subsidiary of ours. IntelliFares offers travelers who
      participate in predictable, recurring travel patterns, such as timeshare or
      second homeowners, college students, business travelers and the like will be
      able to purchase five years of future air travel at or below comparable open
      market air ticket prices, and fix that price for the five year period, by
      contracting with IntelliFares to arrange for the purchase of airfare on their
      behalf, after depositing the full five years of payment with
      IntelliFares .




Sources
      of Revenue




Revenues
      in fiscal year 2006 are from the new operating entity and resulted from travel
      related services.  In 2005 revenues were derived from the sale of software
      licenses, services and maintenance as well as equipment (hardware). License
      and
      maintenance revenues are normally generated from licensing of our products
      to
      end-users and resellers. Service revenues are generated from consulting services
      sold to end-users and software subscription services provided to customers.
      As
      described below:





**Year Ended****Sources of Revenue**
            
            **July 31, 2006**
            
            **July 31, 2005**Software
                Licenses, maintenance and support fees
            
            $
            0
            
            $
            405,796Professional
                Services
            
            
            0
            
            
            113,913Product
                sales (hardware)
            
            
            0
            
            
            87,665Travel
                commissions
            
            
            6,628
            
            
            0Totals
            
            $
            6,628
            
            $
            607,374




8




CRITICAL
      ACCOUNTING POLICIES




In
      preparing the consolidated financial statements in conformity with accounting
      principles generally accepted in the United States, the Company makes 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 its consolidated balance sheet. The Company believes that the
      estimates, assumptions and judgments involved in the accounting policies
      described below have the greatest potential impact on its consolidated financial
      statements. The Company considers these to be its critical accounting
      policies.  The policies described below are not intended to be a
      comprehensive list of all the Company’s 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. The Company’s 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,
      2006, represents the results of operations for Crystal International for the
      period December 8, 2006, (date of inception) through July 31, 2006, and the
      results of operations for Mobile Reach International, Inc. for July 31, 2006
      only. Since Mobile Reach International’s subsidiary Mobile Reach Technologies,
      Inc. is the only current operating subsidiary, for discussion purposes, Mobile
      Reach International’s results of operations prior to July 31, 2006 will be
      included in the following sections.




9




Year
      ending July 31, 2006 Compared to July 31, 2005




REVENUES:




Our
      revenues in fiscal year 2006 was generated from the travel related services
      provided as compared to fiscal year 2005 when revenues were primarily comprise
      of licensing and services fees, which we recognize as revenue when the product
      or services are provided to the client.  The unaudited consolidated
      financial data; is provided for comparative purpose only and does not claim
      to
      be indicative of the actual financial position or results of the Company’s carry
      forward operations.




GENERAL
      AND ADMINISTRATIVE EXPENSES:




Combined
      general and administrative expenses of Crystal and Mobile Reach International
      for the year ended July 31, 2006 was $2,155,769 representing an increase of
      44.8% over Mobile Reach International’s $1,488,735 for the nine-month period
      ended April 30, 2005.  General and administrative consisting primarily of
      compensation, Professional fees including both legal and accounting, costs
      associated with Securities agreements and compliance reporting. The increase
      in
      general and administration reflects the increase in professional fees associated
      with the merger with Crystal Hospitality Holdings, Inc. (Crystal), Crystal’s
      acquisition of certain assets of FS SunTours, Inc., and the license agreement
      with Spectrum Mobile(described above).




LIQUIDITY
      AND CAPITAL RESOURCES




As
      of
      July 31, 2006, the Company had an accumulated deficit of $11,027,335 and a
      working capital deficit of $2,550,640. Our independent auditors, who audited
      our
      financial statements for the period ended July 31, 2006, have expressed
      substantial doubt about the Company’s ability to continue as a going concern
      given our recurring losses from operations, negative working capital and net
      stockholders’ deficit. In addition, the Company must deal with the litigation
      and claims described in Part II Item I of this Form 10-KSB under the heading
      “Legal Proceedings.”




During
      the fourth quarter of the fiscal year ending July 31, 2006 management has
      arranged for a short-term interim credit facility totaling $500,000.  In
      addition to this facility, management is actively
      working on completing a new convertible debt offering totaling $3,000,000 to
      4,000,000, including conversion of various pre-existing obligations, for which
      a
      term sheet has been signed, and for which the company has received a portion
      of
      the funding.  A portion of the funding received was used to repay the
      short-term credit facility.  The Company has filed a registration statement
      covering the securities to be issued upon conversion of the debt.  Once the
      registration statement is declared effective, the Company expects to receive
      the
      balance of the interests sold in the offering of $735,000.  Once this
      balance is received management believes the Company will have adequate cash
      flow
      to fund operations for at least the next 12 months.




10




OTHER
      SIGNIFICANT MATTERS




The
      membership of the board of directors has changed as a result of the Crystal
      merger.  A former employee member of the board resigned and terminated his
      employment with the Company.  Another former employee terminated his
      employment but remained on the board.  The Company filled the openings on
      the board with 3 new employee members and 1 new independent
      director.




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 Two Million ($2,000,000) Dollars, of which Seven Hundred Thousand
      ($700,000) Dollars was received by the Company on July 3, 2006, and an
      additional Six Hundred Thousand ($600,000) Dollars 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.  The Company expects to receive the remaining balance of Seven
      Hundred Thousand ($700,000) Dollars upon the registration statement being
      declared effective, which the Company anticipates will occur within the next
      30
      days.




On
      August
      3, 2006, the Company executed an additional financing agreement for a total
      of
      One Hundred Thousand ($100,000) Dollars, on the same terms and conditions as
      the
      above and received an additional Sixty Five Thousand ($65,000) Dollars. 
The Company expects to receive the remaining balance of Thirty Five Thousand
      ($35,000) Dollars upon the registration statement being declared
      effective.




11




**Risk
      Factors** :




You
      should carefully consider the risk factors described below. If any of the
      following risk factors actually occur, our business, prospects, financial
      condition or results of operations would likely suffer. In such case, the
      trading price of our common stock could fall resulting in the loss of all or
      part of your investment. You should look at all these risk factors in total.
      Some risk factors may stand on their own. Some risk factors may affect (or
      be
      affected by) other risk factors. You should not assume we have identified these
      connections. You should not assume that we will always update these and future
      risk factors in a timely manner. We are not undertaking any obligation to update
      these risk factors to reflect events or circumstances after the date of this
      report or to reflect the occurrence of unanticipated events.




**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, 2006
      reflect substantial losses. Specifically, we have sustained substantial
      operating losses in the twelve months ended July 31, 2006 and the twelve
      months ended July 31, 2005 of $11,027,335 and $970,881, respectively. As of
      July 31, 2005 we are in default on certain notes payable, payroll taxes and
      other payables. In addition, we have used substantial amounts of working capital
      in our operations. Further, at July 31, 2006, our current assets were
      $183,128 and current liabilities were $2,717,772 our accumulated deficit as
      of
      July 31, 2006 was $11,027,335.




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




**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.




12




**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),




·
            increases
                in fuel prices,




·
            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




·
            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.




13




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.




**Our
      failure to recapture and retain travelers in a cost-effective manner could
      adversely affect our business, financial condition and results of
      operations.**




Our
      long-term success will depend on our ability to increase the overall number
      of
      traveler transactions in a cost-effective manner. In order to increase the
      number of traveler transactions, we must capture repeat business from existing
      travelers and also attract new visitors to our websites and other distribution
      channels and convert these visitors into paying travelers. Due to problems
      associated with the SunTrips brand in the past, this may not be possible. Prior
      to our purchase, the SunTrips business failed and on or about March 2006
      and closed operations at that time. We are not currently offering packaged
      tour
      products under the SunTrips name to its prior customers. Our meetings,
      incentives and corporate travel business is dependent on enlisting new corporate
      travelers and in attracting their travel booking activity to our corporate
      travel websites, and planning services specialists as well as retaining existing
      corporate travelers.




**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 Fabrizzio
      Busso-Campana, our Chief Executive Officer and President, will be necessary
      as
      he brings expertise in the areas of strategic and market planing and
      management.




Personnel
      includes; Fabrizzio P. Busso-Campana who has extensive budgeting, strategic
      and market planning experience from Club Med, Celebrity Cruises, Royal Caribbean
      Cruise Lines and MGM Grand Corporation, Teresa Rae Hanneman has extensive tour
      and travel operations experience from MGM Grand Corporation, CheapSeats, and
      Club Med, Peter Wright has extensive management experience from The CMI Network,
      and Apple Vacations, Peter Gallic has extensive product development and
      financial management experience and Richard Sardiello has extensive
      transportation operations and sales experience with ATA airlines and Club
      Med.




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.





14




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.




**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.




15




**Our
      founders, officers and directors beneficially own approximately 50% 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
      October 31, 2006, our founders, officers and directors beneficially owned
      approximately 50% 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;




·   amend or
      prevent amendment of our articles of incorporation or bylaws;




·   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.




16




**CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**
 **(FORMERLY
        MOBILE REACH INTERNATIONAL, INC.)**
 **(A
        Development Stage Company)**
 **INDEX
        TO FINANCIAL STATEMENTS**
 **JULY
        31, 2006**
 PageINDEX
                F1INDEPENDENT
                    AUDITORS’ REPORT
                F2FINANCIAL
                    STATEMENTS:Consolidated
                    Balance Sheet
                F3Consolidated
                    Statement of Income
                F4Consolidated
                    Statement of Changes in Stockholders’ Deficit
                F5Consolidated
                    Statement of Cash Flows
                F6
                    - F7Notes
                    to Consolidated Financial Statements
                F8
                    - F21
  
 Scharf
                    Pera & Co., PLLC
                  Certified
                    Public Accountants
                  4600
                    Park Road
                  Suite
                    112
                  Charlotte,
                    North Carolina 28209
                  704-372-1167
                  Fax:
                    704-377-3259To
                    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,
        2006, and the related consolidated statements of income, stockholders’ deficit,
        and cash flows for the period December 8, 2005 (date of inception) to July
        31,
        2006. 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, 2006, and the results of its operations
        and
        its cash flows for December 8, 2005 (date of inception) to July 31, 2006,
        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 1 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
 November
        10, 2006
  (F2)
   **CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**
 **(FORMERLY
        MOBILE REACH INTERNATIONAL, INC.)**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        BALANCE SHEET**
 **JULY
        31, 2006**
  **ASSETS****CURRENT
                  ASSETS:**Cash
              
              $
              35,489Accounts
                  receivable
              
              
              -Prepaid
                  insurance
              
              
              106,643Deposits
              
              
              25,000Total
                  current assets
              
              
              
              
              
              167,132**PROPERTY
                  & EQUIPMENT -**net
                  of accumulated depreciation
              
              
              
              
              
              15,996**INTANGIBLE
                  ASSETS -**net
                  of accumulated amortization
              
              
              
              
              
              -$
              183,128
 **LIBILITIES
                  & STOCKHOLDERS’ EQUITY****CURRENT
                  LIABILITIES:**Current
                  portion long-term debt
              
              $
              30,000Short-term
                  notes payable
              
              
              264,169Accounts
                  payable
              
              
              816,261Notes
                  payable - related parties
              
              
              286,038Accrued
                  liabilities
              
              
              1,321,3042,717,772**LONG
                  TERM LIABILITIES:**Long-term
                  debt
              
              
              5,021,307Convertible
                  debentures
              
              
              1,389,6616,410,968**STOCKHOLDERS’
                  EQUITY:**Preferred
                  stock; $.0001 par value; 100,000,000 shares authorized
              
              
              -Common
                  stock; par value $.001; 500,000,000 shares authorized, 11,784,813
                  issued
                  and outstanding, 58,463 shares to be issued
              
              
              23,012Paid-in
                  capital
              
              
              2,058,711Deficit
                  accumulated during development stage
              
              
              (11,027,335
              )(8,945,612
              )$
              183,128
 **See
          Notes to Consolidated Financial Statements**
  (F3)
  **CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**
 **(FORMERLY
        MOBILE REACH INTERNATIONAL, INC.)**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENT OF INCOME**
 **PERIOD
        FROM DECEMBER 8, 2005 (DATE OF INCEPTION)**
 **TO
        JULY 31, 2006**
  Cumulative
                  from December 8, 2005 (date of inception) to July 31, 2006**REVENUE:**License
                  and fees
              
              $
              6,6286,628**COST
                  AND EXPENSES:**Cost
                  of goods sold
              
              
              -General
                  and administrative expenses
              
              
              2,155,769Depreciation
                  and amortization expense
              
              
              126,235Loss
                  on impairment of intangible assets
              
              
              4,896,6667,178,670**OPERATING
                  INCOME**
              
              
              (7,172,042
              )**OTHER
                  INCOME (EXPENSES):**Interest
                  expense
              
              
              (1,377,982
              )(1,377,982
              )**NET
                  LOSS BEFORE INCOME TAXES**
              
              
              (8,550,024
              )**INCOME
                  TAX (EXPENSE) BENEFIT**
              
              
              -**NET
                  LOSS**
              
              $
              (8,550,024
              )**WEIGHTED
                  AVERAGE NUMBER OF SHARES**
              
              
              8,918,989**LOSS
                  PER SHARE - BASIC AND DILUTED**
              
              $
              (0.96
              )
 
 **See
          Notes to Consolidated Financial Statements**
  (F4)
 **CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**
 **(FORMERLY
        MOBILE REACH INTERNATIONAL, INC.)**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENT OF STOCKHOLDERS’ DEFICIT**
 **PERIOD
        FROM DECEMBER 8, 2005 (DATE OF INCEPTION)**
 **TO
        JULY 31, 2006**
  Shares
              
              Amount
              
              Paid-in
                  Capital
              
              Deficit
                  Accumulated during Development Stage
              
              TotalBalance
                  at December 8, 2005 (Date of inception)
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Common
                  shares issued in formation of Crystal Hospitality Holdings,
                  Inc.
              
              
              200
              
              
              23,012
              
              
              -
              
              
              -
              
              
              23,012Shares
                  exchanged for common shares of Mobile Reach International,
                  Inc.
              
              
              (200
              )
              
              -
              
              
              -
              
              
              -
              
              
              -Common
                  shares issued to Crystal Hospitality Holdings, Inc
                  stockholders
              
              
              7,100,000
              
              
              -
              
              
              -
              
              
              -
              
              
              -Common
                  shares owned by Mobile Reach International, Inc.
                  stockholders
              
              
              4,743,276
              
              
              -
              
              
              -
              
              
              -
              
              
              -Liabilities
                  in excess of assets received on reverse merger
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,477,311
              )
              
              (2,477,311
              )Fair
                  market value of warrants attached to short-term debt
                  issued
              
              
              -
              
              
              -
              
              
              68,000
              
              
              -
              
              
              68,000Fair
                  market valued of beneficial conversion feature of convertible
                  debentures
              
              
              -
              
              
              -
              
              
              1,990,711
              
              
              -
              
              
              1,990,711Net
                  loss
              
              
              -
              
              
              -
              
              
              0
              
              
              (8,550,024
              )
              
              (8,550,024
              )11,843,276
              
              $
              23,012
              
              $
              2,058,711
              
              $
              (11,027,335
              )
              $
              (8,945,612
              )
  **See
          Notes to Consolidated Financial Statements**
  (F5)
  **CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES (FORMERLY MOBILE REACH
        INTERNATIONAL, INC.)**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENT OF CASH FLOWS**
 **PERIOD
        FROM DECEMBER 8, 2005 (DATE OF INCEPTION)**
 **TO
        JULY 31, 2006**
  Cumulative
                  from December 8, 2005 (date of inception) to July 31, 2006**Net
                  loss**
              
              $
              (8,550,024
              )**Adjustments
                  to reconcile net income to net cash used in operating
                  activities:**Fair
                  value of warrants issued as interest expense
              
              
              68,000Beneficial
                  conversion feature of debentures issued
              
              
              1,039,661Loss
                  on impairment of intangibles
              
              
              4,896,666Debentures
                  issued for services
              
              
              250,000Depreciation
                  and amortization
              
              
              126,235Changes
                  in operating assets and liabilities:Increase
                  in other current assets
              
              
              (132,002
              )Increase
                  in accounts payable
              
              
              407,996Increase
                  in accrued expenses
              
              
              813,445Total
                  adjustments
              
              
              7,470,001**Net
                  cash used in operating activities**
              
              
              (1,080,023
              )**Cash
                  flows used in investing activities:**Cash
                  paid for purchase of property and equipment
              
              
              (17,231
              )**Net
                  cash used in investing activities**
              
              
              (17,231
              )**Cash
                  flows provided by financing activities:**Proceeds
                  from short-term notes
              
              
              500,000Payments
                  on short-term notes
              
              
              (400,000
              )Proceeds
                  from convertible debentures
              
              
              723,097Proceeds
                  from related party advances
              
              
              377,513Payments
                  on related party advances
              
              
              (90,879
              )Proceeds
                  from sale of stock
              
              
              23,012**Net
                  cash provided by financing activities**
              
              
              1,132,743**Net
                  increase in cash**
              
              
              35,489**Cash
                  - Beginning of period**
              
              
              -**Cash
                  - End of period**
              
              $
              35,489
 
 **See
          Notes to Consolidated Financial Statements**
  (F6)
 **CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES (FORMERLY MOBILE REACH
        INTERNATIONAL, INC.)**
 **(A
        Development Stage Company)**
 **SUPPLEMENTAL
        DISCLOSURES OF CASH FLOWS**
 **PERIOD
        FROM DECEMBER 8, 2005 (DATE OF INCEPTION)**
 **TO
        JULY 31, 2006**
 **Non-cash
                    activities:**Exchange
                    of debt for intangible assets
                
                $
                5,021,307Refinancing
                    of short-term debt to convertible debt
                
                
                100,000**Acquisition
                    of Mobile Reach International and Subsidiaries:**Assets
                    assumed:Cash
                
                $
                262Liabilities
                    assumed:Accounts
                    payable
                
                
                408,527Accrued
                    expenses
                
                
                507,859Short-term
                    debt
                
                
                294,169Long-term
                    and convertible debt
                
                
                1,267,0182,477,573Net
                    liabilities exceeding net assets
                
                $
                2,477,311
 
 **See
          Notes to Consolidated Financial Statements**
  (F7)
  **CRYSTAL
        INTERNATIONAL TRAVEL GROUP, INC. AND SUBSIDIARIES**
 **(FORMERLY
        MOBILE REACH INTERNATIONAL, INC.)**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **PERIOD
        FROM DECEMBER 8, 2005 (DATE OF INCEPTION)**
 **TO
        JULY 31, 2006**
   **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 is now a 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. The consolidated financial statements include the results from
        operations for CHH from December 8, 2005 (date of inception) through July
        31,
        2006, and the results from operations for Mobile Reach International, Inc.
        for
        April 30, 2006 through July 31, 2006.
  Subsequent
        to the share exchange, Mobile Reach International, Inc. changed its name
        to
        Crystal International Travel Group, Inc.
  **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 $11,027,335 for the period from December 8,
        2005 (date of inception) through July 31, 2006. Further, at July 31, 2006,
        the
        Company’s current liabilities exceeded current assets by $2,550,640. Based on
        these factors, the Company may not be able to continue as a going
        concern.
  (F8)
  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 also plans on additional financing through the issuance
        of convertible debentures. 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
        to
        Chatham, 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.
  **Development
        stage operations:**
  Since
        December 8, 2006 (date of inception), the Company has been concentrating
        its
        effort on raising capital and developing new travel related products for
        the
        retail market. 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.
  **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.
  (F9)
  **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, 2006, these
        intangibles were fully impaired.
  **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.
  **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 calculates loss per share in accordance with Statement of Financial
        Accounting Standards (“SFAS”) No. 128, “Earnings per Share”, which requires the
        presentation of basic and diluted earnings per share. Basic loss per share
        excludes dilution and is computed by dividing loss by the weighted-average
        number of common shares outstanding for the period. Diluted loss per share
        reflects the potential dilution that could occur if securities or other
        contracts to issue common stock were exercised or converted into common stock
        or
        resulted in the issuance of common stock that then shared in the earnings
        of the
        entity. Potential common shares are excluded from the computation of diluted
        earnings per share when a loss exists because the effect would be
        antidilutive.
  **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.
  (F10)
  **Fair
        value of financial instruments:**
  The
        Company’s financial instruments include cash, accounts 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.
  **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
        institution in the form of demand deposits.
  **Recent
        pronouncements:**
  In
        December 2004, the Financial Accounting Standards Board (“FASB”) issued a
        revision of SFAS 123 ("SFAS 123(R)") that requires compensation costs related
        to
        share-based payment transactions to be recognized in the statement of
        operations. With limited exceptions, the amount of compensation cost will
        be
        measured based on the grant-date fair value of the equity or liability
        instruments issued. In addition, liability awards will be remeasured each
        reporting period. Compensation cost will be recognized over the period that
        an
        employee provides service in exchange for the award. SFAS 123(R) replaces
        SFAS
        123 and is effective as of January 1, 2006. Compensation cost for stock options
        issued by MRI on March 16, 2006 was recognized prior to the merger with Crystal.
        The adoption of SFAS 123(R) is not expected to have a material impact on
        the
        Company’s current financial condition or results of operations.
  In
        December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
        Assets--An Amendment of Accounting Principles Board (“APB”) Opinion No. 29,
        Accounting for Nonmonetary Transactions". SFAS No. 153 eliminates the exception
        from fair measurement for nonmonetary exchanges of similar productive assets
        in
        paragraph 21(b) of APB Opinion No. 29, "Accounting for Nonmonetary
        Transactions," and replaces it with an exception for exchanges that do not
        have
        commercial substance. SFAS No. 153 specifies that a nonmonetary exchange
        has
        commercial substance if the future cash flows of the entity expected to change
        significantly as a result of the exchange. SFAS No. 153 is effective for
        fiscal
        periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not
        expected to have a material impact on the Company's current financial condition
        or results of operations.
  (F11)
   In
        March
        2005, the FASB issued FASB Interpretation (“FIN”) No. 47 - "Accounting for
        Conditional Asset Retirement Obligations - an Interpretation of SFAS 143
        (FIN
        No. 47). FIN No. 47 clarifies the timing of liability recognition for legal
        obligations associated with the retirement of a tangible long-lived asset
        when
        the timing and/or method of settlement are conditional on a future event.
        FIN
        No. 47 is effective no later than December 31, 2005. The adoption of FIN
        47 is
        not expected to have a material impact on the Company’s current financial
        condition or results of operations.
  In
        March
        2005, the SEC released SAB No. 107, "Share-Based Payments". The interpretations
        in SAB 107 express views of the SEC staff regarding the interaction between
        SFAS
        123R and certain SEC rules and regulations, and provide the staff's views
        regarding the valuation of share-based payment arrangements for public
        companies. In particular, SAB 107 provides guidance related to share-based
        payment transactions with non-employees, the transition from nonpublic to
        public
        entity status, valuation methods (including assumptions such as expected
        volatility and expected term), the accounting for certain redeemable financial
        instruments issued under share-based payment arrangements, the classification
        of
        compensation expense, non-GAAP financial measures, first-time adoption of
        SFAS
        123R in an interim period, capitalization of compensation to cost related
        to
        share-based payment arrangements, the accounting for income tax effects of
        share-based payment arrangements upon adoption of SFAS 123R, the modification
        of
        employee share options prior to adoption of SFAS 123R and disclosures in
        Management's Discussion and Analysis subsequent to adoption of SFAS 123R.
        SAB
        107 requires stock-based compensation be classified in the same expense lines
        as
        cash compensation for the same employees. The adoption of SAB 107 is not
        expected to have a material impact on the Company’s current financial condition
        or results of operations.
  In
        May
        2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,
        a
        Replacement of APB No. 20 and FASB 3 (SFAS No.154). SFAS No. 154 requires
        retrospective application to prior periods' financial statements of a voluntary
        change in accounting principle unless it is impracticable. APB Opinion No.
        20
        "Accounting Changes," previously required that most voluntary changes in
        accounting principle be recognized by including in net income of the period
        of
        the change
        the cumulative effect of changing to the new accounting principle. The adoption
        of SFAS 154 is not expected to have a material impact on the Company’s current
        financial condition or results of operations.
  In
        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans, an amendment of SFAS No.
        87, 88,
        106 and 132(r)”, which requires the Company to: (1) recognize in its statement
        of financial position the over-funded or under-funded status of its defined
        benefit postretirement plan measured as the difference between the fair value
        of
        plan assets and the benefit obligation, (2) recognize as a component of other
        comprehensive income, net of tax, the actuarial gains and losses and the
        prior
        service costs and credits that arise during the period but pursuant to FAS
        87
        and 106 are not recognized as components of net periodic benefit cost, (3)
        measure defined benefit plan assets and defined benefit plan obligations
        as of
        the date of its statement of financial position, (4) disclose additional
        information in the notes to financial statements about certain effects on
        net
        periodic benefit cost in the upcoming fiscal year that arise from delayed
        recognition of the actuarial gains and losses and the prior service costs
        and
        credits. This standard is effective for fiscal years ending after December
        15,
        2006. The adoption of SFAS 158 is not expected to have a material impact
        on the
        Company’s current financial condition or results of current
        operations.
  (F12)
  On
        July
        2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes -
        an Interpretation of FASB Statement 109”, which fundamentally changes the way
        that the Company will be required to treat its uncertain tax positions for
        financial accounting purposes. FIN No. 48 prescribes rules regarding how
        the
        Company should recognize, measure and disclose in its financial statements,
        tax
        positions that were taken or will be taken on the Company’s tax return that are
        reflected in measuring current or deferred income tax assets and liabilities
        for
        interim or annual periods. Differences between tax positions taken in a tax
        return and amounts recognized in the financial statements will generally
        result
        in an increase in a liability for income taxes payable, or a reduction in
        a
        deferred tax asset or an increase in a deferred tax liability. This
        interpretation is effective for fiscal years beginning after December 15,
        2006.
        Adoption of FIN 48 is not expected to have a material impact on the Company’s
        current financial condition or results of operations.
  **Note
        4 - Prepaid Expenses and Other Current Assets:**
  Prepaid
        expenses consist of prepaid insurance of $106,643 and deposit of
        $25,000.
  During
        July 2006, the Company entered into an agreement for the outright purchase
        of a
        full service travel agency for $123,500. The deposit of $25,000 represents
        earnest money on the purchase transaction completed subsequent to July 31,
        2006.
  **Note
        5 - Property and Equipment:**
  The
        principal categories and estimated useful lives of property and equipment
        are as
        follows:
  July
                  31, 2006
              
              Estimated
                  Useful LivesOffice
                  and computer equipment
              
              $
              17,231
              
              
              3
                  to 7 yearsLess:
                  accumulated depreciation
              
              
              (1,235
              )15,996
  **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”.
  (F13)
  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.
  **Note
        7 - Accrued Liabilities:**
  At
        July
        31, 2006, accrued expenses consisted of the following items:
  Salary
                  and wages payable
              
              $
              183,653Accrued
                  and withheld taxes
              
              
              499,171Accrued
                  interest
              
              
              181,813Accrued
                  service expense
              
              
              445,692Other
                  accrued expenses
              
              
              10,975Total
                  accrued expenses
              
              $
              1,321,304
  Accrued
        and withheld taxes primarily consist of delinquent payroll taxes withheld
        and
        accrued on employees of MRI. Penalties and interest calculated through July
        31,
        2006 are included.
  **Note
        8 - Short-Term Notes Payable:**
  With
        the
        Exchange Agreement discussed in Note 1, the Company assumed several short
        term
        notes in default. The balances on these 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
              
              $
              9,524Note
                  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.
              
              
              6,244Note
                  payable to former employee dated December 2004; bearing no interest
                  and no
                  specified repayment terms.
              
              
              12,740Note
                  payable to vendor dated July 2005; due in eleven monthly installments
                  of
                  $1,500; note is in default.
              
              
              15,888Notes
                  payable to former employees dated March 2006; due in a single payment
                  on
                  June 30, 2006; notes are in default.
              
              
              42,838Total
                  short-term notes payable
              
              $
              264,169
  (F14)
  **Note
        9 - Long-Term Debt:**
  In
        March
        2006, the Company entered into an agreement to purchase intangible assets
        (Note
        6) from another entity for seven annual installments of $1,200,000, or
        $8,400,000 in total payments. In lieu of cash payments directly to the seller,
        the Company can assume, pay or otherwise cause discharge, waiver, forgiveness
        or
        release of certain debt of the seller’s to other third parties. The result of
        obtaining these releases is to be a cumulative credit as payment on the existing
        debt agreement between the Company and the intangible assets seller.
  In
        March
        2006, the Company obtained its first debt release agreement. As stated in
        the
        agreement, the debt release was credited directly against the intangible
        asset
        price. The remaining balance of the debt, as well as the intangible discussed
        in
        Note 6, was discounted at five and a half percent to calculate the present
        value
        of the debt and asset. At July 31, 2006, long-term debt consisted of this
        single
        liability. Future principal payments required under the agreement are as
        follows:
  2007
              
              $
              -2008
              
              
              177,4792009
              
              
              918,1612010
              
              
              968,6602011
              
              
              1,021,936Thereafter
              
              
              1,935,071Total
              
              $
              5,021,307
  **Note
        10 - Convertible Debentures:**
  With
        the
        Exchange Agreement discussed in Note 1, the Company assumed liability of
        $475,000 of five percent convertible debentures that mature on March 15,
        2007.
        The debentures were convertible into the Company's common stock at a conversion
        price of $0.16 per share. In an effort to entice the debenture holders from
        this
        series of debentures to invest in the second series 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). In connection with these
        debentures, MRI issued 604,298 common stock purchase warrants at the original
        exercise price of $0.32 per share. However, as part of the settlement agreement,
        these warrants were also re-priced to $0.01 per share. The warrants expired
        March 31, 2006.
  (F15)
   Also
        with
        the Exchange Agreement discussed in Note 1, the Company received approximately
        $792,000 of 8% convertible debt from a March 2005 series. All holders of
        this
        issue subsequently entered into a securities purchase agreement whereby they
        cancelled all aspects of this debenture issue, converted their investment
        into
        the June 2006 issue discussed later and cancelled all attached warrants.
  In
        June
        2006, the Company began offering a new series of convertible debentures.
        This
        series required investors from the March 2005 series to invest a minimum
        of
        twenty-five percent over and above the value of their holdings. This series
        of
        convertible debentures matures in 2009 or three years from the date of the
        actual issuance and has an interest rate of five percent. This series has
        a
        variable conversion price that is fifty to sixty-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. In connection
        with this issuance, 5,028,553 warrants expiring in June and July 2013, with
        an
        exercise price of $0.50, were issued. Investors advancing new funds were
        issued
        10,500,000 warrants expiring in June and July 2013 with an exercise price
        of
        $0.50.
  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 paid-in capital.
  Under
        the
        Security Agreement attached to the debentures issued in June 2006, all of
        the
        Company’s assets are pledged as collateral.
  **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. Since
        the
        date of the Exchange agreement, no additional shares have been issued. Total
        shares outstanding at July 31, 2006 were 11,843,276 shares. Of this amount,
        approximately 58,463 shares are still to be issued.
  (F16)
  The
        Company is authorized to issue 100,000,000 shares of preferred stock. As
        of July
        31, 2006, no shares were issued or outstanding.
  **Note
        12 - Stock Options and Warrants:**
  Prior
        to
        the Exchange Agreement discussed in Note 1, all remaining MRI employees eligible
        to exercise options had signed settlement agreements waiving rights to any
        outstanding options. As a result, the Company no longer has any options
        outstanding.
  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.
  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.
  As
        of
        July 31, 2006, no warrants have been exercised.
  **Note
        13 - Loss Per Share:**
  A
        reconciliation of basic loss per share to diluted earnings per share is
        presented below:
  Net
                  Loss
              
              Shares
              
              Per
                  Share
                AmountPeriod
                  from December 8, 2005 (date of inception) through July 31,
                  2006:Basic
                  EPSLoss
                  available to common shareholders
              
              
              (8,550,024
              )
              
              8,918,989
              
              
              (0.96
              )Effect
                  of dilutive securitiesstock
                  options and warrants
              
              
              -
              
              
              -
              
              
              -Total
                  basic and diluted
              
              $
              (8,550,024
              )
              
              8,918,989
              
              $
              (0.96
              )
  (F17)
  **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, 2006:
  Current
              
              Long-Term
              
              TotalPeriod
                  ended July 31, 2006:Deferred
                  tax assets:Net
                  operating loss carryover
              
              $
              726,524
              
              $
              -
              
              $
              726,524Intangible
                  asset impairment
              
              
              -
              
              
              1,780,045
              
              
              1,780,045726,524
              
              
              1,780,045
              
              
              2,506,569Valuation
                  allowance
              
              
              (726,524
              )
              
              (1,780,045
              )
              
              (2,506,569
              )Net
                  deferred tax asset
              
              $
              -
              
              $
              -
              
              $
              -
  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
        period from December 8, 2005 (date of inception) through July 31, 2006 due
        to
        the following:
  Computed
                  “expected” tax benefit
              
              $
              (2,507,133
              )Increase
                  (decrease) in income tax benefit resulting from:Temporary
                  differences
              
              
              2,507,133Permanent
                  differences
              
              
              -$
              -
  The
        Company files its tax returns as a consolidated entity. However, all of its
        subsidiaries are currently non-operating entities. As of July 31, 2006, the
        Company had not filed an income tax return. Estimated operating loss carry
        forwards of approximately $1,881,000 will begin to expire in 2026.
  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.
  (F18)
  **Note
        15 - Related Party Transactions:**
  During
        the period ended July 31, 2006, a limited liability company related through
        common ownership and another corporation that is a stockholder in the Company
        had made advances to the Company. Principal and interest of five percent
        is due
        on each note one year from the date of the note. The balance of these notes
        at
        July 31, 2006 is $286,038. Interest accrued on these notes through July 31,
        2006
        is $5,671 and is included in accrued expenses.
  In
        July,
        the Company issued $250,000 of the June 2006 debentures to a stockholder
        for
        investment banking services received.
  **Note
        16 - Pro-Forma Financial Information:**
  The
        following pro-forma data summarized the results of operations for the year
        ended
        July 31, 2006, as if the merger with Crystal Hospitality Holdings, Inc. had
        been
        completed August 1, 2004:
  July
                  31, 2005
              
              July
                  31, 2006Net
                  revenues
              
              $
              607,374
              
              $
              6,628Operating
                  loss
              
              
              (970,881
              )
              
              (9,261,243
              )Loss
                  per share - basic and diluted
              
              
              (0.08
              )
              
              (0.78
              )
  **Note
        17 - Other Matters:**
  **Commitments
        and contingencies:**
  During
        the period ended July 31, 2006, the Company signed contracts with service
        companies. One contract is a seven year contract with minimum base payments
        due
        in monthly installments for the service and an annual per passenger charge
        due
        in November of each year. Another contract is a non-cancelable website hosting
        agreement for five years consisting of a flat monthly fee. Subsequent to
        July
        31, 2006, management and the website hosting company agreed to new terms
        that
        are based on services performed without any minimum charges.
  The
        future minimum payments under these contracts as of July 31, 2006, are as
        follows:
  2007
              
              $
              1,052,6672008
              
              
              3,674,0002009
              
              
              1,500,0002010
              
              
              1,250,0002011
              
              
              1,200,000Thereafter
              
              
              1,000,000Total
                  minimum payments
              
              $
              9,676,667
  (F19)
 Prior
        to
        the Exchange agreement discussed in Note 1, several vehicles owned by MRI
        were
        repossessed and sold at auction in order to settle MRI’s 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.
  **Legal
        proceedings:**
  During
        the period from December 8, 2005 (date of inception) through July 31, 2006,
        the
        Company was named as defendant in three legal proceedings stemming from its
        purchase of the intangible assets discussed in Note 6. Management and counsel
        are in the process of reviewing these claims and intend to defend their position
        vigorously.
  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
        to July 31, 2006, another former officer of a former subsidiary of MRI filed
        suit against the Company alleging breach of contract. Management and counsel
        are
        currently in negotiations to settle this dispute. All amounts related to
        the
        original agreement signed by the Company and the former officer have been
        included in notes payable and accrued expenses.
  **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.
 (F20)




**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**Fabrizzio
                Busso Campana
            
            40
            
            Director,
                Chief Executive Office and PresidentPeter
                Gallic
            
            39
            
            Director,
                Vice PresidentPeter
                Dugan
            
            52
            
            DirectorHank
                Cohn
            
            36
            
            DirectorFrank
                Salerno
            
            46
            
            DirectorAnthony
                Soich
            
            46
            
            Director




**Fabrizzio
      Busso Campana**


**Director,
      Chief Executive Officer and President**




Mr. Busso-Campana
      has served as a director and our Chief Executive Officer 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 2002 until July 2003,
      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,
      Vice President**




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.




**Peter
      Dugan**


**Director**




Mr. Dugan
      has served as a director 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. 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.




(F21)




**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 July 2004 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.




**BOARD
      COMMITTEES**




Our
      Board
      of Directors recently established an audit committee and a compensation
      committee. The audit committee reviews the results and scope of the audit and
      other services provided by our independent public accountant. The compensation
      committee establishes the compensation policies applicable to our
      executives.




(F22)




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





**Long Term**
            
            **Compensation****Name and Principal Position**
            
            **Fiscal**
              **Year**
            
            **Salary**
            
            **Stock**
              **Awards(1)**
            
            **Securities**
              **Underlying**
              **Options**Fabrizzio
                Busso-Campana
              Chairman
                and Chief Executive Officer
            
            
            2006
              2005
              2004
            
            $
            120,000
              —
              —
            
            
            —
              —
              —
            
            
            —
              —
              —Peter
                Gallic
              President
            
            
            2006
              2005
              2004
            
            $
            120,000
              —
              —
            
            
            —
              —
              —
            
            
            —
              —
              —A.
                Christopher Johnson(1)
              Former
                Chief Executive Officer and Director
            
            
            2006
              2005
              2004
            
            $
            120,000
              
              —
            
            
            —
              —
              —
            
            
            —
              —
              —







(1)  Mr.
      Johnson resigned his position as Chief Executive Officer on April 17, 2006
      and his position as a Director on July 14, 2006. From the execution of his
      employment agreement on April 28, 2005 to his resignation, Mr. Johnson
      deferred all salary payments due.




**OPTION
      GRANTS IN LAST FISCAL YEAR**




During
      the fiscal year ending July 31, 2005 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 14, 2006.




(F23)




**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**David
                Appell
            
            
            1,050,000
            
            
            9.50
            %Fabrizzio
                Busso Campana(1)
            
            
            1,808,333
            
            
            15.61
            %Peter
                Gallic(2)
            
            
            1,808,333
            
            
            15.61
            %Peter
                Dugan(3)
            
            
            1,808,333
            
            
            15.61
            %Crystal
                Capital Partners Corporation
            
            
            1,960,000
            
            
            17.73
            %Hank
                Cohn
            
            
            0
            
            
            0
            %Harborview
                Capital Management
            
            
            880,000
            
            
            7.97
            %A.
                Christopher Johnson
            
            
            675,628
            
            
            6.11
            %Frank
                Salerno(4)
            
            
            350,000
            
            
            3.17
            %Anthony
                Soich
            
            
            0
            
            
            0
            %Officers
                and Directors as a group (5)
            
            
            5,775,000
            
            
            50.00
            %





(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.




(F24)




**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, 2006, 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, 2006 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.




**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,
      2006.




***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.




(F25)




**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:
                July 2, 2007
            **CRYSTAL
                INTERNATIONAL**
              **TRAVEL
                GROUP, INC.**By:
            /s/
                Fabrizzio Busso-Campana
              Fabrizzio
                Busso-CampanaChief
                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/
                Fabrizzio P. Busso-Campana
              Fabrizzio
                P. Busso-Campana
            
            Chief
                Executive Officer and Director (Principal Executive
                Officer)
            
            July
                2, 2007/s/
                Hank Cohn
              Hank
                Cohn
            
            Director
            
            July
                2, 2007/s/
                Peter Dugan
              Peter
                Dugan
            
            Director
            
            July
                2, 2007/s/
                Peter Gallic
              Peter
                Gallic
            
            Director
                and Vice President
            
            July
                2, 2007/s/
                Frank Salerno
              Frank
                Salerno
            
            Director
            
            July
                2, 2007/s/
                Anthony Soich
              Anthony
                Soich
            
            Director
            
            July
                2, 2007




(F26)